Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 12, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | DPW Holdings, Inc. | ||
Entity Central Index Key | 0000896493 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | true | ||
Amendment Description | EXPLANATORY NOTE This Amendment No. 1 on Form 10-K/A (the “Amended Annual Report”) amends the Annual Report on Form 10-K of DPW Holdings, Inc. originally filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2019 (the “Original Filing”). This Amended Annual Report on Form 10-K is filed solely for the purpose of adding additional disclosure to the Original Filing resulting from comments received from the SEC during its review of our Offering Statement on Form 1-A, originally filed with the SEC on May 13, 2019 and as amended on August 14, 2019 and September 25, 2019 (the “Subsequent Filings”), and our responses to such comments contained within the Subsequent Filings. Other than the foregoing, this Amended Annual Report speaks as of the original date of the Original Filing, does not reflect events that may have occurred subsequent to the date of the Original Filing and does not modify or update in any way disclosures made in the Original Filing. | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Reporting Status Current | Yes | ||
Entity File Number | 1-12711 | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 31,701,549 | ||
Entity Common Stock, Shares Outstanding | 23,189,615 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 902,329 | $ 1,478,147 |
Marketable securities | 178,597 | 1,834,570 |
Accounts receivable | 1,930,971 | 1,898,241 |
Accounts and other receivable, related party | 3,887,654 | 173,751 |
Accrued revenue | 1,353,411 | |
Inventories | 3,261,126 | 1,992,865 |
Prepaid expenses and other current assets | 775,981 | 1,407,104 |
TOTAL CURRENT ASSETS | 12,290,069 | 8,784,678 |
Intangible assets | 4,359,798 | 2,898,013 |
Digital currencies | 1,535 | |
Goodwill | 8,463,070 | 3,651,984 |
Property and equipment, net | 9,313,299 | 1,216,847 |
Investments - related party, net of original issue discount of $2,336,693 and $2,115,710, respectively | 5,611,621 | 2,332,910 |
Investments in warrants and common stock - related party | 3,043,499 | 7,728,001 |
Investments in preferred stock of private company | 480,000 | 1,000,000 |
Investments in real estate | 1,969,000 | |
Other investments | 2,572,230 | 1,637,672 |
Other investments, related parties | 862,500 | 915,464 |
Other assets | 459,259 | 343,325 |
TOTAL ASSETS | 49,425,880 | 30,508,894 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 13,065,838 | 4,273,242 |
Accounts payable and accrued expenses, related party | 57,752 | 69,855 |
Advances on future receipts | 2,085,807 | 1,962,965 |
Short term advances | 2,438,667 | |
Short term advances, related party | 73,761 | 245,000 |
Revolving credit facility | 285,605 | 387,572 |
Notes payable | 6,388,787 | 402,234 |
Notes payable, related party | 166,925 | 133,569 |
Convertible notes payable | 6,742,494 | 397,878 |
Other current liabilities | 1,868,402 | 708,391 |
TOTAL CURRENT LIABILITIES | 30,735,371 | 11,019,373 |
LONG TERM LIABILITIES | ||
Notes payable | 483,659 | 525,492 |
Notes payable, related parties | 142,059 | 175,748 |
TOTAL LIABILITIES | 31,361,089 | 11,720,613 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, $0.001 par value - 23,121,224 shares authorized; nil shares issued and outstanding at December 31, 2018 and 2017 | ||
Additional paid-in capital | 77,643,609 | 36,916,659 |
Accumulated deficit | (55,721,115) | (23,414,151) |
Accumulated other comprehensive loss | (3,902,523) | 4,503,046 |
TOTAL DPW HOLDINGS STOCKHOLDERS' EQUITY | 18,024,133 | 18,007,544 |
Non-controlling interest | 40,658 | 780,737 |
TOTAL STOCKHOLDERS' EQUITY | 18,064,791 | 18,788,281 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 49,425,880 | 30,508,894 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible Preferred Stock | 1 | |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible Preferred Stock | 125 | 100 |
Series D Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible Preferred Stock | 379 | |
Common Class A [Member] | ||
STOCKHOLDERS' EQUITY | ||
Common Stock | 4,036 | 1,511 |
Common Class B [Member] | ||
STOCKHOLDERS' EQUITY | ||
Common Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Investments - related parties, original issue discount | $ 2,336,693 | $ 2,115,710 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 23,121,224 | 23,121,224 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Series A Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 25 | $ 25 |
Convertible redeemable preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 1,000,000 | 1,000,000 |
Convertible preferred stock, issued | 1,434 | |
Convertible preferred stock, outstanding | 1,434 | |
Preferred stock, par value (in dollars per share) | $ 2.50 | |
Convertible preferred stock, liquidation preference | $ 35,850 | |
Series B Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 10 | $ 10 |
Convertible redeemable preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 500,000 | 500,000 |
Convertible preferred stock, issued | 125,000 | 100,000 |
Convertible preferred stock, outstanding | 125,000 | 100,000 |
Convertible preferred stock, liquidation preference | $ 1,250,000 | $ 1,000,000 |
Series D Preferred Stock [Member] | ||
Convertible preferred stock, stated value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible redeemable preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 378,776 | 378,776 |
Convertible preferred stock, issued | 378,776 | |
Convertible preferred stock, outstanding | 378,776 | |
Convertible preferred stock, liquidation preference | $ 3,788 | |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 4,036,407 | 1,511,115 |
Common stock, outstanding | 4,036,407 | 1,511,115 |
Common Class B [Member] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 25,000,000 | 25,000,000 |
Common stock, issued | ||
Common stock, outstanding |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHNSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenue | $ 27,154,219 | $ 10,174,500 |
Cost of revenue | 21,774,658 | 6,325,027 |
Gross profit | 5,379,561 | 3,849,473 |
Operating expenses | ||
Engineering and product development | 1,430,538 | 1,119,745 |
Selling and marketing | 3,010,790 | 1,721,050 |
General and administrative | 19,842,378 | 6,991,723 |
Impairment loss on intangible assets | 700,000 | |
Impairment loss on digital currency | 1,311 | |
Total operating expenses | 24,985,017 | 9,832,518 |
Loss from operations | (19,605,456) | (5,983,045) |
Interest expense | (13,453,344) | (4,990,397) |
Loss before income taxes | (33,058,800) | (10,973,442) |
Income tax benefit | 76,599 | 78,393 |
Net loss | (32,982,201) | (10,895,049) |
Less: Net loss attributable to non-controlling interest | 748,320 | 278,818 |
Net loss attributable to DPW Holdings | (32,233,881) | (10,616,231) |
Preferred deemed dividends on Series B and Series C Preferred Stock | (108,049) | (584,182) |
Preferred dividends on Series C Preferred Stock | (54,059) | |
Net loss available to common stockholders | $ (32,341,930) | $ (11,254,472) |
Basic and diluted net loss per common share (in dollars per share) | $ (11.15) | $ (18.05) |
Basic and diluted weighted average common shares outstanding (in shares) | 2,899,888 | 623,583 |
Comprehensive Loss | ||
Loss available to common stockholders | $ (32,341,930) | $ (11,254,472) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustment | (377,823) | 152,078 |
Net unrealized (loss) gain on securities available-for-sale | (8,027,746) | 5,171,743 |
Other comprehensive income (loss) | (8,405,569) | 5,323,821 |
Total Comprehensive loss | (40,747,499) | (5,930,651) |
Revenue [Member] | ||
Total revenue | 17,762,217 | 10,000,749 |
Cryptocurrency Mining [Member] | ||
Total revenue | 1,675,549 | |
Related Party [Member] | ||
Total revenue | 3,907,280 | 173,751 |
Restaurant Operations [Member] | ||
Total revenue | 3,462,140 | |
Lending Activities [Member] | ||
Total revenue | $ 347,033 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interest [Member] | Total |
Balance (in shares) at Dec. 31, 2016 | 383,882 | ||||||
Balance at Dec. 31, 2016 | $ 384 | $ 16,534,243 | $ (12,159,679) | $ (820,775) | $ 3,554,173 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Compensation expense due to stock option issuances | 485,198 | 485,198 | |||||
Compensation expense due to warrant issuances | 93,918 | 93,918 | |||||
Issuance of common stock and warrants for cash (in shares) | 136,482 | ||||||
Issuance of common stock and warrants for cash | $ 136 | 1,962,549 | 1,962,685 | ||||
Issuance of common stock for services (in shares) | 108,067 | ||||||
Issuance of common stock for services | $ 108 | 1,662,594 | 1,662,702 | ||||
Issuance of common stock for conversion of debt (in shares) | 337,990 | ||||||
Issuance of common stock for conversion of debt | $ 338 | 4,036,263 | 4,036,601 | ||||
Issuance of common stock upon exercise of stock options (in shares) | 18,073 | ||||||
Issuance of common stock upon exercise of stock options | $ 18 | 556,999 | 557,017 | ||||
Issuance of common stock upon exercise of warrants (in shares) | 177,305 | ||||||
Issuance of common stock upon exercise of warrants | $ 177 | 2,245,761 | 2,245,938 | ||||
Issuance of Series B preferred stock for cash and warrants (in shares) | 50,000 | ||||||
Issuance of Series B preferred stock for cash and warrants | $ 50 | 499,950 | 500,000 | ||||
Issuance of Series B preferred stock for conversion of debt (in shares) | 50,000 | ||||||
Issuance of Series B preferred stock for conversion of debt | $ 50 | 499,950 | 500,000 | ||||
Issuance of Series C preferred stock for cash and warrants (in shares) | 433,335 | ||||||
Issuance of Series C preferred stock for cash and warrants | $ 433 | 897,607 | 898,040 | ||||
Issuance of Series C preferred stock for conversion of debt (in shares) | 21,667 | ||||||
Issuance of Series C preferred stock for conversion of debt | $ 22 | 51,978 | 52,000 | ||||
Issuance of common stock for conversion of Series C preferred stock (in shares) | (455,002) | 91,000 | |||||
Issuance of common stock for conversion of Series C preferred stock | $ (455) | $ 91 | 364 | ||||
Issuance of Series D preferred stock and common stock in acquisition of Microphase (in shares) | 378,776 | 92,122 | |||||
Issuance of Series D preferred stock and common stock in acquisition of Microphase | $ 379 | $ 92 | 1,450,569 | $ 944,555 | 2,395,595 | ||
Issuance of Series E preferred stock and common stock in acquisition of Microphase (in shares) | 10,000 | ||||||
Issuance of Series E preferred stock and common stock in acquisition of Microphase | $ 10 | 10 | |||||
Issuance of common stock for conversion of Series E preferred stock (in shares) | (10,000) | 30,000 | |||||
Issuance of common stock for conversion of Series E preferred stock | $ (10) | $ 30 | 470,870 | 470,890 | |||
Issuance of common stock in connection with convertible notes (in shares) | 22,500 | ||||||
Issuance of common stock in connection with convertible notes | $ 23 | 399,488 | 399,511 | ||||
Issuance of common stock for domain name (in shares) | 2,500 | ||||||
Issuance of common stock for domain name | $ 3 | 30,950 | 30,953 | ||||
Issuance of common stock and warrants in satisfaction of subsidiary debt (in shares) | 76,193 | ||||||
Issuance of common stock and warrants in satisfaction of subsidiary debt | $ 76 | 940,247 | 940,323 | ||||
Issuance of common stock for acquisition of debt due from related party (in shares) | 30,000 | ||||||
Issuance of common stock for acquisition of debt due from related party | $ 30 | 599,970 | 600,000 | ||||
Beneficial conversion feature in connection with convertible notes | 786,797 | 786,797 | |||||
Fair value warrants issued in connection with convertible notes | 2,133,822 | 2,133,822 | |||||
Fair value of personal guarantees in connection with debt financings | 75,259 | 75,259 | |||||
Issuance of common stock for conversion of debt owed by subsidiary to former stakeholder | 115,000 | 115,000 | |||||
Cash for exchange fees and other financing costs (in shares) | 5,000 | ||||||
Cash for exchange fees and other financing costs | $ 5 | (82,869) | (82,864) | ||||
Comprehensive loss: | |||||||
Net loss | (10,616,231) | (10,616,231) | |||||
Preferred dividends | (54,059) | (54,059) | |||||
Preferred deemed dividends | 584,182 | (584,182) | |||||
Net unrealized loss on securities available-for-sale, net of income taxes | 5,171,743 | 5,171,743 | |||||
Foreign currency translation adjustments | 152,078 | 152,078 | |||||
Net loss attributable to non-controlling interest | (278,818) | (278,818) | |||||
Balance (in shares) at Dec. 31, 2017 | 478,776 | 1,511,115 | |||||
Balance at Dec. 31, 2017 | $ 479 | $ 1,511 | 36,916,659 | (23,414,151) | 4,503,046 | 780,737 | 18,788,281 |
Increase (Decrease) in Stockholders' Equity | |||||||
Compensation expense due to stock option issuances | 1,043,908 | 1,043,908 | |||||
Compensation expense due to warrant issuances | 93,914 | 93,914 | |||||
Issuance of common stock and warrants for cash (in shares) | 1,640,935 | ||||||
Issuance of common stock and warrants for cash | $ 1,641 | 23,882,829 | 23,884,470 | ||||
Issuance of common stock for services (in shares) | 184,153 | ||||||
Issuance of common stock for services | $ 184 | 3,740,704 | 3,740,888 | ||||
Issuance of common stock for conversion of debt (in shares) | 211,225 | ||||||
Issuance of common stock for conversion of debt | $ 212 | 2,445,905 | 2,446,117 | ||||
Issuance of common stock for conversion of short-term advances (in shares) | 181,608 | ||||||
Issuance of common stock for conversion of short-term advances | $ 182 | 2,819,402 | 2,819,584 | ||||
Issuance of common stock upon exercise of stock options (in shares) | 3,000 | ||||||
Issuance of common stock upon exercise of stock options | $ 3 | 97,797 | 97,800 | ||||
Issuance of common stock upon exercise of warrants (in shares) | 107,282 | ||||||
Issuance of common stock upon exercise of warrants | $ 107 | 867,059 | 867,166 | ||||
Issuance of Series A preferred stock for cash (in shares) | 1,434 | ||||||
Issuance of Series A preferred stock for cash | $ 1 | 35,849 | $ 35,849 | ||||
Issuance of Series B preferred stock for conversion of short-term advances (in shares) | 25,000 | 500 | |||||
Issuance of Series B preferred stock for conversion of short-term advances | $ 25 | 249,975 | $ 250,000 | ||||
Issuance of common stock for conversion of Series E preferred stock (in shares) | (378,776) | 37,878 | |||||
Issuance of common stock for conversion of Series E preferred stock | $ (379) | $ 38 | 341 | ||||
Issuance of common stock in connection with convertible notes (in shares) | 136,961 | ||||||
Issuance of common stock in connection with convertible notes | $ 136 | 1,540,972 | 1,541,108 | ||||
Repurchase of common stock (in shares) | (2,750) | ||||||
Repurchase of common stock | $ (3) | (57,745) | (57,748) | ||||
Beneficial conversion feature in connection with convertible notes | 2,555,952 | 2,555,952 | |||||
Fair value warrants issued in connection with convertible notes | 3,408,665 | 3,408,665 | |||||
Cash for exchange fees and other financing costs (in shares) | 25,000 | ||||||
Cash for exchange fees and other financing costs | $ 25 | (2,107,607) | (2,107,582) | ||||
Non-controlling interest from acquisition of I. AM | 981 | 33,241 | 34,222 | ||||
Non-controlling interest from Microphase | (25,000) | (25,000) | |||||
Comprehensive loss: | |||||||
Net loss | (32,233,881) | (32,233,881) | |||||
Preferred deemed dividends | 108,049 | (108,049) | |||||
Net unrealized loss on securities available-for-sale, net of income taxes | (8,027,746) | (8,027,746) | |||||
Foreign currency translation adjustments | 34,966 | (377,823) | (342,857) | ||||
Net loss attributable to non-controlling interest | (748,320) | (748,320) | |||||
Balance (in shares) at Dec. 31, 2018 | 126,434 | 4,036,407 | |||||
Balance at Dec. 31, 2018 | $ 126 | $ 4,036 | $ 77,643,609 | $ (55,721,115) | $ (3,902,523) | $ 40,658 | $ 18,064,791 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (32,982,201) | $ (10,895,049) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,447,249 | 193,671 |
Amortization | 459,656 | 60,335 |
Interest expense - debt discount | 11,191,055 | 4,688,630 |
Impairment of intangible assets | 700,000 | |
Accretion of original issue discount on notes receivable - related party | (2,004,358) | (453,346) |
Accretion of original issue discount on notes receivable | (175,921) | |
Interest expense on conversion of promissory notes to common stock | 13,333 | |
Deferred taxes | (225,488) | |
Provision for bad debts | (32,729) | |
Stock-based compensation | 4,719,266 | 1,831,435 |
Realized losses on sale of digital currencies | 127,602 | |
Realized losses on sale of marketable securities | 175,405 | |
Unrealized losses on trading securities | 77,133 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,754,631 | 285,146 |
Accounts receivable, related party | (3,713,903) | (173,751) |
Accrued revenue | (1,353,411) | |
Digital currencies | (1,633,630) | |
Inventories | 13,137 | 100,156 |
Prepaid expenses and other current assets | 1,210,933 | (763,559) |
Other investments, related party | (335,040) | |
Other assets | (232,442) | (70,846) |
Accounts payable and accrued expenses | 6,850,263 | 1,515,870 |
Accounts payable, related parties | (12,103) | 69,855 |
Other current liabilities | 959,235 | 74,813 |
Net cash used in operating activities | (10,422,404) | (4,116,564) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (8,919,532) | (402,779) |
Proceeds from sale of property and equipment | 16,595 | |
Loss on disposition of asset | 22,172 | |
Purchase of intangible asset | (3,025) | (50,000) |
Purchase of Power Plus | (377,661) | |
Purchase of Enertec | (4,936,562) | |
Cash received on acquisitions | 293,041 | 110,982 |
Investments - related party | (1,244,353) | (3,200,554) |
Related party investment in real property | (1,969,000) | |
Investment in real property | (300,000) | |
Investments in warrants and common stock - related party | (2,672,510) | |
Investments in marketable securities | (858,458) | (1,485,652) |
Sales of marketable securities | 2,188,292 | 63,606 |
Sales of digital currencies | 64,587 | |
Investments - others | (25,000) | |
Loans to third party | ||
Loans to related parties | (44,000) | |
Proceeds from loans to related parties | 12,520 | 35,000 |
Investments in debt and equity securities | (2,571,100) | (3,039,500) |
Net cash used in investing activities | (20,618,928) | (8,673,963) |
Cash flows from financing activities: | ||
Gross proceeds from sales of common stock and warrants | 23,884,470 | 2,035,147 |
Repurchase of common stock | (57,747) | |
Proceeds from issuance of Series A Convertible Preferred Stock | 33,699 | |
Proceeds from issuance of Series B and C Convertible Preferred Stock | 1,540,000 | |
Financing cost in connection with sales of equity securities | (2,107,582) | (297,341) |
Proceeds from stock option exercises | 97,800 | 557,360 |
Proceeds from warrant exercises | 867,166 | 2,245,938 |
Proceeds from convertible notes payable | 11,550,000 | 2,918,200 |
Proceeds from notes payable - related party | 350,000 | |
Proceeds from notes payable | 12,994,999 | 857,000 |
Proceeds from short-term advances - related party | 136,761 | |
Proceeds from short-term advances | 762,000 | 2,439,000 |
Payments on short-term advances | (646,500) | |
Payments on notes payable - related party | (333) | |
Payments on short-term advances - related party | (13,000) | 245,000 |
Payments on notes payable | (12,133,140) | (190,000) |
Payments on convertible notes payable | (2,362,281) | (157,000) |
Proceeds from advances on future receipts | 3,350,277 | 2,889,175 |
Payments on advances on future receipts | (5,505,079) | (1,526,125) |
Payments of preferred dividends | (35,494) | |
Financing cost in connection with sales of debt securities | (122,650) | |
Payments on revolving credit facilities, net | (313,822) | (524,710) |
Net cash provided by financing activities | 30,537,688 | 13,223,500 |
Effect of exchange rate changes on cash and cash equivalents | (72,174) | 49,000 |
Net increase (decrease) in cash and cash equivalents | (575,818) | 481,973 |
Cash and cash equivalents at beginning of period | 1,478,147 | 996,174 |
Cash and cash equivalents at end of period | 902,329 | 1,478,147 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 760,208 | 271,129 |
Non-cash investing and financing activities: | ||
Cancellation of convertible note payable into shares of common stock | 2,446,116 | 2,497,721 |
Cancellation of convertible note payable, related party into shares of common stock | 530,000 | |
Cancellation of short term advances into shares of common stock | 2,554,167 | |
Cancellation of short term advances, related party into shares of common stock | 45,000 | |
Cancellation of short term advances, related party into shares of Series B Preferred Stock | 250,000 | |
Payment of debt with digital currency | 739,967 | |
Purchase of assets with digital currency | 250,460 | |
Payment of accounts payable with digital currency | 449,479 | |
Issuance of common stock for prepaid services | 50,000 | |
Cancellation of notes payable - related party into shares of common stock | 369,334 | |
Cancellation of notes payable into shares of common stock | $ 2,204,365 | |
Cancellation of note payable - related party into series B convertible preferred stock | 500,000 | |
Issuance of common stock for domain name | $ 31,000 | |
Issuance of common stock for prepaid services | $ 410,000 | |
In connection with the Company's acquisition of Microphase Corporation, equity instruments were issued and liabilities assumed during 2017 as follows: | ||
Fair value of assets acquired | 7,907,744 | |
Equity instruments issued | (1,451,040) | |
Non-controlling interest | (945,555) | |
Liabilities assumed | $ 5,511,149 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS DPW Holdings, Inc., a Delaware corporation (“DPW” or the “Company”), formerly known as Digital Power Corporation, was incorporated in September 2017. The Company is a diversified holding company owning subsidiaries engaged in the following operating businesses: commercial and defense solutions, commercial lending, cryptocurrency blockchain mining, advanced textile technology and restaurant operations. The Company’s wholly-owned subsidiaries are Systems 2001 Ltd (“ ”), Super Crypto Mining, Inc and I. AM, Inc. (“I.AM”) On March 14, 2019, pursuant to the authorization provided by the Company’s stockholders . |
LIQUIDITY, GOING CONCERN AND MA
LIQUIDITY, GOING CONCERN AND MANAGEMENT'S PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity Going Concern And Managements Plans [Abstract] | |
LIQUIDITY, GOING CONCERN AND MANAGEMENT'S PLANS | 2. LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. As of December 31, 2018, the Company had cash and cash equivalents of $902,329, an accumulated deficit of $55,721,115 and a negative working capital of $18,445,302. The Company has incurred recurring losses and reported losses for the years ended December 31, 2018 and 2017, totaled $32,233,881 and $10,616,231, respectively. In the past, the Company has financed its operations principally through issuances of convertible debt, promissory notes and equity securities. During 2018, the Company continued to successfully obtain additional equity and debt financing and in restructuring existing debt. The Company expects to continue to incur losses for the foreseeable future and needs to raise additional capital to continue its business development initiatives and to support its working capital requirements. On April 2, 2019, the Company received gross proceeds of approximately $7 million in a public offering of its securities (See Note 28). Management believes that the Company has access to capital resources through potential public or private issuances of debt or equity securities. However, if the Company is unable to raise additional capital, it may be required to curtail operations and take additional measures to reduce costs, including reducing its workforce, eliminating outside consultants and reducing legal fees to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of DPW and its wholly-owned subsidiaries, Coolisys, DP Limited, Power-Plus, Enertec, DP Lending and Digital Farms and its majority-owned subsidiaries, Microphase and I.AM. All significant intercompany accounts and transactions have been eliminated in consolidation. Accounting Estimates The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Key estimates include acquisition accounting, fair value of certain financial instruments, reserve for trade receivables and inventories, carrying amounts of investments, fair value of digital currencies, accruals of certain liabilities including product warranties, useful lives and depreciation, and deferred income taxes and related valuation allowance. Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract with the customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, and Step 5: Recognize revenue when the company satisfies a performance obligation. The Company’s disaggregated revenues consist of the following for the year ended December 31, 2018: Year ended December 31, 2018 Digital DPC DPL Enertec Farms I.AM Total Primary Geographical Markets North America $ 13,875,883 $ 11,804 $ — $ 1,675,549 $ 3,462,140 $ 19,025,376 Europe 159,350 1,656,516 — — — 1,815,866 Middle East — — 5,226,075 — — 5,226,075 Other 718,692 368,210 — — — 1,086,902 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Major Goods RF/Microwave Filters $ 3,331,575 $ — $ — $ — $ — $ 3,331,575 Detector logarithmic video amplifiers 1,338,912 — — — — 1,338,912 Power Supply Units 5,829,125 — — — — 5,829,125 Power Supply Systems — 2,036,530 — — — 2,036,530 Healthcare diagnostic systems — — 1,715,512 — — 1,715,512 Defense systems — — 3,510,563 — — 3,510,563 Digital Currency Mining — — — 1,675,549 — 1,675,549 Restaurant operations — — — — 3,462,140 3,462,140 Lending activities 347,033 — — — — 347,033 MLSE Systems 3,907,280 — — — — 3,907,280 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Timing of Revenue Recognition Goods transferred at a a point in time $ 10,846,645 $ 1,411,798 $ — $ 1,675,549 $ 3,462,140 $ 17,396,132 Services transferred over time 3,907,280 624,732 5,226,075 — — 9,758,087 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Sales of Products The Company generates revenues from the sale of its products through a direct and indirect sales force. The Company’s performance obligations to deliver products are satisfied at the point in time when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership. The Company provides standard assurance warranties, which are not separately priced, that the products function as intended. The Company primarily receives fixed consideration for sales of product. Some of the Company’s contracts with distributors include stock rotation rights after six months for slow moving inventory, which represents variable consideration. The Company uses an expected value method to estimate variable consideration and constrains revenue for estimated stock rotations until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. To date, returns have been insignificant. The Company’s customers generally pay within 30 days from the receipt of a valid invoice. Because the Company’s product sales agreements have an expected duration of one year or less, the Company has elected to adopt the practical expedient in ASC 606-10-50-14(a) of not disclosing information about its remaining performance obligations. Manufacturing Services The Company provides manufacturing services in exchange primarily for fixed fees, however, the initial two MLSE units are subject to variable pricing under the $50 million purchase order from MTIX. Under the terms of the MLSE purchase order, the Company shall be entitled to cost plus $100,000 for the manufacture of the first two MLSE units. The Company has determined that the costs of manufacturing the MLSE units will decline over time due to the effects of a learning curve which will result in a great amount of revenue being recognized for these initial two MLSE units. For manufacturing services, which include revenues generated by Enertec and in certain instances revenues generated by DPL, the Company’s performance obligation for manufacturing services is satisfied over time as the Company creates or enhances an asset that the customer controls as the asset is created or enhanced. Generally, the Company recognizes revenue based upon proportional performance over time using a cost to cost method which measures progress based on the costs incurred to total expected costs in satisfying its performance obligation. This method provides a depiction of the progress in providing the manufacturing service because there is a direct relationship between the costs incurred by the Company and the transfer of the manufacturing service to the customer. Manufacturing services that are recognized based upon the proportional performance method are included in the above table as services transferred over time and to the extent the customer has not been invoiced for these revenues, as accrued revenue in the accompanying consolidated balance sheets. Revisions to the Company’s estimates may result in increases or decreases to revenues and income and are reflected in the consolidated financial statements in the periods in which they are first identified. The Company has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component to the extent that the period between when the Company transfers its promised good or service to the customer and when the customer pays is one year or less. The aggregate amount of the transaction price allocated to the performance obligation that is partially unsatisfied as of December 31, 2018 for the MLSE units was approximately $48 million, representing 24 MLSE units. Based on the Company’s expectations regarding funding of the production process and its experience building the first machines, the Company expects to recognize the remaining revenue related to the partially unsatisfied performance obligation over the next two and a half years. The Company will be paid in installments for this performance obligation over the next two and a half years. Lending Activities DP Lending generates revenue from lending activities primarily through interest, origination fees and late/other fees. Interest income on these products is calculated based on the contractual interest rate and recorded as interest income as earned. The origination fees or original issue discounts are recognized over the life of the loan using the effective interest method. Blockchain Mining The Company has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital currency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The Company’s factional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the digital currency award received is determined using the market rate of the related digital currency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital currencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Expenses associated with running the cryptocurrency mining business, such as equipment deprecation and electricity cost are recorded as a component of cost of revenues. We intend to use the digital assets primarily for operating expenses of Digital Farms. During 2018, we used digital assets for debt reduction, capital purchases, consulting fees, data center costs and other operating expenses. Restaurant Operations The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals and complimentary meals and gift cards. Restaurant cost of sales primarily includes the cost of good, beverages, and merchandise and disposable paper and plastic goods used in preparing and selling the Company’s menu items, and exclude depreciation and amortization. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. Foreign Currency Translation A substantial portion of the Company’s revenues are generated in U.S. dollars (“U.S. dollar”). In addition, a substantial portion of the Company’s costs are incurred in U.S. dollars. Company management has determined that the U.S. dollar is the functional currency of the primary economic environment in which it operates. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) No. 830, Foreign Currency Matters (“ASC No. 830”). All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate. The financial statements of DPL and Enertec, whose functional currencies have been determined to be their local currencies, the British Pound (“GBP”) and the Israeli Shekel (“ILS”), have been translated into U.S. dollars in accordance with ASC No. 830. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate in effect for the reporting period. The resulting translation adjustments are reported as other comprehensive income (loss) in the consolidated statement of comprehensive income (loss) and accumulated comprehensive income (loss) in statement of changes in stockholders' equity (deficit). Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions. These balances may, at times, exceed the U.S. Federal Deposit Insurance Corporation insurance limits. The Company has cash and cash equivalents of $409,945 and $292,153 at December 31, 2018 and 2017, respectively, in the United Kingdom (“U.K”) and $60,040 and nil, respectively, in Israel. The Company has not experienced any losses on deposits of cash and cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying amount of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company individually reviews all accounts receivable balances and based upon an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. The Company estimates the allowance for doubtful accounts based on historical collection trends, age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that a specific receivable balance may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. A customer’s receivable balance is considered past-due based on its contractual terms. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due. Based on an assessment as of December 31, 2018 and 2017, of the collectability of invoices, accounts receivable are presented net of an allowance for doubtful accounts of $5,000 and $5,000, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence. Cost of inventories is determined as follows: Raw materials, parts and supplies - using the “first-in, first-out” method. Work-in-progress and finished products - on the basis of direct manufacturing costs with the addition of indirect manufacturing costs. The Company periodically assesses its inventories valuation in respect of obsolete and slow-moving items by reviewing revenue forecasts and technological obsolescence. When inventories on hand exceed the foreseeable demand or become obsolete, the value of excess inventory, which at the time of the review was not expected to be sold, is written off. During the years ended December 31, 2018 and 2017, the Company did not record inventory write-offs within the cost of revenue. Property and Equipment, Net Property and equipment as well as an intangible asset are stated at cost, net of accumulated depreciation and amortization. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: Useful lives (in years) Computer, software and related equipment 3 - 5 Office furniture and equipment 5 - 10 Leasehold improvements Over the term of the lease or the life of the asset, whichever is shorter. Goodwill The Company evaluates its goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 of each fiscal year or more frequently if there are indicators that the carrying amount of the goodwill exceeds its carried value. At December 31, 2018, the Company had five reporting units. The Company performed a qualitative assessment and concluded that no impairment existed as of December 31, 2018. Intangible Assets The Company acquired amortizable intangibles assets as part of three asset purchase agreements consisting of customer lists and non-compete agreements. The Company also has the trade names and trademarks associated with the acquisitions of Microphase and I.AM which were determined to have an indefinite life. The Company’s intangible assets, net also include definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Useful lives (in years) Customer list 5 - 14 Non-competition agreements 3 Domain name and other intangible assets 3 The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. No impairments were recorded on intangible assets as no impairment indicators were noted for the periods presented in these consolidated financial statements. Long-Lived Assets The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, Property, Plant, and Equipment Warranty The Company offers a warranty period for all its manufactured products. Warranty periods range from one to two years depending on the product. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of units sold, historical rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. As of December 31, 2018 and 2017, the Company’s accrued warranty liability was $86,495. Income Taxes The Company determines its income taxes under the asset and liability method in accordance with FASB ASC No. 740, Income Taxes The Company accounts for uncertain tax positions in accordance with ASC No. 740-10-25 . Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of issuance of warrants to purchase shares of common stock in connection with convertible notes and to employees of the Company, satisfy the criteria for classification as equity instruments as these warrants do not contain cash settlement features or variable settlement provision that cause them to not be indexed to the Company’s own stock. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC No. 718, Compensation – Stock Compensation “ASC No. 718” The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC No. 505-50, Equity Based Payments to Non-Employees Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with ASC No. 815, Derivatives and Hedging Activities “ASC No. 815” Conversion options that contain variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument. The Company accounts for convertible instruments, when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, in accordance with ASC No. 470-20, Debt with Conversion and Other Options “ASC No. 470-20” Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Cash and cash equivalents are invested in banks in the U.S., UK and Israel. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Trade receivables of the Company and its subsidiaries are mainly derived from sales to customers located primarily in the U.S., Europe and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company and its subsidiaries have determined to be doubtful of collection. Comprehensive Income (Loss) The Company reports comprehensive loss in accordance with ASC No. 220, Comprehensive Income Fair value of Financial Instruments In accordance with ASC No. 820, Fair Value Measurements and Disclosures The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations. All significant inputs used in our valuations are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include quoted prices that were adjusted for security-specific restrictions which are compared to output from internally developed models such as a discounted cash flow model. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, accounts receivables and accounts and other receivable – related party, investments, notes receivable, trade payables and trade payables – related party approximate their fair value due to the short-term maturities of such instruments. As of December 31, 2018 and 2017, the fair value of the Company’s investments were $3,256,468 and $9,562,571, respectively, and were concentrated in equity securities of Avalanche International Corp., which we refer to as AVLP, a related party (See Note 10), which are classified as available-for-sale investments. At December 31, 2018, the Company's investment in AVLP included marketable equity securities of $812,858 and warrants to purchase 13,887,993 shares of AVLP common stock at an exercise price of $0.50 per share of common stock with an aggregate fair value of $3,043,499. At December 31, 2017, the Company's investment in AVLP included marketable equity securities of $826,408 and warrants to purchase 8,248,440 shares of AVLP common stock at an exercise price of $0.50 per share of common stock with an aggregate fair value of $7,728,001. For investments in marketable equity securities, the Company took into consideration general market conditions, the duration and extent to which the fair value is above cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. As a result of this analysis, the Company has determined that its investment in AVLP’s marketable equity securities are valued based upon the closing market price of common stock at December 31, 2018 and 2017, which resulted in an unrealized gain of $119,329 and $550,048, respectively. At December 31, 2018, the Company held shares of common stock in one company that it had purchased at the market, for a total cost of $220,880 with an aggregate fair value of $178,597. In accordance with ASC No. 320-10, this investment is accounted for based upon the closing market price of the respective common stock at December 31, 2018 and 2017, resulting in an unrealized loss of $42,283 and unrealized gain of $133,067, respectively. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurement at December 31, 2018 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of $ 3,043,499 $ 812,858 $ — $ 2,230,641 Investments in marketable securities 178,597 178,597 — — Investments in warrants of public companies 34,372 — — 34,372 Total Investments $ 3,256,468 $ 991,455 $ — $ 2,265,013 Fair Value Measurement at December 31, 2017 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of $ 7,728,001 $ 826,408 $ — $ 6,901,593 Investments in marketable securities 1,834,570 1,834,570 — $ — Total Investments $ 9,562,571 $ 2,660,978 $ — $ 6,901,593 We assess the inputs used to measure fair value using thee three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market. Debt Discounts The Company accounts for debt discount according to ASC No. 470-20, Debt with Conversion and Other Options Net Loss per Share Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding. The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities, which are convertible into the Company’s Class A common stock, consist of the following at December 31, 2018 and 2017: 2018 2017 Stock options 373,000 192,125 Warrants 936,381 219,443 Convertible notes 999,641 64,197 Preferred stock 127,551 109,306 Total 2,436,573 585,071 Reclassifications Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency with the current period presentation. Recently Issued Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASC 606 effective January 1, 2018 to all contracts using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements In July 2017, the FASB issued ASU No. 2017-11, Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting |
Digital Currencies
Digital Currencies | 12 Months Ended |
Dec. 31, 2018 | |
Digital Currencies [Abstract] | |
Digital Currencies | 4. Digital Currencies The following table presents additional information about digital currencies: Digital Balance at January 1, 2017 $ — Additions of digital currencies 1,634,941 Payment on convertible notes payable (739,967 ) Payments to vendors (449,479 ) Purchase of fixed assets (250,460 ) Realized loss on sale of digital currencies (127,602 ) Cash proceeds (64,587 ) Unrealized loss on digital currencies (1,311 ) Balance at December 31, 2018 $ 1,535 Digital currencies (including Bitcoin and Litecoin) are included in current assets in the accompanying consolidated balance sheets. Digital currencies awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed above. Digital currencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the digital currency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Fair value is determined by taking the closing price from the most liquid exchanges. Subsequent reversal of impairment losses is not permitted. Digital currencies awarded to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. During 2018, we used digital assets for debt reduction, capital purchases, consulting fees, data center costs and other operating expenses. Such transactions were based on agreements denominated in U.S. Dollars, but satisfied with digital currencies, based on the quoted price of the digital currency at the time of the transaction. Any realized gains or losses from such transactions are included in other income (expense) in the consolidated statements of operations. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Marketable Securities [Abstract] | |
Marketable Securities | 5. Marketable Securities Marketable securities in equity securities with readily determinable market prices consisted of the following as of December 31, 2018 and December 31, 2017: Available-for-sale securities at December 31, 2018 Gross unrealized Gross realized Cost gains (losses) gains (losses) Fair value Common shares $220,880 ($42,283) $ — $ 178,597 Available-for-sale securities at December 31, 2017 Gross unrealized Gross realized Cost gains (losses) gains (losses) Fair value Common shares $1,701,503 $133,067 $ — $ 1,834,570 The following table presents additional information about marketable securities: Balance at January 1, 2018 $ 1,834,570 Purchases of marketable securities 858,458 Sales of marketable securities (2,188,292) Realized losses on marketable securities (175,405) Unrealized gains on marketable securities (150,734) Balance at December 31, 2018 $ 178,597 Available-for-sale Securities At December 31, 2018 and 2017, the Company had invested in the marketable securities of certain publicly traded companies. At December 31, 2018 and 2017, the Company recorded an unrealized loss of $42,283 and an unrealized gain of $133,067, respectively, representing the difference between the cost basis and the estimated fair value, as accumulated other comprehensive income in the stockholder's equity section of the Company’s consolidated balance sheet and as a change in unrealized gains and losses on marketable securities in the Company’s consolidated statements of comprehensive income (loss). The Company’s investment in marketable securities will be revalued on each balance sheet date. The fair value of the Company’s holdings in marketable securities at December 31, 2018 and 2017 is a Level 1 measurement based on quoted prices in an active market. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 6. INVENTORIES At December 31, 2018 and 2017, inventories consist of: 2018 2017 Raw materials, parts and supplies $ 2,026,839 $ 541,816 Work-in-progress 483,706 685,410 Finished products 750,581 765,639 Total inventories $ 3,261,126 $ 1,992,865 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET At December 31, 2018 and 2017, property and equipment consist of: 2018 2017 Cryptocurrency machines and related equipment $ 9,168,928 $ — Computer, software and related equipment 2,495,470 2,431,906 Restaurant equipment 752,103 — Office furniture and equipment 287,583 289,288 Leasehold improvements 1,274,865 788,057 13,978,949 3,509,251 Accumulated depreciation and amortization (4,665,650) (2,292,404) Property and equipment, net $ 9,313,299 $ 1,216,847 For the years ended December 31, 2018, depreciation expense amounted to $2,447,249 and $193,671, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets Net [Abstract] | |
INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET At December 31, 2018 and 2017 intangible assets consist of: 2018 2017 Trade name and trademark $ 1,562,332 $ 1,739,307 Customer list 2,388,139 988,041 Non-competition agreements 150,000 150,000 Domain name and other intangible assets 762,807 81,000 4,863,278 2,958,348 Accumulated depreciation and amortization (503,480 ) (60,335 ) Intangible assets, net $ 4,359,798 $ 2,898,013 During the years ended December 31, 2018 and 2017, the Company acquired the trade names and trademarks of I.AM and Microphase, both which were determined to have an indefinite life, for $520,000 and $1,739,307, respectively. The remaining definite lived intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense was $459,656 and $60,335 for the years ended December 31, 2018 and 2017, respectively. The customer list and non-competition agreements are subject to amortization over their estimated useful lives, which range between 3 and 14 years. The following table presents estimated amortization expense for each of the succeeding five calendar years and thereafter. 2019 $ 506,271 2020 382,251 2021 242,503 2022 224,003 2023 210,670 Thereafter 1,044,254 $ 2,609,952 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
GOODWILL | 9. GOODWILL The Company’s goodwill relates to the acquisitions of a controlling interest in Microphase on June 2, 2017 and I. AM, Inc. (“I. AM”) on May 23, 2018, the acquisition of Enertec Systems 2001 Ltd. (“Enertec”) on May 22, 2018, and the acquisition of all of the outstanding membership interests in Power Plus on September 1, 2017. |
INVESTMENTS - RELATED PARTIES
INVESTMENTS - RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS - RELATED PARTIES | 10. INVESTMENTS – RELATED PARTIES Investments in AVLP at December 31, 2018 and 2017, are comprised of the following: December 31, 2018 2017 Investment in convertible promissory note of AVLP $ 6,943,997 $ 4,124,220 Investment in warrants of AVLP 2,230,641 6,901,593 Investment in common stock of AVLP 812,858 826,408 Accrued interest in convertible promissory note of AVLP 1,004,317 324,400 Total investment in AVLP – Gross 10,991,813 12,176,621 Less: original issue discount (2,336,693 ) (2,115,710 ) Total investment in AVLP – Net $ 8,655,120 $ 10,060,911 The following table summarizes the changes in our investments in AVLP during the year ended December 31, 2018: Investment in Investment in warrants and convertible Total common stock promissory investment of AVLP note of AVLP in AVLP – Net Balance at January 1, 2017 $ 84,578 $ 952,073 $ 1,036,651 Investment in convertible promissory notes of AVLP — 620,091 620,091 Investment in common stock of AVLP 191,782 — 191,782 Fair value of warrants issued by AVLP 2,388,681 — 2,388,681 Unrealized gain in warrants of AVLP 4,512,912 — 4,512,912 Unrealized gain in common stock of AVLP 550,048 — 550,048 Accretion of discount — 436,346 436,346 Accrued Interest — 324,400 324,400 Balance at December 31, 2018 $ 7,728,001 $ 2,332,910 $ 10,060,911 Investment in convertible promissory notes of AVLP — 1,671,936 1,671,936 Payment of convertible promissory notes of AVLP — (1,107,500 ) (1,107,500 ) Investment in common stock of AVLP 417,169 — 417,169 Fair value of warrants issued by AVLP 2,255,341 — 2,255,341 Unrealized loss in warrants of AVLP (6,926,293 ) — (6,926,293 ) Unrealized loss in common stock of AVLP (430,719 ) — (430,719 ) Accretion of discount — 2,034,358 2,034,358 Accrued Interest — 679,917 679,917 Balance at December 31, 2018 $ 3,043,499 $ 5,611,621 $ 8,655,120 The Company has made a strategic decision to invest in AVLP, a related party controlled by Philou Ventures, LLC, or Philou, a significant stockholder of the Company. The Company’s investments in AVLP consist of convertible promissory notes, warrants and shares of common stock of AVLP. On September 6, 2017, the Company and AVLP entered into a Loan and Security Agreement (“AVLP Loan Agreement”) with an effective date of August 21, 2017 pursuant to which the Company will provide AVLP a non-revolving credit facility of up to $10 million for a period ending on August 21, 2019, subject to the terms and conditions stated in the Loan Agreement, including the Company having available funds to grant such credit. At December 31, 2018, the Company has provided loans to AVLP in the principal amount $6,943,997 and, in addition to the 12% convertible promissory notes, AVLP has issued to the Company warrants to purchase 13,887,994 shares of AVLP common stock. Under the terms of the AVLP Loan Agreement, any notes issued by AVLP to the Company are secured by the assets of AVLP. The warrants entitle the Company to purchase up to 13,887,994 shares of AVLP common stock at an exercise price of $0.50 per share for a period of five years. The exercise price of $0.50 is subject to adjustment for customary stock splits, stock dividends, combinations or similar events. The warrant may be exercised for cash or on a cashless basis. At December 31, 2018 and 2017, the Company recorded an unrealized gain (loss) on its investment in warrants of AVLP of ($6,926,293) and $4,512,912 respectively, representing the difference between the cost basis and the estimated fair value of the warrants in the Company’s accumulated other comprehensive income in the stockholder's equity section of the Company’s consolidated balance sheet and as a change in net unrealized gains on securities available-for-sale in the Company’s consolidated statements of comprehensive loss. During the years ended December 31, 2018 and 2017, the Company recognized, in other comprehensive income (loss), net unrealized gain (loss) on securities available-for-sale of ($8,027,746) and $5,171,743, respectively. The Company’s investment in warrants and common stock of AVLP represented ($7,357,012) and $5,062,960, respectively, of the net unrealized gain (loss) on securities available-for-sale. The Company’s investment in AVLP will be revalued on each balance sheet date. The fair value of the Company’s holdings in the AVLP warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate, which ranged between 1.92% and 2.98%, was derived from the U.S. Treasury yield curve, matching the term of our investment, in effect at the measurement date. The volatility factor which ranged between 68.7% and 80.4% was determined based on historical stock prices for similar technology companies with market capitalizations under $100 million. The warrant valuation is a Level 3 measurement. In accordance with ASC No. 310, Receivables The Company evaluated the collectability of both interest and principal for the convertible promissory notes in AVLP to determine whether there was an impairment. Based on current information and events, the Company determined that it is probable that it will be able to collect amounts due according to the existing contractual terms. Impairment assessments require significant judgments and are based on significant assumptions related to the borrower’s credit risk, financial performance, expected sales, and estimated fair value of the collateral. During the years ended December 31, 2018 and 2017, the Company also acquired in the open market 430,942 shares of AVLP common stock for $417,169 and 221,333 shares of AVLP common stock for $191,782, respectively. At December 31, 2018, the closing market price of AVLP’s common stock was $0.90, a decline from $1.75 at December 31, 2017. The Company has determined that its investment in AVLP marketable equity securities are accounted for in accordance with ASC No. 820, Fair Value Measurements and Disclosures In aggregate, the Company has 903,175 shares of AVLP common stock which represents 16.3% of AVLP’s outstanding shares of common stock. The Company has determined that AVLP is a variable interest entity (“VIE”) as it does not have sufficient equity at risk. The Company does not consolidate AVLP because the Company is not the primary beneficiary and does not have a controlling financial interest. To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, among other factors. Although the Company has made a significant investment in AVLP, the Company has determined that Philou, which controls AVLP through its equity investment and deemed to be more closely associated with AVLP, is the primary beneficiary. As a result, AVLP’s financial position and results of operations are not consolidated in our financial position and results of operations. |
INVESTMENTS IN PREFERRED STOCK
INVESTMENTS IN PREFERRED STOCK OF PRIVATE COMPANY AND OTHER INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Other Investments [Abstract] | |
INVESTMENTS IN PREFERRED STOCK OF PRIVATE COMPANY AND OTHER INVESTMENTS | 11. INVESTMENTS IN PREFERRED STOCK OF PRIVATE COMPANY AND OTHER INVESTMENTS We hold a portfolio of investments in equity and debt securities in other entities that are accounted for under the cost method. Investment in Preferred Stock of Private Company On December 15, 2017, the Company and Sandstone Diagnostics, Inc. (“Sandstone”) entered into a Series A1 Preferred Stock Purchase Agreement (“Loan Agreement”) pursuant to which the Company purchased 976,286 shares of Sandstone’s Series A1 Preferred Shares for $1,000,000. Sandstone is a medical device company focused on a data-driven approach to men’s reproductive health. Founded in 2012 in part by government scientists from Sandia National Laboratories, Sandstone’s mission is to provide innovative, data-driven tools to help men assess, manage, and improve their reproductive health. The funding from the Series A1 Preferred Stock financing will support sales growth and continued product development leveraging the company’s unique technology platform, Sandstone’s Trak™ Male Fertility Testing System. The Company follows the guidance of ASC No. 321, Equity Securities Other Investments On November 1, 2017, the Company and I.AM entered into a Loan and Security Agreement pursuant to which the Company provided I.AM with a non-revolving credit facility of up to $1,600,000. On May 23, 2018, DP Lending entered into and closed a securities purchase agreement with I.AM. At the date of the acquisition, I.AM owed DP Lending $1,715,330 in outstanding principal, pursuant to the loan and security agreement. The purchase agreement provides that as I.AM repays the outstanding loan to DP Lending in accordance with the loan agreement, DP Lending will on a pro rata basis transfer shares of common stock of I.AM to David J. Krause, up to an aggregate of 471 shares (see Note 14). The Company, primarily through DP Lending, has made additional investments in debt and equity securities of various entities. At December 31, 2018 and 2017, the outstanding balance of these investments was $2,572,230 and $1,637,672, respectively. |
INVESTMENTS IN REAL ESTATE
INVESTMENTS IN REAL ESTATE | 12 Months Ended |
Dec. 31, 2018 | |
Investments In Real Estate [Abstract] | |
INVESTMENTS IN REAL ESTATE | 12. INVESTMENTS IN REAL ESTATE On June 8, 2018, the Company entered into a limited partnership agreement, in which it agreed to become a limited partner in the partnership (the “ NY Partnership |
OTHER INVESTMENTS, RELATED PART
OTHER INVESTMENTS, RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Investments Related Parties [Abstract] | |
OTHER INVESTMENTS, RELATED PARTIES | 13. OTHER INVESTMENTS, RELATED PARTIES The Company’s other related party investments primarily consist of two investments. MTIX, Ltd. On December 5, 2017, the Company entered into an exchange agreement with WT Johnson pursuant to which the Company issued to WT Johnson two convertible promissory notes in the principal amount of $600,000 (“Note A”) and $1,667,766 (“Note B”), in exchange for cancellation of amounts due to WT Johnson by MTIX Ltd., a related party of the Company. During December 2017, the Company issued 30,000 shares of its common stock to WT Johnson & Sons upon the conversion of Note A and WT Johnson subsequently sold the 30,000 shares. The proceeds from the sale of shares of common stock received upon the conversion of Note A were sufficient to satisfy the entire $2,267,766 obligation as well as an additional $400,500 of value added tax due to WT Johnson. Concurrent with entering into the exchange agreement, the Company received a promissory note in the amount of $2,668,266 from MTIX and cancelled Note B. At December 31, 2018 and 2017, the Company has valued the note receivable at $600,000, the carrying amount of Note A. The Company will recognize the remainder of the amount due from MTIX upon payment of the promissory note by MTIX. Israeli Property During the year ended December 31, 2017, our President, Amos Kohn, purchased certain real property that serves as a facility for the Company’s business operations in Israel Under the Tenancy In Common Agreement, Coolisys and its executive officers shall have the exclusive rights to use the Property for the Company and its affiliates’ business operations. The Property shall be managed by Ms. Kohn. Further, pursuant to the Tenancy In Common Agreement, for each completed calendar month of employment of Mr. Kohn by the Company, Ms. Kohn shall have the right to purchase a portion of the Company’s interest in the Property. Such right shall fully vest at the end of five years of continuous employment and the Trustee shall have the right to purchase the Company’s 28% interest in the Property for a nominal value. The Company will amortize its $300,000 investment over ten years, subject to a cliff vesting after five years. During the years ended December 31, 2018 and 2017, the Company recognized $30,000 and $7,500, respectively, in amortization expense. In the event that Mr. Kohn is not employed by the Company, the Company shall have the right to demand that Ms. Kohn purchase the Company’s remaining interest in the Property that was not subject to vesting for the fair market value of such unvested Property interest. Other investments and interest receivable During the year ended December 31, 2017, DP Lending made loans to Alzamend Neuro, Inc. (“Alzamend”), in the amount of $44,000, these loans were repaid during 2018. AVLP is a party to a management services agreement pursuant to which AVLP provides management, consulting and financial services to Alzamend. As additional consideration, the Company received a warrant to purchase 22,000 shares of Alzamend’s common stock at an exercise price of $0.30 per share of common stock. The warrants were determined to have a de minimis value. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | 14. BUSINESS COMBINATIONS Business combinations are accounted for under the acquisition method of accounting in accordance with ASC No. 805, Business Combinations Acquisitions during 2018 Enertec Systems 2001 Ltd. On December 31, 2017, CooliSys entered into a share purchase agreement with Micronet Enertec Technologies, Inc. (“MICT”), a Delaware corporation, Enertec Management Ltd., an Israeli corporation and wholly owned subsidiary of MICT (“EML” and, together with MICT, the “Seller Parties”), and Enertec Systems 2001 Ltd. (“Enertec”), an Israeli corporation, pursuant to which Coolisys acquired Enertec (the “Acquisition”). Enertec is a manufacturer of specialized electronic systems for the military market. On May 23, 2018, Coolisys acquired Enertec for an aggregate cash purchase price of $4,850,099. I.AM, Inc. On May 23, 2018, DP Lending entered into and closed a securities purchase agreement with I.AM, David J. Krause and Deborah J. Krause. Pursuant to the securities purchase agreement, I.AM sold to DPL, 981 shares of common stock for a purchase price of $981, representing, upon the closing, 98.1% of I.AM’s outstanding common stock. I.AM owns and operates the Prep Kitchen brand restaurants located in the San Diego area. I.AM owed DP Lending $1,715,330 in outstanding principal, pursuant to a loan and security agreement, between I.AM and DP Lending, which I.AM used to acquire the restaurants. The purchase agreement provides that, as I.AM repays the outstanding loan to DP Lending in accordance with the loan agreement, DP Lending will on a pro rata basis transfer shares of common stock of I.AM to David J. Krause, up to an aggregate of 471 shares. Components of the purchase price for acquisitions completed during the year ended December 31, 2018: Enertec I.AM Accounts receivable $ 3,184,227 $ 29,319 Inventories 1,343,053 40,581 Property and equipment 648,649 700,291 Trade name and trademark 2,094,741 520,000 Domain name and other intangible assets — 90,000 Other assets 29,056 1,492 Accounts payable and accrued expenses (2,702,306 ) (103,961 ) Deferred tax liability (160,311 ) — Notes payable (4,235,725 ) — Accrued severance pay (131,811 ) — Net assets assumed 69,573 1,277,722 Goodwill 4,780,526 265,252 Non-controlling interest — (33,242 ) Purchase price $ 4,850,099 $ 1,509,732 Acquisitions during 2017 Microphase Corporation On April 28, 2017, the Company entered into a share exchange agreement with Microphase; Microphase Holding Company LLC, a limited liability company organized under the laws of Connecticut (“MHC”), Ergul Family Limited Partnership, a partnership organized under the laws of Connecticut (“EFLP”) RCKJ Trust, a trust organized under the laws of New Jersey (“RCKJ” and with MHC and EFLP, the “Significant Stockholders”) and those additional persons who have executed the share exchange agreement (collectively, the “Minority Stockholders” and with the Significant Stockholders, the “Stockholders”). Upon the terms and subject to the conditions set forth in the share exchange agreement, the Company acquired 1,603,434 shares (the “Subject Shares”) of the issued and outstanding common stock of Microphase (the “MPC Common Stock”), from the Stockholders in exchange for the issuance by the Company of 92,122 shares of DPW common stock (“Common Stock”) and 378,776 shares of DPW Series D Preferred Stock (collectively, the “Exchange Shares”), which shares of DPW Series D Preferred Stock are convertible into an aggregate of 757,552 shares of Common Stock and warrants to purchase an aggregate of 50,000 shares of Common Stock. At the time of the closing of the acquisition the Exchange Shares constituted 56.4% of the outstanding equity interests of Microphase Corporation. The operating results of Microphase from the closing date of the acquisition, June 2, 2017, are included in the consolidated financial statements. At closing, the purchase price of the Company’s 56.4% interest in Microphase was determined to be $1,451,040 comprised of the Exchange Shares, valued at $1,222,000 based on the closing price of the Company’s common stock on June 2, 2017 of $9.40 per share, and the warrants, valued at $229,040. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. The risk-free rate of 1.4% was derived from the U.S. Treasury yield curve, matching the warrant’s term, in effect at the measurement date. The volatility factor of 105.9% was determined based on the Company’s historical stock prices. Power-Plus Technical Distributors On August 3, 2017, Coolisys entered into a Securities Purchase Agreement to acquire all the outstanding membership Interests of Power-Plus. Power-Plus is an industrial distributor of value-added power supply solutions, UPS systems, fans, filters, line cords, and other power-related components. On September 1, 2017, Coolisys completed the acquisition. Under the terms of the agreement, Coolisys Technologies acquired all the membership Interests of Power-Plus for a price of $850,000, which was reduced by certain debts of Power-Plus in the amount of $185,927. The purchase price of $664,073 was paid by (i) a two-year promissory note in the amount of $255,000 payable in 24 monthly installments; and (ii) cash at closing of $409,073 resulting in a net purchase price of $664,073. Components of the purchase price for acquisitions completed during the year ended December 31, 2017: Microphase Power-Plus Cash and cash equivalents $ 10,982 $ 31,411 Accounts receivable 438,456 235,358 Inventories 667,020 240,843 Prepaid expenses and other current assets 139,665 2,068 Restricted cash 100,000 — Intangible assets 2,627,348 250,000 Property and equipment 406,432 22,925 Other investments 303,333 — Deposits and loans 43,479 — Accounts payable and accrued expenses (1,577,281 ) (388,746 ) Deferred tax liability (225,488 ) — Revolving credit facility (879,666 ) (210,739 ) Notes payable (2,203,835 ) — Notes payable, related parties (406,194 ) — Convertible notes payable — — Other current liabilities (219,685 ) — Net (liabilities) assets assumed (775,434 ) 183,119 Goodwill 3,171,029 480,953 Non-controlling interest (944,555 ) — Purchase price $ 1,451,040 $ 664,073 The following pro forma data for the years ended December 31, 2018 and 2017 summarizes the results of operations for the period indicated as if the Microphase, Power-Plus and Enertec acquisitions, which closed on June 2, 2017, September 1, 2017, and May 23, 2018, respectively, had been completed as of the beginning of each period presented. At the time of the acquisition, I. AM was not material to the Company’s operations and has not been included in the pro forma data. The pro forma data gives effect to actual operating results prior to the acquisition. These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred as of the beginning of each period presented or that may be obtained in future periods: For the Years Ended December 31, 2018 2017 Total Revenue $ 28,691,641 $ 20,807,590 Net loss $ (35,627,242 ) $ (16,877,041 ) Less: Net loss attributable to non-controlling interest 748,320 772,596 Net loss attributable to common stockholders $ (34,878,922 ) $ (16,104,445 ) Preferred deemed dividends (108,049 ) (584,182 ) Preferred dividends — (54,059 ) Loss available to common shareholders $ (34,986,971 ) $ (16,742,686 ) Basic and diluted net loss per common share $ (12.06 ) $ (26.85 ) Basic and diluted weighted average common shares outstanding 2,899,888 623,583 Comprehensive Loss Loss available to common shareholders $ (34,986,971 ) $ (16,742,686 ) Other comprehensive income (loss) Change in net foreign currency translation adjustments (377,823 ) 152,078 Net unrealized gain (loss) on securities available-for-sale (8,027,746 ) 5,171,743 Other comprehensive income (loss) (8,405,569 ) 5,323,821 Total Comprehensive loss $ (43,392,540 ) $ (11,418,865 ) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION Under the Company's 2018 Stock Incentive Plan (the “2018 Plan”), 2017 Stock Incentive Plan (the “2017 Plan”), 2016 Stock Incentive Plan (the “2016 Plan”) and the 2012 Stock Option Plan, as amended (the “2012 Plan”) (collectively, the “Plans”), options may be granted to employees, officers, consultants, service providers and directors of the Company. The Plans, as amended, provide for the issuance of a maximum of 868,632 shares of the Company’s common stock. The Company also has 1,500 outstanding options that were granted between 2009 and 2011 pursuant to the terms of the Company's 2002 Stock Option Plan (the “2002 Plan”). Options granted pursuant to the 2002 Plan expire between December 2020 and February 2021. Options granted under the Plans have an exercise price equal to or greater than the fair value of the underlying common stock at the date of grant and become exercisable based on a vesting schedule determined at the date of grant. Typically, options granted generally become fully vested after four years. Any options that are forfeited or cancelled before expiration become available for future grants. The options expire between 5 and 10 years from the date of grant. Restricted stock awards granted under the Plans are subject to a vesting period determined at the date of grant. As of December 31, 2018, an aggregate of 507,789 of the Company's options are still available for future grant. During the year ended December 31, 2018, the Company granted 50,000 options to its employees from the Plans and also granted 144,875 options outside of the Plans. During the year ended December 31, 2017, the Company granted 40,500 options from the Plans. These options become fully vested after four years. The Company estimated the grant date fair value of options granted utilizing the Black-Scholes option pricing model during the year ended December 31, 2018 and 2017 was $513,510 and $482,055, respectively, which is being recognized as stock-based compensation expense over the requisite four-year service period. During the year ended December 31, 2018 and 2017, the Company also issued 79,153 and 97,440, respectively, shares of common stock to its consultants and service providers pursuant to the Plans. The Company estimated the grant date fair value of these shares of common stock was $2,640,102 and $1,532,702, respectively, which was determined from the closing price of the Company’s common stock on the date of issuance. The Company has valued the options at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the options’ term, exercise price, current stock price, risk-free interest rate estimated over the expected term and estimated volatility of our stock over the expected term of the options. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method. The estimated volatility was determined based on the historical volatility of our common stock. During the year ended December 31, 2018 and 2017, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions: 2018 2017 Weighted average risk-free interest rate 2.41% — 2.80% 1.73% — 2.14% Weighted average life (in years) 4.70 5.0 Volatility 124.7% — 131.7% 98.4% — 115.8% Expected dividend yield 0% 0% Weighted average grant-date fair value per share of $ 15.61 $ 12.00 The options outstanding as of December 31, 2018, have been classified by exercise price, as follows: Outstanding Exercisable x Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Number Exercise Price Outstanding Life (Years) Price Exercisable Price $11.40 - $16.00 161,500 7.54 $13.37 92,876 $13.32 $20.00 - $27.60 8,500 8.52 $27.46 3,031 $27.20 $30.20 - $33.80 3,125 3.71 $32.73 3,125 $32.73 $11.40 - $33.80 173,125 7.52 $14.41 99,032 $14.35 Issuances outside of Plans $16.00 - $46.40 199,875 7.39 $26.09 36,842 $29.36 Total Options $11.40 - 46.40 373,000 7.45 $20.67 135,874 $18.42 The total stock-based compensation expense related to stock options and stock awards issued pursuant to the Plans to the Company’s employees, consultants and directors, included in reported net loss for the years ended December 31, 2018 and 2017, is comprised as follows: 2018 2017 Cost of revenues $ 4,874 $ 8,466 Engineering and product development 13,650 21,449 Selling and marketing 11,922 46,431 General and administrative 2,921,532 1,501,544 Stock-based compensation from Plans $ 2,951,978 $ 1,577,890 Stock-based compensation from issuances outside of Plans 1,767,287 253,395 Total stock-based compensation $ 4,719,265 $ 1,831,285 The combination of stock-based compensation of $2,951,978 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $965,220 and warrants and options of $802,066, which were issued outside of the Plans, resulted in aggregate stock-based compensation of $4,719,265 during the year ended December 31, 2018. During the years ended December 31, 2018 and 2017, the Company issued 144,875 and 55,000 options, respectively, to purchase shares of common stock at an average exercise price of $26.09 per share to its directors and officers. During the year ended December 31, 2017, stock-based compensation was comprised of $1,577,890 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $130,000 and warrants and options of $123,395, which were issued outside of the Plans. A summary of option activity under the Company's stock option plans as of December 31, 2018 and 2017, and changes during the years ended are as follows: Outstanding Options Weighted Weighted Average Shares Average Remaining Aggregate Available Number Exercise Contractual Intrinsic for Grant of Shares Price Life (years) Value January 1, 2017 161,382 118,300 $16.59 9.08 $0 Adoption of 2017 SIP 100,000 — Restricted stock awards (97,440 ) — Granted (40,500 ) 40,500 $16.84 Forfeited 3,500 (3,500 ) $12.57 Exercised — (18,175 ) $31.26 December 31, 2017 126,942 137,125 $15.43 8.80 $6,688 Adoption of 2018 SIP 500,000 — Restricted stock awards (79,153 ) — Granted (50,000 ) 50,000 $14.00 Forfeited 1 10,000 (11,000 ) $20.27 Exercised — (3,000 ) $32.60 December 31, 2018 507,789 173,125 $14.41 7.52 $0 1 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on December 31, 2018 of $2.00 and the exercise price, multiplied by the number of in-the-money-options). As of December 31, 2018, there was $752,529 of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted average period of 3.2 years. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
WARRANTS | 16. WARRANTS During the years ended December 31, 2018 and 2017, the Company issued a total of 1,166,681 warrants at an average exercise price of $19.80 per share. Warrant issuances during 2017 During the year ended December 31, 2017, the Company issued a total of 431,543 warrants at an average exercise price of $16.60 per share. (i) In February 2017, the Company issued five-year warrants to purchase 16,667 shares of common stock at a per share exercise price of $14.00 in connection with $400,000 of 6% demand promissory notes entered into by the Company (See Note 20o). (ii) Between March 24, 2017 and June 2, 2017, the Company issued warrants to purchase 71,429 shares of common stock, at an exercise price of $14.00 per share of common stock, in connection with preferred stock purchase agreements to purchase 100,000 shares of Series B Preferred Stock by Philou (See Note 24). (iii) On April 5, 2017, the Company issued warrants to purchase 9,000 shares of common stock, at an exercise price of $18.00 per share of common stock, in connection with the cancellation of $270,000 in demand promissory notes (See Note 20p). (iv) On April 17, 2017, the Company issued warrants to purchase 8,333 shares of common stock, at an exercise price of $18.00 per share of common stock, in connection with the issuance of two 7% convertible notes in the aggregate principal amount of $250,000. On July 25, 2017, the Company agreed to reduce the exercise price of warrants to purchase 4,167 shares of common stock from $18.00 per share to $11.00 per share and on July 28, 2017, the Company issued a new warrant to purchase 4,167 shares of common stock at $11.00 per share and cancelled the prior warrant to purchase 4,167 shares of common stock at $18.00 per share (See Note 22h). (v) On April 26, 2017, the Company issued warrants to purchase 8,000 shares of common stock, at an exercise price of $16.00 per share of common stock, in connection with the issuance of a 7% convertible note in the aggregate principal amount of $104,000 (See Note 22i). (vi) Between May 5, 2017 and June 30, 2017, the Company issued warrants to purchase 11,219 shares of common stock in connection with the issuance of short-term loans of $140,000 that the Company entered into with four accredited investors (See Note 20n) of which $75,000 was from the Company’s corporate counsel, a related party. The exercise price was $15.00 per share of common stock for 6,795 warrants and $16.00 per share of common stock for the remaining 4,423 warrants. (vii) Between May 24, 2017 and June 19, 2017, the Company issued warrants to purchase 91,000 shares of common stock issued in connection with the sale of twenty-one units (the “Units”) at a purchase price of $52,000 per Unit raising in the aggregate $1,092,000. Each Unit consisted of 21,667 shares of Series C Preferred Stock and Warrants to purchase 4,333 shares of common stock, at an exercise price of $20.00 per share of common stock (See Note 24). (viii) The Company engaged Divine Capital Markets, LLC (“Divine”) to act as Placement Agent (the “Placement Agent”) for the private placement of the Series C Preferred Stock and Warrants. For its services, the Placement Agent received, in addition to a 10.0% commission on the sale of each Unit and a 3.0% non-refundable expense allowance, warrants to purchase 10% of the Units sold at 120% of the Unit purchase price. The warrants to purchase 2.1 Units equates to a warrant to purchase 9,100 shares of the Company’s common stock at $14.40 per share and a second warrant to purchase 9,100 shares of the Company’s common stock at $20.00 per share (See Note 24). (ix) On June 2, 2017, the Company issued warrants to purchase 50,000 shares of common stock, at an exercise price of $22.00 per share of common stock, pursuant to the terms of a share exchange agreement (See Note 14). (x) On July 25, 2017, the Company issued warrants to purchase an aggregate of 8,182 shares of common stock at an exercise price equal to $11.00 per share of common stock in connection with a private placement agreement under which we issued and sold 13,636 shares of common stock to the investor at $11.00 per share for an aggregate purchase price of $150,000. (See Note 24). (xi) On July 28, 2017, the Company entered into an exchange agreement related to a 7% Convertible Note in the principal amount of $125,000 in which the Company exchanged the 7% Convertible Note for three new promissory notes in the principal amounts of $110,000 due August 1, 2017; $35,000 due August 1, 2017; and $34,000 due August 8, 2017 (individually an Exchange Note and collectively the Exchange Notes). Concurrent with entering into the exchange agreement, the investor entered into a subscription agreement under which the Company issued and sold in a registered direct offering 10,000 shares of common stock at $11.00 per share for an aggregate purchase price of $110,000. The 10,000 shares of common stock were purchased through the cancellation of the Exchange Note in the principal amount of $110,000. Further, the Company issued a warrant to purchase 6,000 shares of common stock at $11.00 per share (See Note 22h). (xii) On August 3, 2017, the Company issued warrants to purchase an aggregate of 33,333 shares of common stock at an exercise price equal to $14.00 per share of common stock in connection with the issuance of a 12% Convertible Promissory Note in the aggregate principal amount of $400,000 (See Note 22c). (xiii) On August 10, 2017, the Company issued warrants to purchase an aggregate of 73,750 shares of the common stock at an exercise price equal to $13.20 per share of common stock in connection with the issuance of 10% Convertible Promissory Notes in the aggregate principal amount of $880,000 (See Note 22g). (xiv) On November 2, 2017, the Company paid to Aegis Capital Corp. (“Aegis”), its financial advisor, a cash fee of $80,800 and issued to Aegis a warrant to purchase 7,407 shares of common stock with an exercise price of $13.20 per share of common stock in connection with the issuance of 10% Convertible Promissory Notes in the aggregate principal amount of $1,111,000 (See Note 22f). (xv) On December 5, 2017, the Company entered into an exchange agreement (the “Exchange Agreement”) with several accredited investors, pursuant to which the Company issued an aggregate of 76,193 shares of common stock and warrants to purchase 19,023 shares of common stock with an exercise price of $22.00 per share of common stock, in exchange for cancellation of $690,000 of outstanding debt owed to the investors by Microphase Corporation (See Note 20l). Warrant issuances during 2018 During the year ended December 31, 2018, the Company issued a total of 735,291 warrants at an average exercise price of $21.80 per share. (i) On January 23, 2018, the Company issued warrants to purchase an aggregate of 31,250 shares of common stock at an exercise price equal to $44.00 per share of common stock in connection with the issuance of a 10% senior convertible promissory note in the aggregate principal amount of $1,250,000 (See Note 22e). (ii) On January 25, 2018, the Company entered into three agreements for the Purchase and Sale of Future Receipt, pursuant to which the Company sold up to (i) $562,125 of the Company’s future receipts for a purchase price of $375,000, (ii) $337,275 in future receipts for a purchase price of $225,000 and (iii) $118,000 in future receipts for a purchase price of $100,000. Under the terms of these agreements, the Company issued warrants to purchase an aggregate of 5,625 shares of common stock at an exercise price of $45.00 per share of common stock and warrants to purchase 8,125 shares of common stock at an exercise price of $50.00 per share of common stock (See Note 18). (iii) On March 22, 2018, the Company issued warrants to purchase an aggregate of 62,500 shares of common stock at an exercise price equal to $23.00 per share of common stock in connection with the issuance of a promissory note in the principal amount of $1,750,000 with a term of two months, subject to the Company’s ability to prepay within one month (See Note 20s). (iv) On March 23, 2018, the Company entered into a securities purchase agreement to sell and issue a 12% promissory note in the principal amount of $1,000,000 and a warrant to purchase 15,000 shares of common stock to an accredited investor. Since the promissory note was not paid in full on or before May 23, 2018, the Company issued an additional warrant to purchase 7,500 shares of common stock, at an exercise price of $23.00 per share of common stock (See Note 20a). (v) On April 16, 2018, the Company issued warrants to purchase an aggregate of 49,679 shares of common stock at an exercise price equal to $26.00 per share of common stock in connection with the issuance of 12% secured convertible promissory notes in the aggregate principal amount of $1,722,222 (See Note 22d). (vi) On April 24, 2018, the Company issued warrants to purchase 25,510 shares of common stock, at an exercise price of $14.00 per share of common stock, in connection with the Preferred Stock Purchase Agreement to purchase 25,000 shares of Series B Preferred Stock by Philou (See Note 24). (vii) On October 5, 2017, Ault & Company purchased 3,750 shares of the Company’s common stock at $12.00 per share and a warrant to purchase up to 3,750 shares of the Company’s common stock at $12.00 per share for an aggregate purchase price of $45,000. The shares and warrants were issued by the Company on May 8, 2018, the date all necessary approvals to issue the shares were received. Ault & Company is controlled by Mr. Milton Ault, the Company’s Chairman and Chief Executive Officer (See Note 24). (viii) On May 15, 2018, the Company entered into securities purchase agreements with certain investors in which it sold an aggregate of 384,589 shares of its common stock for aggregate consideration of $6,000,000. In connection with this financing, the Company issued (i) five-year warrants to purchase 96,147 shares of the Company’s Class A common stock and (ii) five-year warrants to purchase 288,442 shares of the Company’s Class A common stock. The warrants were issued at an exercise price of $18.80 per share of common stock (See Note 24). (ix) On May 15, 2018, the Company entered into a securities purchase agreement with an institutional investor to sell and issue a senior secured convertible promissory note with a principal face amount of $6,000,000 and (i) a five-year warrant to purchase 55,556 shares of the Company’s Class A common stock at an exercise price of $27.00 per share of Class A common stock (the “Series A Warrant”) and (ii) a five-year warrant to purchase 86,207 shares of the Company’s Class B common stock at an exercise price of $17.40 per share of Class A common stock (See Note 22a). In connection with the financing, the Company issued the placement agent a warrant to purchase 7,500 shares of common stock with an exercise price of $20.00. The following table summarizes information about common stock warrants outstanding at December 31, 2018: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Number Exercise Price Outstanding Life (Years) Price Exercisable Price $0.20 15,873 7.84 $0.20 15,873 $0.20 $11.00 14,182 3.86 $11.00 14,182 $11.00 $12.00 3,750 4.33 $12.00 3,750 $12.00 $13.20 7,407 3.84 $13.20 7,407 $13.20 $14.00 106,286 3.87 $14.00 106,286 $14.00 $15.00 6,795 3.37 $15.00 6,795 $15.00 $16.00 24,083 1.69 $16.00 24,083 $16.00 $17.40 86,207 4.37 $17.40 86,207 $17.40 $18.80 384,589 4.38 $18.80 384,589 $18.80 $20.00 14,000 3.94 $20.00 14,000 $20.00 $22.00 37,974 2.68 $22.00 37,974 $22.00 $23.00 85,000 4.24 $23.00 85,000 $23.00 $26.00 49,679 4.29 $26.00 49,679 $26.00 $27.00 55,556 4.37 $27.00 55,556 $27.00 $44.00 31,250 4.06 $44.00 31,250 $44.00 $45.00 5,625 4.07 $45.00 5,625 $45.00 $50.00 8,125 4.07 $50.00 8,125 $50.00 $0.20 - $50.00 936,381 4.18 $20.19 936,381 $20.19 The Company has valued the warrants at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the warrants’ term, exercise price, current stock price, risk-free interest rate and estimated volatility of our stock over the contractual term of the warrants. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the contractual life of the warrants. The Company utilized the Black-Scholes option pricing model and the assumptions used during the years ended December 31, 2018 and 2017: 2018 2017 Weighted average risk-free interest rate 2.41% — 2.94% 1.42% — 2.01% Weighted average life (in years) 4.8 4.8 Volatility 124.8% — 138.4% 98.5% — 128.7% Expected dividend yield 0% 0% Weighted average grant-date fair value per $ 15.80 $ 8.20 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Current Liabilities [Abstract] | |
OTHER CURRENT LIABILITIES | 17. OTHER CURRENT LIABILITIES Other current liabilities at December 31, 2018 and 2017 consist of: 2018 2017 Accrued payroll and payroll taxes $ 1,497,470 $ 359,512 Warranty liability 86,495 86,495 Other accrued expenses 284,437 262,384 $ 1,868,402 $ 708,391 |
ADVANCES ON FUTURE RECEIPTS
ADVANCES ON FUTURE RECEIPTS | 12 Months Ended |
Dec. 31, 2018 | |
Advances On Future Receipts [Abstract] | |
ADVANCES ON FUTURE RECEIPTS | 18. ADVANCES ON FUTURE RECEIPTS During 2017, the Company received funding as a result of entering into multiple Agreements for the Purchase and Sale of Future Receipts (collectively, the “Agreements on Future Receipts”) pursuant to which the Company sold in the aggregate $4,068,352 in future receipts of the Company for $2,889,175. Future receipts include cash, check, ACH, credit card, debit card, bank card, charge card or other form of monetary payment. During 2017, the Company had repaid $1,525,547 and during the year ended December 31, 2018, the Company entered into a total of nine additional Agreements on Future Receipts pursuant to which the Company sold up to $5,632,400 in future receipts for a purchase price in the amount of $4,100,000. The Agreements on Future Receipts have been personally guaranteed by the Company’s Chief Executive Officer and in one instance has also been guaranteed by Philou. During 2018, the Company recorded a discount in the amount of $1,651,193 in connection with these nine additional agreements, based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company. Under the terms of these agreements, the Company also issued warrants to purchase an aggregate of 5,625 shares of common stock at an exercise price of $45.00 per share of common stock and warrants to purchase 8,125 shares of common stock at an exercise price of $50.00 per share of common stock. The Company recorded an additional discount of $258,370 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. These discounts are reflected as a reduction on the outstanding liability and are being amortized as non-cash interest expense over the term of the agreement. During the years ended December 31, 2018 and 2017, non-cash interest expense of $2,489,403 and $599,337, respectively, was recorded from the amortization of debt discounts. |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | 19. REVOLVING CREDIT FACILITY Microphase entered into a revolving loan agreement with Gerber Finance, Inc. (“Gerber”) in February of 2012, as amended in September 2015 and July 2017 (the “Revolving Credit Facility”). Under the Revolving Credit Facility, Microphase received funds based on a borrowing base, which consisted of a percentage of eligible accounts receivable, up to a maximum revolving amount of $1,400,000 (the “Maximum Revolving Amount”). Interest accrued at the prime rate plus three and three-quarters percent (3.75%) on the unpaid principal. Effective June 15, 2017, the prime rate was increased from 4.00% to 4.25% resulting in a base rate of 8.00%. In December 2017, the Company paid off the Revolving Credit Facility in cash. On November 6, 2017, Microphase entered into a factoring agreement with CSNK Working Capital Finance Corp. (the “Factoring Agreement”). Under the Factoring Agreement, Microphase received funds based on a borrowing base, which consisted solely of eligible accounts receivable. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | 20. NOTES PAYABLE Notes Payable at December 31, 2018 and 2017, are comprised of the following. 2018 2017 12% short-term promissory note (a) $ 1,000,000 $ — Other short-term notes payable (b) 1,033,553 — Notes payable to Wells Fargo (c) 291,988 300,130 Note payable to Dept. of Economic and Community Development (d) 260,169 292,509 Power-Plus Credit Facilities (e) — 170,473 Note payable to Power-Plus Member (f) 13,250 130,125 Note payable to People's United Bank (g) 18,589 19,489 8% short-term promissory note (h) 1,272,600 — 12% September 2018 short-term promissory note (i) 789,473 — October '18 short-term promissory note (j) 565,000 Microphase December 2018 short-term promissory note (k) 200,000 10% short-term promissory notes (l) — 15,000 Short term bank credit (m) 1,558,197 — Total notes payable 7,002,819 927,726 Less: Unamortized debt discounts (151,499 ) — Unamortized financing cost (7,541 ) — Total notes payable, net of financing cost $ 6,843,779 $ 927,726 Less: current portion (6,360,120 ) (402,234 ) Notes payable – long-term portion $ 483,659 $ 525,492 (a) On March 23, 2018, the Company entered into a securities purchase agreement pursuant to which it issued a 12% promissory note and a warrant to purchase 22,500 shares of common stock to an accredited investor. The promissory note was issued with a 10% OID. The promissory note is in the principal amount of $1,000,000, was sold for $900,000, accrued simple interest at 12% and was due on June 22, 2018. The Company is in negotiations with the investor to amend the payment terms on this 12% promissory note, however, since payment was not made on the specified maturity date this unsecured 12% promissory note is currently in default. Interest only payments are due, in arrears, on a monthly basis commencing on April 23, 2018. The exercise price of the warrant is $23.00 per share. The Company recorded debt discount in the amount of $271,565 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. The debt discount was amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $271,565 was recorded from the amortization of debt discount and interest expense of $100,000 was recorded from the amortization of the OID on this 12% promissory note. The 12% promissory note is unsecured by any of the Company’s assets but is guaranteed by our Chief Executive Officer. (b) During the year ended December 31, 2018, the Company entered into the following short-term promissory notes: (i) On February 7, 2018, the Company issued demand promissory notes in the aggregate principal face amount of $440,000 to accredited investors. These promissory notes included an OID of $40,000 resulting in net proceeds to the Company of $400,000. The principal and OID on these notes were due and payable on demand after April 24, 2018. These loans were paid on April 27, 2018. During the year ended December 31, 2018, the Company recognized $40,000 from the amortization of OID on these demand promissory notes. (ii) On February 26, 2018, the Company issued a 10% promissory note in the principal amount of $330,000 to an accredited investor. This promissory note included an OID of $30,000 resulting in net proceeds to the Company of $300,000. The principal and accrued interest on this note was due and payable on April 12, 2018, subject to a 30-day extension available to the Company. This 10% promissory note was paid on April 27, 2018. During the year ended December 31, 2018, the Company recognized $35,991 from interest and the amortization of OID on this 10% promissory note. (iii) On March 27, 2018, the Company issued a 10% promissory note in the principal amount of $200,000 to an accredited investor. Between March 29, 2018 and April 24, 2018, the Company paid the outstanding principal amount of $200,000 on this 10% promissory note. (iv) On May 23, 2018, the Company issued a promissory note in the aggregate principal face amount of $81,000 to an accredited investor. The promissory note included an OID of $6,000 resulting in net proceeds to the Company of $75,000 and was due and payable on August 20, 2018. This promissory note was paid on July 25, 2018. During the year ended December 31, 2018, the Company recognized $6,000 from the amortization of OID on this promissory note. (v) On May 23, 2018, the Company issued a promissory note in the aggregate principal face amount of $360,000 to an accredited investor. The promissory note included an OID of $60,000 resulting in net proceeds to the Company of $300,000 and was due and payable on June 22, 2018. The outstanding balance on this note was paid on July 2, 2018. During the year ended December 31, 2018, the Company recognized $60,000 from the amortization of OID on this promissory note. (vi) On June 5, 2018, the Company received loans in the aggregate amount of $75,000 from accredited investors. The principal and interest on these loans was paid on July 16, 2018. (vii) On June 8, 2018, the Company issued a promissory note in the aggregate principal face amount of $511,750 to an accredited investor. The promissory note included an OID of $66,750 resulting in net proceeds to the Company of $445,000 and was due and payable on July 9, 2018. At December 31, 2018, the outstanding principal balance on this note was $54,750. Since payment was not made on the specified maturity date this unsecured promissory note is currently in default. During the year ended December 31, 2018, the Company recognized $66,750 from the amortization of OID on this promissory note. On August 3, 2018, the Company and lender entered into an agreement to extend the maturity date from July 9, 2018 to August 31, 2018. The Company agreed to pay the lender an extension fee of 100,000 shares of common stock. The Company remains in default and continues to negotiate with the investor on extended payment terms. (viii) On July 13, 2018, the Company issued a 15% promissory note in the principal amount of $176,000 to an accredited investor. This promissory note included an OID of $16,000 and debt issuance costs of $5,000 resulting in net proceeds of $155,000. At December 31, 2018, the outstanding balance on this note was $124,303. The principal and accrued interest on this note was due and payable on October 11, 2018 and is currently in default. Mr. Ault personally guaranteed the repayment of this note. (ix) On August 10, 2018, DP Lending issued a 12% promissory note in the principal amount of $550,000 to an accredited investor. This promissory note included an OID of $50,000 resulting in net proceeds of $500,000. The principal and accrued interest on this note is due and payable on August 10, 2019. (x) On August 16, 2018, the Company issued an 8% promissory note in the principal amount of $225,000 to an accredited investor. This promissory note included an OID of $25,000 resulting in net proceeds of $200,000. At December 31, 2018, the outstanding balance on this note was $159,500. This note was due and payable on October 5, 2018 and is currently in default. Mr. Ault personally guaranteed the repayment of this note. (xi) On August 23, 2018, DP Lending issued a promissory note in the principal amount of $85,000 to an accredited investor. This promissory note included an OID of $10,000 resulting in net proceeds of $75,000. At December 31, 2018, the outstanding balance on this note was $85,000. This note was due and payable on September 24, 2018, subject to a 28-day extension available to DP Lending. However, since payment was not made on the specified maturity date this unsecured promissory note is currently in default. (xii) On August 28, 2018, DP Lending issued a promissory note in the principal amount of $115,000 to an accredited investor. This promissory note included an OID of $15,000 resulting in net proceeds of $100,000. The principal and accrued interest on this note was due and payable on September 14, 2018, subject to a 10-business day cure period available to DP Lending. This promissory note was paid on September 21, 2018. (xiii) On October 9, 2018, DP Lending issued a promissory note in the principal amount of $60,000 to an accredited investor. This promissory note included an OID of $10,000 resulting in net proceeds of $50,000. At December 31, 2018, the outstanding balance on this note was $60,000. This note was due and payable on October 23, 2018. However, since payment was not made on the specified maturity date this unsecured promissory note is currently in default. (c) At December 31, 2018, Microphase had guaranteed the repayment of two equity lines of credit in the aggregate amount of $291,988 with Wells Fargo Bank, NA (“Wells Fargo”) (collectively, the “Wells Fargo Notes”). These loans originated prior to the Company’s acquisition of Microphase and Microphase was the recipient of the actual proceeds from the loans. Microphase had previously guaranteed the payment under the first Wells Fargo equity line during 2008, the proceeds of which Microphase had received from a concurrent loan from Edson Realty Inc., a related party owned real estate holding company. As of December 31, 2018, the first line of credit, which is secured by residential real estate owned by a former officer, had an outstanding balance of $210,822, with an annual interest rate of 4.00%. Microphase had guaranteed the payment under the second Wells Fargo equity line in 2014. Microphase had received working capital loans from the former CEO from funds that were drawn against the second Wells Fargo equity line. As of December 31, 2018, the second line of credit, secured by the former CEO’s principal residence, had an outstanding balance of $81,166, with an annual interest rate of 3.00%. During the years ended December 31, 2018, Microphase incurred $17,629 of interest on the Wells Fargo Notes. (d) In August 2016, Microphase received a $300,000 loan, of which $39,831 has been repaid, pursuant to the State of Connecticut Small Business Express Job Creation Incentive Program which is administered through the Department of Economic and Community Development (“DECD”) (the “DECD Note”). The DECD Note accrues interest at a rate of 3% per annum and is due in August 2026. Payment of principal and interest commenced in September 2017, payable in equal monthly installments over the remaining term. During the year ended December 31, 2018, Microphase incurred $9,286 of interest on the DECD Note. (e) At December 31, 2017, Power-Plus had guaranteed the repayment of two lines of credit in the aggregate amount of $170,473 with Bank of America NA and Wells Fargo (collectively, the “Power-Plus Lines”). During 2018, the Power-Plus Lines had been paid. (f) Pursuant to the terms of the Purchase Agreement with Power-Plus, the Company entered into a two-year promissory note in the amount of $255,000 payable to the former owner as part of the purchase consideration. The $255,000 note is payable in 24 equal monthly installments. On October 18, 2017, for cancellation of debt, the Company entered into a subscription agreement with the former owner under which the Company sold 6,940 shares of common stock at $13.40 per share for an aggregate purchase price of $93,000. The outstanding balance on this note was $13,250 at December 31, 2018. During the year ended December 31, 2018, the Company paid $116,875 in principal payments. (g) In December 2016, Microphase utilized a $20,000 overdraft credit line at People’s United Bank with an annual interest rate of 15%. As of December 31, 2018, the balance of that overdraft credit line was $18,589. (h) On August 16, 2018, the Company entered into a securities purchase agreement with certain institutional investors providing for the issuance of (i) secured promissory notes in the aggregate principal face amount of $1,212,000 due February 15, 2019, at an interest rate of eight percent (8%) per annum for which the Company received an aggregate of $1,010,000, and (ii) issued an aggregate of 20,000 shares of common stock to the investors. On November 29, 2018, these 8% short-term promissory notes were amended and the Company incurred an additional OID of $60,600 resulting in an outstanding principal balance of $1,272,600 at December 31, 2018. (i) During September 2018, the Company issued to institutional investors 12% term promissory notes in the principal face amount of $789,473, with an interest rate of 12% for a purchase price of $750,000. The outstanding principal face amount, plus any accrued and unpaid interest, was due by December 31, 2018. During October 2018, in accordance with the notes, the Company issued 22,500 shares of its common stock to the investors. Since payment was not made on the specified maturity date these 12% term promissory notes are currently in default. (j) On October 11, 2018, the Company entered into a securities purchase agreement with an institutional investor providing for the issuance of (i) a secured promissory note in the aggregate principal face amount of $565,000 due December 8, 2018, for which the Company received an aggregate of $510,000, and (ii) issued an aggregate of 20,000 shares of common stock to the investor. Upon maturity, the Company was required to pay $27,500 of interest. The note was not paid on the maturity date and was in default at December 31, 2018. (k) On December 28, 2018, Microphase entered into a secured promissory note with an institutional investor providing for the issuance of (i) a secured promissory note in the aggregate principal face amount of $200,000, with an interest rate of 10% per annum and a maturity date of March 31, 2019. In connection with the Microphase Note, Mr. Ault entered into a personal guarantee agreement for the benefit of the investor. (l) In December 2016, Microphase issued $705,000 in 10% short-term promissory notes to nineteen accredited investors which, after deducting $70,500 of placement fees to its selling agent, Spartan Capital Securities, LLC (“Spartan”), resulted in $634,500 in net proceeds to Microphase (the “10% Short-Term Notes”). The 10% Short-Term Notes were due one year from the date of issuance. The amount due pursuant to the 10% Short-Term Notes was equal to the entire original principal amount multiplied by 125% (the “Loan Premium”) plus accrued interest. On December 5, 2017, in exchange for the cancellation of $690,000 of outstanding principal and $250,323 of accrued interest owed to the investors by Microphase Corporation, the Company entered into an Exchange Agreement pursuant to which the Company issued an aggregate of 76,193 shares of common stock and warrants to purchase 19,023 shares of common stock with an exercise price of $22.00 per share of common stock. During 2018, the Company paid the remaining balance of principal and accrued interest of $15,000 and $5,615, respectively. (m) At December 31, 2018, Enertec had short term bank credit of $1,558,197 that bears interest at prime plus 0.7% through 3.85% paid either on a monthly or weekly basis. Further, the Company has undertaken to comply with certain covenants under its bank loan. During the period May 22 to December 31, 2018, the Company incurred $47,076 of interest from Enertec’s short term bank credit. Other Notes Payable (n) Between May 5, 2017 and December 31, 2017, the Company received additional short-term loans of $297,000 from five accredited investors, of which $75,000 was from the Company’s corporate counsel, a related party. As additional consideration, the investors received five-year warrants to purchase 11,219 shares of common stock at a weighted average exercise price of $15.40 per share. The warrants are exercisable commencing six months after the issuance date and are subject to certain beneficial ownership limitations. The exercise price of these warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The warrants may be exercised for cash or on a cashless basis. During the quarter ended June 30, 2017, the Company recorded debt discount in the amount of $95,000 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. As a result of the short-term feature of these loans and advances, the debt discount was amortized as non-cash interest expense upon issuance of the warrants using the effective interest method. During June 2017, the holders of $55,000 of these short-term loans agreed to cancel their notes for the purchase of 5,000 shares of the Company’s common stock at a price of $11.00 per share. An additional $75,000 in short-term loans from the Company’s corporate counsel was converted into the Company’s equity securities; $52,000 was converted into one of the Series C Units and $23,000 was converted into the Company’s common stock. The Company did not record any additional interest expense as a result of the extinguishment of $130,000 in short-term loans since the carrying amount of the short-term loans was equivalent to the fair value of the consideration transferred, which was determined from the closing price of the Company’s equity securities on the date of extinguishment. During the year ended December 31, 2017, the Company also repaid $157,000 in short-term loans. (o) In February 2017, the Company issued to eight accredited investors $400,000 in demand promissory notes bearing interest at a rate of 6% per annum. Of the eight accredited investors, one investor was deemed a related party. As additional consideration, the investors received five-year warrants to purchase 16,667 shares of common stock at an exercise price of $14.00 per share (the “Feb. 2017 Warrants”). The Feb. 2017 Warrants are exercisable commencing six months after the issuance date. The exercise price of the Feb. 2017 Warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The Feb. 2017 Warrants may be exercised for cash or on a cashless basis. During the quarter ended March 31, 2017, the Company recorded debt discount in the amount of $151,000 based on the estimated fair value of the Feb. 2017 Warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. As a result of the due on demand feature of the promissory notes, the debt discount was amortized as non-cash interest expense upon issuance of the Feb. 2017 Warrants using the effective interest method. Between February 16, 2017 and February 23, 2017, the holders of the $400,000 in demand promissory notes agreed to cancel their demand promissory notes for the purchase of 33,333 shares of the Company’s common stock, an extinguishment price of $12.00 per share. During the quarter ended March 31, 2017, the Company recorded additional interest expense of $13,333 as a result of the extinguishment of the $400,000 in demand promissory notes based on the difference of the carrying amount of the demand promissory notes and the fair value of the consideration transferred, which was determined from the closing price of the Company’s common stock on the date of extinguishment. (p) On March 28, 2017, the Company issued $270,000 in demand promissory notes to several investors. These demand promissory notes accrued interest at the rate of 6% per annum. On April 5, 2017, the Company canceled these promissory notes by issuing to the investors 18,000 shares of common stock, at $15.00 per share, and warrants to purchase 9,000 shares of common stock at $18.00 per share. During the quarter ended June 30, 2017, the Company recorded additional interest expense of $109,000 as a result of the extinguishment of the $270,000 in demand promissory notes based on the difference of the carrying amount of the demand promissory notes and the fair value of the consideration transferred, which was determined from the closing price of the Company’s common stock on the date of extinguishment. (q) On June 2, 2017, pursuant to the terms of the Share Exchange Agreement and in consideration of legal services, Microphase issued a $450,000 8% promissory note with a maturity date of November 25, 2017 to Lucosky Brookman, LLP (the “Lucosky Note”). In conjunction with the issuance of the Lucosky Note, the Company issued Lucosky Brookman 10,000 shares of redeemable convertible Series E preferred stock (the “Series E Preferred Stock”) with a stated value of $45 per share as an alternative to providing a guarantee for the amount of the Lucosky Note. The Company, at its option, had the right to redeem for cash the outstanding shares of Series E Preferred Stock, upon written notice to the holder of the shares, at a cash redemption price equal to $45 multiplied by the number of shares being redeemed. Any such optional redemption by the Company would have resulted in a credit against the Lucosky Note. During the period June 3, 2017 to December 29, 2017, Microphase incurred $21,000 of interest on the Lucosky Note. On December 29, 2017, the Lucosky Note was satisfied through the conversion of the 10,000 shares of Series E Preferred Stock into 30,000 shares of the Company’s common stock (See Note 24). (r) On January 25, 2018, the Company issued two 5% promissory notes, each in the principal face amount of $2,500,000 for an aggregate debt of $5,000,000 to two institutional investors. The entire unpaid balance of the principal and accrued interest on each of the 5% promissory notes was due and payable on February 23, 2018, subject to a 30-day extension available to the Company. The proceeds from these two 5% promissory notes were used to purchase 1,000 Antminer S9s manufactured by Bitmain Technologies, Inc. in connection with our crypto mining operations. The Company repaid the entire outstanding principal and accrued interest on the 5% promissory notes of $5,101,127 during 2018. (s) On February 20, 2018, the Company issued a promissory note in the principal face amount of $900,000 to an accredited investor. This promissory note included an original issue discount (“OID”) of $150,000 resulting in net proceeds of $750,000. The principal and OID on this note was due and payable on March 22, 2018. On March 23, 2018, the Company entered into a new promissory note in the principal amount of $2,100,000 for a term of two months, subject to the Company’ ability to prepay within one month. The new promissory note included an OID of $350,000, resulting in net proceeds of $1,750,000. The Company also issued to the lender a warrant to purchase 62,500 shares of the Company’s common stock at an exercise price of $23.00 per share. The principal amount of the new promissory note consisted of cash of $1,000,000 and the cancellation of principal of $750,000 from the February 20, 2018 promissory note. The interest on the February 20, 2018 note in the amount of $150,000 was paid to the lender prior to entering into the new promissory note. The warrants are exercisable commencing on the issuance date for a term of three years. The exercise price of these warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The warrants may be exercised for cash or on a cashless basis. The Company recorded debt discount in the amount of $604,227 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. The debt discount was amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $604,227 was recorded from the amortization of debt discount and interest expense of $350,000 was recorded from the amortization of the OID on the new promissory note. On April 23, 2018, the Company paid the entire outstanding principal on the new promissory note of $2,100,000. The new promissory note had been guaranteed by our Chief Executive Officer and had also been guaranteed by Philou. |
NOTES PAYABLE - RELATED PARTIES
NOTES PAYABLE - RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable - Related Parties [Abstract] | |
NOTES PAYABLE RELATED PARTIES | 21. NOTES PAYABLE – RELATED PARTIES Notes Payable – Related parties at December 31, 2018 and 2017, are comprised of the following: 2018 2017 Notes payable to former officer and employee (a) $ 308,984 $ 309,317 Total notes payable 308,984 309,317 Less: current portion (166,925 ) (133,569 ) Notes payable – long-term portion $ 142,059 $ 175,748 (a) Microphase is a party to several notes payable agreements with seven of its past officers, employees and their family members. As of December 31, 2018, the aggregate outstanding balance pursuant to these notes payable agreements, inclusive of $57,752 of accrued interest, was $366,736, with annual interest rates ranging between 3.00% and 6.00%. During the year ended December 31, 2018, Microphase incurred $10,897 of interest on these notes payable agreements. In July 2016, one of these noteholders initiated litigation to collect the balance owed under the terms of his respective agreement. In October 2017, Microphase and the noteholder entered into a settlement agreement whereby Microphase agreed to pay the outstanding principal and interest of $122,000 and $43,000, respectively, by issuing to the noteholder 95,834 shares of Microphase common stock valued at $115,000 and paying $25,000 in cash. The value of the Microphase common stock was derived from the Company’s recent acquisition of a majority interest in Microphase. Further, the parties agreed a final $25,000 would be paid within 18 months of the settlement agreement or Microphase would be required to pay the noteholder an additional $25,000. (b) On December 29, 2016, the Company entered into an agreement with MCKEA Holdings, LLC (“MCKEA”). MCKEA is the majority member of Philou Ventures, LLC, which is the Company’s controlling stockholder. Kristine L. Ault, a director and the wife of Milton C. Ault III, Executive Chairman of the Company’s Board of Directors, is the manager and owner of MCKEA, for a demand promissory note (The “MCKEA Note”) in the amount of $250,000 bearing interest at the rate of 6% per annum on unpaid principal. On March 24, 2017, the MCKEA Note was cancelled to purchase the Company’s Series B Preferred Stock pursuant to the terms of the Preferred Stock Purchase Agreement entered into on March 9, 2017 (See Note 24). Since there was no difference between the reacquisition price and the net carrying value of the cancelled debt, no gain or loss was recognized as a result of this transaction. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Dec. 31, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
CONVERTIBLE NOTES | 22. CONVERTIBLE NOTES Convertible Notes Payable at December 31, 2018 and 2017, are comprised of the following: 2018 2017 10% Convertible secured notes (a) $ 7,997,126 $ — 5% Convertible secured notes (b) — 550,000 12% Convertible secured note (c) (d) (e) — 202,000 Total convertible notes payable 7,997,126 752,000 Less: Unamortized debt discounts (1,189,276 ) (351,573 ) Unamortized financing cost (65,356 ) (2,549 ) Total convertible notes payable, net of financing cost $ 6,742,494 $ 397,878 (a) On May 15, 2018, the Company entered into a securities purchase agreement to sell (i) a 10% convertible note (the “10% Convertible Note”), (ii) a five-year warrant to purchase 55,556 shares of the Company’s common stock at an exercise price of $27.00 per share; (iii) a five-year warrant to purchase 86,207 shares of the Company’s Class A common stock at an exercise price of $17.40 per share; and (iv) 17,241 shares of the Company’s common stock to an institutional investor. Initially, the 10% Convertible Note was convertible into the Company’s common stock at $15.00 per share, but could only be converted if an event of default thereunder had occurred and not been cured on a timely basis. On September 25, 2018, the Company entered into an agreement to amend the maturity date on the 10% Convertible Note, pursuant to which amendment the amortization schedule of the 10% Convertible Note provides for 13 monthly payments in the amount of $309,193, and for the fourteenth payment to be in the amount of $1,011,427, plus accrued and unpaid interest. Each such amortization payment shall be made in cash or Bitcoin. The 10% Convertible Note is in the principal amount of $6,000,000 and bears interest at 10% simple interest on the principal amount with 50% of the total interest due on the principal payable at the closing and the remaining 50% payable over the term of the 10% Convertible Note. In connection with the financing, the Company agreed to pay the placement agent, Alliance Global Partners, a cash fee of $300,000 and a warrant to purchase 7,500 shares of the Company’s common stock with an exercise price of $20.00 per share. The Company computed the fair value of the warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $1,397,389 based on the estimated fair value of the warrants. The Company estimated that the grant date fair value of the shares of common stock was $405,024, which was determined from the closing price of the Company’s common stock on the dates of issuance. In aggregate, the Company recorded debt discount in the amount of $2,169,613 based on the relative fair values of the warrants, common stock and debt issuance costs of $367,200. During the year ended December 31, 2018, non-cash interest expense of $2,169,613 was recorded from the amortization of debt discounts. The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 2.94% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 127.9% was determined based on the Company’s historical stock prices. On July 2, 2018, the Company entered into a securities purchase agreement with the institutional investor providing for the issuance of (i) a second 10% convertible note (the “Second 10% Convertible Note”) with a principal face amount of $1,000,000 which Second 10% Convertible Note was convertible into the Company’s common stock at $15.00 per share and (ii) an additional 20,000 of the Company’s common stock to be issued in connection with the 10% Convertible Note. The Second 10% Convertible Note, as amended, matures on February 15, 2019, as to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. On August 31, 2018, the Company entered into a securities purchase agreement with the institutional investor providing for the issuance of a third 10% convertible note (the “Third 10% Convertible Note” and with the 10% Convertible Note and the Second 10% Convertible Note, the “10% Convertible Notes”) with a principal face amount of $2,000,000, which Third Convertible Note is convertible into 250,000 shares of the Company’s common stock at $8.00 per share and (ii) an additional 31,000 of the Company’s common stock. The shares of common stock issuable pursuant to the Third 10% Convertible Note have not been issued to the institutional investor. The Third 10% Convertible Note, as amended, matures on February 15, 2019, as to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. At the time of issuance of the Third 10% Convertible Note, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a beneficial conversion feature (“BCF”). The BCF embedded in the Third 10% Convertible Note is accounted for under ASC No. 470, De The Company recorded debt issuance costs of $200,500 from the Third 10% Convertible Note. The debt issuance costs are being amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $135,144 was recorded from the amortization of the debt issuance costs. Pursuant to an amendment dated as of August 31, 2018 to the 10% Convertible Note and the Second 10% Convertible Note, the Company reduced the conversion price to $8.00 from $15.00. The amendment to the embedded conversion options of the 10% Convertible Note and the Second 10% Convertible Note caused a material change in the fair value of the embedded conversion options on these two notes and resulted in a loss on extinguishment of $665,346. At the time of the amendment, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a BCF. The intrinsic value of the BCF was $1,131,960 on the 10% Convertible Note and $225,000 on the Second 10% Convertible Note based on the difference between the effective conversion price and the fair value of the Company’s common stock. During the year ended December 31, 2018, non-cash interest expense of $1,356,960 was recorded from the amortization of debt discounts attributed to the August 31, 2018 amendment of to the 10% Convertible Note and the Second 10% Convertible Note. Pursuant to the terms of an amendment dated December 7, 2018, the Company agreed that if the investor elects to convert three monthly payments in the principal amount of $309,193 into shares of the Company’s common stock at the stated conversion price of $8.00 and the proceeds from the sale of the shares did not result in net proceeds to the investor of 103% of the principal, interest and penalties due, then the Company would pay the investor the difference in cash (the “True-Up Payment). During December 2018, the Company issued to the investor 109,724 shares of its common stock at $8.00 per share upon the conversion of $877,793 in principal, accrued interest and penalties. During December 2018, the investor received $304,608 from the sale of the shares of common stock, which approximated the value of the shares of common stock on the date of issuance, resulting in a True-Up Payment due to the investor of $599,519. (b) On December 4, 2017, the Company entered into a securities purchase agreement to sell a 5% Convertible Note (the “5% Convertible Note”) and 7,500 shares of restricted common stock to an institutional investor. The principal of the 5% Convertible Note and interest thereon was convertible into shares of common stock at $12.00 per share of common stock, subject to adjustments for lower priced issuances, stock splits, stock dividends, combinations or similar events. The 5% Convertible Note was in the principal amount of $550,000, included an OID of $50,000 resulting in net proceeds to the Company of $500,000, accrued interest at 5% simple interest on the principal amount, and was due on August 13, 2018. Interest only payments were due on a quarterly basis and the principal was due on June 3, 2018. At the time of issuance of the 5% Convertible Note, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a BCF accounted for under ASC 470. At issuance, the intrinsic value of the BCF totaled $244,260 based on the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date of the transaction. The intrinsic value of the BCF exceeded the proceeds allocated to the relative fair value of the 5% Convertible Note. The BCF was amortized to interest expense over the term of the 5% Convertible Note using the effective interest method. The valuation of the BCF was calculated based on the effective conversion price compared with the market price of the Company’s common stock on the date of issuance of the 5% Convertible Note. In the aggregate, the Company recorded debt discount in the amount of $550,000 based on the relative fair values of the 7,500 shares of common stock of $25,740, BCF of $244,260 and OID of $50,000. The debt discount is being amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2017, non-cash interest expense of $380,769 was recorded from the amortization of debt discounts. In January 2018, the 5% Convertible Note was converted into 46,082 shares of the Company’s common stock based upon the contractual rights included in the 5% Convertible Note (See Note 24). (c) On August 3, 2017, the Company entered into a securities purchase agreement to sell a 12% Convertible Note (the “12% Convertible Note”) and a warrant to purchase 33,333 shares of common stock to an accredited investor. The principal of the 12% Convertible Note may be converted into shares of common stock at $11.00 per share and under the terms of the Warrant, up to 33,333 shares of common stock may be purchased at an exercise price of $14.00 per share. The 12% Convertible Note was in the principal amount of $400,000, included an OID of $40,000 resulting in net proceeds to the Company of $360,000, accrued interest at 12% simple interest on the principal amount, and was due on August 13, 2018. Interest only payments were due on a quarterly basis and the principal was due on August 3, 2018. The principal may be converted into shares of the Company’s common stock at $11.00 per share. The Company computed the fair value of the 33,333 warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $167,203 based on the estimated fair value of the 33,333 warrants. The BCF embedded in the 12% Convertible Note is accounted for under ASC 470. At issuance, the intrinsic value of the BCF totaled $186,797. The Company, however, was prohibited from issuing shares of common stock pursuant to the 12% Convertible Note until stockholder approval of such issuance of securities was obtained as required by applicable NYSE American listing rules. The Company received stockholder approval for the share issuances on December 28, 2017. The intrinsic value of the BCF was amortized to interest expense over the term of the 12% Convertible Note using the effective interest method. The valuation of the BCF was calculated based on the effective conversion price compared with the market price of the Company’s common stock on the date of issuance of the 12% Convertible Note. In aggregate, the Company recorded debt discount in the amount of $394,000 based on the relative fair values of the 33,333 warrants, BCF and OID of $40,000. During the year ended December 31, 2017, non-cash interest expense of $211,658 was recorded from the amortization of debt discounts. On December 28, 2017, principal and accrued interest of $198,000 and $4,818, respectively, on the 12% Convertible Note was satisfied through the issuance of 18,438 shares of the Company’s common stock and the remaining balance of $202,000 was converted into 18,884 shares of the Company’s common stock on January 10, 2018 (See Note 24). The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 1.79% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 107.3% was determined based on the Company’s historical stock prices. (d) On April 16, 2018, the Company entered into securities purchase agreements to sell (i) a 12% convertible note (the “12% April 2018 Convertible Note”), (ii) a five-year warrant to purchase 49,679 shares of the Company’s common stock at an exercise price of $26.00 per share; and (iii) 10,046 shares of the Company’s common stock to three institutional investors. The 12% April 2018 Convertible Note is convertible into common stock at $14.00 per share, but may only be converted if an event of default thereunder has occurred and not been cured on a timely basis. The 12% April 2018 Convertible Note is in the principal amount of $1,722,222, included an OID of $172,222 resulting in net proceeds to the Company of $1,550,000 and bears interest at 12% simple interest on the principal amount. The Company is required to make monthly principal and interest payments until the 12% April 2018 Convertible Note is satisfied in full on October 16, 2018. The Company computed the fair value of the warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $539,360 based on the estimated fair value of the warrants. The Company estimated that the grant date fair value of the shares of common stock was $128,524, which was determined from the closing price of the Company’s common stock on the date of issuance. In aggregate, the Company recorded debt discount in the amount of $885,106 based on the relative fair values of the warrants, common stock, OID and debt issuance costs of $45,000. During the year ended December 31, 2018, non-cash interest expense of $885,106 was recorded from the amortization of debt discounts. The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 2.94% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 127.9% was determined based on the Company’s historical stock prices. Beginning on May 16, 2018, the Company was required to make six monthly cash payments in the aggregate amount of $304,259. On August 31, 2018, the Company made its final payment and in aggregate paid principal and accrued interest of $1,722,222 and $103,333, respectively, on the 12% April 2018 Convertible Note. (e) On January 23, 2018, we entered into a securities purchase agreement with an institutional investor to sell, for an aggregate purchase price of $1,000,000, a 10% senior convertible promissory note (the “January 2018 10% Convertible Note”) with an aggregate principal face amount of $1,250,000, a warrant to purchase an aggregate of 31,250 shares of our common stock and 27,174 shares of our common stock. The transactions contemplated by the securities purchase agreement closed on February 8, 2018. The January 2018 10% Convertible Note was convertible into 31,250 shares of the Company’s common stock, a conversion price of $40.00 per share. The exercise price of the warrant to purchase 31,250 shares of the Company’s common stock is $44.00 per share. On February 9, 2018, in addition to the 27,174 shares of common stock provided for pursuant to the securities purchase agreement, the Company issued to the investor an aggregate of 34,597 shares of the Company’s common stock upon the conversion of the entire outstanding principal and accrued interest on the January 2018 10% Convertible Note of $1,383,884 (See Note 24). Convertible Notes Converted into Common Stock during 2017 (f) On November 2, 2017, the Company entered into a securities purchase agreement to sell a 5% Convertible Note (the “November 5% Convertible Note”) and 15,000 shares of restricted common stock to an institutional investor. The principal of the November 5% Convertible Note and interest thereon was convertible into shares of common stock at $12.00 per share of common stock, subject to adjustments for lower priced issuances, stock splits, stock dividends, combinations or similar events. The November 5% Convertible Note was in the principal amount of $1,111,000 and included an original issue discount (“OID”) of $101,000 and debt issuance costs of $105,800, resulting in net proceeds to the Company of $904,200. The November 5% Convertible Note provided for 5% simple interest on the principal amount. In connection with the November 5% Convertible Note, the Company paid to Aegis Capital Corp. (“Aegis”), its financial advisor, a cash fee of $80,800 and issued to Aegis a warrant to purchase up to 7,407 shares of common stock with an exercise price of $13.20 per share, subject to adjustment for stock splits, stock dividends, combinations or similar events. The warrant is exercisable at any time commencing six months from the date of issuance through five years from the date of issuance and may be exercised for cash or on a “cashless” basis if there is no effective registration statement registering, or no current prospectus available for the resale of, all of the shares of common stock underlying the warrant. The debt conversion features embedded in the November 5% Convertible Note is accounted for under ASC No. 470, De On December 13, 2017 and December 14, 2017, the entire $1,111,000 of principal on the November 5% Convertible Note was satisfied through the issuance of 92,583 shares of the Company’s common stock based upon the contractual rights provided for in the November 5% Convertible Note (See Note 14). During the year ended December 31, 2017, non-cash interest expense of $828,668 was recorded from the amortization of debt discounts and debt financing cost. (g) On August 10, 2017, the Company, entered into securities purchase agreements with five institutional investors to sell for an aggregate purchase price of $800,000, 10% Senior Convertible Promissory Notes (the “10% Convertible Notes”) with an aggregate principal face amount of $880,000 and warrants to purchase an aggregate of 73,750 shares of common stock. The principal of the 10% Convertible Notes and interest earned thereon may be converted into shares of common stock at $12.00 per share and under the terms of the Warrant, up to 73,750 shares of common stock may be purchased at an exercise price of $13.20 per share. The 10% Convertible Notes are in the aggregate principal amount of $880,000, included an OID of $80,000 resulting in net proceeds to the Company of $800,000, bear simple interest at 10% on the principal amount, and principal and interest are due on February 10, 2018. Subject to certain beneficial ownership limitations, each investor may convert the principal amount of the 10% Convertible Notes and accrued interest earned thereon at any time into shares of common stock at $12.00 per share. The conversion price of the 10% Convertible Notes is subject to adjustment for customary stock splits, stock dividends, combinations or similar events. The Company computed the fair value of the 73,750 warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $356,691 based on the estimated intrinsic value of the 73,750 warrants. The intrinsic value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 1.78% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 107.3% was determined based on the Company’s historical stock prices. The BCF embedded in the 10% Convertible Notes is accounted for under ASC No. 470, De During December 2017, the entire principal and accrued interest of $880,000 and $54,450, respectively, on the 10% Convertible Notes was satisfied through the issuance of 77,871 shares of the Company’s common stock based upon the contractual rights provided for in the 10% Convertible Note (See Note 14). Other Convertible Notes Payable (h) On April 17, 2017, the Company entered into two 7% convertible notes (the “7% Convertible Notes”) each in the aggregate principal amount of $125,000 for a total of $250,000. The 7% Convertible Notes accrued interest at 7% simple interest on the principal amount and were due on June 2, 2017. The principal was convertible into shares of the Company’s common stock at $15.00 per share. The noteholder could convert the principal amount of the 7% Convertible Notes at any time into common stock. The 7% Convertible Notes contained standard and customary events of default including, but not limited to, failure to make payments when due under the 7% Convertible Note agreements and bankruptcy or insolvency of the Company. The Company had the right to prepay the 7% Convertible Notes. The 7% Convertible Notes were repaid during July 2017. As additional consideration, the investors received five and a half year warrants to purchase 8,333 shares of common stock at an exercise price of $18.00 per share (collectively the “7% Convertible Note Warrants”). The 7% Convertible Note Warrants are exercisable commencing six months after the issuance date. The exercise price of the 7% Convertible Note Warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The 7% Convertible Note Warrants may be exercised for cash or on a cashless basis. The Company computed the fair value of the 7% Convertible Note Warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $61,304 based on the estimated fair value of the 7% Convertible Note Warrants. The BCF embedded in the 7% Convertible Notes is accounted for under ASC No. 470, De On July 25, 2017, the Company repaid one of the 7% Convertible Notes. Due to the event of default, the Company agreed to reduce the exercise price of warrants to purchase 83,334 shares of common stock from $18.00 per share to $11.00 per share and made a payment of $144,000. As a result of this transaction, the Company recorded additional interest expense of $17,226 and recorded an additional $2,641 in non-cash interest expense based upon the change in the fair value of the warrants due to the adjustment to the exercise price. On July 28, 2017, the Company entered into an exchange agreement related to the second 7% Convertible Note. Under the terms of the exchange agreement, the Company exchanged the 7% Convertible Note for three new promissory notes in the principal amounts of $110,000 due August 1, 2017; $35,000 due August 1, 2017; and $34,000 due August 8, 2017 (individually an Exchange Note and collectively the Exchange Notes) and issued a new warrant to purchase 4,167 shares of common stock at $11.00 per share and cancelled the prior warrant to purchase 4,167 shares of common stock at $18.00 per share. The Company recorded a $54,583 extinguishment charge as a result of this transaction. Concurrent with entering into the exchange agreement, the investor entered into a subscription agreement under which the Company issued and sold in a registered direct offering 10,000 shares of common stock at $11.00 per share for an aggregate purchase price of $110,000. The 10,000 shares of common stock were purchased through the cancellation of the Exchange Note in the principal amount of $110,000. In addition, in a concurrent private placement, the investor entered into a separate securities purchase agreement under which the Company issued and sold 3,180 shares of common stock at $11.00 per share for an aggregate of purchase price of $35,000. The 3,180 shares of common stock were purchased through the cancellation of the Exchange Note in the principal amount of $35,000. Further, the Company issued a warrant to purchase 6,000 shares of common stock at $11.00 per share. The final Exchange Note in the principal amount of $34,000 was repaid. In aggregate, and including the $54,583 extinguishment charge above, the Company recorded an additional non-cash interest expense of $110,421 as a result of the extinguishment of the $125,000 7% Convertible Note based on the difference of the carrying amount of the 7% Convertible Note and the fair value of the consideration transferred, which was determined from the closing price of the Company’s common stock on the date of extinguishment and based upon (i) the change in the fair value of the warrants due to the exchange of the warrant with an exercise price of $18.00 per share with a new warrant with an exercise price of $11.00 per share, (ii) the fair value of the warrant to purchase 6,000 shares of common stock and (iii) the value of the shares of cash and common stock in excess of the amount owed pursuant to the 7% Convertible Note. (i) On April 26, 2017, the Company entered into a 7% convertible note in the aggregate principal amount of $104,000. On June 28, 2017, the noteholder converted the outstanding balance into 9,455 shares of the Company’s common stock. The Company did not record any additional interest expense as a result of the extinguishment since the carrying amount of the convertible notes was equivalent to the fair value of the consideration transferred, which was determined from the closing price of the Company’s equity securities on the date of extinguishment. As additional consideration, the investor received a five-year warrant to purchase 8,000 shares of common stock at an exercise price of $16.00 per share. The warrants are exercisable commencing six months after the issuance date. The exercise price of the warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The warrants may be exercised for cash or on a cashless basis. The Company computed the fair value of these warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $24,912 based on the estimated fair value of the warrants. The BCF embedded in this convertible note is accounted for under ASC No. 470, De |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 23. COMMITMENTS AND CONTINGENCIES On July 31, 2018 a stockholder derivative complaint was filed in the United States District Court for the Central District of California against the Company as the nominal defendant, as well as its current directors and a former director styled Ethan Young and Greg Young, Derivatively on Behalf of Nominal Defendant, DPW Holdings, Inc. v. Milton C. Ault, III, Amos Kohn, William B. Horne, Jeff Bentz, Mordechai Rosenberg, Robert O. Smith, and Kristine Ault and DPW Holdings, Inc. The Complaint alleges violations of state law and breaches of fiduciary duty, unjust enrichment and gross mismanagement by the individual defendants as, in the view of the plaintiffs, the Company has entered into poorly advised loan transactions and related party transactions. The Company and the individual defendants believe that these claims are without merit and intend to vigorously defend themselves. The Company and the individual defendants moved to dismiss the Complaint and on February 25, 2019, the Court granted the motion to dismiss but granted plaintiffs leave to amend their Complaint. On March 11, 2019, plaintiffs filed their amended complaint asserting violations of breaches of fiduciary duties and unjust enrichment claims based on the previously pled transactions. On March 25, 2019, the Company and the individual defendants filed a motion to dismiss the amended complaint. The motion to dismiss is returnable before the Court on May 6, 2019. Based on the Company’s assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. However, an unfavorable outcome may have a material adverse effect on the Company’s business, financial condition and results of operations. On November 28, 2018, Blockchain Mining Supply and Services, Ltd On February 4, 2019, pursuant to the Court’s Rules, the Company requested a pre-motion Conference with the Court. The Company’s time to file its motion to dismiss is stayed until the Court’ holds the pre-motion Conference, which has not yet been scheduled by the Court. Based on the Company’s assessment of the facts underlying the claims, the uncertainty of litigation, and the preliminary stage of the case, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. However, the Company has established a reserve in the amount of the unpaid portion of the purchase agreement. An unfavorable outcome may have a material adverse effect on the Company’s business, financial condition and results of operations. In November 2012, the Company signed an operating lease agreement for the US headquarters for a period of 7 years with an option to extend for an additional 5 years. In September 2009, the Company's United Kingdom subsidiary signed an agreement for a lease in respect of the UK facility for a period of 15 years with an option to cancel the lease after 10 years on September 2019. In June 201, the Company’s Israeli subsidiary signed an agreement for a lease in respect of the Israel facility for a period of 10 years. In addition, the Company leases 43,062 square-feet of other space domestically that includes office, engineering, laboratory, restaurant and warehouse space in both California and Connecticut. The annual base rent under these leases, payable on a monthly basis, is approximately $1,272,000 during 2019. These leases expire between May 2019 and January 2028. Future non-cancellable rental commitments under operating leases are as follows: 2019 $ 1,272,957 2020 1,032,302 2021 801,305 2022 501,411 2023 514,895 Thereafter 1,582,120 $ 5,704,990 Total rent expense for the years ended December 31, 2018 and 2017 was approximately $1,086,031 and $291,092, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 24. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 25,000,000 shares of Preferred Stock $0.001 par value. The Board of Directors has designated 1,000,000 shares as Series A Convertible Preferred Stock (the “Series A Preferred Stock”), 500,000 shares as Series B Convertible Preferred Stock (the “Series B Preferred Stock”). On February 27, 2019, subsequent to December 31, 2018, the Board of Directors designated 2,500 shares as Series C Convertible Redeemable Preferred Stock and the Company filed a Certificate of Designations of Rights and Preferences of Series C Convertible Redeemable Preferred Stock with the Secretary of State of the State of Delaware. On December 21, 2018, the Company filed with the Delaware Secretary of State a Certificate of Elimination eliminating its previous Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock (collectively, the “Preferred Shares”) and returning them to authorized but undesignated shares of the Company’s preferred stock. None of the Preferred Shares was outstanding. The rights, preferences, privileges and restrictions on the remaining authorized 23,497,500 shares of Preferred Stock have not been determined. The Company’s Board of Directors is authorized to create a new series of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares. As of December 31, 2018, there were 125,000 shares of Series B Preferred Stock and no other shares of Preferred Stock issued or outstanding. Series A Preferred Stock On September 13, 2018, the Company filed a Certificate of Designations of Rights and Preferences (the “Certificate of Designations”) to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to establish the preferences, limitations and relative rights of the 10% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”). Dividends on the Series A Preferred Stock shall accrue daily and be cumulative from, and including, the date of original issue and shall be payable monthly on the last day of each calendar month, subject to the terms and conditions set forth in the Certificate of Designations. Dividends accrue at the annual rate of 10%, which is equivalent to $2.50 per annum per share, based on the $25.00 liquidation preference from, and including, the date of original issuance to, but not including, September 30, 2023, or such other date fixed for redemption. On and after September 30, 2023, the Company may, at its option, upon not less than thirty (30) days nor more than sixty (60) days’ written notice, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share of Series A Preferred Stock, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. In addition, upon the occurrence of a change of control, subject to certain restrictions, the Company may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice, redeem the Series A Preferred Stock, in whole or in part, within one hundred twenty (120) days after the first date on which such change of control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. There is no mandatory redemption of the Series A Preferred Stock. Holders of the Series A Preferred Stock generally have no voting rights except as set forth in the Certificate of Designations or as otherwise required by law. The holders of Series A Preferred Stock, together with the holders of shares of every other series of Parity Stock upon which like voting rights have been conferred and are exercisable, voting together as a single class regardless of series, shall be entitled to elect two directors to the Company’s board of directors at any annual meeting of stockholders or special meeting held in place thereof. When the Series A Preferred Stock is entitled to vote, such shares are entitled to one vote per share. In any matter in which the Series A Preferred Stock may vote as a single class with any other series of Preferred Stock (as may be required by law), each share of Series A Preferred Stock shall be entitled to one vote per $25.00 of stated liquidation preference. Series B Preferred Stock On March 9, 2017, the Company entered into a Preferred Stock Purchase Agreement with Philou, a related party. Pursuant to the terms of the Preferred Stock Purchase Agreement, Philou may invest up to $5,000,000 in the Company through the purchase of Series B Preferred Stock over the term of 36 months. Each share of Series B Preferred Stock has a stated value of $10.00 per share. Each share of Series B Preferred Stock may be convertible at the holder’s option into shares of common stock of the Company at a conversion rate of $14.00 per share, upon the earlier to occur of: (i) 60 months from the closing date, or (ii) upon the filing by the Company of one or more periodic reports that, singly or collectively, evidence that the Company’s gross revenues have reached no less than $10 million in the aggregate, on a consolidated reporting basis, over four consecutive quarters in accordance with U.S. GAAP. The conversion price will be subject to standard anti-dilution provisions in connection with any stock split, stock dividend, subdivision or similar reclassification of the common stock. Each share of Series B Preferred Stock shall have the right to receive dividends equal to one ten millionth (0.0000001) of earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”) calculated for a particular calendar year. Assuming the purchase of the entire $5,000,000 of shares of Preferred Stock, the holders thereof will be entitled to receive dividends equal to five percent (5%) in the aggregate of EBITDAS. Payment of dividends shall be calculated for a calendar year, payable on a quarterly basis, with payments to occur no later than 90 days in arrears from each reporting period subject to a year-end reconciliation. EBITDAS shall mean earnings before interest, taxes, depreciation, amortization, and stock-based compensation. At such time as (i) all shares of common stock issuable upon conversion of all outstanding shares of Series B Preferred Stock (the “Conversion Shares”) shall have been registered for resale pursuant to an effective Registration Statement covering such Conversion Shares, (ii) but no earlier than the twenty-fifth (25th) anniversary of the effective date, the shares of Series B Preferred Stock shall be subject to redemption in cash at the option of the Company in an amount per share equal to 120% of the greater of (a) the stated value plus all accrued and unpaid dividends, if any and (b) the fair market value of such shares of Series B Preferred Stock. In addition, for each share of Series B Preferred Stock purchased, Philou will receive warrants to purchase shares of common stock in a number equal to the stated value of each share of Series B Preferred Stock purchased divided by $0.70, at an exercise price equal to $14.00 per share of common stock. The warrants do not require a net cash-settlement or provide the holder with a choice of net-cash settlement. The warrants also do not contain a variable settlement provision. Accordingly, any warrants issued to Philou pursuant to the terms of the Preferred Stock Purchase Agreement shall be classified as equity instruments. Further, Philou shall have the right to participate in the Company’s future financings under substantially the same terms and conditions as other investors in those respective financings in order to maintain its then percentage ownership interest in the Company. Philou’s right to participate in such financings shall accrue and accumulate provided that it still owns at least 100,000 shares of Series B Preferred Stock. Between March 24, 2017 and June 2, 2017, Philou purchased 100,000 shares of Series B Preferred Stock pursuant to the Preferred Stock Purchase Agreement in consideration of the cancellation of the Company debt due to Philou in the aggregate amount of $500,000 and cash of $500,000. In addition, Philou received warrants to purchase 102,041 shares of common stock at an exercise price of $14.00 per share of common stock, which have been classified as equity instruments. The Company determined that the estimated relative fair value of these warrants, which are classified as equity, was $401,399 using the Black-Scholes option pricing model. Since the warrants were classified as equity securities, the Company allocated the $1,000,000 purchase price based on the relative fair values of the Series B Preferred Stock and the warrants following the guidance in ASC No. 470, Debt On April 24, 2018, pursuant to the terms of the Preferred Stock Purchase Agreement, Philou purchased an additional 25,000 shares of Series B Preferred Stock in consideration of the cancellation of short-term advances due to Philou in the aggregate amount of $250,000. In addition, Philou received warrants to purchase 25,510 shares of common stock at an exercise price of $14.00 per share of common stock. The Company determined that the estimated relative fair value of these warrants, which are classified as equity, was $141,951 using the Black-Scholes option pricing model. Since the warrants were classified as equity securities, the Company allocated the $250,000 purchase price based on the relative fair values of the Series B Preferred Stock and the warrants. The Series B Convertible Preferred Stock is convertible at any time, in whole or in part, at the option of Philou, into shares of common stock at a fixed conversion price, which is subject to adjustment for stock splits, stock dividends, combinations or similar events, of $14.00 per share. As the effective conversion price of the Series B Convertible Preferred Stock on a converted basis was below the market price of the Company’s common stock on the date of issuance, it was determined that these discounts represent beneficial conversion features. During the years ended December 31, 2018 and 2017, the Company valued the BCF at $108,049 and 265,054, respectively, based on the difference between the effective conversion price and the market price of the Company’s common stock on the date of issuance. These features are analogous to preference dividends and are recorded as a non-cash return to preferred stockholders through accumulated deficit. Series C Preferred Stock Between May 24, 2017 and June 19, 2017, the Company entered into subscription agreements (the “Series C Subscription Agreement”) with approximately twenty accredited investors (the “Series C Investors”) in connection with the sale of twenty-one Units at a purchase price of $52,000 per Unit raising in the aggregate $1,092,000 with each Unit consisting of 21,667 shares of Series C Preferred Stock and Warrants to purchase 4,333 shares of common stock. Divine acted as the Company’s placement agent. Each share of Series C Preferred Stock had a stated value of $2.40 per share. Five shares of Series C Preferred Stock were convertible at the holder’s option into one share of Common Stock of the Company. As the effective conversion price of the Series C Convertible Preferred Stock on a converted basis was below the market price of the Company’s common stock on the date of issuance, it was determined that these discounts represent beneficial conversion features, which were valued at $319,128 and recognized as a deemed dividend, based on the difference between the effective conversion price and the market price of the Company’s common stock on the date of issuance. Each share of Series C Preferred Stock had the right to receive dividends equal $0.24 per share per annum as declared by the Company’s Board of Directors. The dividends were payable on a quarterly basis on the 20th day following each calendar quarter. During December 2017, pursuant to the conversion terms of the Series C Preferred Stock, all of the Series C Investors elected to convert their 455,002 shares of Series C Preferred Stock into 91,000 shares of the Company’s common stock. Additionally, of the 91,000 warrants that were issued in conjunction with the Series C Subscription Agreements, the Company issued 80,167 shares of its common stock upon cash-based exercises that resulted in gross proceeds to the Company of $1,603,000 and issued 3,545 shares of its common stock upon the cashless exercise of a warrant to purchase 4,333 shares of common stock. Series D Preferred Stock On June 2, 2017, pursuant to the terms of the Share Exchange Agreement, the Company acquired 1,603,434 shares of the issued and outstanding common stock of Microphase Common Stock in exchange for the issuance by the Company of 92,122 shares of the Company’s Common Stock, 378,776 shares of the Company’s Series D Preferred Stock and warrants to purchase an aggregate of 50,000 shares of the Company’s Common Stock. In the event the Company shall liquidate, dissolve or wind up, the holders of Series D Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of the Common Stock, the Company’s Series A Preferred Stock, or to the holders of any other junior series of preferred stock, by reason of their ownership thereof and subject to the rights of the Company’s Series B Preferred Stock, Series C Preferred Stock and any other class or series of Company stock subsequently issued that ranks senior to the Series D Preferred Stock, an amount per share in cash or equivalent value in securities or other consideration equal to its Stated Value of $0.01 per share. The holders of Series D Preferred Stock shall not be entitled to receive dividends and shall have no voting rights except as otherwise required by law. Upon the stockholders of DPW Common Stock approving the conversion of the Series D Preferred Stock into shares of DPW Common Stock in connection with the acquisition of MPC Common Stock and for purposes of compliance with Rule 713 of the NYSE American, then each share of Series D Preferred Stock shall automatically be converted into 37,878 shares of DPW Common Stock. Series E Preferred Stock On June 2, 2017, pursuant to the terms of the Share Exchange Agreement and in consideration of legal services, Microphase issued a $450,000 8% promissory note with a maturity date of November 25, 2017 to an unsecured creditor, Lucosky Brookman, LLP (the “Lucosky Note”). In conjunction with the issuance of the Lucosky Note, the Company issued Lucosky Brookman 10,000 shares of Series E Preferred Stock with a stated value equal to forty-five dollars ($45.00) per share. The Company, at its option, may redeem for cash, in whole or in part, at any time and from time to time, the shares of Series E Preferred Stock at the time outstanding, upon written notice to the holder of the shares, at a cash redemption price equal to $45 multiplied by the number of shares being redeemed. Any such optional redemption by the Company shall be credited against the Lucosky Note. In the event the Company shall liquidate, dissolve or wind up, the holders of Series E Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of the DPW Common Stock, the Company’s Series A Preferred Stock, or to the holders of any other junior series of preferred stock, by reason of their ownership thereof and subject to the rights of the Company’s Series B Preferred Stock, Series C Preferred Stock and any other class or series of Company stock subsequently issued that ranks senior to the Series E Preferred Stock an amount per share in cash or equivalent value in securities or other consideration equal to $0.01 per share. The holders of Series E Preferred Stock shall not be entitled to receive dividends and shall have no voting rights except as otherwise required by law. Subject to the stockholders of DPW Common Stock of the Company approving the conversion of the Series E Preferred Stock into shares of Common Stock in connection with the acquisition of MPC Common Stock and for purposes of compliance with Rule 713 of the NYSE American, then each share of Series E Preferred Stock may be converted into sixty (60) shares of DPW Common Stock, for an aggregate of 30,000 shares of DPW Common Stock. On December 29, 2017, the Lucosky Note was satisfied through the conversion of the 10,000 shares of Series E Preferred Stock into 30,000 shares of the Company’s common stock. Common Stock Common stock confers upon the holders the rights to receive notice to participate and vote in the general meeting of stockholders of the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company. The Class B common stock carries the voting power of 10 shares of Class A common stock. 2018 Issuances Issuance of Common Stock pursuant to the At the Market Offering On February 27, 2018, the Company entered into a sales agreement with H.C. Wainwright & Co., LLC (“HCW”) to sell shares of the Company’s common stock, having an aggregate offering price of up to $50 million from time to time, through an “at the market offering” program (the “HCW ATM Offering”) under which HCW acts as sales agent. Between February 27, 2018 and December 31, 2018, the Company had received gross proceeds of $19,022,416 through the sale of 1,062,096 shares of the Company’s common stock through the HCW ATM Offering. The offer and sale of the shares through the HCW ATM Offering were made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-222132) filed with the SEC on December 18, 2017, amended on January 8, 2018, and declared effective by the SEC on January 11, 2018, and a prospectus supplement related to the HCW ATM Offering, dated February 27, 2018. The HCW ATM Offering was terminated effective September 23, 2018. In connection with the termination of the HCW ATM Offering, HCW released DPW from the right of first refusal provisions set forth in the sales agreement. In consideration for the release, the Company issued HCW 25,000 shares of its common stock, which have been recorded in additional paid in capital, and to pay HCW a fee until February 28, 2020 of three percent fee of aggregate gross proceeds received on future financings by the Company and a one percent fee of aggregate gross proceeds received on future financings by the Company’s subsidiaries. On October 10, 2018, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Wilson-Davis & Co., Inc., as sales agent (the “Agent”) to sell shares of its Common Stock, having an aggregate offering price of up to $25,000,000 (the “Shares”) from time to time, through an “at the market offering” program (the “WDCO ATM Offering”). Through December 31, 2018, we had received gross proceeds of $1,637,054 through the sale of 372,109 shares of our common stock through the WDCO ATM Offering. The offer and sale of the shares through the WDCO ATM Offering were made pursuant to our then effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-222132) filed with the SEC on December 18, 2017, amended on January 8, 2018, and declared effective by the SEC on January 11, 2018, and a prospectus supplement related to the WDCO ATM Offering, dated October 15, 2018. Issuance of Common Stock for Services During the year ended December 31, 2018, the Company issued to its consultants a total 184,153 shares of its common stock with an aggregate value of $3,740,888, an average of $20.31 per share for services rendered. Issuance of common stock for conversion of debt On January 3, 2018, accrued interest of $23,250 on the 10% Convertible Notes was satisfied through the issuance of 1,938 shares of the Company’s common stock. On January 10, 2018, principal and accrued interest of $202,000 and $5,723, respectively, on the 12% Convertible Note was satisfied through the issuance of 18,884 shares of the Company’s common stock (See Note 22c). On January 12, 2018, principal and accrued interest of $550,000 and $2,987, respectively, on the 5% Convertible Note was satisfied through the issuance of 46,082 shares of the Company’s common stock (See Note 22b). On February 9, 2018, principal and accrued interest of $1,250,000 and $133,884, respectively, on the January 2018 10% Convertible Note was satisfied through the issuance of 34,597 shares of the Company’s common stock (See Note 22e). During December 2018, principal and accrued interest of $18,865 and $259,408, respectively, on the 10% Convertible Note was satisfied through the issuance of 109,724 shares of the Company’s common stock (See Note 22a). Issuances of Common Stock upon Exercise of Stock Options During January 2018, the Company issued a total of 3,000 shares of its common stock upon the cash exercise of options. These options were issued pursuant to the Company’s Plans. The Company received cash of $97,800 as a result of these option exercises. Issuances of Common Stock upon Exercise of Warrants During January 2018, the Company issued a total of 93,324 shares of its common stock upon the cash and cashless exercise of warrants to purchase an aggregate of 109,382 shares of its common stock. These warrants were issued between August 2017 and December 2017 in conjunction with various common stock and debt financings. The Company received cash of $867,166 as a result of these warrant exercises. On May 8, 2018, the Company issued 13,958 shares of common stock pursuant a cashless exercise of warrants issued to Divine Capital Markets, LLC, its Placement Agent (the “Placement Agent”) for the 2017 private placement of the Series C Preferred Stock and warrants. For its services, the Placement Agent received, a warrant to purchase 9,100 shares of the Company’s common stock at $14.40 per share and a second warrant to purchase 9,100 shares of the Company’s common stock at $20.00 per share. Issuances of common stock in connection with convertible notes On February 9, 2018, in conjunction with the securities purchase agreement to sell the January 2018 10% Convertible Note in the principal amount of $1,250,000 the Company issued 27,174 shares of restricted common stock to the institutional investor (See Note 22b). On April 16, 2018, in conjunction with the securities purchase agreements to sell the 12% April 2018 Convertible Note in the principal amount of $1,722,222, the Company issued 10,046 shares of restricted common stock to the institutional investor (See Note 22d). On May 15, 2018, in conjunction with the securities purchase agreement to sell the 10% Convertible Note in the principal amount of $6,000,000 the Company issued 17,241 shares of restricted common stock to the institutional investor (See Note 22a). On August 10, 2018, pursuant to an amendment to the 10% Convertible Note entered into on July 2, 2018, the Company is required to issue an additional 31,000 shares of restricted common stock to the holder of the note. On July 2, 2018, in conjunction with the securities purchase agreement to sell the Second 10% Convertible Note in the principal amount of $1,000,000 the Company issued 20,000 shares of restricted common stock to the institutional investor (See Note 22a). On August 16, 2018, in conjunction with the securities purchase agreements to sell secured promissory notes in the aggregate principal face amount of $1,272,600, the Company issued 20,000 shares of restricted common stock to the institutional investors (See Note 20h). During September 2018, in conjunction with the securities purchase agreements to sell secured promissory notes in the aggregate principal face amount of $789,473, the Company issued 22,500 shares of restricted common stock to the institutional investors (See Note 20i). On October 11, 2018, in conjunction with the securities purchase agreements to secured promissory note in the aggregate principal face amount of $565,000, the Company issued 20,000 shares of restricted common stock to the institutional investor (See Note 20j). Issuances of Common Stock upon Conversion of Series D Preferred Stock During the year ended December 31, 2018, pursuant to the conversion terms of the Series D Preferred Stock, 378,776 shares of the Series D Preferred Stock were converted into 37,878 shares of the Company’s common stock. Issuances of Common Stock for cash and cancellation of short-term advances On October 5, 2017, Ault & Company purchased 3,750 shares of the Company’s common stock at $12.00 per share and a warrant to purchase up to 3,750 shares of the Company’s common stock at $12.00 per share for an aggregate purchase price of $45,000. The shares and warrants were issued by the Company on May 8, 2018. Ault & Company is controlled by Mr. Milton Ault, the Company’s Chairman and Chief Executive Officer. On May 15, 2018, the Company entered into securities purchase agreements with certain investors in which the Company sold an aggregate of 384,589 shares of its common stock, 206,730 for cash and 177,858 for the cancellation of short-term advances, and five-year warrants to purchase such number of shares of common stock equal to the shares of common stock purchased by the investors. The Company received aggregate consideration of $5,999,584, consisting of cash and the cancellation of short-term advances of $3,225,000 and $2,774,584, respectively. These securities were issued pursuant to our registration statement filed with the Securities and Exchange Commission (File No. 333-222132) which became effective on January 11, 2018. Treasury Stock The Company utilizes the cost method of accounting for treasury stock. The cost of reissued shares is determined under the last-in, first-out method. The Company purchased 2,750 shares for $57,748 during the year ended December 31, 2018. 2017 Issuances Issuances of Common Stock for Cash or a Combination of Cash and Cancellation of Debt On March 15, 2017, Company entered into a subscription agreement with a related party for the sale of 25,000 shares of common stock at $12.00 per share for the aggregate purchase price of $300,000. On July 24, 2017, we entered into subscription agreements with six investors, and on July 25, 2017 we entered into a securities purchase agreement with an institutional investor, under which we agreed to issue and sell in the aggregate 42,568 shares of common stock to the investors at $11.00 per share for an aggregate purchase price of $468,250. Of the aggregate purchase price of $468,250, $445,250 was paid in cash and $23,000, which represented 2,091 of the total shares of common stock sold, was in consideration for the cancellation of debt of the Company. The company granted warrants to purchase 5,455 shares of common stock to two of the investors that entered into the subscription agreements at $15.00 per share. In a concurrent private placement, we sold to the institutional investor warrants to purchase an aggregate of 8,182 shares of the Company’s common stock at an exercise price equal to $11.00 per share. On October 18, 2017, the Company entered into subscription agreements with five investors, under which we agreed to issue and sell in the aggregate 22,612 shares of common stock to the investors at $13.40 per share for an aggregate purchase price of $303,000. $210,000 of the purchase price was paid in cash and $93,000, which represented 6,940 of the total shares of common stock sold, was paid through the cancellation of debt incurred by the Company. On November 7, 2017, the Company entered into subscription agreements with investors under which the Company agreed to issue and sell in the aggregate 36,250 shares of common stock to the investors at $12.00 per share for an aggregate purchase price of $435,000. $280,000 of the aggregate purchase price was paid in cash and $155,000, which represented 12,917 of the total shares of common stock sold, was paid through the cancellation of debt incurred by the Company. On December 5, 2017, the Company entered into subscription agreements with investors for the sale of 32,000 shares of common stock at $25.00 per share for the aggregate purchase price of $800,000. The direct offering closed December 13, 2017. In aggregate, the above transactions resulted in the issuance of 136,482 shares of common stock for cash proceeds, net of $72,769 in financing costs, of $1,962,481 and the issuance of 21,498 shares of common stock for the cancellation of $271,000 in debt incurred by the Company. Issuances of Common Stock for Services On March 8, 2017, the Company issued an aggregate of 12,547 shares of its common stock as payment for services to a consultant. The shares were valued at $10, an average of $0.80 per share. Between May 9, 2017 and June 18, 2017, the Company issued an aggregate of 47,808 shares of its common stock as payment for services to its consultant. The shares were valued at $498,769, an average of $10.40 per share. Between August 21, 2017 and September 5, 2017, the Company issued an aggregate of 29,032 shares of its common stock as payment for services to its consultants. The shares were valued at $363,613, an average of $12.40 per share. Between October 3, 2017 and December 28, 2017, the Company issued an aggregate of 30,600 shares of its common stock as payment for services to its consultants. The shares were valued at $790,320, an average of $25.80 per share. In aggregate, during the year ended December 31, 2017, the Company issued a total of 108,067 shares of its common stock, with a value of $1,662,702, to its consultants for services. Issuance of common stock for conversion of debt Between February 16, 2017 and February 23, 2017, the Company issued 33,333 shares of its common stock, an extinguishment price of $12.00 per share, for the cancellation of $400,000 in demand promissory notes. On April 5, 2017, the Company issued 18,000 shares of its common stock, at a price of $15.00 per share, for the cancellation of $270,000 in demand promissory notes. On June 28, 2017, the Company issued 9,455 shares of its common stock, at a price of $11.00 per share, for the cancellation of a 7% convertible promissory note in the principal amount of $104,000. On June 28, 2017, the holders of $55,000 of in short-term loans agreed to cancel their notes for the purchase of 5,000 shares of the Company’s common stock at a price of $11.00 per share. On July 28, 2017, an institutional investor agreed to cancel two promissory notes in the aggregate amount of $145,000 for the issuance of 13,180 shares of the Company’s common stock at a price of $11.00 per share. During the period from November 27, 2017 to December 6, 2017, the entire $530,000 of principal on the Convertible Note was satisfied through the issuance of 48,182 shares of the Company’s common stock (See Note 20). On December 13, 2017 and December 14, 2017, the entire $1,111,000 of principal on the November 5% Convertible Note was satisfied through the issuance of 92,583 shares of the Company’s common stock (See Note 22f). On December 28, 2017, principal and accrued interest of $198,000 and $4,818, respectively, on the 12% Convertible Note was satisfied through the issuance of 18,438 shares of the Company’s common stock (See Note 22c). During December 2017, the entire principal and accrued interest of $880,000 and $54,452, respectively, on the 10% Convertible Notes was satisfied through the issuance of 77,871 shares of the Company’s common stock (See Note 22g). Issuances of Common Stock upon Exercise of Stock Options Between December 4, 2017 and December 22, 2017, the Company issued a total of 361,458 shares of its common stock upon the cash and cashless exercise of options to purchase an aggregate of 363,500 shares of its common stock. These options were issued pursuant to the Company’s Plans. The Company received cash of $557,360 as a result of these option exercises. Issuances of Common Stock upon Exercise of Warrants Between November 27, 2017 and December 28, 2017, the Company issued a total of 93,593 shares of its common stock upon the cash and cashless exercise of warrants to purchase an aggregate of 105,673 shares of its common stock. These warrants were issued b |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 25. INCOME TAXES On December 22, 2017, the United States enacted significant changes to U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”). Introduced initially as the Tax Cuts and Jobs Act, the Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Act”) was enacted on December 22, 2017. The Act applies to corporations generally beginning with taxable years starting after December 31, 2017 and reduces the corporate tax rate from a graduated set of rates with a maximum 35% tax rate to a flat 21% tax rate. Additionally, the Act introduces other changes that impact corporations, including a net operating loss (“NOL”) deduction annual limitation, an interest expense deduction annual limitation, elimination of the alternative minimum tax, and immediate expensing of the full cost of qualified property. The Act also introduces an international tax reform that moves the U.S. toward a territorial system, in which income earned in other countries will generally not be subject to U.S. taxation. However, the accumulated foreign earnings of certain foreign corporations will be subject to a one-time transition tax, which can be elected to be paid over an eight-year tax transition period, using specified percentages, or in one lump sum. NOL and foreign tax credit (“FTC”) carryforwards can be used to offset the transition tax liability. The Company does not expect that this change will have an impact on the Company as it has not earned taxable income in the past and it has significant NOL carryforwards. The application of this rate reduction to the ending deferred tax assets and deferred tax liabilities impacted our expense for income taxes in 2017 by $1,138,845 which was fully offset by a corresponding change to our valuation allowance. We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017 and throughout 2018. At December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes. At December 31, 2018, we have now completed our accounting for all of the enactment-date income tax effects of the Act. During 2018 we did not need to adjust to the provisional amounts recorded at December 31, 2017. The 2017 and 2018 impacts of the enactment of the Tax Act are reflected in the tables below. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company's deferred tax assets are as follows: 2018 2017 Deferred tax asset: Net operating loss $ 6,924,325 $ 3,543,284 Reserves and allowances 1,724,446 568,866 Equity Compensation 425,603 155,565 Tax credit carryforward 142,484 162,794 Property and equipment 300,240 231,148 Total deferred tax asset 9,517,098 4,661,657 Deferred tax liability: Intangible assets, net (567,923 ) (653,139 ) Total deferred tax liability (567,923 ) (653,139 ) Valuation allowance (9,054,147 ) (4,166,999 ) Deferred tax asset (liability), net $ (104,972 ) $ (158,481 ) The Company had Federal and state net operating loss carryforwards of approximately $43,051,999 and $7,960,184 at December 31, 2018 and December 31, 2017 respectively, available to offset future taxable income, expiring at various times starting in 2022 through 2039. The net operating loss generated in 2018 will carryforward indefinitely. In accordance with Section 382 of the Internal Revenue Code, the future utilization of the Company’s net operating loss to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future. Management believes that such an ownership change may have occurred during 2017. The Company has estimated the Section 382 annual limitation due to this ownership change to be approximately $157,433. This has been used to reduce the amount of the net operating losses that have limited carryforward periods. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available and due to the last five years significant losses there is substantial doubt related to the Company’s ability to utilize its deferred tax assets, the Company recorded a full valuation allowance of the deferred tax asset. For the year ended December 31, 2018, the valuation allowance has increased by $4,887,148. The 2015 tax year remains open to examination by the Internal Revenue Service ( “IRS” “FTB” (“CDR” As of December 31, 2018, the Company’s foreign subsidiaries had accumulated losses for income tax purposes in the amount of approximately $1,808,466. All of the Company’s international accumulated losses were generated in the United Kingdom and Israel which have statutory tax rates of 20% and 7.5% respectively. These net operating losses may be carried forward and offset against taxable income in the future for an indefinite period. The net income tax benefit consists of the following: 2018 2017 Current Foreign $ 134,017 $ — Federal — — State — — Total Current $ 134,017 Deferred Foreign (52,134 ) $ — Federal (158,482 ) (78,393 ) State — — Total Deferred $ (210,616 ) $ (78,393 ) Income tax (benefit) $ (76,599 ) $ (78,393 ) The Company’s effective tax rates were (0.3%) and (0.8%) for the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, the effective tax rate differed from the U.S. federal statutory rate primarily due to the change in the valuation allowance and the effect of changes in tax rates in future periods. The reconciliation of income tax attributable to operations computed at the 2018 and 2017 U.S. Federal statutory income tax rates of 21% and 34% respectively to income tax expense is as follows: 2018 2017 Tax benefit at U.S. Federal statutory tax rate (21.0 %) (34.0 %) Increase (decrease) in tax rate resulting from: Effect of change in tax rates 1.8 % 12.0 % Effect of Section 382 limitation 4.9 % 0.0 % Increase in valuation allowance 15.1 % 17.0 % Nondeductible meals & entertainment expense and other 0.9 % 6.1 % State taxes, net of federal benefit (2.4 %) (4.5 %) Foreign rate differential 0.3 % 0.7 % Stock compensation expense (0.1 %) 1.9 % Effective tax rate (0.3 %) (0.8 %) The Company accounts for uncertain tax positions in accordance with ASC No. 740-10-25. ASC No. 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC No. 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC No. 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management of the Company has evaluated tax positions taken by the Company and has concluded that as of December 31, 2018 and 2017, there are no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in the financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | 26. RELATED PARTY TRANSACTIONS a. The Company has made a strategic investment in AVLP in expectation of future business generated by the Company from MTIX Ltd., an advanced materials and processing technology company located in Huddersfield, West Yorkshire, UK (“MTIX”), a wholly-owned subsidiary of AVLP. The Company’s investments in AVLP consist of convertible promissory notes, warrants and shares of common stock of AVLP. On September 6, 2017, the Company and AVLP entered into a Loan and Security Agreement (“AVLP Loan Agreement”) with an effective date of August 21, 2017 pursuant to which the Company will provide AVLP a non-revolving credit facility of up to $10 million for a period ending on August 21, 2019, subject to the terms and conditions stated in the Loan Agreement, including that the Company having available funds to grant such credit. At December 31, 2018, the Company has provided loans to AVLP in the principal amount $6,943,997 and, in addition to the 12% convertible promissory notes, AVLP has issued to the Company warrants to purchase 13,887,994 shares of AVLP common stock. Under the terms of the AVLP Loan Agreement, any notes issued by AVLP are secured by the assets of AVLP. As of December 31, 2018 and 2017, the Company recorded contractual interest receivable attributed to the AVLP Loan Agreement of $1,004,317 and $324,000, respectively. During the year ended December 31, 2018 and 2017, the Company also acquired in the open market 430,942 shares of AVLP common stock for $417,169 and 221,333 shares of AVLP common stock for $191,782 respectively. At December 31, 2018, the closing market price of AVLP’s common stock was $0.90, a decline from $1.75 at December 31, 2017. The Company has determined that its investment in AVLP marketable equity securities are accounted for pursuant to the fair value method and based upon the closing market price of common stock at December 31, 2018, the amount of the Company’s unrealized gain is $119,329. Philou is AVLP’s controlling stockholder. Mr. Ault is Chairman of AVLP’s Board of Directors and the Chairman of the Company’s Board of Directors. Mr. William B. Horne is the Chief Financial Officer of AVLP and the Chief Financial Officer and a director of the Company. During the years ended December 31, 2018 and 2017, the Company recognized $3,907,280 and $173,751, respectively, in revenues resulting from its relationship with MTIX, which was acquired by AVLP on August 22, 2017 and is therefore deemed to be a related party. In March 2017, the Company was awarded a 3-year, $50 million purchase order by MTIX to manufacture, install and service the Multiplex Laser Surface Enhancement (“MLSE”) plasma-laser system. Management believes that the MLSE purchase order will be a source of revenue and generate significant cash flows for the Company. However, at December 31, 2018, $3,887,000 in revenues recognized during the years ended December 31, 2018 and 2017, had not yet been received and was reflected on the financial statements as accounts receivable, related party. Subsequent to year end the Company received $2,676,219 for manufacturing services performed on the first MLSE system. b. On April 13, 2018, the Company entered into an amended and restated consulting agreement with Mr. Ault pursuant to which the parties thereto agreed to amend and restate that certain independent contractor agreement dated September 22, 2016, by and between the Company and Mr. Ault. In accordance with the terms set forth in the Agreement, Mr. Ault shall continue to serve as the Company’s Chief Executive Officer and Chairman of the Board of Directors in consideration of a monthly fee of $33,333, effective November 15, 2017. On June 17, 2018, the Company entered into a ten-year executive employment agreement with Mr. Ault. For his services, Mr. Ault will be paid a base salary of $400,000 per annum. For his services, Mr. Ault was paid $400,000 and $207,500, respectively, during the years ended December 31, 2018 and 2017. c. On March 9, 2017, the Company entered into a Preferred Stock Purchase Agreement with Philou. Pursuant to the terms of the Preferred Stock Purchase Agreement, Philou may invest up to $5,000,000 in the Company through the purchase of Series B Preferred Stock over 36 months. Philou has purchased 125,000 shares of Series B Preferred Stock pursuant to the terms of the Purchase Agreement, the most recent purchase having occurred on April 24, 2018 for the purchase of 25,000 shares of Series B Preferred Stock d. Between July 6, 2017 and September 30, 2018, Milton C. Ault, III, the Company’s Chairman and Chief Executive Officer, personally guaranteed the repayment of (i) $8,218,000 from the sale of Advances on Future Receipts (ii) and $4,781,000 from the sale of the promissory notes. These personal guarantees were necessary to facilitate the consummation of these financing transactions. Mr. Ault’s payment obligations would be triggered if the Company failed to perform under these financing obligations. Our board of directors has agreed to compensate Mr. Ault for his personal guarantees. The amount of annual compensation for each of these guarantees, which will be in the form of non-cash compensation, is approximately 1.5% of the amount of the obligation. e. During the year ended December 31, 2017, DP Lending made loans to Alzamend Neuro, Inc. (“Alzamend”), in the amount of $44,000. AVLP is a party to a management services agreement pursuant to which AVLP provides management, consulting and financial services to Alzamend. The outstanding principal under these loans was repaid during 2018. As additional consideration, the Company received a warrant to purchase 22,000 shares of Alzamend’s common stock at an exercise price of $0.30 per share of common stock. f. On December 5, 2017, the Company entered into an exchange agreement with WT Johnson pursuant to which the Company issued to WT Johnson two convertible promissory notes in the principal amount of $600,000 (“Note A”) and $1,667,766 (“Note B”), in exchange for cancellation of amounts due to WT Johnson by MTIX Ltd., a related party of the Company. During December 2017, the Company issued 30,000 shares of its common stock to WT Johnson & Sons upon the conversion of Note A and WT Johnson subsequently sold the 30,000 shares. The proceeds from the sale of Note A were sufficient to satisfy the entire $2,267,766 obligation as well as an additional $400,500 of value added tax due to WT Johnson. Concurrent with entering into the exchange agreement, the Company received a promissory note in the amount of $2,667,766 from MTIX. At December 31, 2017, the Company has valued the note receivable at $600,000, the carrying amount of Note A. The Company will recognize the remainder of the amount due from MTIX upon payment of the promissory note by MTIX. g. Between May 5, 2017 and June 30, 2017, the Company received additional short-term loans of $140,000 from four accredited investors of which $75,000 was from the Company’s corporate counsel, a related party. As additional consideration, the investors received five-year warrants to purchase 11,219 shares of common stock at a weighted average exercise price of $15.40 per share. On June 28, 2017, $52,000 in short-term loans that was received from the related party was converted into one of the Series C Units (See Note 24) and on July 24, 2017, the remaining $23,000 in short-term loans was converted in 2,091 shares of the Company’s common stock in conjunction with the subscription agreements that the Company entered into with six investors (See Note 20h). h. During the year ended December 31, 2017, our President, Amos Kohn, purchased certain real property that will serve as a facility for the Company’s business operations in Israel. The Company made $300,000 of payments to the seller of the property and received a 28% undivided interest in the real property (“Property’). The Company’s subsidiary, Coolisys, entered into a Trust Agreement and Tenancy In Common Agreement with Roni Kohn, who owns a 72% interest in the Property, is the daughter of Mr. Kohn and is an Israeli citizen. The Property was purchased to serve as a residence/office facility for the Company in order to oversee its European operations and to expand its business in the hi-tech industry located in Israel. Pursuant to the Trust Agreement, Ms. Kohn will hold and manage Coolisys’ undivided 28% interest in the Property. The trust will be in effect until it is terminated by mutual agreement of the parties. During the term of the trust, the Ms. Kohn will not sell, lease, sublease, transfer, grant, encumber, change or effect any other disposition with respect to the Property or the Coolisys’ interest without the Company’s approval. |
SEGMENT, CUSTOMERS AND GEOGRAPH
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT CUSTOMERS AND GEOGRAPHICAL INFORMATION | 27. SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION The Company has five reportable segments as of December 31, 2018 and had two reportable segments as of December 3, 2017; see Note 1 for a brief description of the Company’s business. The following data presents the revenues, expenditures and other operating data of the Company’s geographic operating segments and presented in accordance with ASC No. 280. Year ended December 31, 2018 DPC DPL Enertec Digital Farms I.AM Eliminations Total Revenue $ 10,499,612 $ 2,036,530 $ 5,226,075 $ — $ — $ — $ 17,762,217 Revenue, cryptocurrency mining — — — 1,675,549 — — 1,675,549 Revenue, related party 3,907,280 — — — — — 3,907,280 Revenue, restaurant operations — — — — 3,462,140 — 3,462,140 Revenue, lending activities 347,033 — — — — — 347,033 Inter-segment revenues 36,833 — — — — (36,833 ) — Total revenues $ 14,790,758 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ (36,833 ) $ 27,154,219 Depreciation and amortization expense $ 300,326 $ 65,046 $ 389,808 $ 2,151,505 $ — $ — $ 2,906,685 Loss from operations $ (3,608,828 ) $ (586,107 ) $ (431,320 ) $ (6,369,138 ) $ (81,264 ) $ — $ (11,076,657 ) Capital expenditures for segment assets, as of December 31, 2018 $ 44,190 $ 1,301 $ 48,826 $ 8,891,928 $ 184,377 $ — $ 9,169,992 Identifiable assets as of December 31, 2018 $ 28,623,729 $ 1,458,699 $ 10,251,816 $ 7,018,958 $ 2,072,678 $ — $ 49,425,880 Year ended December 31, 2017 DPC DPL Eliminations Total Revenues $ 7,889,731 $ 2,111,018 $ — $ 10,000,749 Revenue, related party 173,751 — — 173,751 Inter-segment revenues 53,501 — (53,501 ) — Total revenues $ 8,116,983 $ 2,111,018 $ (53,501 ) $ 10,174,500 Depreciation and amortization expense $ 183,252 $ 70,754 $ — $ 254,006 Loss from operations $ (5,558,272 ) $ (424,773 ) $ — $ (5,983,045 ) Capital expenditures for segment assets, as of $ 382,250 $ 20,529 $ — $ 402,779 Identifiable assets as of December 31, 2017 $ 28,780,371 $ 1,728,523 $ — $ 30,508,894 Concentration Risk: The following table provides the percentage of total revenues attributable to a single customer from which 10% or more of total revenues are derived: For the Year Ended December 31, 2018 Total Revenues by Major Percentage of Customers Total Company (in thousands) Revenues Customer A $ 3,907,280 14 % For the Year Ended December 31, 2017 Total Revenues by Major Percentage of Customers Total Company (in thousands) Revenues Customer B $ 1,340,766 13 % Revenue from Customer A is related party revenue attributable to Coolisys and revenue from Customer B is also attributable to Coolisys. At December 31, 2018, MTIX represented all of the Company’s accounts and other receivable, related party. For the years ended December 31, 2018 and 2017, total revenues from external customers divided on the basis of the Company’s product lines are as follows: For the Years Ended December 31, 2018 2017 Revenues: Commercial products $ 10,597,256 $ 5,488,657 Defense products 16,556,963 4,685,843 Total revenues $ 27,154,219 $ 10,174,500 Financial data relating to geographic areas: The Company’s total revenues are attributed to geographic areas based on the location. The following table presents total revenues for the years ended December 31, 2018 and 2017. Other than as shown, no foreign country or region contributed materially to revenues or long-lived assets for these periods: For the Years Ended December 31, 2018 2017 Revenues: North America $ 19,113,226 $ 6,636,954 Europe 1,765,991 2,634,166 Middle East 5,226,075 672,256 Other 1,048,927 231,124 Total revenues $ 27,154,219 $ 10,174,500 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 28. SUBSEQUENT EVENTS In accordance with FASB ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2018 and thru the date of this report being issued and has determined that it does not have any material subsequent events to disclose in these financial statements except for the following. Amendments to Certificate of Incorporation On January 3, 2019, the Company filed a certificate of amendment (the “Certificate of Amendment”) to its Certificate of Incorporation, with the Secretary of State of the State of Delaware, to effectuate an increase to the number of authorized shares of common stock of the Company. Pursuant to the Certificate of Amendment, the Company increased the number of authorized shares of its Class A common stock, par value $0.001, to 500,000,000 from 200,000,000 (the “Authorized Increase”). The number of authorized shares of the Company’s Class B common stock remains at 25,000,000 and the number of authorized shares of the Company’s preferred stock remains at 25,000,000. As a result of the increase of authorized shares of its Class A common stock, the aggregate number of the Company’s authorized shares is 550,000,000. The Authorized Increase was approved by the Company’s board of directors as of December 28, 2018, and approved by a vote of the stockholders of the Company at the December 28, 2018 Annual Meeting of Stockholders. The Certificate of Amendment became effective upon filing with the State of Delaware on January 3, 2019. On February 27, 2019, the Company filed a Certificate of Designations of Rights and Preferences of Series C Convertible Redeemable Preferred Stock (the “Certificate of Designations”) to its Certificate of Incorporation, as amended on January 2, 2019, with the Secretary of State of the State of Delaware to establish the preferences, limitations and relative rights of the Series C Convertible Redeemable Preferred Stock. The Series C Redeemable Preferred Stock issued and outstanding sixty (60) months from the from their date of issuance (the “Redemption Date”), shall be mandatorily redeemed and repurchased by the Company at the Stated Value. On March 14, 2019, pursuant to the authorization provided by the Company’s stockholders with no change in authorized shares or par value per share. Amendments to 10% Convertible Note On January 9, 2019, the Company and the Investor of the 10% Convertible Note entered into an amendment, which revised the amortization schedule of the 10% Convertible Note such that the monthly amortization payments in the principal amount $309,193, at the request of the holder, shall be satisfied by the issuance of shares of the Company’s common stock. The shares of common stock shall be issued at a price equal to the greater of (i) $2.40 per share (the closing price of the Company’s common stock on January 9, 2019) or (ii) 80% of the lowest daily VWAP in the three days prior to the date of issuance, but not to exceed $8.00 per share. However, the Company shall have the right to pay the monthly amortization payment in cash within 72 hours by advising the investor via email within two hours of receipt of any conversion notice. Between January 4, 2019 and February 21, 2019, the Company issued to the investor 336,486 shares of its common stock at $1.96 per share upon the conversion of $1,053,351 in principal and accrued interest. The investor received $660,337 from the sale of the shares of common stock, which approximated the value of the shares of common stock on the date of issuance, resulting in a True-Up Payment due to the investor of $393,014. Public Offering On March 29, 2019, the entered into an underwriting agreement (the “Underwriting Agreement”) with A.G.P./Alliance Global Partners (the “Underwriter”), pursuant to which the Company agreed to issue and sell an aggregate of (a) 2,855,500 shares of its common stock (the “Shares”) together with warrants to purchase 2,855,500 shares of common stock (the “Common Warrants”) and (b) pre-funded warrants to purchase up to an aggregate of 12,700,000 shares of its common stock (the “Pre-Funded Warrants”) together with a number of Common Warrants to purchase 12,700,000 shares of common stock (the “Offering”). The Shares were sold to the purchasers at the public offering price of $0.44 per share (the “Offering Price”). The Common Warrants were sold at a public offering price of $0.01 per Common Warrant. The Pre-Funded Warrants were offered to each purchaser whose purchase of the Shares and the Common Warrant in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of the Company’s outstanding common stock immediately following the consummation of the Offering. The purchase price of each Pre-Funded Warrant equaled the Offering Price at which the Shares were sold to the public in the Offering, minus $0.01, and the exercise price of each Pre-Funded Warrant equaled $0.01 per share. Pursuant to the Underwriting Agreement, the Company also granted the Underwriter the option to purchase up to 428,325 additional shares of common stock, and/or Pre-funded Warrants to purchase up to 1,905,000 additional shares of common stock and/or Common Warrants to purchase up to 2,333,325 additional shares of common stock to cover over-allotments, if any. The option is exercisable 45 days after entry into the Underwriting Agreement. The Offering was made pursuant to the shelf registration statement on Form S-3 (File No. 333-222132), as amended, that was filed by the Company with the SEC on January 8, 2019 and declared effective by the SEC on January 11, 2018, and a related prospectus supplement. The Common Warrants are exercisable at any time after the date of issuance at an exercise price of $0.45 per share and will expire on the fifth anniversary of the original issuance date. If at the time of exercise, there is no effective registration statement registering, or no current prospectus available for, the issuance of the shares of common stock underlying the Common Warrants, then the Common Warrant may be exercised through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Common Warrant. If on any date on or after May 2, 2019, the volume weighted average price of the Company’s common stock fails to exceed the exercise price of the Common Warrant in effect on such date, the Common Warrant may be exercised such that the holder will receive one common share for each warrant held. The Pre-Funded Warrants are exercisable at any time after the date of issuance and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. As an alternative to payment in immediately available funds, the holder may elect to exercise the Pre-Funded Warrant through a cashless exercise. In addition, the Company has also issued the Underwriter a warrant to purchase a maximum of 622,220 additional shares of common stock (equal to 4% of the Shares sold in the Offering plus the number of shares of common stock underlying the Pre-Funded Warrants) at an initial exercise price of $0.50 per share, with a term of five years (the “Underwriter’s Warrant”). The Underwriter’s Warrant contains demand and piggy-back registration rights. If at the time of exercise, there is no effective registration statement registering, or no current prospectus available for, the issuance of the shares of common stock underlying the Underwriter’s Warrant, then the Underwriter’s Warrant may be exercised through a cashless exercise. The Company received net proceeds from the Offering of approximately $6 million, after deducting underwriting discounts and commissions and estimated Offering expenses, and assuming no exercise of the Underwriter’s option to purchase additional shares. The Company used the net proceeds from the Offering for the repayment of debt, working capital and other general corporate purposes. The Offering closed on April 2, 2019 and as of April 12, 2019 the Company had issued a total of 12,555,500 shares of its common stock, inclusive of shares issued pursuant to the exercise of a total of 9,700,000 Pre-Funded Warrants. WDCO ATM Offering Between January 1, 2019 and April 12, 2018, the Company had received net proceeds of $4,469,630 through the sale of 4,791,642 shares of the Company’s common stock through the WDCO ATM Offering. The offer and sale of the shares through the WDCO ATM Offering were made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-222132) filed with the SEC on December 18, 2017, amended on January 8, 2018, and declared effective by the SEC on January 11, 2018, and a prospectus supplement related to the ATM Offering, dated October 15, 2018. Series C Convertible Redeemable Preferred Stock On February 27, 2019, the Company entered into a Securities Purchase Agreement with Ault & Company, Inc., a Delaware corporation and a stockholder of the Company (“Ault & Company”). Pursuant to the terms of the Agreement, Ault & Company will invest at its sole and absolute discretion up to $2,500,000 in the Company through the purchase of the Company’s Series C Convertible Redeemable Preferred Stock (“The Series C Preferred Stock”), during the period commencing on the Closing Date and ending on December 31, 2019. Each share of Series C Preferred Stock shall be purchased at $1,000 (the “Stated Value”) for up to a maximum issuance of 2,500 shares of Preferred Stock. Each share of Preferred Stock shall become convertible after the eighteen months from the date from the date of issuance into such number of fully paid and non-assessable shares of the Company’s common stock (“Common Stock”) for $2.40 per share, subject to adjustments (the “Conversion Price”). The Preferred Stock is mandatorily redeemable by the Company after five years from the date of issuance. January 2019 Exchange Agreement On January 23, 2019 the Company entered into an Exchange Agreement (the “January ’19 Exchange Agreement”) with an institutional investor pursuant to which the Company issued to the investor two new 8% promissory notes in the aggregate principal amount of $1,043,799 (the “New Notes”) the Secured Promissory Note issued by the Company to the investor on October 10, 2018 (the “October Note”) and that certain Secured Promissory Note issued by the Company to the investor on August 16, 2018, as amended on November 29, 2018 (the “November Note”, and together with the October Note, the “Old Notes”). Pursuant to the January ’19 Exchange Agreement, the investor may elect to receive from the Company shares of Common Stock of the Company issued under the Company’s Registration Statement on Form S-3 (File No. 333-222132). Any Common Stock issued to the investor in accordance therewith shall reduce the outstanding sums due under the New Notes by an amount equal to the number of shares of Common Stock issued multiplied by the applicable issuance price. The number of shares of Common Stock issuable upon delivery of issuance notices by the investor to the Company shall be determined by dividing the amount of the New Note to be drawn down by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the acquisition of the Common Stock. In addition, in the event the investor’s proceeds from the sale of all Common Stock received by the investor pursuant to the terms of the February ’19 Exchange Agreement, do not equal at least 100% of the deemed payment of the outstanding principal balance of the New Note, the Company shall owe the difference to the investor in cash or through the delivery of free trading shares of Common Stock. Subject to the conditions set forth in the Exchange Agreement, on or after April 15, 2019, unless the New Notes have been paid in full, the Investor may be issued a secured convertible promissory note (the “Convertible Note”) in exchange for the November Note. The Convertible Note, if issued, will be issued on or about April 15, 2019, with a maturity date of July 15, 2019, and will bear interest at 8% per annum payable by the Company to the Investor, in cash, within seven days of the end of each calendar quarter while the Convertible Note remains outstanding. The number of shares of Common Stock issuable upon conversion of the Convertible Note shall be determined by dividing the amount to be converted by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the conversion, subject to certain conditions. The Convertible Note contains standard and customary events of default including, but not limited to, failure to make payments when due under the Convertible Note, failure to comply with certain covenants contained in the Convertible Note, or bankruptcy or insolvency of the Company. On February 11, 2019 and March 22, 2019, pursuant to the January ’19 Exchange Agreement, the Company issued to the investor 436,753 and 102,041 shares, respectively, of the Company’s common stock for an aggregate reduction in the note of $876,324, resulting in a remaining balance due of $171,883. February 2019 Exchange Agreement On February 20, 2019 the Company entered into an Exchange Agreement (the “February ’19 Exchange Agreement”) with an institutional investor pursuant to which the Company issued to the investor a new 8% promissory note in the principal amount of $433,884 (the “New Note”) in exchange for the Secured Promissory Note issued by the Company to the investor on August 16, 2018, as amended on November 29, 2018 (the “Old Note”). Pursuant to the February ’19 Exchange Agreement, the investor may elect to receive from the Company shares of Common Stock of the Company issued under the Company’s Registration Statement on Form S-3 (File No. 333-222132). Any Common Stock issued to the investor in accordance therewith shall reduce the outstanding sums due under the New Note by an amount equal to the number of shares of Common Stock issued multiplied by the applicable issuance price. The number of shares of Common Stock issuable upon delivery of issuance notices by the investor to the Company shall be determined by dividing the amount of the New Note to be drawn down by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the acquisition of the Common Stock. In addition, in the event the investor’s proceeds from the sale of all Common Stock received by the investor pursuant to the terms of the February ’19 Exchange Agreement, do not equal at least 100% of the deemed payment of the outstanding principal balance of the New Note, the Company shall owe the difference to the investor in cash or through the delivery of free trading shares of Common Stock. On March 18, 2019 and April 4, 2019, pursuant to the February ’19 Exchange Agreement, the Company issued to the investor 180,785 and 375,000 shares of the Company’s common stock for an aggregate reduction in the note of $250.062, resulting in a remaining balance due of $183,822. Issuances of Common Stock for Services Between January 7, 2019 and March 20, 2019, the Company issued an aggregate of 375,000 shares of its common stock as payment for services to its consultant. The shares were valued at $482,500, an average of $1.29 per share. Short-term Promissory Notes On December 28, 2018, Enertec entered into a $500,000 Secured Promissory Note (the “Enertec Note”), whereby Enertec agreed to pay interest in an amount of 10% per annum in cash to the investor, beginning on January 15, 2019, on a monthly basis, until the Enertec Note is paid in full. The maturity date of the Enertec Note shall be the earlier of June 15, 2019 or as otherwise provided in the terms of the Enertec Note. The proceeds from the Enertec Note were received in January 2019. The Enertec Note was paid from proceeds received in the Offering. On December 28, 2018, Microphase entered into a $200,000 Secured Promissory Note (the “Microphase Note”), whereby Microphase agreed to pay interest in an amount of 10% per annum in cash to the investor, beginning on January 15, 2019, on a monthly basis, until the Microphase Note is paid in full. The maturity date of the Microphase Note shall be the earlier of March 31, 2019, or as otherwise provided in the terms of the Microphase Note. The Microphase Note was paid from proceeds received in the Offering. In connection with the Enertec Note and the Microphase Note, Milton C. Ault III provided a personal guarantee for the benefit of the investor. Payment of related party receivable During the years ended December 31, 2018 and 2017, the Company recognized $3,907,280 and $173,751 in revenues from MTIX, a related party, to manufacture the Multiplex Laser Surface Enhancement (“MLSE”) plasma-laser systems. On April 12, 2019, the Company received payment of $2,676,219 for manufacturing services performed on the first MLSE system. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of DPW and its wholly-owned subsidiaries, Coolisys, DP Limited, Power-Plus, Enertec, DP Lending and Digital Farms and its majority-owned subsidiaries, Microphase and I.AM. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Accounting Estimates | Accounting Estimates The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Key estimates include acquisition accounting, fair value of certain financial instruments, reserve for trade receivables and inventories, carrying amounts of investments, fair value of digital currencies, accruals of certain liabilities including product warranties, useful lives and depreciation, and deferred income taxes and related valuation allowance. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers Step 1: Identify the contract with the customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, and Step 5: Recognize revenue when the company satisfies a performance obligation. The Company’s disaggregated revenues consist of the following for the year ended December 31, 2018: Year ended December 31, 2018 Digital DPC DPL Enertec Farms I.AM Total Primary Geographical Markets North America $ 13,875,883 $ 11,804 $ — $ 1,675,549 $ 3,462,140 $ 19,025,376 Europe 159,350 1,656,516 — — — 1,815,866 Middle East — — 5,226,075 — — 5,226,075 Other 718,692 368,210 — — — 1,086,902 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Major Goods RF/Microwave Filters $ 3,331,575 $ — $ — $ — $ — $ 3,331,575 Detector logarithmic video amplifiers 1,338,912 — — — — 1,338,912 Power Supply Units 5,829,125 — — — — 5,829,125 Power Supply Systems — 2,036,530 — — — 2,036,530 Healthcare diagnostic systems — — 1,715,512 — — 1,715,512 Defense systems — — 3,510,563 — — 3,510,563 Digital Currency Mining — — — 1,675,549 — 1,675,549 Restaurant operations — — — — 3,462,140 3,462,140 Lending activities 347,033 — — — — 347,033 MLSE Systems 3,907,280 — — — — 3,907,280 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Timing of Revenue Recognition Goods transferred at a a point in time $ 10,846,645 $ 1,411,798 $ — $ 1,675,549 $ 3,462,140 $ 17,396,132 Services transferred over time 3,907,280 624,732 5,226,075 — — 9,758,087 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Sales of Products The Company generates revenues from the sale of its products through a direct and indirect sales force. The Company’s performance obligations to deliver products are satisfied at the point in time when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership. The Company provides standard assurance warranties, which are not separately priced, that the products function as intended. The Company primarily receives fixed consideration for sales of product. Some of the Company’s contracts with distributors include stock rotation rights after six months for slow moving inventory, which represents variable consideration. The Company uses an expected value method to estimate variable consideration and constrains revenue for estimated stock rotations until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. To date, returns have been insignificant. The Company’s customers generally pay within 30 days from the receipt of a valid invoice. Because the Company’s product sales agreements have an expected duration of one year or less, the Company has elected to adopt the practical expedient in ASC 606-10-50-14(a) of not disclosing information about its remaining performance obligations. Manufacturing Services The Company provides manufacturing services in exchange primarily for fixed fees, however, the initial two MLSE units are subject to variable pricing under the $50 million purchase order from MTIX. Under the terms of the MLSE purchase order, the Company shall be entitled to cost plus $100,000 for the manufacture of the first two MLSE units. The Company has determined that the costs of manufacturing the MLSE units will decline over time due to the effects of a learning curve which will result in a great amount of revenue being recognized for these initial two MLSE units. For manufacturing services, which include revenues generated by Enertec and in certain instances revenues generated by DPL, the Company’s performance obligation for manufacturing services is satisfied over time as the Company creates or enhances an asset that the customer controls as the asset is created or enhanced. Generally, the Company recognizes revenue based upon proportional performance over time using a cost to cost method which measures progress based on the costs incurred to total expected costs in satisfying its performance obligation. This method provides a depiction of the progress in providing the manufacturing service because there is a direct relationship between the costs incurred by the Company and the transfer of the manufacturing service to the customer. Manufacturing services that are recognized based upon the proportional performance method are included in the above table as services transferred over time and to the extent the customer has not been invoiced for these revenues, as accrued revenue in the accompanying consolidated balance sheets. Revisions to the Company’s estimates may result in increases or decreases to revenues and income and are reflected in the consolidated financial statements in the periods in which they are first identified. The Company has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component to the extent that the period between when the Company transfers its promised good or service to the customer and when the customer pays is one year or less. The aggregate amount of the transaction price allocated to the performance obligation that is partially unsatisfied as of December 31, 2018 for the MLSE units was approximately $48 million, representing 24 MLSE units. Based on the Company’s expectations regarding funding of the production process and its experience building the first machines, the Company expects to recognize the remaining revenue related to the partially unsatisfied performance obligation over the next two and a half years. The Company will be paid in installments for this performance obligation over the next two and a half years. Lending Activities DP Lending generates revenue from lending activities primarily through interest, origination fees and late/other fees. Interest income on these products is calculated based on the contractual interest rate and recorded as interest income as earned. The origination fees or original issue discounts are recognized over the life of the loan using the effective interest method. Blockchain Mining The Company has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital currency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain. The Company’s factional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the digital currency award received is determined using the market rate of the related digital currency at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital currencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Expenses associated with running the cryptocurrency mining business, such as equipment deprecation and electricity cost are recorded as a component of cost of revenues. We intend to use the digital assets primarily for operating expenses of Digital Farms. During 2018, we used digital assets for debt reduction, capital purchases, consulting fees, data center costs and other operating expenses. Restaurant Operations The Company records revenue from restaurant sales at the time of sale, net of discounts, coupons, employee meals and complimentary meals and gift cards. Restaurant cost of sales primarily includes the cost of good, beverages, and merchandise and disposable paper and plastic goods used in preparing and selling the Company’s menu items, and exclude depreciation and amortization. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. |
Foreign Currency Translation | Foreign Currency Translation A substantial portion of the Company’s revenues are generated in U.S. dollars (“U.S. dollar”). In addition, a substantial portion of the Company’s costs are incurred in U.S. dollars. Company management has determined that the U.S. dollar is the functional currency of the primary economic environment in which it operates. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) No. 830, Foreign Currency Matters (“ASC No. 830”). All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate. The financial statements of DPL and Enertec, whose functional currencies have been determined to be their local currencies, the British Pound (“GBP”) and the Israeli Shekel (“ILS”), have been translated into U.S. dollars in accordance with ASC No. 830. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate in effect for the reporting period. The resulting translation adjustments are reported as other comprehensive income (loss) in the consolidated statement of comprehensive income (loss) and accumulated comprehensive income (loss) in statement of changes in stockholders' equity (deficit). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions. These balances may, at times, exceed the U.S. Federal Deposit Insurance Corporation insurance limits. The Company has cash and cash equivalents of $409,945 and $292,153 at December 31, 2018 and 2017, respectively, in the United Kingdom (“U.K”) and $60,040 and nil, respectively, in Israel. The Company has not experienced any losses on deposits of cash and cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying amount of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company individually reviews all accounts receivable balances and based upon an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. The Company estimates the allowance for doubtful accounts based on historical collection trends, age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that a specific receivable balance may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. A customer’s receivable balance is considered past-due based on its contractual terms. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due. Based on an assessment as of December 31, 2018 and 2017, of the collectability of invoices, accounts receivable are presented net of an allowance for doubtful accounts of $5,000 and $5,000, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items or technological obsolescence. Cost of inventories is determined as follows: Raw materials, parts and supplies - using the “first-in, first-out” method. Work-in-progress and finished products - on the basis of direct manufacturing costs with the addition of indirect manufacturing costs. The Company periodically assesses its inventories valuation in respect of obsolete and slow-moving items by reviewing revenue forecasts and technological obsolescence. When inventories on hand exceed the foreseeable demand or become obsolete, the value of excess inventory, which at the time of the review was not expected to be sold, is written off. During the years ended December 31, 2018 and 2017, the Company did not record inventory write-offs within the cost of revenue. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment as well as an intangible asset are stated at cost, net of accumulated depreciation and amortization. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: Useful lives (in years) Computer, software and related equipment 3 - 5 Office furniture and equipment 5 - 10 Leasehold improvements Over the term of the lease or the life of the asset, whichever is shorter. |
Goodwill | Goodwill The Company evaluates its goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 of each fiscal year or more frequently if there are indicators that the carrying amount of the goodwill exceeds its carried value. At December 31, 2018, the Company had five reporting units. The Company performed a qualitative assessment and concluded that no impairment existed as of December 31, 2018. |
Intangible Assets | Intangible Assets The Company acquired amortizable intangibles assets as part of three asset purchase agreements consisting of customer lists and non-compete agreements. The Company also has the trade names and trademarks associated with the acquisitions of Microphase and I.AM which were determined to have an indefinite life. The Company’s intangible assets, net also include definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Useful lives (in years) Customer list 5 - 14 Non-competition agreements 3 Domain name and other intangible assets 3 The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. No impairments were recorded on intangible assets as no impairment indicators were noted for the periods presented in these consolidated financial statements. |
Long-Lived Assets | Long-Lived Assets The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, Property, Plant, and Equipment |
Warranty | Warranty The Company offers a warranty period for all its manufactured products. Warranty periods range from one to two years depending on the product. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of units sold, historical rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. As of December 31, 2018 and 2017, the Company’s accrued warranty liability was $86,495. |
Income Taxes | Income Taxes The Company determines its income taxes under the asset and liability method in accordance with FASB ASC No. 740, Income Taxes The Company accounts for uncertain tax positions in accordance with ASC No. 740-10-25 . |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of issuance of warrants to purchase shares of common stock in connection with convertible notes and to employees of the Company, satisfy the criteria for classification as equity instruments as these warrants do not contain cash settlement features or variable settlement provision that cause them to not be indexed to the Company’s own stock. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC No. 718, Compensation – Stock Compensation “ASC No. 718” The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC No. 505-50, Equity Based Payments to Non-Employees |
Convertible Instruments | Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with ASC No. 815, Derivatives and Hedging Activities “ASC No. 815” Conversion options that contain variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument. The Company accounts for convertible instruments, when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, in accordance with ASC No. 470-20, Debt with Conversion and Other Options “ASC No. 470-20” |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Cash and cash equivalents are invested in banks in the U.S., UK and Israel. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Trade receivables of the Company and its subsidiaries are mainly derived from sales to customers located primarily in the U.S., Europe and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company and its subsidiaries have determined to be doubtful of collection. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company reports comprehensive loss in accordance with ASC No. 220, Comprehensive Income |
Fair value of Financial Instruments | Fair value of Financial Instruments In accordance with ASC No. 820, Fair Value Measurements and Disclosures The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations. All significant inputs used in our valuations are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include quoted prices that were adjusted for security-specific restrictions which are compared to output from internally developed models such as a discounted cash flow model. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, accounts receivables and accounts and other receivable – related party, investments, notes receivable, trade payables and trade payables – related party approximate their fair value due to the short-term maturities of such instruments. As of December 31, 2018 and 2017, the fair value of the Company’s investments were $3,256,468 and $9,562,571, respectively, and were concentrated in equity securities of Avalanche International Corp., which we refer to as AVLP, a related party (See Note 10), which are classified as available-for-sale investments. At December 31, 2018, the Company's investment in AVLP included marketable equity securities of $812,858 and warrants to purchase 13,887,993 shares of AVLP common stock at an exercise price of $0.50 per share of common stock with an aggregate fair value of $3,043,499. At December 31, 2017, the Company's investment in AVLP included marketable equity securities of $826,408 and warrants to purchase 8,248,440 shares of AVLP common stock at an exercise price of $0.50 per share of common stock with an aggregate fair value of $7,728,001. For investments in marketable equity securities, the Company took into consideration general market conditions, the duration and extent to which the fair value is above cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. As a result of this analysis, the Company has determined that its investment in AVLP’s marketable equity securities are valued based upon the closing market price of common stock at December 31, 2018 and 2017, which resulted in an unrealized gain of $119,329 and $550,048, respectively. At December 31, 2018, the Company held shares of common stock in one company that it had purchased at the market, for a total cost of $220,880 with an aggregate fair value of $178,597. In accordance with ASC No. 320-10, this investment is accounted for based upon the closing market price of the respective common stock at December 31, 2018 and 2017, resulting in an unrealized loss of $42,283 and unrealized gain of $133,067, respectively. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurement at December 31, 2018 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of AVLP – a related party $ 3,043,499 $ 812,858 $ — $ 2,230,641 Investments in marketable securities 178,597 178,597 — — Investments in warrants of public companies 34,372 — — 34,372 Total Investments $ 3,256,468 $ 991,455 $ — $ 2,265,013 Fair Value Measurement at December 31, 2017 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of AVLP – a related party $ 7,728,001 $ 826,408 $ — $ 6,901,593 Investments in marketable securities 1,834,570 1,834,570 — $ — Total Investments $ 9,562,571 $ 2,660,978 $ — $ 6,901,593 We assess the inputs used to measure fair value using thee three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market. |
Debt Discounts | Debt Discounts The Company accounts for debt discount according to ASC No. 470-20, Debt with Conversion and Other Options |
Net Loss per Share | Net Loss per Share Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding. The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities, which are convertible into the Company’s Class A common stock, consist of the following at December 31, 2018 and 2017: 2018 2017 Stock options 373,000 192,125 Warrants 936,381 219,443 Convertible notes 999,641 64,197 Preferred stock 127,551 109,306 Total 2,436,573 585,071 |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency with the current period presentation. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASC 606 effective January 1, 2018 to all contracts using the modified retrospective approach. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements In July 2017, the FASB issued ASU No. 2017-11, Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Scehdule of disaggregated revenues | The Company’s disaggregated revenues consist of the following for the year ended December 31, 2018: Year ended December 31, 2018 Digital DPC DPL Enertec Farms I.AM Total Primary Geographical Markets North America $ 13,875,883 $ 11,804 $ — $ 1,675,549 $ 3,462,140 $ 19,025,376 Europe 159,350 1,656,516 — — — 1,815,866 Middle East — — 5,226,075 — — 5,226,075 Other 718,692 368,210 — — — 1,086,902 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Major Goods RF/Microwave Filters $ 3,331,575 $ — $ — $ — $ — $ 3,331,575 Detector logarithmic video amplifiers 1,338,912 — — — — 1,338,912 Power Supply Units 5,829,125 — — — — 5,829,125 Power Supply Systems — 2,036,530 — — — 2,036,530 Healthcare diagnostic systems — — 1,715,512 — — 1,715,512 Defense systems — — 3,510,563 — — 3,510,563 Digital Currency Mining — — — 1,675,549 — 1,675,549 Restaurant operations — — — — 3,462,140 3,462,140 Lending activities 347,033 — — — — 347,033 MLSE Systems 3,907,280 — — — — 3,907,280 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 Timing of Revenue Recognition Goods transferred at a a point in time $ 10,846,645 $ 1,411,798 $ — $ 1,675,549 $ 3,462,140 $ 17,396,132 Services transferred over time 3,907,280 624,732 5,226,075 — — 9,758,087 $ 14,753,925 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ 27,154,219 |
Schedule of estimated useful lives | Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: Useful lives (in years) Computer, software and related equipment 3 - 5 Office furniture and equipment 5 - 10 Leasehold improvements Over the term of the lease or the life of the asset, whichever is shorter. |
Schedule of intangible assets, net also include definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives | The Company’s intangible assets, net also include definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Useful lives (in years) Customer list 5 - 14 Non-competition agreements 3 Domain name and other intangible assets 3 |
Schedule of fair value measurement | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurement at December 31, 2018 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of AVLP – a related party $ 3,043,499 $ 812,858 $ — $ 2,230,641 Investments in marketable securities 178,597 178,597 — — Investments in warrants of public companies 34,372 — — 34,372 Total Investments $ 3,256,468 $ 991,455 $ — $ 2,265,013 Fair Value Measurement at December 31, 2017 Total Level 1 Level 2 Level 3 Investments in common stock and warrants of AVLP – a related party $ 7,728,001 $ 826,408 $ — $ 6,901,593 Investments in marketable securities 1,834,570 1,834,570 — $ — Total Investments $ 9,562,571 $ 2,660,978 $ — $ 6,901,593 |
Schedule of anti-dilutive securities | Anti-dilutive securities, which are convertible into the Company’s Class A common stock, consist of the following at December 31, 2018 and 2017: 2018 2017 Stock options 373,000 192,125 Warrants 936,381 219,443 Convertible notes 999,641 64,197 Preferred stock 127,551 109,306 Total 2,436,573 585,072 |
Digital Currencies (Tables)
Digital Currencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Digital Currencies [Abstract] | |
Schedule of additional information about digital currencies | The following table presents additional information about digital currencies: Digital Currencies Balance at January 1, 2017 $ — Additions of digital currencies 1,634,941 Payment on convertible notes payable (739,967) Payments to vendors (449,479) Purchase of fixed assets (250,460) Realized loss on sale of digital currencies (127,602) Cash proceeds (64,587) Unrealized loss on digital currencies (1,311) Balance at December 31, 2018 $ 1,535 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Marketable Securities [Abstract] | |
Schedule of marketable securities | Marketable securities in equity securities with readily determinable market prices consisted of the following as of December 31, 2018 and December 31, 2017: Available-for-sale securities at December 31, 2018 Gross unrealized Gross realized Cost gains (losses) gains (losses) Fair value Common shares $220,880 ($42,283) $ — $ 178,597 Available-for-sale securities at December 31, 2017 Gross unrealized Gross realized Cost gains (losses) gains (losses) Fair value Common shares $1,701,503 $133,067 $ — $ 1,834,570 |
Schedule of additional information about marketable securities | The following table presents additional information about marketable securities: Balance at January 1, 2018 $ 1,834,570 Purchases of marketable securities 858,458 Sales of marketable securities (2,188,292) Realized losses on marketable securities (175,405) Unrealized gains on marketable securities (150,734) Balance at December 31, 2018 $ 178,597 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | At December 31, 2018 and 2017, inventories consist of: 2018 2017 Raw materials, parts and supplies $ 2,026,839 $ 541,816 Work-in-progress 483,706 685,410 Finished products 750,581 765,639 Total inventories $ 3,261,126 $ 1,992,865 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | At December 31, 2018 and 2017, property and equipment consist of: 2018 2017 Cryptocurrency machines and related equipment $ 9,168,928 $ — Computer, software and related equipment 2,495,470 2,431,906 Restaurant equipment 752,103 — Office furniture and equipment 287,583 289,288 Leasehold improvements 1,274,865 788,057 13,978,949 3,509,251 Accumulated depreciation and amortization (4,665,650) (2,292,404) Property and equipment, net $ 9,313,299 $ 1,216,847 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets Net [Abstract] | |
Schedule of intangible assets | At December 31, 2018 and 2017 intangible assets consist of: 2018 2017 Trade name and trademark $ 1,562,332 $ 1,739,307 Customer list 2,388,139 988,041 Non-competition agreements 150,000 150,000 Domain name and other intangible assets 762,807 81,000 4,863,278 2,958,348 Accumulated depreciation and amortization (503,480 ) (60,335 ) Intangible assets, net $ 4,359,798 $ 2,898,013 |
Schedule of estimated amortization expense | The following table presents estimated amortization expense for each of the succeeding five calendar years and thereafter. 2019 $ 506,271 2020 382,251 2021 242,503 2022 224,003 2023 210,670 Thereafter 1,044,254 $ 2,609,952 |
INVESTMENTS - RELATED PARTIES (
INVESTMENTS - RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investments | Investments in AVLP at December 31, 2018 and 2017, are comprised of the following: December 31, 2018 2017 Investment in convertible promissory note of AVLP $ 6,943,997 $ 4,124,220 Investment in warrants of AVLP 2,230,641 6,901,593 Investment in common stock of AVLP 812,858 826,408 Accrued interest in convertible promissory note of AVLP 1,004,317 324,400 Total investment in AVLP – Gross 10,991,813 12,176,621 Less: original issue discount (2,336,693) (2,115,710) Total investment in AVLP – Net $ 8,655,120 $ 10,060,911 |
Schedule of summarizes the changes in our investments | The following table summarizes the changes in our investments in AVLP during the year ended December 31, 2018: Investment in Investment in warrants and convertible Total common stock promissory investment of AVLP note of AVLP in AVLP – Net Balance at January 1, 2017 $ 84,578 $ 952,073 $ 1,036,651 Investment in convertible promissory notes of AVLP — 620,091 620,091 Investment in common stock of AVLP 191,782 — 191,782 Fair value of warrants issued by AVLP 2,388,681 — 2,388,681 Unrealized gain in warrants of AVLP 4,512,912 — 4,512,912 Unrealized gain in common stock of AVLP 550,048 — 550,048 Accretion of discount — 436,346 436,346 Accrued Interest — 324,400 324,400 Balance at December 31, 2018 $ 7,728,001 $ 2,332,910 $ 10,060,911 Investment in convertible promissory notes of AVLP — 1,671,936 1,671,936 Payment of convertible promissory notes of AVLP — (1,107,500 ) (1,107,500 ) Investment in common stock of AVLP 417,169 — 417,169 Fair value of warrants issued by AVLP 2,255,341 — 2,255,341 Unrealized loss in warrants of AVLP (6,926,293 ) — (6,926,293 ) Unrealized loss in common stock of AVLP (430,719 ) — (430,719 ) Accretion of discount — 2,034,358 2,034,358 Accrued Interest — 679,917 679,917 Balance at December 31, 2018 $ 3,043,499 $ 5,611,621 $ 8,655,120 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of components of the purchase price for acquisitions | Components of the purchase price for acquisitions completed during the year ended December 31, 2018: Enertec I. AM Accounts receivable $ 3,184,227 $ 29,319 Inventories 1,343,053 40,581 Property and equipment 648,649 700,291 Trade name and trademark 2,094,741 520,000 Domain name and other intangible assets — 90,000 Other assets 29,056 1,492 Accounts payable and accrued expenses (2,702,306 ) (103,961 ) Deferred tax liability (160,311 ) — Notes payable (4,235,725 ) — Accrued severance pay (131,811 ) — Net assets assumed 69,573 1,277,722 Goodwill 4,780,526 265,252 Non-controlling interest — (33,242 ) Purchase price $ 4,850,099 $ 1,509,732 Components of the purchase price for acquisitions completed during the year ended December 31, 2017: Microphase Power-Plus Cash and cash equivalents $ 10,982 $ 31,411 Accounts receivable 438,456 235,358 Inventories 667,020 240,843 Prepaid expenses and other current assets 139,665 2,068 Restricted cash 100,000 — Intangible assets 2,627,348 250,000 Property and equipment 406,432 22,925 Other investments 303,333 — Deposits and loans 43,479 — Accounts payable and accrued expenses (1,577,281 ) (388,746 ) Deferred tax liability (225,488 ) — Revolving credit facility (879,666 ) (210,739 ) Notes payable (2,203,835 ) — Notes payable, related parties (406,194 ) — Convertible notes payable — — Other current liabilities (219,685 ) — Net (liabilities) assets assumed (775,434 ) 183,119 Goodwill 3,171,029 480,953 Non-controlling interest (944,555 ) — Purchase price $ 1,451,040 $ 664,073 |
Scehdule of acquisition that may be obtained in future periods | These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred as of the beginning of each period presented or that may be obtained in future periods: For the Years Ended December 31, 2018 2017 Total Revenue $ 28,691,641 $ 20,807,590 Net loss $ (35,627,242 ) $ (16,877,041 ) Less: Net loss attributable to non-controlling interest 748,320 772,596 Net loss attributable to common stockholders $ (34,878,922 ) $ (16,104,445 ) Preferred deemed dividends (108,049 ) (584,182 ) Preferred dividends — (54,059 ) Loss available to common shareholders $ (34,986,971 ) $ (16,742,686 ) Basic and diluted net loss per common share $ (12.06 ) $ (26.85 ) Basic and diluted weighted average common shares outstanding 2,899,888 623,583 Comprehensive Loss Loss available to common shareholders $ (34,986,971 ) $ (16,742,686 ) Other comprehensive income (loss) Change in net foreign currency translation adjustments (377,823 ) 152,078 Net unrealized gain (loss) on securities available-for-sale (8,027,746 ) 5,171,743 Other comprehensive income (loss) (8,405,569 ) 5,323,821 Total Comprehensive loss $ (43,392,540 ) $ (11,418,865 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average assumptions | During the year ended December 31, 2018 and 2017, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions: 2018 2017 Weighted average risk-free interest rate 2.41% — 2.80% 1.73% — 2.14% Weighted average life (in years) 4.70 5.0 Volatility 124.7% — 131.7% 98.4% — 115.8% Expected dividend yield 0% 0% Weighted average grant-date fair value per share of $ 15.61 $ 12.00 |
Schedule of exercise price | The options outstanding as of December 31, 2018, have been classified by exercise price, as follows: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Number Exercise Price Outstanding Life (Years) Price Exercisable Price $11.40 - $16.00 161,500 7.54 $13.37 92,876 $13.32 $20.00 - $27.60 8,500 8.52 $27.46 3,031 $27.20 $30.20 - $33.80 3,125 3.71 $32.73 3,125 $32.73 $11.40 - $33.80 173,125 7.52 $14.41 99,032 $14.35 Issuances outside of Plans $16.00 - $46.40 199,875 7.39 $26.09 36,842 $29.36 Total Options $11.40 - 46.40 373,000 7.45 $20.67 135,874 $18.42 |
Schedule of stock-based compensation expense | The total stock-based compensation expense related to stock options and stock awards issued pursuant to the Plans to the Company’s employees, consultants and directors, included in reported net loss for the years ended December 31, 2018 and 2017, is comprised as follows: 2018 2017 Cost of revenues $ 4,874 $ 8,466 Engineering and product development 13,650 21,449 Selling and marketing 11,922 46,431 General and administrative 2,921,532 1,501,544 Stock-based compensation from Plans $ 2,951,978 $ 1,577,890 Stock-based compensation from issuances outside of Plans 1,767,287 253,395 Total stock-based compensation $ 4,719,265 $ 1,831,285 |
Schedule of option activity under the company's stock option plans | A summary of option activity under the Company's stock option plans as of December 31, 2018 and 2017, and changes during the years ended are as follows: Outstanding Options Weighted Weighted Average Shares Average Remaining Aggregate Available Number Exercise Contractual Intrinsic for Grant of Shares Price Life (years) Value January 1, 2017 161,382 118,300 $16.59 9.08 $0 Adoption of 2017 SIP 100,000 — Restricted stock awards (97,440) — Granted (40,500) 40,500 $16.84 Forfeited 3,500 (3,500) $12.57 Exercised — (18,175) $31.26 December 31, 2017 126,942 137,125 $15.43 8.80 $6,688 Adoption of 2018 SIP 500,000 — Restricted stock awards (79,153) — Granted (50,000) 50,000 $14.00 Forfeited 1 10,000 (11,000) $20.27 Exercised — (3,000) $32.60 December 31, 2018 507,789 173,125 $14.41 7.52 $0 1 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Schedule of option pricing | The following table summarizes information about common stock warrants outstanding at December 31, 2018: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Average Exercise Number Contractual Exercise Number Exercise Price Outstanding Life (Years) Price Exercisable Price $0.20 15,873 7.84 $0.20 15,873 $0.20 $11.00 14,182 3.86 $11.00 14,182 $11.00 $12.00 3,750 4.33 $12.00 3,750 $12.00 $13.20 7,407 3.84 $13.20 7,407 $13.20 $14.00 106,286 3.87 $14.00 106,286 $14.00 $15.00 6,795 3.37 $15.00 6,795 $15.00 $16.00 24,083 1.69 $16.00 24,083 $16.00 $17.40 86,207 4.37 $17.40 86,207 $17.40 $18.80 384,589 4.38 $18.80 384,589 $18.80 $20.00 14,000 3.94 $20.00 14,000 $20.00 $22.00 37,974 2.68 $22.00 37,974 $22.00 $23.00 85,000 4.24 $23.00 85,000 $23.00 $26.00 49,679 4.29 $26.00 49,679 $26.00 $27.00 55,556 4.37 $27.00 55,556 $27.00 $44.00 31,250 4.06 $44.00 31,250 $44.00 $45.00 5,625 4.07 $45.00 5,625 $45.00 $50.00 8,125 4.07 $50.00 8,125 $50.00 $0.20 - $50.00 936,381 4.18 $20.19 936,381 $20.19 |
Schedule of the Black-Scholes option pricing model and the assumptions | The Company utilized the Black-Scholes option pricing model and the assumptions used during the years ended December 31, 2018 and 2017: 2018 2017 Weighted average risk-free interest rate 2.41% — 2.94% 1.42% — 2.01% Weighted average life (in years) 4.8 4.8 Volatility 124.8% — 138.4% 98.5% — 128.7% Expected dividend yield 0 % 0 % Weighted average grant-date fair value per $ 15.80 $ 8.20 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Current Liabilities [Abstract] | |
Schedule of Other current liabilities | Other current liabilities at December 31, 2018 and 2017 consist of: 2018 2017 Accrued payroll and payroll taxes $ 1,497,470 $ 359,512 Warranty liability 86,495 86,495 Other accrued expenses 284,437 262,384 $ 1,868,402 $ 708,391 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Notes Payable at December 31, 2018 and 2017, are comprised of the following. 2018 2017 12% short-term promissory note (a) $ 1,000,000 $ — Other short-term notes payable (b) 1,033,553 — Notes payable to Wells Fargo (c) 291,988 300,130 Note payable to Dept. of Economic and Community Development (d) 260,169 292,509 Power-Plus Credit Facilities (e) — 170,473 Note payable to Power-Plus Member (f) 13,250 130,125 Note payable to People's United Bank (g) 18,589 19,489 8% short-term promissory note (h) 1,272,600 — 12% September 2018 short-term promissory note (i) 789,473 — October '18 short-term promissory note (j) 565,000 Microphase December 2018 short-term promissory note (k) 200,000 10% short-term promissory notes (l) — 15,000 Short term bank credit (m) 1,558,197 — Total notes payable 7,002,819 927,726 Less: Unamortized debt discounts (151,499 ) — Unamortized financing cost (7,541 ) — Total notes payable, net of financing cost $ 6,843,779 $ 927,726 Less: current portion (6,360,120 ) (402,234 ) Notes payable – long-term portion $ 483,659 $ 525,492 (a) On March 23, 2018, the Company entered into a securities purchase agreement pursuant to which it issued a 12% promissory note and a warrant to purchase 22,500 shares of common stock to an accredited investor. The promissory note was issued with a 10% OID. The promissory note is in the principal amount of $1,000,000, was sold for $900,000, accrued simple interest at 12% and was due on June 22, 2018. The Company is in negotiations with the investor to amend the payment terms on this 12% promissory note, however, since payment was not made on the specified maturity date this unsecured 12% promissory note is currently in default. Interest only payments are due, in arrears, on a monthly basis commencing on April 23, 2018. The exercise price of the warrant is $23.00 per share. The Company recorded debt discount in the amount of $271,565 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. The debt discount was amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $271,565 was recorded from the amortization of debt discount and interest expense of $100,000 was recorded from the amortization of the OID on this 12% promissory note. The 12% promissory note is unsecured by any of the Company’s assets but is guaranteed by our Chief Executive Officer. (b) During the year ended December 31, 2018, the Company entered into the following short-term promissory notes: (i) On February 7, 2018, the Company issued demand promissory notes in the aggregate principal face amount of $440,000 to accredited investors. These promissory notes included an OID of $40,000 resulting in net proceeds to the Company of $400,000. The principal and OID on these notes were due and payable on demand after April 24, 2018. These loans were paid on April 27, 2018. During the year ended December 31, 2018, the Company recognized $40,000 from the amortization of OID on these demand promissory notes. (ii) On February 26, 2018, the Company issued a 10% promissory note in the principal amount of $330,000 to an accredited investor. This promissory note included an OID of $30,000 resulting in net proceeds to the Company of $300,000. The principal and accrued interest on this note was due and payable on April 12, 2018, subject to a 30-day extension available to the Company. This 10% promissory note was paid on April 27, 2018. During the year ended December 31, 2018, the Company recognized $35,991 from interest and the amortization of OID on this 10% promissory note. (iii) On March 27, 2018, the Company issued a 10% promissory note in the principal amount of $200,000 to an accredited investor. Between March 29, 2018 and April 24, 2018, the Company paid the outstanding principal amount of $200,000 on this 10% promissory note. (iv) On May 23, 2018, the Company issued a promissory note in the aggregate principal face amount of $81,000 to an accredited investor. The promissory note included an OID of $6,000 resulting in net proceeds to the Company of $75,000 and was due and payable on August 20, 2018. This promissory note was paid on July 25, 2018. During the year ended December 31, 2018, the Company recognized $6,000 from the amortization of OID on this promissory note. (v) On May 23, 2018, the Company issued a promissory note in the aggregate principal face amount of $360,000 to an accredited investor. The promissory note included an OID of $60,000 resulting in net proceeds to the Company of $300,000 and was due and payable on June 22, 2018. The outstanding balance on this note was paid on July 2, 2018. During the year ended December 31, 2018, the Company recognized $60,000 from the amortization of OID on this promissory note. (vi) On June 5, 2018, the Company received loans in the aggregate amount of $75,000 from accredited investors. The principal and interest on these loans was paid on July 16, 2018. (vii) On June 8, 2018, the Company issued a promissory note in the aggregate principal face amount of $511,750 to an accredited investor. The promissory note included an OID of $66,750 resulting in net proceeds to the Company of $445,000 and was due and payable on July 9, 2018. At December 31, 2018, the outstanding principal balance on this note was $54,750. Since payment was not made on the specified maturity date this unsecured promissory note is currently in default. During the year ended December 31, 2018, the Company recognized $66,750 from the amortization of OID on this promissory note. On August 3, 2018, the Company and lender entered into an agreement to extend the maturity date from July 9, 2018 to August 31, 2018. The Company agreed to pay the lender an extension fee of 100,000 shares of common stock. The Company remains in default and continues to negotiate with the investor on extended payment terms. (viii) On July 13, 2018, the Company issued a 15% promissory note in the principal amount of $176,000 to an accredited investor. This promissory note included an OID of $16,000 and debt issuance costs of $5,000 resulting in net proceeds of $155,000. At December 31, 2018, the outstanding balance on this note was $124,303. The principal and accrued interest on this note was due and payable on October 11, 2018 and is currently in default. Mr. Ault personally guaranteed the repayment of this note. (ix) On August 10, 2018, DP Lending issued a 12% promissory note in the principal amount of $550,000 to an accredited investor. This promissory note included an OID of $50,000 resulting in net proceeds of $500,000. The principal and accrued interest on this note is due and payable on August 10, 2019. (x) On August 16, 2018, the Company issued an 8% promissory note in the principal amount of $225,000 to an accredited investor. This promissory note included an OID of $25,000 resulting in net proceeds of $200,000. At December 31, 2018, the outstanding balance on this note was $159,500. This note was due and payable on October 5, 2018 and is currently in default. Mr. Ault personally guaranteed the repayment of this note. (xi) On August 23, 2018, DP Lending issued a promissory note in the principal amount of $85,000 to an accredited investor. This promissory note included an OID of $10,000 resulting in net proceeds of $75,000. At December 31, 2018, the outstanding balance on this note was $85,000. This note was due and payable on September 24, 2018, subject to a 28-day extension available to DP Lending. However, since payment was not made on the specified maturity date this unsecured promissory note is currently in default. (xii) On August 28, 2018, DP Lending issued a promissory note in the principal amount of $115,000 to an accredited investor. This promissory note included an OID of $15,000 resulting in net proceeds of $100,000. The principal and accrued interest on this note was due and payable on September 14, 2018, subject to a 10-business day cure period available to DP Lending. This promissory note was paid on September 21, 2018. (xiii) On October 9, 2018, DP Lending issued a promissory note in the principal amount of $60,000 to an accredited investor. This promissory note included an OID of $10,000 resulting in net proceeds of $50,000. At December 31, 2018, the outstanding balance on this note was $60,000. This note was due and payable on October 23, 2018. However, since payment was not made on the specified maturity date this unsecured promissory note is currently in default. (c) At December 31, 2018, Microphase had guaranteed the repayment of two equity lines of credit in the aggregate amount of $291,988 with Wells Fargo Bank, NA (“Wells Fargo”) (collectively, the “Wells Fargo Notes”). These loans originated prior to the Company’s acquisition of Microphase and Microphase was the recipient of the actual proceeds from the loans. Microphase had previously guaranteed the payment under the first Wells Fargo equity line during 2008, the proceeds of which Microphase had received from a concurrent loan from Edson Realty Inc., a related party owned real estate holding company. As of December 31, 2018, the first line of credit, which is secured by residential real estate owned by a former officer, had an outstanding balance of $210,822, with an annual interest rate of 4.00%. Microphase had guaranteed the payment under the second Wells Fargo equity line in 2014. Microphase had received working capital loans from the former CEO from funds that were drawn against the second Wells Fargo equity line. As of December 31, 2018, the second line of credit, secured by the former CEO’s principal residence, had an outstanding balance of $81,166, with an annual interest rate of 3.00%. During the years ended December 31, 2018, Microphase incurred $17,629 of interest on the Wells Fargo Notes. (d) In August 2016, Microphase received a $300,000 loan, of which $39,831 has been repaid, pursuant to the State of Connecticut Small Business Express Job Creation Incentive Program which is administered through the Department of Economic and Community Development (“DECD”) (the “DECD Note”). The DECD Note accrues interest at a rate of 3% per annum and is due in August 2026. Payment of principal and interest commenced in September 2017, payable in equal monthly installments over the remaining term. During the year ended December 31, 2018, Microphase incurred $9,286 of interest on the DECD Note. (e) At December 31, 2017, Power-Plus had guaranteed the repayment of two lines of credit in the aggregate amount of $170,473 with Bank of America NA and Wells Fargo (collectively, the “Power-Plus Lines”). During 2018, the Power-Plus Lines had been paid. (f) Pursuant to the terms of the Purchase Agreement with Power-Plus, the Company entered into a two-year promissory note in the amount of $255,000 payable to the former owner as part of the purchase consideration. The $255,000 note is payable in 24 equal monthly installments. On October 18, 2017, for cancellation of debt, the Company entered into a subscription agreement with the former owner under which the Company sold 6,940 shares of common stock at $13.40 per share for an aggregate purchase price of $93,000. The outstanding balance on this note was $13,250 at December 31, 2018. During the year ended December 31, 2018, the Company paid $116,875 in principal payments. (g) In December 2016, Microphase utilized a $20,000 overdraft credit line at People’s United Bank with an annual interest rate of 15%. As of December 31, 2018, the balance of that overdraft credit line was $18,589. (h) On August 16, 2018, the Company entered into a securities purchase agreement with certain institutional investors providing for the issuance of (i) secured promissory notes in the aggregate principal face amount of $1,212,000 due February 15, 2019, at an interest rate of eight percent (8%) per annum for which the Company received an aggregate of $1,010,000, and (ii) issued an aggregate of 20,000 shares of common stock to the investors. On November 29, 2018, these 8% short-term promissory notes were amended and the Company incurred an additional OID of $60,600 resulting in an outstanding principal balance of $1,272,600 at December 31, 2018. (i) During September 2018, the Company issued to institutional investors 12% term promissory notes in the principal face amount of $789,473, with an interest rate of 12% for a purchase price of $750,000. The outstanding principal face amount, plus any accrued and unpaid interest, was due by December 31, 2018. During October 2018, in accordance with the notes, the Company issued 22,500 shares of its common stock to the investors. Since payment was not made on the specified maturity date these 12% term promissory notes are currently in default. (j) On October 11, 2018, the Company entered into a securities purchase agreement with an institutional investor providing for the issuance of (i) a secured promissory note in the aggregate principal face amount of $565,000 due December 8, 2018, for which the Company received an aggregate of $510,000, and (ii) issued an aggregate of 20,000 shares of common stock to the investor. Upon maturity, the Company was required to pay $27,500 of interest. The note was not paid on the maturity date and was in default at December 31, 2018. (k) On December 28, 2018, Microphase entered into a secured promissory note with an institutional investor providing for the issuance of (i) a secured promissory note in the aggregate principal face amount of $200,000, with an interest rate of 10% per annum and a maturity date of March 31, 2019. In connection with the Microphase Note, Mr. Ault entered into a personal guarantee agreement for the benefit of the investor. (l) In December 2016, Microphase issued $705,000 in 10% short-term promissory notes to nineteen accredited investors which, after deducting $70,500 of placement fees to its selling agent, Spartan Capital Securities, LLC (“Spartan”), resulted in $634,500 in net proceeds to Microphase (the “10% Short-Term Notes”). The 10% Short-Term Notes were due one year from the date of issuance. The amount due pursuant to the 10% Short-Term Notes was equal to the entire original principal amount multiplied by 125% (the “Loan Premium”) plus accrued interest. On December 5, 2017, in exchange for the cancellation of $690,000 of outstanding principal and $250,323 of accrued interest owed to the investors by Microphase Corporation, the Company entered into an Exchange Agreement pursuant to which the Company issued an aggregate of 76,193 shares of common stock and warrants to purchase 19,023 shares of common stock with an exercise price of $22.00 per share of common stock. During 2018, the Company paid the remaining balance of principal and accrued interest of $15,000 and $5,615, respectively. (m) At December 31, 2018, Enertec had short term bank credit of $1,558,197 that bears interest at prime plus 0.7% through 3.85% paid either on a monthly or weekly basis. Further, the Company has undertaken to comply with certain covenants under its bank loan. During the period May 22 to December 31, 2018, the Company incurred $47,076 of interest from Enertec’s short term bank credit. Other Notes Payable (n) Between May 5, 2017 and December 31, 2017, the Company received additional short-term loans of $297,000 from five accredited investors, of which $75,000 was from the Company’s corporate counsel, a related party. As additional consideration, the investors received five-year warrants to purchase 11,219 shares of common stock at a weighted average exercise price of $15.40 per share. The warrants are exercisable commencing six months after the issuance date and are subject to certain beneficial ownership limitations. The exercise price of these warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The warrants may be exercised for cash or on a cashless basis. During the quarter ended June 30, 2017, the Company recorded debt discount in the amount of $95,000 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. As a result of the short-term feature of these loans and advances, the debt discount was amortized as non-cash interest expense upon issuance of the warrants using the effective interest method. During June 2017, the holders of $55,000 of these short-term loans agreed to cancel their notes for the purchase of 5,000 shares of the Company’s common stock at a price of $11.00 per share. An additional $75,000 in short-term loans from the Company’s corporate counsel was converted into the Company’s equity securities; $52,000 was converted into one of the Series C Units and $23,000 was converted into the Company’s common stock. The Company did not record any additional interest expense as a result of the extinguishment of $130,000 in short-term loans since the carrying amount of the short-term loans was equivalent to the fair value of the consideration transferred, which was determined from the closing price of the Company’s equity securities on the date of extinguishment. During the year ended December 31, 2017, the Company also repaid $157,000 in short-term loans. (o) In February 2017, the Company issued to eight accredited investors $400,000 in demand promissory notes bearing interest at a rate of 6% per annum. Of the eight accredited investors, one investor was deemed a related party. As additional consideration, the investors received five-year warrants to purchase 16,667 shares of common stock at an exercise price of $14.00 per share (the “Feb. 2017 Warrants”). The Feb. 2017 Warrants are exercisable commencing six months after the issuance date. The exercise price of the Feb. 2017 Warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The Feb. 2017 Warrants may be exercised for cash or on a cashless basis. During the quarter ended March 31, 2017, the Company recorded debt discount in the amount of $151,000 based on the estimated fair value of the Feb. 2017 Warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. As a result of the due on demand feature of the promissory notes, the debt discount was amortized as non-cash interest expense upon issuance of the Feb. 2017 Warrants using the effective interest method. Between February 16, 2017 and February 23, 2017, the holders of the $400,000 in demand promissory notes agreed to cancel their demand promissory notes for the purchase of 33,333 shares of the Company’s common stock, an extinguishment price of $12.00 per share. During the quarter ended March 31, 2017, the Company recorded additional interest expense of $13,333 as a result of the extinguishment of the $400,000 in demand promissory notes based on the difference of the carrying amount of the demand promissory notes and the fair value of the consideration transferred, which was determined from the closing price of the Company’s common stock on the date of extinguishment. (p) On March 28, 2017, the Company issued $270,000 in demand promissory notes to several investors. These demand promissory notes accrued interest at the rate of 6% per annum. On April 5, 2017, the Company canceled these promissory notes by issuing to the investors 18,000 shares of common stock, at $15.00 per share, and warrants to purchase 9,000 shares of common stock at $18.00 per share. During the quarter ended June 30, 2017, the Company recorded additional interest expense of $109,000 as a result of the extinguishment of the $270,000 in demand promissory notes based on the difference of the carrying amount of the demand promissory notes and the fair value of the consideration transferred, which was determined from the closing price of the Company’s common stock on the date of extinguishment. (q) On June 2, 2017, pursuant to the terms of the Share Exchange Agreement and in consideration of legal services, Microphase issued a $450,000 8% promissory note with a maturity date of November 25, 2017 to Lucosky Brookman, LLP (the “Lucosky Note”). In conjunction with the issuance of the Lucosky Note, the Company issued Lucosky Brookman 10,000 shares of redeemable convertible Series E preferred stock (the “Series E Preferred Stock”) with a stated value of $45 per share as an alternative to providing a guarantee for the amount of the Lucosky Note. The Company, at its option, had the right to redeem for cash the outstanding shares of Series E Preferred Stock, upon written notice to the holder of the shares, at a cash redemption price equal to $45 multiplied by the number of shares being redeemed. Any such optional redemption by the Company would have resulted in a credit against the Lucosky Note. During the period June 3, 2017 to December 29, 2017, Microphase incurred $21,000 of interest on the Lucosky Note. On December 29, 2017, the Lucosky Note was satisfied through the conversion of the 10,000 shares of Series E Preferred Stock into 30,000 shares of the Company’s common stock (See Note 24). (r) On January 25, 2018, the Company issued two 5% promissory notes, each in the principal face amount of $2,500,000 for an aggregate debt of $5,000,000 to two institutional investors. The entire unpaid balance of the principal and accrued interest on each of the 5% promissory notes was due and payable on February 23, 2018, subject to a 30-day extension available to the Company. The proceeds from these two 5% promissory notes were used to purchase 1,000 Antminer S9s manufactured by Bitmain Technologies, Inc. in connection with our crypto mining operations. The Company repaid the entire outstanding principal and accrued interest on the 5% promissory notes of $5,101,127 during 2018. (s) On February 20, 2018, the Company issued a promissory note in the principal face amount of $900,000 to an accredited investor. This promissory note included an original issue discount (“OID”) of $150,000 resulting in net proceeds of $750,000. The principal and OID on this note was due and payable on March 22, 2018. On March 23, 2018, the Company entered into a new promissory note in the principal amount of $2,100,000 for a term of two months, subject to the Company’ ability to prepay within one month. The new promissory note included an OID of $350,000, resulting in net proceeds of $1,750,000. The Company also issued to the lender a warrant to purchase 62,500 shares of the Company’s common stock at an exercise price of $23.00 per share. The principal amount of the new promissory note consisted of cash of $1,000,000 and the cancellation of principal of $750,000 from the February 20, 2018 promissory note. The interest on the February 20, 2018 note in the amount of $150,000 was paid to the lender prior to entering into the new promissory note. The warrants are exercisable commencing on the issuance date for a term of three years. The exercise price of these warrants is subject to adjustment for customary stock splits, stock dividends, combinations and other standard anti-dilution events. The warrants may be exercised for cash or on a cashless basis. The Company recorded debt discount in the amount of $604,227 based on the estimated fair value of these warrants. The Company computed the fair value of these warrants using the Black-Scholes option pricing model. The debt discount was amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $604,227 was recorded from the amortization of debt discount and interest expense of $350,000 was recorded from the amortization of the OID on the new promissory note. On April 23, 2018, the Company paid the entire outstanding principal on the new promissory note of $2,100,000. The new promissory note had been guaranteed by our Chief Executive Officer and had also been guaranteed by Philou. |
NOTES PAYABLE - RELATED PARTI_2
NOTES PAYABLE - RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable - Related Parties [Abstract] | |
Schedule of notes payable - related parties | Notes Payable – Related parties at December 31, 2018 and 2017, are comprised of the following: 2018 2017 Notes payable to former officer and employee (a) $ 308,984 $ 309,317 Total notes payable 308,984 309,317 Less: current portion (166,925 ) (133,569 ) Notes payable – long-term portion $ 142,059 $ 175,748 (a) Microphase is a party to several notes payable agreements with seven of its past officers, employees and their family members. As of December 31, 2018, the aggregate outstanding balance pursuant to these notes payable agreements, inclusive of $57,752 of accrued interest, was $366,736, with annual interest rates ranging between 3.00% and 6.00%. During the year ended December 31, 2018, Microphase incurred $10,897 of interest on these notes payable agreements. In July 2016, one of these noteholders initiated litigation to collect the balance owed under the terms of his respective agreement. In October 2017, Microphase and the noteholder entered into a settlement agreement whereby Microphase agreed to pay the outstanding principal and interest of $122,000 and $43,000, respectively, by issuing to the noteholder 95,834 shares of Microphase common stock valued at $115,000 and paying $25,000 in cash. The value of the Microphase common stock was derived from the Company’s recent acquisition of a majority interest in Microphase. Further, the parties agreed a final $25,000 would be paid within 18 months of the settlement agreement or Microphase would be required to pay the noteholder an additional $25,000. (b) On December 29, 2016, the Company entered into an agreement with MCKEA Holdings, LLC (“MCKEA”). MCKEA is the majority member of Philou Ventures, LLC, which is the Company’s controlling stockholder. Kristine L. Ault, a director and the wife of Milton C. Ault III, Executive Chairman of the Company’s Board of Directors, is the manager and owner of MCKEA, for a demand promissory note (The “MCKEA Note”) in the amount of $250,000 bearing interest at the rate of 6% per annum on unpaid principal. On March 24, 2017, the MCKEA Note was cancelled to purchase the Company’s Series B Preferred Stock pursuant to the terms of the Preferred Stock Purchase Agreement entered into on March 9, 2017 (See Note 24). Since there was no difference between the reacquisition price and the net carrying value of the cancelled debt, no gain or loss was recognized as a result of this transaction. |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of convertible notes | Convertible Notes Payable at December 31, 2018 and 2017, are comprised of the following: 2018 2017 10% Convertible secured notes (a) $ 7,997,126 $ — 5% Convertible secured notes (b) — 550,000 12% Convertible secured note (c) (d) (e) — 202,000 Total convertible notes payable 7,997,126 752,000 Less: Unamortized debt discounts (1,189,276 ) (351,573 ) Unamortized financing cost (65,356 ) (2,549 ) Total convertible notes payable, net of financing cost $ 6,742,494 $ 397,878 (a) On May 15, 2018, the Company entered into a securities purchase agreement to sell (i) a 10% convertible note (the “10% Convertible Note”), (ii) a five-year warrant to purchase 55,556 shares of the Company’s common stock at an exercise price of $27.00 per share; (iii) a five-year warrant to purchase 86,207 shares of the Company’s Class A common stock at an exercise price of $17.40 per share; and (iv) 17,241 shares of the Company’s common stock to an institutional investor. Initially, the 10% Convertible Note was convertible into the Company’s common stock at $15.00 per share, but could only be converted if an event of default thereunder had occurred and not been cured on a timely basis. On September 25, 2018, the Company entered into an agreement to amend the maturity date on the 10% Convertible Note, pursuant to which amendment the amortization schedule of the 10% Convertible Note provides for 13 monthly payments in the amount of $309,193, and for the fourteenth payment to be in the amount of $1,011,427, plus accrued and unpaid interest. Each such amortization payment shall be made in cash or Bitcoin. The 10% Convertible Note is in the principal amount of $6,000,000 and bears interest at 10% simple interest on the principal amount with 50% of the total interest due on the principal payable at the closing and the remaining 50% payable over the term of the 10% Convertible Note. In connection with the financing, the Company agreed to pay the placement agent, Alliance Global Partners, a cash fee of $300,000 and a warrant to purchase 7,500 shares of the Company’s common stock with an exercise price of $20.00 per share. The Company computed the fair value of the warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $1,397,389 based on the estimated fair value of the warrants. The Company estimated that the grant date fair value of the shares of common stock was $405,024, which was determined from the closing price of the Company’s common stock on the dates of issuance. In aggregate, the Company recorded debt discount in the amount of $2,169,613 based on the relative fair values of the warrants, common stock and debt issuance costs of $367,200. During the year ended December 31, 2018, non-cash interest expense of $2,169,613 was recorded from the amortization of debt discounts. The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 2.94% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 127.9% was determined based on the Company’s historical stock prices. On July 2, 2018, the Company entered into a securities purchase agreement with the institutional investor providing for the issuance of (i) a second 10% convertible note (the “Second 10% Convertible Note”) with a principal face amount of $1,000,000 which Second 10% Convertible Note was convertible into the Company’s common stock at $15.00 per share and (ii) an additional 20,000 of the Company’s common stock to be issued in connection with the 10% Convertible Note. The Second 10% Convertible Note, as amended, matures on February 15, 2019, as to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. On August 31, 2018, the Company entered into a securities purchase agreement with the institutional investor providing for the issuance of a third 10% convertible note (the “Third 10% Convertible Note” and with the 10% Convertible Note and the Second 10% Convertible Note, the “10% Convertible Notes”) with a principal face amount of $2,000,000, which Third Convertible Note is convertible into 250,000 shares of the Company’s common stock at $8.00 per share and (ii) an additional 31,000 of the Company’s common stock. The shares of common stock issuable pursuant to the Third 10% Convertible Note have not been issued to the institutional investor. The Third 10% Convertible Note, as amended, matures on February 15, 2019, as to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. At the time of issuance of the Third 10% Convertible Note, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a beneficial conversion feature (“BCF”). The BCF embedded in the Third 10% Convertible Note is accounted for under ASC No. 470, De The Company recorded debt issuance costs of $200,500 from the Third 10% Convertible Note. The debt issuance costs are being amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2018, non-cash interest expense of $135,144 was recorded from the amortization of the debt issuance costs. Pursuant to an amendment dated as of August 31, 2018 to the 10% Convertible Note and the Second 10% Convertible Note, the Company reduced the conversion price to $8.00 from $15.00. The amendment to the embedded conversion options of the 10% Convertible Note and the Second 10% Convertible Note caused a material change in the fair value of the embedded conversion options on these two notes and resulted in a loss on extinguishment of $665,346. At the time of the amendment, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a BCF. The intrinsic value of the BCF was $1,131,960 on the 10% Convertible Note and $225,000 on the Second 10% Convertible Note based on the difference between the effective conversion price and the fair value of the Company’s common stock. During the year ended December 31, 2018, non-cash interest expense of $1,356,960 was recorded from the amortization of debt discounts attributed to the August 31, 2018 amendment of to the 10% Convertible Note and the Second 10% Convertible Note. Pursuant to the terms of an amendment dated December 7, 2018, the Company agreed that if the investor elects to convert three monthly payments in the principal amount of $309,193 into shares of the Company’s common stock at the stated conversion price of $8.00 and the proceeds from the sale of the shares did not result in net proceeds to the investor of 103% of the principal, interest and penalties due, then the Company would pay the investor the difference in cash (the “True-Up Payment). During December 2018, the Company issued to the investor 109,724 shares of its common stock at $8.00 per share upon the conversion of $877,793 in principal, accrued interest and penalties. During December 2018, the investor received $304,608 from the sale of the shares of common stock, which approximated the value of the shares of common stock on the date of issuance, resulting in a True-Up Payment due to the investor of $599,519. (b) On December 4, 2017, the Company entered into a securities purchase agreement to sell a 5% Convertible Note (the “5% Convertible Note”) and 7,500 shares of restricted common stock to an institutional investor. The principal of the 5% Convertible Note and interest thereon was convertible into shares of common stock at $12.00 per share of common stock, subject to adjustments for lower priced issuances, stock splits, stock dividends, combinations or similar events. The 5% Convertible Note was in the principal amount of $550,000, included an OID of $50,000 resulting in net proceeds to the Company of $500,000, accrued interest at 5% simple interest on the principal amount, and was due on August 13, 2018. Interest only payments were due on a quarterly basis and the principal was due on June 3, 2018. At the time of issuance of the 5% Convertible Note, the closing price of the Company’s common stock was in excess of the conversion price, resulting in a BCF accounted for under ASC 470. At issuance, the intrinsic value of the BCF totaled $244,260 based on the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date of the transaction. The intrinsic value of the BCF exceeded the proceeds allocated to the relative fair value of the 5% Convertible Note. The BCF was amortized to interest expense over the term of the 5% Convertible Note using the effective interest method. The valuation of the BCF was calculated based on the effective conversion price compared with the market price of the Company’s common stock on the date of issuance of the 5% Convertible Note. In the aggregate, the Company recorded debt discount in the amount of $550,000 based on the relative fair values of the 7,500 shares of common stock of $25,740, BCF of $244,260 and OID of $50,000. The debt discount is being amortized as non-cash interest expense over the term of the debt. During the year ended December 31, 2017, non-cash interest expense of $380,769 was recorded from the amortization of debt discounts. In January 2018, the 5% Convertible Note was converted into 46,082 shares of the Company’s common stock based upon the contractual rights included in the 5% Convertible Note (See Note 24). (c) On August 3, 2017, the Company entered into a securities purchase agreement to sell a 12% Convertible Note (the “12% Convertible Note”) and a warrant to purchase 33,333 shares of common stock to an accredited investor. The principal of the 12% Convertible Note may be converted into shares of common stock at $11.00 per share and under the terms of the Warrant, up to 33,333 shares of common stock may be purchased at an exercise price of $14.00 per share. The 12% Convertible Note was in the principal amount of $400,000, included an OID of $40,000 resulting in net proceeds to the Company of $360,000, accrued interest at 12% simple interest on the principal amount, and was due on August 13, 2018. Interest only payments were due on a quarterly basis and the principal was due on August 3, 2018. The principal may be converted into shares of the Company’s common stock at $11.00 per share. The Company computed the fair value of the 33,333 warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $167,203 based on the estimated fair value of the 33,333 warrants. The BCF embedded in the 12% Convertible Note is accounted for under ASC 470. At issuance, the intrinsic value of the BCF totaled $186,797. The Company, however, was prohibited from issuing shares of common stock pursuant to the 12% Convertible Note until stockholder approval of such issuance of securities was obtained as required by applicable NYSE American listing rules. The Company received stockholder approval for the share issuances on December 28, 2017. The intrinsic value of the BCF was amortized to interest expense over the term of the 12% Convertible Note using the effective interest method. The valuation of the BCF was calculated based on the effective conversion price compared with the market price of the Company’s common stock on the date of issuance of the 12% Convertible Note. In aggregate, the Company recorded debt discount in the amount of $394,000 based on the relative fair values of the 33,333 warrants, BCF and OID of $40,000. During the year ended December 31, 2017, non-cash interest expense of $211,658 was recorded from the amortization of debt discounts. On December 28, 2017, principal and accrued interest of $198,000 and $4,818, respectively, on the 12% Convertible Note was satisfied through the issuance of 18,438 shares of the Company’s common stock and the remaining balance of $202,000 was converted into 18,884 shares of the Company’s common stock on January 10, 2018 (See Note 24). The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 1.79% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 107.3% was determined based on the Company’s historical stock prices. (d) On April 16, 2018, the Company entered into securities purchase agreements to sell (i) a 12% convertible note (the “12% April 2018 Convertible Note”), (ii) a five-year warrant to purchase 49,679 shares of the Company’s common stock at an exercise price of $26.00 per share; and (iii) 10,046 shares of the Company’s common stock to three institutional investors. The 12% April 2018 Convertible Note is convertible into common stock at $14.00 per share, but may only be converted if an event of default thereunder has occurred and not been cured on a timely basis. The 12% April 2018 Convertible Note is in the principal amount of $1,722,222, included an OID of $172,222 resulting in net proceeds to the Company of $1,550,000 and bears interest at 12% simple interest on the principal amount. The Company is required to make monthly principal and interest payments until the 12% April 2018 Convertible Note is satisfied in full on October 16, 2018. The Company computed the fair value of the warrants using the Black-Scholes option pricing model and, as a result of this calculation, recorded debt discount in the amount of $539,360 based on the estimated fair value of the warrants. The Company estimated that the grant date fair value of the shares of common stock was $128,524, which was determined from the closing price of the Company’s common stock on the date of issuance. In aggregate, the Company recorded debt discount in the amount of $885,106 based on the relative fair values of the warrants, common stock, OID and debt issuance costs of $45,000. During the year ended December 31, 2018, non-cash interest expense of $885,106 was recorded from the amortization of debt discounts. The fair value of the warrants was estimated using the Black-Scholes option-pricing method. The risk-free rate of 2.94% was derived from the U.S. Treasury yield curve, matching the term of the warrant, in effect at the measurement date. The volatility factor of 127.9% was determined based on the Company’s historical stock prices. Beginning on May 16, 2018, the Company was required to make six monthly cash payments in the aggregate amount of $304,259. On August 31, 2018, the Company made its final payment and in aggregate paid principal and accrued interest of $1,722,222 and $103,333, respectively, on the 12% April 2018 Convertible Note. (e) On January 23, 2018, we entered into a securities purchase agreement with an institutional investor to sell, for an aggregate purchase price of $1,000,000, a 10% senior convertible promissory note (the “January 2018 10% Convertible Note”) with an aggregate principal face amount of $1,250,000, a warrant to purchase an aggregate of 31,250 shares of our common stock and 27,174 shares of our common stock. The transactions contemplated by the securities purchase agreement closed on February 8, 2018. The January 2018 10% Convertible Note was convertible into 31,250 shares of the Company’s common stock, a conversion price of $40.00 per share. The exercise price of the warrant to purchase 31,250 shares of the Company’s common stock is $44.00 per share. On February 9, 2018, in addition to the 27,174 shares of common stock provided for pursuant to the securities purchase agreement, the Company issued to the investor an aggregate of 34,597 shares of the Company’s common stock upon the conversion of the entire outstanding principal and accrued interest on the January 2018 10% Convertible Note of $1,383,884 (See Note 24). |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future non-cancellable rental commitments under operating leases | Future non-cancellable rental commitments under operating leases are as follows: 2019 $ 1,272,957 2020 1,032,302 2021 801,305 2022 501,411 2023 514,895 Thereafter 1,582,120 $ 5,704,990 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | Significant components of the Company's deferred tax assets are as follows: 2018 2017 Deferred tax asset: Net operating loss $ 6,924,325 $ 3,543,284 Reserves and allowances 1,724,446 568,866 Equity Compensation 425,603 155,565 Tax credit carryforward 142,484 162,794 Property and equipment 300,240 231,148 Total deferred tax asset 9,517,098 4,661,657 Deferred tax liability: Intangible assets, net (567,923 ) (653,139 ) Total deferred tax liability (567,923 ) (653,139 ) Valuation allowance (9,054,147 ) (4,166,999 ) Deferred tax asset (liability), net $ (104,972 ) $ (158,481 ) |
Schedule of net income tax benefit | The net income tax benefit consists of the following: 2018 2017 Current Foreign $ 134,017 $ — Federal — — State — — Total Current $ 134,017 Deferred Foreign (52,134 ) $ — Federal (158,482 ) (78,393 ) State — — Total Deferred $ (210,616 ) $ (78,393 ) Income tax (benefit) $ (76,599 ) $ (78,393 ) |
Schedule of reconciliation of income tax attributable to operations | The reconciliation of income tax attributable to operations computed at the 2018 and 2017 U.S. Federal statutory income tax rates of 21% and 34% respectively to income tax expense is as follows: 2018 2017 Tax benefit at U.S. Federal statutory tax rate (21.0 %) (34.0 %) Increase (decrease) in tax rate resulting from: Effect of change in tax rates 1.8 % 12.0 % Effect of Section 382 limitation 4.9 % 0.0 % Increase in valuation allowance 15.1 % 17.0 % Nondeductible meals & entertainment expense and other 0.9 % 6.1 % State taxes, net of federal benefit (2.4 %) (4.5 %) Foreign rate differential 0.3 % 0.7 % Stock compensation expense (0.1 %) 1.9 % Effective tax rate (0.3 %) (0.8 %) |
SEGMENT CUSTOMERS AND GEOGRAPHI
SEGMENT CUSTOMERS AND GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of geographic operating segments | The following data presents the revenues, expenditures and other operating data of the Company’s geographic operating segments and presented in accordance with ASC No. 280. Year ended December 31, 2018 DPC DPL Enertec Digital Farms I.AM Eliminations Total Revenue $ 10,499,612 $ 2,036,530 $ 5,226,075 $ — $ — $ — $ 17,762,217 Revenue, cryptocurrency mining — — — 1,675,549 — — 1,675,549 Revenue, related party 3,907,280 — — — — — 3,907,280 Revenue, restaurant operations — — — — 3,462,140 — 3,462,140 Revenue, lending activities 347,033 — — — — — 347,033 Inter-segment revenues 36,833 — — — — (36,833 ) — Total revenues $ 14,790,758 $ 2,036,530 $ 5,226,075 $ 1,675,549 $ 3,462,140 $ (36,833 ) $ 27,154,219 Depreciation and amortization expense $ 300,326 $ 65,046 $ 389,808 $ 2,151,505 $ — $ — $ 2,906,685 Loss from operations $ (3,608,828 ) $ (586,107 ) $ (431,320 ) $ (6,369,138 ) $ (81,264 ) $ — $ (11,076,657 ) Capital expenditures for segment assets, as of December 31, 2018 $ 44,190 $ 1,301 $ 48,826 $ 8,891,928 $ 184,377 $ — $ 9,169,992 Identifiable assets as of December 31, 2018 $ 28,623,729 $ 1,458,699 $ 10,251,816 $ 7,018,958 $ 2,072,678 $ — $ 49,425,880 Year ended December 31, 2017 DPC DPL Eliminations Total Revenues $ 7,889,731 $ 2,111,018 $ — $ 10,000,749 Revenue, related party 173,751 — — 173,751 Inter-segment revenues 53,501 — (53,501 ) — Total revenues $ 8,116,983 $ 2,111,018 $ (53,501 ) $ 10,174,500 Depreciation and amortization expense $ 183,252 $ 70,754 $ — $ 254,006 Loss from operations $ (5,558,272 ) $ (424,773 ) $ — $ (5,983,045 ) Capital expenditures for segment assets, as of $ 382,250 $ 20,529 $ — $ 402,779 Identifiable assets as of December 31, 2017 $ 28,780,371 $ 1,728,523 $ — $ 30,508,894 |
Schedule of total revenues | The following table provides the percentage of total revenues attributable to a single customer from which 10% or more of total revenues are derived: For the Year Ended December 31, 2018 Total Revenues by Major Percentage of Customers Total Company (in thousands) Revenues Customer A $ 3,907,280 14 % For the Year Ended December 31, 2017 Total Revenues by Major Percentage of Customers Total Company (in thousands) Revenues Customer B $ 1,340,766 13 % |
Schedule of revenues from external customers | For the years ended December 31, 2018 and 2017, total revenues from external customers divided on the basis of the Company’s product lines are as follows: For the Years Ended December 31, 2018 2017 Revenues: Commercial products $ 10,597,256 $ 5,488,657 Defense products 16,556,963 4,685,843 Total revenues $ 27,154,219 $ 10,174,500 |
Schedule of total revenues are attributed to geographic areas | Other than as shown, no foreign country or region contributed materially to revenues or long-lived assets for these periods: For the Years Ended December 31, 2018 2017 Revenues: North America $ 19,113,226 $ 6,636,954 Europe 1,765,991 2,634,166 Middle East 5,226,075 672,256 Other 1,048,927 231,124 Total revenues $ 27,154,219 $ 10,174,500 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Dec. 31, 2018Number | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 5 |
LIQUIDITY, GOING CONCERN AND _2
LIQUIDITY, GOING CONCERN AND MANAGEMENT'S PLANS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liquidity Going Concern And Managements Plans [Abstract] | |||
Cash and cash equivalent | $ 902,329 | $ 1,478,147 | $ 996,174 |
Accumulated deficit | (55,721,115) | (23,414,151) | |
Working capital | 18,445,302 | ||
Net income (loss) attributable to parent | (32,982,201) | $ (10,895,049) | |
Proceeds from public offering | $ 7,000,000 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenue | $ 27,154,219 | $ 10,174,500 |
RF/Microwave Filters [Member] | ||
Total revenue | 3,331,575 | |
Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | 1,338,912 | |
Power Supply Units [Member] | ||
Total revenue | 5,829,125 | |
Power Supply Systems [Member] | ||
Total revenue | 2,036,530 | |
Healthcare Diagnostic Systems [Member] | ||
Total revenue | 1,715,512 | |
Defense Systems [Member] | ||
Total revenue | 3,510,563 | |
Digital Currency Mining [Member] | ||
Total revenue | 1,675,549 | |
Restaurant Operations [Member] | ||
Total revenue | 3,462,140 | |
Lending Activities [Member] | ||
Total revenue | 347,033 | |
MLSE Systems [Member] | ||
Total revenue | 3,907,280 | |
Goods Transferred At A Point In Time [Member] | ||
Total revenue | 17,396,132 | |
Services Transferred Over Time [Member] | ||
Total revenue | 9,758,087 | |
DPC [Member] | ||
Total revenue | 14,753,925 | |
DPC [Member] | RF/Microwave Filters [Member] | ||
Total revenue | 3,331,575 | |
DPC [Member] | Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | 1,338,912 | |
DPC [Member] | Power Supply Units [Member] | ||
Total revenue | 5,829,125 | |
DPC [Member] | Power Supply Systems [Member] | ||
Total revenue | ||
DPC [Member] | Healthcare Diagnostic Systems [Member] | ||
Total revenue | ||
DPC [Member] | Defense Systems [Member] | ||
Total revenue | ||
DPC [Member] | Digital Currency Mining [Member] | ||
Total revenue | ||
DPC [Member] | Restaurant Operations [Member] | ||
Total revenue | ||
DPC [Member] | Lending Activities [Member] | ||
Total revenue | 347,033 | |
DPC [Member] | MLSE Systems [Member] | ||
Total revenue | 3,907,280 | |
DPC [Member] | Goods Transferred At A Point In Time [Member] | ||
Total revenue | 10,846,645 | |
DPC [Member] | Services Transferred Over Time [Member] | ||
Total revenue | 3,907,280 | |
DPL [Member] | ||
Total revenue | 2,036,530 | |
DPL [Member] | RF/Microwave Filters [Member] | ||
Total revenue | ||
DPL [Member] | Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | ||
DPL [Member] | Power Supply Units [Member] | ||
Total revenue | ||
DPL [Member] | Power Supply Systems [Member] | ||
Total revenue | 2,036,530 | |
DPL [Member] | Healthcare Diagnostic Systems [Member] | ||
Total revenue | ||
DPL [Member] | Defense Systems [Member] | ||
Total revenue | ||
DPL [Member] | Digital Currency Mining [Member] | ||
Total revenue | ||
DPL [Member] | Restaurant Operations [Member] | ||
Total revenue | ||
DPL [Member] | Lending Activities [Member] | ||
Total revenue | ||
DPL [Member] | MLSE Systems [Member] | ||
Total revenue | ||
DPL [Member] | Goods Transferred At A Point In Time [Member] | ||
Total revenue | 1,411,798 | |
DPL [Member] | Services Transferred Over Time [Member] | ||
Total revenue | 624,732 | |
Enertec [Member] | ||
Total revenue | 5,226,075 | |
Enertec [Member] | RF/Microwave Filters [Member] | ||
Total revenue | ||
Enertec [Member] | Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | ||
Enertec [Member] | Power Supply Units [Member] | ||
Total revenue | ||
Enertec [Member] | Power Supply Systems [Member] | ||
Total revenue | ||
Enertec [Member] | Healthcare Diagnostic Systems [Member] | ||
Total revenue | 1,715,512 | |
Enertec [Member] | Defense Systems [Member] | ||
Total revenue | 3,510,563 | |
Enertec [Member] | Digital Currency Mining [Member] | ||
Total revenue | ||
Enertec [Member] | Restaurant Operations [Member] | ||
Total revenue | ||
Enertec [Member] | Lending Activities [Member] | ||
Total revenue | ||
Enertec [Member] | MLSE Systems [Member] | ||
Total revenue | ||
Enertec [Member] | Goods Transferred At A Point In Time [Member] | ||
Total revenue | ||
Enertec [Member] | Services Transferred Over Time [Member] | ||
Total revenue | 5,226,075 | |
Digital Farms [Member] | ||
Total revenue | 1,675,549 | |
Digital Farms [Member] | RF/Microwave Filters [Member] | ||
Total revenue | ||
Digital Farms [Member] | Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | ||
Digital Farms [Member] | Power Supply Units [Member] | ||
Total revenue | ||
Digital Farms [Member] | Power Supply Systems [Member] | ||
Total revenue | ||
Digital Farms [Member] | Healthcare Diagnostic Systems [Member] | ||
Total revenue | ||
Digital Farms [Member] | Defense Systems [Member] | ||
Total revenue | ||
Digital Farms [Member] | Digital Currency Mining [Member] | ||
Total revenue | 1,675,549 | |
Digital Farms [Member] | Restaurant Operations [Member] | ||
Total revenue | ||
Digital Farms [Member] | Lending Activities [Member] | ||
Total revenue | ||
Digital Farms [Member] | MLSE Systems [Member] | ||
Total revenue | ||
Digital Farms [Member] | Goods Transferred At A Point In Time [Member] | ||
Total revenue | 1,675,549 | |
Digital Farms [Member] | Services Transferred Over Time [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | ||
Total revenue | 3,462,140 | |
I. AM, Inc. [Member] | RF/Microwave Filters [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Detector Logarithmic Video Amplifiers [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Power Supply Units [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Power Supply Systems [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Healthcare Diagnostic Systems [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Defense Systems [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Digital Currency Mining [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Restaurant Operations [Member] | ||
Total revenue | 3,462,140 | |
I. AM, Inc. [Member] | Lending Activities [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | MLSE Systems [Member] | ||
Total revenue | ||
I. AM, Inc. [Member] | Goods Transferred At A Point In Time [Member] | ||
Total revenue | 3,462,140 | |
I. AM, Inc. [Member] | Services Transferred Over Time [Member] | ||
Total revenue | ||
North America [Member] | ||
Total revenue | 19,025,376 | |
North America [Member] | DPC [Member] | ||
Total revenue | 13,875,883 | |
North America [Member] | DPL [Member] | ||
Total revenue | 11,804 | |
North America [Member] | Enertec [Member] | ||
Total revenue | ||
North America [Member] | Digital Farms [Member] | ||
Total revenue | 1,675,549 | |
North America [Member] | I. AM, Inc. [Member] | ||
Total revenue | 3,462,140 | |
Europe [Member] | ||
Total revenue | 1,815,866 | |
Europe [Member] | DPC [Member] | ||
Total revenue | 159,350 | |
Europe [Member] | DPL [Member] | ||
Total revenue | 1,656,516 | |
Europe [Member] | Enertec [Member] | ||
Total revenue | ||
Europe [Member] | Digital Farms [Member] | ||
Total revenue | ||
Europe [Member] | I. AM, Inc. [Member] | ||
Total revenue | ||
Middle East [Member] | ||
Total revenue | 5,226,075 | |
Middle East [Member] | DPC [Member] | ||
Total revenue | ||
Middle East [Member] | DPL [Member] | ||
Total revenue | ||
Middle East [Member] | Enertec [Member] | ||
Total revenue | 5,226,075 | |
Middle East [Member] | Digital Farms [Member] | ||
Total revenue | ||
Middle East [Member] | I. AM, Inc. [Member] | ||
Total revenue | ||
Other [Member] | ||
Total revenue | 1,086,902 | |
Other [Member] | DPC [Member] | ||
Total revenue | 718,692 | |
Other [Member] | DPL [Member] | ||
Total revenue | 368,210 | |
Other [Member] | Enertec [Member] | ||
Total revenue | ||
Other [Member] | Digital Farms [Member] | ||
Total revenue | ||
Other [Member] | I. AM, Inc. [Member] | ||
Total revenue |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details1) | 12 Months Ended |
Dec. 31, 2018 | |
Leasehold improvements [Member] | |
Property, and equipment, useful life | Over the term of the lease or the life of the asset, whichever is shorter. |
Computer Software and Related Equipment [Member] | Minimum [Member] | |
Property, and equipment, useful life (Year) | 3 years |
Computer Software and Related Equipment [Member] | Maximum [Member] | |
Property, and equipment, useful life (Year) | 5 years |
Office Furniture and Equipment [Member] | Minimum [Member] | |
Property, and equipment, useful life (Year) | 5 years |
Office Furniture and Equipment [Member] | Maximum [Member] | |
Property, and equipment, useful life (Year) | 10 years |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended |
Dec. 31, 2018 | |
Maximum [Member] | |
Intangible asset, useful life | 14 years |
Minimum [Member] | |
Intangible asset, useful life | 3 years |
Non-competition agreements [Member] | |
Intangible asset, useful life | 3 years |
Domain Name and Other Intangible Assets [Member] | |
Intangible asset, useful life | 3 years |
Customer Lists [Member] | Maximum [Member] | |
Intangible asset, useful life | 14 years |
Customer Lists [Member] | Minimum [Member] | |
Intangible asset, useful life | 5 years |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-sale securities | $ 5,611,621 | $ 2,332,910 |
Fair Value, Measurements, Recurring [Member] | ||
Available-for-sale securities | 3,256,468 | 9,562,571 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 991,455 | 2,660,978 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | 2,265,013 | 6,901,593 |
Avalanche International Corp. [Member] | ||
Available-for-sale securities | 3,256,468 | 9,562,571 |
Avalanche International Corp. [Member] | Fair Value, Measurements, Recurring [Member] | ||
Available-for-sale securities | 3,043,499 | 7,728,001 |
Avalanche International Corp. [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 812,858 | 826,408 |
Avalanche International Corp. [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | ||
Avalanche International Corp. [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | 2,230,641 | 6,901,593 |
Marketable Securities {Member] | Fair Value, Measurements, Recurring [Member] | ||
Available-for-sale securities | 178,597 | 1,834,570 |
Marketable Securities {Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities | 178,597 | 1,834,570 |
Marketable Securities {Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | ||
Marketable Securities {Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | ||
Investment In Warrants Of Public Companies [Member] | Fair Value, Measurements, Recurring [Member] | ||
Available-for-sale securities | 34,372 | |
Investment In Warrants Of Public Companies [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-sale securities | ||
Investment In Warrants Of Public Companies [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-sale securities | 34,372 | |
Investments in Warrants of Public Companies [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-sale securities |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 4) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Anti-dilutive securities | 2,436,573 | 585,071 |
Preferred Stock [Member] | ||
Anti-dilutive securities | 127,551 | 109,306 |
Employee Stock Option [Member] | ||
Anti-dilutive securities | 373,000 | 192,125 |
Warrant [Member] | ||
Anti-dilutive securities | 936,381 | 219,443 |
Convertible Notes [Member] | ||
Anti-dilutive securities | 999,641 | 64,197 |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 15, 2017 | Dec. 31, 2016 | |
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||
Unrealized gain | $ 119,329 | $ 550,048 | |||
Revenue performance obligation | 48,000,000 | ||||
Cash and cash equivalents | 902,329 | 1,478,147 | $ 996,174 | ||
Allowance for Doubtful Accounts Receivable | 5,000 | 5,000 | |||
Available-for-sale securities | 5,611,621 | 2,332,910 | |||
Amortization of debt discount | 11,191,056 | 4,688,630 | |||
Lease payments | 4,200,000 | ||||
MTIX Ltd [Member] | Two MLSE Units [Member] | |||||
Unit purchase price | 50,000,000 | ||||
Manufacturing costs | 100,000 | ||||
Avalanche International Corp. [Member] | |||||
Available-for-sale securities, equity securities | $ 812,858 | $ 826,408 | |||
Warrant outstanding | 13,887,993 | 8,248,440 | |||
Exercise price of warrants (in dollars per share) | $ 0.50 | $ 0.50 | |||
Available-for-sale securities | $ 3,256,468 | $ 9,562,571 | |||
Aggregate fair value | 3,043,499 | 7,728,001 | |||
Common Stock [Member] | |||||
Payments to acquire investments | 220,880 | ||||
Unrealized gain | 42,283 | 133,067 | |||
Aggregate fair value | 178,597 | ||||
UNITED KINGDOM | |||||
Cash and cash equivalents | 409,945 | 292,153 | |||
ISRAEL | |||||
Cash and cash equivalents | $ 60,040 | $ 0 |
Digital Currencies (Details)
Digital Currencies (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Digital Currencies [Abstract] | |
Balance at beginning | |
Additions of digital currencies | 1,634,941 |
Payment on convertible notes payable | (739,967) |
Payments to vendors | (449,479) |
Purchase of fixed assets | (250,460) |
Realized loss on sale of digital currencies | (127,602) |
Cash proceeds | (64,587) |
Unrealized loss on digital currencies | (1,311) |
Balance at ending | $ 1,535 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Payments to acquire investments | $ 1,244,353 | $ 3,200,554 |
Common Stock [Member] | ||
Payments to acquire investments | 220,880 | 1,701,503 |
Gross unrealized gains (losses) | (42,283) | 133,067 |
Gross realized gains (losses) | ||
Fair value | $ 178,597 | $ 1,834,570 |
Marketable Securities (Details
Marketable Securities (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Purchases of marketable securities | $ 25,000 | |
Sales of marketable securities | (2,188,292) | $ (63,606) |
Realized losses on marketable securities | (175,405) | |
Common Stock [Member] | ||
Balance at beginning | 1,834,570 | |
Purchases of marketable securities | 858,458 | |
Sales of marketable securities | (2,188,292) | |
Realized losses on marketable securities | (175,405) | |
Unrealized gains on marketable securities | (150,734) | |
Balance at end | $ 178,597 | $ 1,834,570 |
Marketable Securities (Detail_2
Marketable Securities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Common Stock [Member] | ||
Gross unrealized gains (losses) | $ 42,283 | $ 133,067 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials, parts and supplies | $ 2,026,839 | $ 541,816 |
Work-in-progress | 483,706 | 685,410 |
Finished products | 750,581 | 765,639 |
Total inventories | $ 3,261,126 | $ 1,992,865 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, plant and equipment, gross | $ 13,978,949 | $ 3,509,251 |
Accumulated depreciation and amortization | (4,665,650) | (2,292,404) |
Property and equipment, net | 9,313,299 | 1,216,847 |
Cryptocurrency machines and related equipment [Member] | ||
Property, plant and equipment, gross | 9,168,928 | |
Computer, software and related equipment [Member] | ||
Property, plant and equipment, gross | 2,495,470 | 2,431,906 |
Restaurant equipment [Member] | ||
Property, plant and equipment, gross | 752,103 | |
Office furniture and equipment [Member] | ||
Property, plant and equipment, gross | 287,583 | 289,288 |
Leasehold improvements [Member] | ||
Property, plant and equipment, gross | $ 1,274,865 | $ 788,057 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and Amortization of Intangible Assets | $ 2,447,249 | $ 193,671 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible assets gross | $ 4,863,278 | $ 2,958,348 |
Accumulated amortization | (503,480) | (60,335) |
Intangible assets, net | 4,359,798 | 2,898,013 |
Customer Lists [Member] | ||
Intangible assets gross | 2,388,139 | 988,041 |
Non-competition agreements [Member] | ||
Intangible assets gross | 150,000 | 150,000 |
Domain Name And Other Intangible Assets [Member] | ||
Intangible assets gross | 762,807 | 81,000 |
Trademarks and Trade Names [Member] | ||
Intangible assets gross | $ 1,562,332 | $ 1,739,307 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details 1) | Dec. 31, 2018USD ($) |
Intangible Assets Net [Abstract] | |
2019 | $ 506,271 |
2020 | 382,251 |
2021 | 242,503 |
2022 | 224,003 |
2023 | 210,670 |
Thereafter | 1,044,254 |
Estimated amortization expense | $ 2,609,952 |
INTANGIBLE ASSETS, NET (Detai_3
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of Intangible Assets | $ 459,656 | $ 60,335 |
Indefinite-lived Intangible Assets | $ 520,000 | $ 1,739,307 |
Minimum [Member] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Estimated useful lives | 14 years |
INVESTMENTS - RELATED PARTIES_2
INVESTMENTS - RELATED PARTIES (Details) - Avalanche International Corp. [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Investment in convertible promissory notes of AVLP - Gross | $ 6,943,997 | $ 4,124,220 |
Investment in warrants of AVLP | 2,230,641 | 6,901,593 |
Investment in common stock of AVLP | 812,858 | 826,408 |
Accrued interest in convertible promissory note of AVLP | 1,004,317 | 324,400 |
Total investment in AVLP - Gross | 10,991,813 | 12,176,621 |
Less: original issue discount | (2,336,693) | (2,115,710) |
Total investment in AVLP - Net | $ 8,655,120 | $ 10,060,911 |
INVESTMENTS - RELATED PARTIES_3
INVESTMENTS - RELATED PARTIES (Details 1) - Avalanche International Corp. [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balance at beginning | $ 10,060,911 | $ 1,036,651 |
Investment in convertible promissory notes of AVLP | 1,671,936 | 620,091 |
Payment of convertible promissory notes of AVLP | (1,107,500) | |
Investment in common stock of AVLP | 417,169 | 191,782 |
Fair value of warrants issued by AVLP | 2,255,341 | 2,388,681 |
Unrealized gain in warrants of AVLP | (6,926,293) | 4,512,912 |
Unrealized gain in common stock of AVLP | (430,719) | 550,048 |
Accretion of discount | 2,034,358 | 436,346 |
Accrued Interest | 679,917 | 324,400 |
Balance at ending | 8,655,120 | 10,060,911 |
Convertible Promissory Note [Member] | ||
Balance at beginning | 2,332,910 | 952,073 |
Investment in convertible promissory notes of AVLP | 1,671,936 | 620,091 |
Payment of convertible promissory notes of AVLP | (1,107,500) | |
Accretion of discount | 2,034,358 | 436,346 |
Accrued Interest | 679,917 | 324,400 |
Balance at ending | 5,611,621 | 2,332,910 |
Warrants and Common Stock [Member] | ||
Balance at beginning | 7,728,001 | 84,578 |
Investment in convertible promissory notes of AVLP | ||
Payment of convertible promissory notes of AVLP | ||
Investment in common stock of AVLP | 417,169 | 191,782 |
Fair value of warrants issued by AVLP | 2,255,341 | 2,388,681 |
Unrealized gain in warrants of AVLP | (6,926,293) | 4,512,912 |
Unrealized gain in common stock of AVLP | (430,719) | 550,048 |
Accretion of discount | ||
Accrued Interest | ||
Balance at ending | $ 3,043,499 | $ 7,728,001 |
INVESTMENTS - RELATED PARTIES_4
INVESTMENTS - RELATED PARTIES (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 15, 2017 |
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||
Purchase warrant | 9,000 | ||||
Share price (in dollars per share) | $ 2 | $ 2 | |||
Net unrealized loss on securities available-for-sale | $ (8,027,746) | $ 5,171,743 | |||
Avalanche International Corp. [Member] | Common Stock [Member] | |||||
Number of shares purchased | 430,942 | 221,333 | |||
Share price (in dollars per share) | $ 191,782 | ||||
Number of shares | 903,175 | ||||
Avalanche International Corp. [Member] | Common Stock [Member] | Ownership [Member] | |||||
Share price (in dollars per share) | $ 417,169 | $ 417,169 | |||
Ownership percentage | 16.30% | 16.30% | |||
Avalanche International Corp. [Member] | Loan And Security Agreement [Member] | 12% New Convertible Promissory Note [Member] | |||||
Financing receivable term | 2 years | ||||
Discription of warrant conversion | The warrants entitle the Company to purchase up to 13,887,994 shares of AVLP common stock at an exercise price of $0.50 per share for a period of five years. The exercise price of $0.50 is subject to adjustment for customary stock splits, stock dividends, combinations or similar events. | ||||
Unrealized gain (loss) on its investment | $ (6,926,293) | $ 4,512,912 | |||
Fair value of the warrants | 4,644,022 | ||||
Recognized unrealized gain | 119,329 | ||||
Net unrealized loss on securities available-for-sale | (7,357,012) | 5,062,960 | |||
Avalanche International Corp. [Member] | |||||
Convertible promissory note aggregate principal amount | $ 6,943,997 | $ 6,943,997 | |||
Conversion price (in dollars per share) | $ 0.50 | $ 0.50 | |||
Interest rate | 12.00% | 12.00% | |||
Financing receivable term | 5 years | ||||
Exercise price of warrants (in dollars per share) | $ 0.50 | $ 0.50 | |||
Purchase warrant | 13,887,994 | 13,887,994 | |||
Avalanche International Corp. [Member] | Notes Receivable [Member] | |||||
Interest Income, Related Party | $ 2,034,358 | 436,346 | |||
Interest receivable | $ 679,917 | $ 679,917 | $ 324,400 |
INVESTMENTS IN PREFERRED STOC_2
INVESTMENTS IN PREFERRED STOCK OF PRIVATE COMPANY AND OTHER INVESTMENTS (Details narrative) - USD ($) | May 23, 2018 | Dec. 15, 2017 | Nov. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Other investments | $ 2,572,230 | $ 1,637,672 | |||
Series A1 Preferred Stock Purchase Agreement [Member] | Sandstone Diagnostics, Inc [Member] | |||||
Number of shares purchase (in shares) | 976,286 | ||||
Purchase shares value | $ 1,000,000 | ||||
Loan And Security Agreement [Member] | I. AM, Inc. [Member] | |||||
Authorized non-revolving credit facility | $ 1,600,000 | ||||
Securities Purchase Agreements [Member] | I. AM, Inc. [Member] | |||||
Outstanding principal value | $ 1,715,330 | ||||
Maximum number of shares transfer | $ 471 |
INVESTMENTS IN REAL ESTATE (Det
INVESTMENTS IN REAL ESTATE (Details Narrative) - Limited Partnership Agreement [Member] - USD ($) | Jun. 08, 2018 | Dec. 31, 2018 |
Investment in partnership | $ 1,869,000 | |
Real estate investments | $ 100,000 | |
Description of capital contribution terms | Subject to the occurrence of certain events and other conditions over which the Company has no control, it was required to make monthly capital contributions of $500,000 every thirty days until the Company’s commitment of $10 million is funded in full. The Company has received a waiver for its obligation to make monthly capital contributions through September 30, 2019. | |
August 16, 2018 Notes [Member] | ||
Capital contributions | $ 1,000,000 |
OTHER INVESTMENTS - RELATED PAR
OTHER INVESTMENTS - RELATED PARTIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 05, 2017 | Apr. 05, 2017 | Mar. 15, 2017 | |
Payments to acquire property | $ 8,919,532 | $ 402,779 | |||||
Amortization expense | 11,191,055 | 4,688,630 | |||||
Proceeds from short term debt | 762,000 | 2,439,000 | |||||
Number of warrants purchased | 9,000 | ||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||||
Accrued interest | $ 1,353,411 | ||||||
Alzamend Neuro, Inc. [Member] | |||||||
Proceeds from short term debt | 44,000 | ||||||
Number of warrants purchased | 22,000 | ||||||
Exercise price of warrants (in dollars per share) | $ 0.30 | ||||||
Tenancy In Common Agreement [Member] | |||||||
Amortization of property | 300,000 | ||||||
Amortization expense | $ 30,000 | 7,500 | |||||
WT Johnson & Sons [Member] | Convertible Promissory Note A [Member] | |||||||
Number of shares issued upon conversion | 30,000 | ||||||
Number of shares sold | 30,000 | ||||||
Proceeds from promissory note | $ 2,267,766 | ||||||
Value added tax payable | 400,500 | 400,500 | |||||
WT Johnson & Sons [Member] | Exchange Agreement [Member] | Convertible Promissory Note A [Member] | |||||||
Principal amount | $ 600,000 | ||||||
Value added tax payable | 2,668,266 | 2,668,266 | |||||
Debt carrying amount | $ 600,000 | $ 600,000 | 600,000 | ||||
WT Johnson & Sons [Member] | Exchange Agreement [Member] | 10% Convertible Secured Notes [Member] | |||||||
Principal amount | $ 1,667,766 | ||||||
Amos Kohn [Member] | |||||||
Payments to acquire property | $ 300,000 | ||||||
Amos Kohn [Member] | Undivided Interest [Member] | |||||||
Percentage of real property | 28.00% | 28.00% | |||||
Roni Kohn [Member] | |||||||
Percentage of real property | 72.00% | 72.00% |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax liability | $ (567,923) | $ (653,139) |
Notes payable | (7,002,819) | (927,726) |
Goodwill | 8,463,070 | $ 3,651,984 |
Enertec [Member] | ||
Accounts receivable | 3,184,227 | |
Inventories | 1,343,053 | |
Property and equipment | 648,649 | |
Trade name and trademark | 2,094,741 | |
Domain name and other intangible assets | ||
Other assets | 29,056 | |
Accounts payable and accrued expenses | (2,702,306) | |
Deferred tax liability | (160,311) | |
Notes payable | (4,235,725) | |
Accrued severance pay | (131,811) | |
Net assets assumed | 69,573 | |
Goodwill | 4,780,526 | |
Non-controlling interest | ||
Purchase price | 4,850,099 | |
I. AM, Inc. [Member] | ||
Accounts receivable | 29,319 | |
Inventories | 40,581 | |
Property and equipment | 700,291 | |
Trade name and trademark | 520,000 | |
Domain name and other intangible assets | 90,000 | |
Other assets | 1,492 | |
Accounts payable and accrued expenses | (103,961) | |
Deferred tax liability | ||
Notes payable | ||
Accrued severance pay | ||
Net assets assumed | 1,277,722 | |
Goodwill | 265,252 | |
Non-controlling interest | (33,242) | |
Purchase price | $ 1,509,732 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2016 |
Cash and cash equivalents | $ 1,478,147 | $ 902,329 | $ 996,174 |
Accounts receivable | 1,898,241 | 1,930,971 | |
Inventories | 1,992,865 | 3,261,126 | |
Prepaid expenses and other current assets | 1,407,104 | 775,981 | |
Property and equipment | 1,216,847 | 9,313,299 | |
Other investments | 1,637,672 | 2,572,230 | |
Deferred tax liability | (653,139) | (567,923) | |
Notes payable | (927,726) | (7,002,819) | |
Notes payable, related parties | (309,317) | (308,984) | |
Convertible notes payable | 397,878 | 6,742,494 | |
Other current liabilities | (708,391) | (1,868,402) | |
Goodwill | 3,651,984 | $ 8,463,070 | |
Microphase [Member] | |||
Cash and cash equivalents | 10,982 | ||
Accounts receivable | 438,456 | ||
Inventories | 667,020 | ||
Prepaid expenses and other current assets | 139,665 | ||
Restricted cash | 100,000 | ||
Intangible assets | 2,627,348 | ||
Property and equipment | 406,432 | ||
Other investments | 303,333 | ||
Deposits and loans | 43,479 | ||
Accounts payable and accrued expenses | (1,577,281) | ||
Deferred tax liability | (225,488) | ||
Revolving credit facility | (879,666) | ||
Notes payable | (2,203,835) | ||
Notes payable, related parties | (406,194) | ||
Convertible notes payable | |||
Other current liabilities | (219,685) | ||
Net (liabilities) assets assumed | (775,434) | ||
Goodwill | 3,171,029 | ||
Non-controlling interest | (944,555) | ||
Purchase price | 1,451,040 | ||
Power Plus [Member] | |||
Cash and cash equivalents | 31,411 | ||
Accounts receivable | 235,358 | ||
Inventories | 240,843 | ||
Prepaid expenses and other current assets | 2,068 | ||
Restricted cash | |||
Intangible assets | 250,000 | ||
Property and equipment | 22,925 | ||
Other investments | |||
Deposits and loans | |||
Accounts payable and accrued expenses | (388,746) | ||
Deferred tax liability | |||
Revolving credit facility | (210,739) | ||
Notes payable | |||
Notes payable, related parties | |||
Convertible notes payable | |||
Other current liabilities | |||
Net (liabilities) assets assumed | 183,119 | ||
Goodwill | 480,953 | ||
Non-controlling interest | |||
Purchase price | $ 664,073 |
BUSINESS COMBINATIONS (Detail_2
BUSINESS COMBINATIONS (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net loss | $ (32,982,201) | $ (10,895,049) |
Less: Net loss attributable to non-controlling interest | 748,320 | 278,818 |
Net loss attributable to common stockholders | (32,233,881) | (10,616,231) |
Preferred deemed dividends | $ (108,049) | $ (584,182) |
Basic and diluted weighted average common shares outstanding | 2,899,888 | 623,583 |
Microphase Corporation and Power-Plus Technical Distributors [Member] | ||
Total Revenue | $ 28,691,641 | $ 20,807,590 |
Net loss | (35,627,242) | (16,877,041) |
Less: Net loss attributable to non-controlling interest | 748,320 | 772,596 |
Net loss attributable to common stockholders | (34,878,922) | (16,104,445) |
Preferred deemed dividends | (108,049) | (584,182) |
Preferred dividends | (54,059) | |
Loss available to common shareholders | $ (34,986,971) | $ (16,742,686) |
Basic and diluted net loss per common share | $ (12.06) | $ (26.85) |
Basic and diluted weighted average common shares outstanding | 2,899,888 | 623,583 |
Comprehensive Loss | ||
Loss available to common shareholders | $ (34,986,971) | $ (16,742,686) |
Other comprehensive income (loss) | ||
Change in net foreign currency translation adjustments | (377,823) | 152,078 |
Net unrealized gain (loss) on securities available-for-sale | (8,027,746) | 5,171,743 |
Other comprehensive income (loss) | (8,405,569) | 5,323,821 |
Total Comprehensive loss | $ (43,392,540) | $ (11,418,865) |
BUSINESS COMBINATIONS (Detail_3
BUSINESS COMBINATIONS (Details Narrative) | May 23, 2018USD ($)shares | Apr. 28, 2017Numbershares | Dec. 31, 2018USD ($)$ / shares | Jun. 19, 2017$ / shares | Jun. 02, 2017 |
Equity instruments issued | $ (1,451,040) | ||||
Common Stock [Member] | Share Exchange Agreement [Member] | |||||
Number of shares issued | shares | 92,122 | ||||
Warrant [Member] | |||||
Number of shares issued | shares | 50,000 | ||||
Shares issued (in dollars per share) | $ / shares | $ 52,000 | ||||
Series D Preferred Stock [Member] | Share Exchange Agreement [Member] | |||||
Number of shares issued | shares | 378,776 | ||||
Common Stock And Warrants [Member] | Series D Preferred Stock [Member] | Share Exchange Agreement [Member] | |||||
Number of shares converted | Number | 757,552 | ||||
Microphase Corporation [Member] | |||||
Ownership percentage | 56.40% | 56.40% | |||
Equity instruments issued | $ 1,451,040 | ||||
Shares issued (in dollars per share) | $ / shares | $ 9.40 | ||||
Purchase price | $ 1,451,040 | ||||
Microphase Corporation [Member] | Common Stock [Member] | Share Exchange Agreement [Member] | |||||
Common stock, shares issued | shares | 1,603,434 | ||||
Common stock, shares outstanding | shares | 1,603,434 | ||||
Microphase Corporation [Member] | Series D Preferred Stock [Member] | |||||
Equity instruments issued | 1,222,000 | ||||
Microphase Corporation [Member] | Common Stock And Warrants [Member] | |||||
Equity instruments issued | 229,040 | ||||
Power-Plus Technical Distributors, LLC [Member] | |||||
Membership interests acquired | 850,000 | ||||
Certain debt amount reduce form purchase price | $ 185,927 | ||||
Description of purchase price consideration paid | A two-year promissory note in the amount of $255,000 payable in 24 monthly installments; and (ii) cash at closing of $409,073 resulting in a net purchase price of $664,073. | ||||
Purchase price | $ 664,073 | ||||
Enertec Systems 2001 Ltd [Member] | Share Purchase Agreement [Member] | |||||
Purchase price | $ 4,850,099 | ||||
I. AM, Inc. [Member] | |||||
Purchase price | $ 1,509,732 | ||||
I. AM, Inc. [Member] | Securities Purchase Agreement [Member] | |||||
Description of equity interests issued | 981 shares of common stock for a purchase price of $1, representing, upon the closing, 98.1% of I. AM’s outstanding common stock. | ||||
I. AM, Inc. [Member] | Loan And Security Agreement [Member] | |||||
Number of shares issued | shares | 471 | ||||
Purchase price | $ 1,715,330 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted average risk free interest rate, minimum | 2.41% | 1.73% |
Weighted average risk free interest rate, maximum | 2.80% | 2.14% |
Weighted average life (in years) | 4 years 8 months 12 days | 5 years |
Volatility, minimum | 124.70% | 98.40% |
Volatility, maximum | 131.70% | 115.80% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant-date fair value per share of options granted (in dollars per share) | $ 15.61 | $ 12 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Exercise Price, lower limit | $ 11.40 |
Exercise Price, upper limit | $ 33.80 |
Options Outstanding | shares | 173,125 |
Weighted Average Remaining Contractual Life (Years) | 7 years 6 months 7 days |
Weighted Average Exercise Price, Outstanding | $ 14.41 |
Options, Exercisable | shares | 99,032 |
Weighted Average Exercise Price, Exercisable | $ 14.35 |
Issuances Outside Of Plans [Member] | |
Exercise Price, lower limit | 16 |
Exercise Price, upper limit | $ 46.40 |
Options Outstanding | shares | 199,875 |
Weighted Average Remaining Contractual Life (Years) | 7 years 4 months 20 days |
Weighted Average Exercise Price, Outstanding | $ 26.09 |
Options, Exercisable | shares | 36,842 |
Weighted Average Exercise Price, Exercisable | $ 29.36 |
Total Options [Member] | |
Exercise Price, lower limit | 11.40 |
Exercise Price, upper limit | $ 46.40 |
Options Outstanding | shares | 373,000 |
Weighted Average Remaining Contractual Life (Years) | 7 years 5 months 12 days |
Weighted Average Exercise Price, Outstanding | $ 20.67 |
Options, Exercisable | shares | 135,874 |
Weighted Average Exercise Price, Exercisable | $ 18.42 |
Exercise Price Range $11.40 - $16.00 [Member] | |
Exercise Price, lower limit | 11.40 |
Exercise Price, upper limit | $ 16 |
Options Outstanding | shares | 161,500 |
Weighted Average Remaining Contractual Life (Years) | 7 years 6 months 14 days |
Weighted Average Exercise Price, Outstanding | $ 13.37 |
Options, Exercisable | shares | 92,876 |
Weighted Average Exercise Price, Exercisable | $ 13.32 |
Exercise Price Range $20.00 - $27.60 [Member] | |
Exercise Price, lower limit | 20 |
Exercise Price, upper limit | $ 27.60 |
Options Outstanding | shares | 8,500 |
Weighted Average Remaining Contractual Life (Years) | 8 years 6 months 7 days |
Weighted Average Exercise Price, Outstanding | $ 27.46 |
Options, Exercisable | shares | 3,031 |
Weighted Average Exercise Price, Exercisable | $ 27.20 |
Exercise Price Range $30.20 - $33.80 [Member] | |
Exercise Price, lower limit | 30.20 |
Exercise Price, upper limit | $ 33.80 |
Options Outstanding | shares | 3,125 |
Weighted Average Remaining Contractual Life (Years) | 3 years 8 months 16 days |
Weighted Average Exercise Price, Outstanding | $ 32.73 |
Options, Exercisable | shares | 3,125 |
Weighted Average Exercise Price, Exercisable | $ 32.73 |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total stock-based compensation | $ 4,719,265 | $ 1,831,285 |
Cost Of Revenues [Member] | ||
Total stock-based compensation | 4,874 | 8,466 |
Engineering And Product Development [Member] | ||
Total stock-based compensation | 13,650 | 21,449 |
Selling And Marketing [Member] | ||
Total stock-based compensation | 11,922 | 46,431 |
General And Administrative [Member] | ||
Total stock-based compensation | 2,921,532 | 1,501,544 |
Stock Based Compensation From Plans [Member] | ||
Total stock-based compensation | 2,951,978 | 1,577,890 |
Stock Based Compensation From Issuances Outside Plans [Member] | ||
Total stock-based compensation | $ 1,767,287 | $ 253,395 |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Shares Available for Grant | |||
Beginning balance | 126,942 | 161,382 | |
Adoption of 2017/2018 SIP | 500,000 | 100,000 | |
Restricted stock awards | (79,153) | (97,440) | |
Granted | (50,000) | (40,500) | |
Forfeited | 10,000 | [1] | 3,500 |
Exercised | |||
Ending balance | 507,789 | 126,942 | |
Number of Shares | |||
Beginning balance | 137,125 | 118,300 | |
Adoption of 2017/2018 SIP | |||
Restricted stock awards | |||
Granted | 50,000 | 40,500 | |
Forfeited | (11,000) | [1] | (3,500) |
Exercised | (3,000) | (18,175) | |
Ending balance | 173,125 | 137,125 | |
Weighted Average Exercise Price | |||
Beginning balance | $ 15.43 | $ 16.59 | |
Adoption of 2017/2018 SIP | |||
Restricted stock awards | |||
Granted | 14 | 16.84 | |
Forfeited | 20.27 | [1] | 12.57 |
Exercised | 32.60 | 31.26 | |
Ending balance | $ 14.41 | $ 15.43 | |
Weighted Average Remaining Contractual Life | |||
Beginning balance | 8 years 9 months 18 days | 9 years 29 days | |
Ending balance | 7 years 6 months 7 days | 8 years 9 months 18 days | |
Aggregate Intrinsic Value | |||
Beginning balance | $ 6,688 | $ 0 | |
Ending balance | $ 0 | $ 6,688 | |
[1] | Includes 1,000 options that were issued pursuant to the Company's 2002 Plan and are not available for future issuance. |
STOCK-BASED COMPENSATION (Det_5
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 19, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares granted | 50,000 | 40,500 | |
Weighted average exercise price | $ 14 | $ 16.84 | |
Share-based compensation expense | $ 4,719,265 | $ 1,831,285 | |
Share price (in dollars per share) | $ 2 | ||
Directors and officers [Member] | |||
Number of shares granted | 144,875 | ||
Weighted average exercise price | $ 26.09 | ||
Restricted Stock [Member] | |||
Share-based compensation expense | $ 965,220 | ||
2017 Stock Incentive Plan [Member] | |||
Number of shares authorized | 868,632 | ||
Number of shares available for grant | 507,789 | ||
2017 Stock Incentive Plan [Member] | Minimum [Member] | |||
Expiration period | 5 years | ||
2017 Stock Incentive Plan [Member] | Maximum [Member] | |||
Expiration period | 10 years | ||
2002 Stock Option Plan [Member] | |||
Number of shares granted | 1,500 | ||
Share-based compensation expense | $ 1,577,890 | ||
Number of shares issued | 123,395 | ||
2017 & 2016 Stock Incentive Plan and 2012 Stock Option Plan [Member] | Employee [Member] | |||
Granted | 50,000 | 2,897,500 | |
Vesting period | 4 years | ||
Number of shares granted | 40,500 | ||
Weighted average exercise price | $ 0.60 | ||
Weighted average grant date fair value | $ 513,510 | $ 482,055 | |
2016 Stock Incentive Plan [Member] | |||
Share-based compensation expense | 4,719,265 | ||
Compensation cost not yet recognized | $ 752,529 | ||
Weighted average period for recognition | 3 years 2 months 12 days | ||
Aggregate Stock-based Compensation [Member] | |||
Share-based compensation expense | $ 2,951,978 | ||
Number of shares issued | 130,000 | ||
Common Stock [Member] | 2017 Stock Incentive Plan [Member] | Consultants and Service Providers [Member] | |||
Weighted average grant date fair value | $ 2,640,102 | $ 1,532,702 | |
Number of shares issued | 79,153 | 97,440 | |
Warrant [Member] | |||
Number of shares issued | 21,667 | ||
Warrant [Member] | Employee Stock Option [Member] | |||
Share-based compensation expense | $ 802,066 |
WARRANTS (Details)
WARRANTS (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 05, 2017 | Mar. 15, 2017 | |
Exercse Price | $ 18 | $ 12 | |
Exercise Price $0.20 [Member] | |||
Exercse Price | $ 0.20 | ||
Number outstanding | 15,873 | ||
Weighted average remaining contractual life (years) | 7 years 10 months 2 days | ||
Weighted Average Exercise Price | $ 0.20 | ||
Number Exercisable | 15,873 | ||
Weighted Average Exercise Price | $ 0.20 | ||
Exercise Price $11.00 [Member] | |||
Exercse Price | $ 11 | ||
Number outstanding | 14,182 | ||
Weighted average remaining contractual life (years) | 3 years 10 months 10 days | ||
Weighted Average Exercise Price | $ 11 | ||
Number Exercisable | 14,182 | ||
Weighted Average Exercise Price | $ 11 | ||
Exercise Price $12.00 [Member] | |||
Exercse Price | $ 12 | ||
Number outstanding | 3,750 | ||
Weighted average remaining contractual life (years) | 4 years 3 months 29 days | ||
Weighted Average Exercise Price | $ 12 | ||
Number Exercisable | 3,750 | ||
Weighted Average Exercise Price | $ 12 | ||
Exercise Price $13.20 [Member] | |||
Exercse Price | $ 13.20 | ||
Number outstanding | 7,407 | ||
Weighted average remaining contractual life (years) | 3 years 10 months 2 days | ||
Weighted Average Exercise Price | $ 13.20 | ||
Number Exercisable | 7,407 | ||
Weighted Average Exercise Price | $ 13.20 | ||
Exercise Price $14.00 [Member] | |||
Exercse Price | $ 14 | ||
Number outstanding | 106,286 | ||
Weighted average remaining contractual life (years) | 3 years 10 months 13 days | ||
Weighted Average Exercise Price | $ 14 | ||
Number Exercisable | 106,286 | ||
Weighted Average Exercise Price | $ 14 | ||
Exercise Price $15.00 [Member] | |||
Exercse Price | $ 15 | ||
Number outstanding | 6,795 | ||
Weighted average remaining contractual life (years) | 3 years 4 months 13 days | ||
Weighted Average Exercise Price | $ 15 | ||
Number Exercisable | 6,795 | ||
Weighted Average Exercise Price | $ 15 | ||
Exercise Price $16.00 [Member] | |||
Exercse Price | $ 16 | ||
Number outstanding | 24,083 | ||
Weighted average remaining contractual life (years) | 1 year 8 months 8 days | ||
Weighted Average Exercise Price | $ 16 | ||
Number Exercisable | 24,083 | ||
Weighted Average Exercise Price | $ 16 | ||
Exercise Price $17.40 [Member] | |||
Exercse Price | $ 17.40 | ||
Number outstanding | 86,207 | ||
Weighted average remaining contractual life (years) | 4 years 4 months 13 days | ||
Weighted Average Exercise Price | $ 17.40 | ||
Number Exercisable | 86,207 | ||
Weighted Average Exercise Price | $ 17.40 | ||
Exercise Price $18.80 [Member] | |||
Exercse Price | $ 18.80 | ||
Number outstanding | 384,589 | ||
Weighted average remaining contractual life (years) | 4 years 4 months 17 days | ||
Weighted Average Exercise Price | $ 18.80 | ||
Number Exercisable | 384,589 | ||
Weighted Average Exercise Price | $ 18.80 | ||
Exercise Price $20.00 [Member] | |||
Exercse Price | $ 20 | ||
Number outstanding | 14,000 | ||
Weighted average remaining contractual life (years) | 3 years 11 months 8 days | ||
Weighted Average Exercise Price | $ 20 | ||
Number Exercisable | 14,000 | ||
Weighted Average Exercise Price | $ 20 | ||
Exercise Price $22.00 [Member] | |||
Exercse Price | $ 22 | ||
Number outstanding | 37,974 | ||
Weighted average remaining contractual life (years) | 2 years 8 months 5 days | ||
Weighted Average Exercise Price | $ 22 | ||
Number Exercisable | 37,974 | ||
Weighted Average Exercise Price | $ 22 | ||
Exercise Price $23.00 [Member] | |||
Exercse Price | $ 23 | ||
Number outstanding | 85,000 | ||
Weighted average remaining contractual life (years) | 4 years 2 months 26 days | ||
Weighted Average Exercise Price | $ 23 | ||
Number Exercisable | 85,000 | ||
Weighted Average Exercise Price | $ 23 | ||
Exercise Price $26.00 [Member] | |||
Exercse Price | $ 26 | ||
Number outstanding | 49,679 | ||
Weighted average remaining contractual life (years) | 4 years 3 months 14 days | ||
Weighted Average Exercise Price | $ 26 | ||
Number Exercisable | 49,679 | ||
Weighted Average Exercise Price | $ 26 | ||
Exercise Price $27.00 [Member] | |||
Exercse Price | $ 27 | ||
Number outstanding | 55,556 | ||
Weighted average remaining contractual life (years) | 4 years 4 months 13 days | ||
Weighted Average Exercise Price | $ 27 | ||
Number Exercisable | 55,556 | ||
Weighted Average Exercise Price | $ 27 | ||
Exercise Price $44.00 [Member] | |||
Exercse Price | $ 44 | ||
Number outstanding | 31,250 | ||
Weighted average remaining contractual life (years) | 4 years 22 days | ||
Weighted Average Exercise Price | $ 44 | ||
Number Exercisable | 31,250 | ||
Weighted Average Exercise Price | $ 44 | ||
Exercise Price $45.00 [Member] | |||
Exercse Price | $ 45 | ||
Number outstanding | 5,625 | ||
Weighted average remaining contractual life (years) | 4 years 25 days | ||
Weighted Average Exercise Price | $ 45 | ||
Number Exercisable | 5,625 | ||
Weighted Average Exercise Price | $ 45 | ||
Exercise Price $50.00 [Member] | |||
Exercse Price | $ 50 | ||
Number outstanding | 8,125 | ||
Weighted average remaining contractual life (years) | 4 years 25 days | ||
Weighted Average Exercise Price | $ 50 | ||
Number Exercisable | 8,125 | ||
Weighted Average Exercise Price | $ 50 | ||
Exercise Price $0.20 - 50.00 [Member] | |||
Number outstanding | 936,381 | ||
Weighted average remaining contractual life (years) | 4 years 2 months 5 days | ||
Weighted Average Exercise Price | $ 20.19 | ||
Number Exercisable | 936,381 | ||
Weighted Average Exercise Price | $ 20.19 | ||
Exercise Price $0.20 - 50.00 [Member] | Minimum [Member] | |||
Exercse Price | 0.20 | ||
Exercise Price $0.20 - 50.00 [Member] | Maximum [Member] | |||
Exercse Price | $ 50 |
WARRANTS (Details 1)
WARRANTS (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average risk-free interest rate | 2.41% | 1.73% |
Weighted average life (in years) | 4 years 8 months 12 days | 5 years |
Volatility | 131.70% | 115.80% |
Expected dividend yield | 0.00% | 0.00% |
Warrant [Member] | ||
Weighted average life (in years) | 4 years 9 months 18 days | 4 years 9 months 18 days |
Expected dividend yield | 0.00% | 0.00% |
Weighted average grant-date fair value per share of warrants granted | $ 15.80 | $ 8.20 |
Warrant [Member] | Minimum [Member] | ||
Weighted average risk-free interest rate | 2.41% | 1.42% |
Volatility | 124.80% | 98.50% |
Warrant [Member] | Maximum [Member] | ||
Weighted average risk-free interest rate | 2.94% | 2.01% |
Volatility | 138.40% | 128.70% |
WARRANTS (Details Narrative)
WARRANTS (Details Narrative) - USD ($) | Dec. 05, 2017 | Nov. 02, 2017 | Jul. 28, 2017 | Jul. 25, 2017 | Jun. 02, 2017 | Apr. 05, 2017 | Jun. 19, 2017 | Jun. 30, 2017 | Jun. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 10, 2017 | Aug. 08, 2017 | Aug. 03, 2017 | Aug. 01, 2017 | Apr. 26, 2017 | Apr. 17, 2017 | Mar. 15, 2017 | Feb. 28, 2017 |
Number of warrants purchased | 9,000 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||||||||||||||||
Number of shares issued, value | $ 2,204,365 | ||||||||||||||||||
Warrant [Member] | |||||||||||||||||||
Number of warrants purchased | 50,000 | 91,000 | 50,000 | 1,166,681 | 431,543 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ 22 | $ 22 | $ 19.80 | $ 16.60 | |||||||||||||||
Number of shares issued | 21,667 | ||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 52,000 | ||||||||||||||||||
Number of shares issued, value | $ 1,092,000 | ||||||||||||||||||
Warrant [Member] | Subscription Agreement [Member] | |||||||||||||||||||
Number of warrants purchased | 6,000 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 11 | ||||||||||||||||||
Number of shares issued | 10,000 | ||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 11 | ||||||||||||||||||
Number of shares issued, value | $ 110,000 | ||||||||||||||||||
Warrant [Member] | Private Placement [Member] | |||||||||||||||||||
Number of warrants purchased | 8,182 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 11 | ||||||||||||||||||
Number of shares issued | 13,636 | ||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 11 | ||||||||||||||||||
Number of shares issued, value | $ 150,000 | ||||||||||||||||||
Warrant [Member] | Four Investor [Member] | |||||||||||||||||||
Number of warrants purchased | 6,795 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 15 | ||||||||||||||||||
Warrant [Member] | Several Accredited Investor [Member] | Exchange Agreement [Member] | |||||||||||||||||||
Number of warrants purchased | 19,023 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 22 | ||||||||||||||||||
Number of shares issued | 76,193 | ||||||||||||||||||
Number of shares issued, value | $ 690,000 | ||||||||||||||||||
Warrant [Member] | Short-Term Loans [Member] | Four Investor [Member] | |||||||||||||||||||
Number of warrants purchased | 11,219 | ||||||||||||||||||
Principal amount | $ 140,000 | ||||||||||||||||||
Professional fees | $ 75,000 | ||||||||||||||||||
Warrant [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||
Number of warrants purchased | 71,429 | 71,429 | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | $ 14 | |||||||||||||||||
Number of shares issued | 100,000 | ||||||||||||||||||
Warrant [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||
Number of warrants purchased | 4,333 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 20 | ||||||||||||||||||
Number of shares issued | 21,667 | ||||||||||||||||||
Warrant [Member] | Series C Preferred Stock [Member] | Divine Capital Markets, LLC [Member] | Private Placement [Member] | |||||||||||||||||||
Number of warrants purchased | 2.1 | ||||||||||||||||||
Number of shares issued | 9,100 | ||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 14.40 | ||||||||||||||||||
Description of commission percent | For its services, the Placement Agent received, in addition to a 10.0% commission on the sale of each Unit and a 3.0% non-refundable expense allowance, warrants to purchase 10% of the Units sold at 120% of the Unit purchase price. | ||||||||||||||||||
Warrant [Member] | 6% Demand Promissory Notes [Member] | |||||||||||||||||||
Number of warrants purchased | 16,667 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | ||||||||||||||||||
Warrant term | 5 years | ||||||||||||||||||
Principal amount | $ 400,000 | ||||||||||||||||||
Warrant [Member] | Demand Promissory Notes [Member] | |||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 22 | $ 18 | $ 22 | ||||||||||||||||
Principal amount | $ 270,000 | ||||||||||||||||||
Number of shares issued | 50,000 | 9,000 | |||||||||||||||||
Warrant [Member] | 7% Two Convertible Notes [Member] | |||||||||||||||||||
Number of warrants purchased | 4,167 | 4,167 | 8,333 | ||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 11 | $ 11 | $ 18 | ||||||||||||||||
Principal amount | $ 250,000 | ||||||||||||||||||
Warrant [Member] | 7% Convertible Note [Member] | |||||||||||||||||||
Number of warrants purchased | 8,000 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 16 | ||||||||||||||||||
Principal amount | $ 104,000 | ||||||||||||||||||
Warrant [Member] | 7% Convertible Note [Member] | Exchange Agreement [Member] | |||||||||||||||||||
Principal amount | $ 125,000 | ||||||||||||||||||
Warrant [Member] | 7% New Convertible Note Due on August 1, 2017 And 7% Convertible Note [Member] | |||||||||||||||||||
Principal amount | $ 110,000 | $ 34,000 | $ 35,000 | ||||||||||||||||
Warrant [Member] | 12% Convertible Promissory Note [Member] | |||||||||||||||||||
Number of warrants purchased | 33,333 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | ||||||||||||||||||
Principal amount | $ 400,000 | ||||||||||||||||||
Warrant [Member] | 10% Convertible Promissory Notes [Member] | |||||||||||||||||||
Number of warrants purchased | 73,750 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 13.20 | ||||||||||||||||||
Principal amount | $ 880,000 | ||||||||||||||||||
Warrant [Member] | 10% Convertible Promissory Notes [Member] | Aegis Capital Corp. [Member] | |||||||||||||||||||
Number of warrants purchased | 7,407 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 13.20 | ||||||||||||||||||
Principal amount | $ 1,111,000 | ||||||||||||||||||
Professional fees | $ 80,800 | ||||||||||||||||||
Warrant 1 [Member] | |||||||||||||||||||
Number of warrants purchased | 4,423 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 16 | ||||||||||||||||||
Second Warrant [Member] | Series C Preferred Stock [Member] | Divine Capital Markets, LLC [Member] | Private Placement [Member] | |||||||||||||||||||
Number of shares issued | 9,100 | ||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 20 |
WARRANTS (Details Narrative 1)
WARRANTS (Details Narrative 1) - USD ($) | May 15, 2018 | Apr. 24, 2018 | Mar. 23, 2018 | Mar. 22, 2018 | Jan. 25, 2018 | Oct. 05, 2017 | Apr. 16, 2018 | Jan. 23, 2018 | Apr. 05, 2017 | Mar. 15, 2017 |
Number of warrants purchased | 9,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | ||||||||
Ault & Company [Member] | ||||||||||
Number of warrants purchased | 3,750 | |||||||||
Number of shares issued | 3,750 | |||||||||
Shares issued (in dollars per share) | $ 12 | |||||||||
Exercise price of warrants (in dollars per share) | $ 12 | |||||||||
Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Principal amount | $ 6,000,000 | |||||||||
Number of warrants purchased | 288,442 | |||||||||
Warrant [Member] | Ault & Company [Member] | ||||||||||
Number of shares issued | 3,750 | |||||||||
Shares issued (in dollars per share) | $ 12 | |||||||||
Aggregate offering price | $ 45,000 | |||||||||
Series A Warrant Shares [Member] | Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Number of warrants purchased | 7,500 | |||||||||
Exercise price of warrants (in dollars per share) | $ 20 | |||||||||
Warrant term | 5 years | |||||||||
Series B Warrant Shares [Member] | Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Number of warrants purchased | 86,207 | |||||||||
Exercise price of warrants (in dollars per share) | $ 17.40 | |||||||||
Warrant term | 5 years | |||||||||
10% Senior Convertible Promissory Notes [Member] | ||||||||||
Principal amount | $ 1,722,000 | $ 1,250,000 | ||||||||
Number of warrants purchased | 49,679 | 31,250 | ||||||||
Interest rate on debt | 12.00% | 10.00% | ||||||||
Exercise price of warrants (in dollars per share) | $ 26 | $ 44 | ||||||||
Securities Purchase Agreements [Member] | ||||||||||
Description of purchase and sale of future receipt | On January 25, 2018, the Company entered into three agreements for the Purchase and Sale of Future Receipt, pursuant to which the Company sold up to (i) $562,125 of the Company’s future receipts for a purchase price of $375,000, (ii) $337,275 in future receipts for a purchase price of $225,000 and (iii) $118,000 in future receipts for a purchase price of $100,000. Under the terms of these agreements, the Company issued warrants to purchase an aggregate of 5,625 shares of common stock at an exercise price of $45.00 per share of common stock and warrants to purchase 8,125 shares of common stock at an exercise price of $50.00 per share of common stock (See Note 18). | |||||||||
Securities Purchase Agreements [Member] | Warrant [Member] | Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Aggregate purchase price | $ 6,000,000 | |||||||||
Number of warrants purchased | 384,589 | |||||||||
Securities Purchase Agreements [Member] | Series A Warrant Shares [Member] | Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Number of warrants purchased | 96,147 | |||||||||
Exercise price of warrants (in dollars per share) | $ 18.80 | |||||||||
Warrant term | 5 years | |||||||||
Securities Purchase Agreements [Member] | Series B Warrant Shares [Member] | Investor [Member] | 10% Senior Secured Convertible Promissory Note Due January 1, 2019 [Member] | ||||||||||
Number of warrants purchased | 55,556 | |||||||||
Exercise price of warrants (in dollars per share) | $ 27 | |||||||||
Warrant term | 5 years | |||||||||
Securities Purchase Agreements [Member] | 10% Senior Convertible Promissory Notes [Member] | ||||||||||
Principal amount | $ 1,000,000 | |||||||||
Number of warrants purchased | 15,000 | |||||||||
Interest rate on debt | 12.00% | |||||||||
Number of shares issued | 7,500 | |||||||||
Exercise price of warrants (in dollars per share) | $ 23 | |||||||||
Preferred Stock Purchase Agreement [Member] | ||||||||||
Number of warrants purchased | 62,500 | |||||||||
Number of shares issued | 1,750,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ 23 | |||||||||
Preferred Stock Purchase Agreement [Member] | Series B Preferred Stock [Member] | ||||||||||
Number of warrants purchased | 25,510 | |||||||||
Number of shares issued | 25,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ 14 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Current Liabilities [Abstract] | ||
Accrued payroll and payroll taxes | $ 1,497,470 | $ 359,512 |
Warranty liability | 86,495 | 86,495 |
Other accrued expenses | 284,437 | 262,384 |
Total | $ 1,868,402 | $ 708,391 |
ADVANCES ON FUTURE RECEIPTS (De
ADVANCES ON FUTURE RECEIPTS (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Apr. 05, 2017 | Mar. 15, 2017 | |
Purchase warrant | 9,000 | ||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||
Purchase and Sale Agreement [Member] | TVT Capital LLC [Member] | |||||
Amortization of debt discounts | $ 258,370 | ||||
Non-cash interest expense | 2,489,403 | $ 599,337 | |||
Purchase and Sale Agreement [Member] | Philou Ventures, LLC [Member] | |||||
Cost of future receipts | 5,632,400 | 4,068,352 | |||
Aggregate Value of future receipts | $ 4,100,000 | 2,889,175 | |||
Repayment of future receipts | $ 1,525,547 | ||||
Financing receivable, discount | $ 1,651,193 | ||||
Purchase and Sale Agreement [Member] | Philou Ventures, LLC [Member] | First Warrant [Member] | |||||
Purchase warrant | 5,625 | ||||
Exercise price of warrants (in dollars per share) | $ 45 | ||||
Purchase and Sale Agreement [Member] | Philou Ventures, LLC [Member] | Second Warrant [Member] | |||||
Purchase warrant | 8,125 | ||||
Exercise price of warrants (in dollars per share) | $ 50 |
REVOLVING CREDIT FACILITY (Deta
REVOLVING CREDIT FACILITY (Details Narrative) - Revolving Credit Facility [Member] - Gerber Finance Inc ("Gerber") [Member] - Revolving loan agreement [Member] - USD ($) | 1 Months Ended | |
Jul. 31, 2017 | Sep. 30, 2015 | |
Maximum revolving amount | $ 1,400,000 | $ 1,400,000 |
Description of facility interest rate | Interest accrued at the prime rate plus three and three-quarters percent (3.75%) on the unpaid principal. Effective June 15, 2017, the prime rate was increased from 4.00% to 4.25% resulting in a base rate of 8.00%. | Interest accrued at the prime rate plus three and three-quarters percent (3.75%) on the unpaid principal. Effective June 15, 2017, the prime rate was increased from 4.00% to 4.25% resulting in a base rate of 8.00%. |
Interest rate during period | 8.00% | 8.00% |
Percentage of fees | 2.50% | 2.50% |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Total notes payable | $ 7,002,819 | $ 927,726 |
Less: Unamortized debt discounts | (151,499) | |
Unamortized financing cost | (7,541) | |
Total notes payable, net of financing cost | 6,843,779 | 927,726 |
Less: current portion | (6,388,787) | (402,234) |
Notes payable - long-term portion | 483,659 | 525,492 |
Other Short Term Notes Payable [Member] | ||
Total notes payable | 1,033,553 | |
12% Short Term Promissory Notes [Member] | ||
Total notes payable | 1,000,000 | |
Notes Payable To Wells Fargo [Member] | ||
Total notes payable | 291,988 | 300,130 |
Note Payable To Dept. Of Economic And Community Development [Member] | ||
Total notes payable | 260,169 | 292,509 |
Power-Plus Credit Facilities [Member] | ||
Total notes payable | 170,473 | |
Note Payable To Power-Plus Member [Member] | ||
Total notes payable | 13,250 | 130,125 |
Note Payable To Peoples United Bank [Member] | ||
Total notes payable | 18,589 | 19,489 |
8% Short Term Promissory Note [Member] | ||
Total notes payable | 1,272,600 | |
12% September 2018 Short-Term Promissory Note [Member] | ||
Total notes payable | 789,473 | |
October 18 Short-Term Promissory Note [Member] | ||
Total notes payable | 565,000 | |
Microphase December 2018 Short Term Promissory Note [Member] | ||
Total notes payable | 200,000 | |
10% Short Term Promissory Notes [Member] | ||
Total notes payable | 15,000 | |
Short Term Bank Credit [Member] | ||
Total notes payable | $ 1,558,197 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 28, 2018 | Nov. 29, 2018 | Oct. 31, 2018 | Oct. 11, 2018 | Oct. 09, 2018 | Sep. 30, 2018 | Aug. 28, 2018 | Aug. 23, 2018 | Aug. 16, 2018 | Aug. 16, 2018 | Aug. 10, 2018 | Aug. 03, 2018 | Jul. 13, 2018 | Jun. 08, 2018 | May 23, 2018 | May 15, 2018 | Mar. 23, 2018 | Mar. 23, 2018 | Feb. 26, 2018 | Feb. 20, 2018 | Feb. 07, 2018 | Jan. 25, 2018 | Jan. 23, 2018 | Dec. 14, 2017 | Dec. 05, 2017 | Oct. 18, 2017 | Jun. 28, 2017 | Jun. 02, 2017 | Apr. 05, 2017 | Feb. 23, 2017 | Aug. 31, 2016 | Dec. 31, 2016 | Aug. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2017 | Dec. 29, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 29, 2017 | Jun. 05, 2018 | Mar. 27, 2018 | Mar. 28, 2017 | Mar. 15, 2017 | Feb. 28, 2017 |
Share price | $ 2 | $ 2 | $ 2 | $ 2 | |||||||||||||||||||||||||||||||||||||||||||||
Amount of shares issued | $ 2,204,365 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 7,002,819 | $ 7,002,819 | $ 7,002,819 | $ 927,726 | 7,002,819 | 927,726 | |||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 9,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | 151,499 | 151,499 | 151,499 | 151,499 | |||||||||||||||||||||||||||||||||||||||||||||
Number of convertible securities cancellation | 18,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of convertible securities | $ 15 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance initial public offering | 7,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Value of convertible securities per share | 2,446,117 | 4,036,601 | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from related party | 350,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from short term debt | 762,000 | $ 2,439,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt issuance costs | 367,200 | $ 367,200 | 367,200 | 367,200 | |||||||||||||||||||||||||||||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 2,100,000 | $ 2,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt payment term | For a term of two months, subject to the Company’ ability to prepay within one month. | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 1,750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 350,000 | $ 350,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 211,225 | 337,990 | |||||||||||||||||||||||||||||||||||||||||||||||
Value of convertible securities per share | $ 212 | $ 338 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock And Warrants [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 62,500 | 62,500 | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 23 | $ 23 | |||||||||||||||||||||||||||||||||||||||||||||||
Original debt amount | $ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | Two 5% Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Feb. 23, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest on debt | $ 5,101,127 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original debt amount | $ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Description of extension of maturity date | 30-day extension | ||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 92,583 | ||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Common Stock And Warrants [Member] | 12% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Jun. 22, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 1,000,000 | $ 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 12.00% | 12.00% | |||||||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 22,500 | 22,500 | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 23 | $ 23 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | $ 271,565 | $ 271,565 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 271,565 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt issuance costs | $ 900,000 | $ 900,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Enertec [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument periodic payment | Either on a monthly or weekly basis. | ||||||||||||||||||||||||||||||||||||||||||||||||
Description of interest on the principal amount | The Company incurred $47,076 of interest from Enertec’s short term bank credit. | ||||||||||||||||||||||||||||||||||||||||||||||||
Short term bank credit | 1,558,197 | $ 1,558,197 | 1,558,197 | 1,558,197 | |||||||||||||||||||||||||||||||||||||||||||||
8% Notes payable to Lucosky Brookman, LLP Due On November 25, 2017 [Member] | Microphase Corporation [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 450 | ||||||||||||||||||||||||||||||||||||||||||||||||
8% Notes payable to Lucosky Brookman, LLP Due On November 25, 2017 [Member] | Microphase Corporation [Member] | Redeemable Convertible Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 30,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ 21,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Value of convertible securities per share | $ 45 | ||||||||||||||||||||||||||||||||||||||||||||||||
Note payable to Department of Economic and Community Development Due in August 2026 [Member] | Department of Economic and Community Development ("DECD") [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 300,000 | $ 300,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 3.00% | 3.00% | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 9,286 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt payment term | Payment of principal and interest commenced in September 2017, payable in equal monthly installments over the remaining term. | ||||||||||||||||||||||||||||||||||||||||||||||||
Repaid loan | $ 35 | ||||||||||||||||||||||||||||||||||||||||||||||||
Power-Plus Credit Facilities [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | 170,473 | 170,473 | |||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable To Wells Fargo [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | 291,988 | 291,988 | 291,988 | 300,130 | 291,988 | $ 300,130 | |||||||||||||||||||||||||||||||||||||||||||
Notes Payable To Wells Fargo [Member] | Former officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 210,822 | $ 210,822 | $ 210,822 | $ 210,822 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 4.00% | 4.00% | 4.00% | 4.00% | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ 17,629 | ||||||||||||||||||||||||||||||||||||||||||||||||
Second line of credit [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 81,166 | $ 81,166 | $ 81,166 | $ 81,166 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 3.00% | 3.00% | 3.00% | 3.00% | |||||||||||||||||||||||||||||||||||||||||||||
Nineteen accredited investors [Member] | 10% short term promissory notes [Member] | Microphase Corporation [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 76,193 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 690,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 705,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Term of notes payable | 1 year | ||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest on debt | $ 250,323 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument periodic payment | Payable in 24 equal monthly installments. | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 2200.00% | ||||||||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 19,023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ 5,615 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Convertible Debt | $ 634,500 | ||||||||||||||||||||||||||||||||||||||||||||||||
Placement fees | $ 70,500 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt payment term | The amount due pursuant to the 10% Short-Term Notes was equal to the entire original principal amount multiplied by 125% (the “Loan Premium”) plus accrued interest. | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal payments | $ 15,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Several Investor [Member] | Demand Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 270,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ 109,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Eight Accredited Investor [Member] | Demand Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 333,333 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 16,667 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | $ 151,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | $ 13,333 | ||||||||||||||||||||||||||||||||||||||||||||||||
Extinguishment price (in dollars per share) | $ 12 | ||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | 12% Term Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price | $ 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 789,473 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | Common Stock [Member] | 12% Term Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 450,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 17,241 | 34,597 | |||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 8, 2018 | Feb. 15, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 565,000 | $ 1,212,000 | $ 1,212,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 8.00% | 8.00% | |||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 510,000 | $ 1,010,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 60,600 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | $ 1,272,600 | $ 1,272,600 | $ 1,272,600 | $ 1,272,600 | |||||||||||||||||||||||||||||||||||||||||||||
Description of interest on the principal amount | The Company was required to pay $27,500 of interest. | ||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 20,000 | 20,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Institutional Investor [Member] | Microphase [Member] | Secured Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Demand Promissory Notes [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Apr. 24, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 440,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 40,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | 10% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Apr. 27, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 330,000 | $ 200,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument periodic payment | The principal and accrued interest on this note was due and payable on April 12, 2018, subject to a 30-day extension available to the Company. | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 35,991 | $ 30,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | $ 200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Aug. 20, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 81,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument periodic payment | This promissory note was paid on July 25, 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 75,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 6,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Jun. 22, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument periodic payment | The outstanding balance on this note was paid on July 2, 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 60,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Jul. 9, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 511,750 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 445,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 66,750 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | $ 54,750 | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans received | $ 75 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | 15% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 176,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 155,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 16,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | 124,303 | 124,303 | 124,303 | 124,303 | |||||||||||||||||||||||||||||||||||||||||||||
Debt issuance costs | $ 5,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | 12% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Aug. 10, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 550,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 50,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | 8% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Oct. 5, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 225,000 | $ 225,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 25,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | 159,500 | 159,500 | 159,500 | 159,500 | |||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Sep. 24, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 85,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 75,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | 85,000 | 85,000 | 85,000 | 85,000 | |||||||||||||||||||||||||||||||||||||||||||||
Description of extension of maturity date | 28-day extension | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Sep. 14, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 115,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 15,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Description of extension of maturity date | 10-business day cure period | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Oct. 23, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 60,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 50,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | $ 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal balance | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | Mar. 22, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount | $ 900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | 604,227 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of debt | 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Original issue discount | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of principal | $ 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Accredited Investor [Member] | Agreement [Member] | Promissory Note [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Description of extension of maturity date | From July 9, 2018 to August 31, 2018. | ||||||||||||||||||||||||||||||||||||||||||||||||
Description of extension fee | The Company agreed to pay the lender an extension fee of 100,000 shares of common stock. | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Short Term Notes Payable [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | 1,033,553 | 1,033,553 | 1,033,553 | 1,033,553 | |||||||||||||||||||||||||||||||||||||||||||||
Other Short Term Notes Payable [Member] | Five Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Warrant term | 5 years | ||||||||||||||||||||||||||||||||||||||||||||||||
Warrant issued | 11,219 | 11,219 | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 15.40 | $ 15.40 | |||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | $ 95,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Amount of share cancelled | $ 55,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of share cancelled | 5,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Description of conversion | An additional $75,000 in short-term loans from the Company’s corporate counsel was converted into the Company’s equity securities; $52,000 was converted into one of the Series C Units and $23,000 was converted into the Company’s common stock. The Company did not record any additional interest expense as a result of the extinguishment of $130,000 in short-term loans since the carrying amount of the short-term loans was equivalent to the fair value of the consideration transferred, which was determined from the closing price of the Company’s equity securities on the date of extinguishment. During the year ended December 31, 2017, the Company also repaid $157,000 in short-term loans. | ||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from related party | $ 75,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from short term debt | 297,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Short Term Notes Payable [Member] | Four Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ 11 | ||||||||||||||||||||||||||||||||||||||||||||||||
Promissory Note [Member] | Power-Plus Credit Facilities [Member] | Asset Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | 6,940 | ||||||||||||||||||||||||||||||||||||||||||||||||
Share price | $ 13.40 | ||||||||||||||||||||||||||||||||||||||||||||||||
Amount of shares issued | $ 93,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | 13,250 | 13,250 | 13,250 | 13,250 | |||||||||||||||||||||||||||||||||||||||||||||
Principal amount | 255,000 | $ 255,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Principal payments | 116,875 | ||||||||||||||||||||||||||||||||||||||||||||||||
Two equity lines of credit [Member] | Power-Plus Credit Facilities [Member] | Bank of America NA ("B of A") [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 170,473 | $ 170,473 | |||||||||||||||||||||||||||||||||||||||||||||||
Overdraft credit line [Member] | Note payable to People's United Bank [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Total notes payable | $ 18,589 | $ 18,589 | $ 18,589 | $ 20,000 | $ 18,589 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 15.00% |
NOTES PAYABLE - RELATED PARTI_3
NOTES PAYABLE - RELATED PARTIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Total notes payable | $ 308,984 | $ 309,317 | |
Less: current portion | (166,925) | (133,569) | |
Notes payable - long-term portion | 142,059 | 175,748 | |
Former Officer And Employee [Member] | |||
Total notes payable | [1] | $ 308,984 | $ 309,317 |
[1] | Microphase is a party to several notes payable agreements with seven of its past officers, employees and their family members. As of December 31, 2018, the aggregate outstanding balance pursuant to these notes payable agreements, inclusive of $57,752 of accrued interest, was $366,736, with annual interest rates ranging between 3.00% and 6.00%. During the year ended December 31, 2018, Microphase incurred $10,897 of interest on these notes payable agreements. In July 2016, one of these noteholders initiated litigation to collect the balance owed under the terms of his respective agreement. In October 2017, Microphase and the noteholder entered into a settlement agreement whereby Microphase agreed to pay the outstanding principal and interest of $122,000 and $43,000, respectively, by issuing to the noteholder 95,834 shares of Microphase common stock valued at $115,000 and paying $25,000 in cash. The value of the Microphase common stock was derived from the Company's recent acquisition of a majority interest in Microphase. Further, the parties agreed a final $25,000 would be paid within 18 months of the settlement agreement or Microphase would be required to pay the noteholder an additional $25,000. |
NOTES PAYABLE - RELATED PARTI_4
NOTES PAYABLE - RELATED PARTIES (Details Narrative) | 12 Months Ended | |||
Dec. 31, 2018USD ($)Numbershares | Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Dec. 29, 2016USD ($) | |
Notes payable from related parties | $ 166,925 | $ 133,569 | ||
Amount of shares issued | $ 2,204,365 | |||
Former Officer And Employee [Member] | Notes Payable, Other Payables [Member] | ||||
Number of officers and employees | Number | 7 | |||
Principal amount | $ 57,752 | |||
Notes payable from related parties | 366,736 | |||
Interest payable | $ 10,897 | $ 43,000 | ||
Notes payable outstanding | $ 122,000 | |||
Number of shares issued | shares | 95,834 | |||
Amount of shares issued | $ 115,000 | |||
Amount of shares issued in cash | 25,000 | |||
Periodic payment | $ 25,000 | |||
MCKEA [Member] | Notes Payable, Other Payables [Member] | ||||
Notes payable from related parties | $ 250,000 | |||
Debt instrument, interest rate | 6.00% | |||
Minimum [Member] | Former Officer And Employee [Member] | Notes Payable, Other Payables [Member] | ||||
Debt instrument, interest rate | 3.00% | |||
Maximum [Member] | Former Officer And Employee [Member] | Notes Payable, Other Payables [Member] | ||||
Debt instrument, interest rate | 6.00% |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible note | $ 7,997,126 | $ 752,000 |
Unamortized debt discounts | (1,189,276) | (351,573) |
Unamortized financing cost | (65,356) | (2,549) |
Convertible notes payable, net of financing cost | 6,742,494 | 397,878 |
10% Convertible Secured Notes [Member] | ||
Convertible note | 7,997,126 | |
5% Convertible Secured Notes [Member] | ||
Convertible note | 550,000 | |
12% Convertible Secured Note [Member] | ||
Convertible note | $ 202,000 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) | Dec. 07, 2018USD ($)$ / shares | Oct. 11, 2018USD ($) | Sep. 25, 2018USD ($) | Aug. 31, 2018USD ($)$ / sharesshares | Aug. 16, 2018USD ($) | Jul. 02, 2018USD ($)$ / sharesshares | May 15, 2018$ / sharesshares | Apr. 16, 2018USD ($)Number$ / sharesshares | Apr. 16, 2018USD ($)Number$ / sharesshares | Feb. 09, 2018shares | Jan. 31, 2018shares | Jan. 23, 2018USD ($)$ / sharesshares | Jan. 10, 2018shares | Dec. 28, 2017USD ($)shares | Dec. 14, 2017USD ($)shares | Dec. 04, 2017USD ($)$ / sharesshares | Nov. 02, 2017USD ($)$ / sharesshares | Nov. 02, 2017USD ($)$ / sharesshares | Nov. 02, 2017USD ($)$ / sharesshares | Aug. 10, 2017USD ($)Number$ / sharesshares | Jul. 25, 2017USD ($)shares | Apr. 17, 2017USD ($)Number$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($)Number$ / sharesshares | Dec. 31, 2017USD ($)shares | Aug. 03, 2017$ / sharesshares | Apr. 05, 2017$ / sharesshares | Mar. 15, 2017$ / shares |
Number of warrants purchased | shares | 9,000 | |||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 18 | $ 12 | ||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 11,191,055 | $ 4,688,630 | ||||||||||||||||||||||||||
Debt discount | 151,499 | |||||||||||||||||||||||||||
Fair value of common stock | 405,024 | |||||||||||||||||||||||||||
Debt issuance costs | 367,200 | |||||||||||||||||||||||||||
Number of shares issued, value | 2,204,365 | |||||||||||||||||||||||||||
Risk Free Interest Rate [Member] | ||||||||||||||||||||||||||||
Debt instrument measurement input | Number | 0 | |||||||||||||||||||||||||||
Option Volatility [Member] | ||||||||||||||||||||||||||||
Debt instrument measurement input | Number | 1 | |||||||||||||||||||||||||||
Non-Cash Interest Expense [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 2,169,613 | |||||||||||||||||||||||||||
Black-Scholes Option Pricing Model [Member] | ||||||||||||||||||||||||||||
Debt discount | $ 423,593 | $ 423,593 | $ 423,593 | |||||||||||||||||||||||||
10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||
Principal amount | $ 6,000,000 | |||||||||||||||||||||||||||
Description of interest on the principal amount | The principal amount with 50% of the total interest due on the principal payable at the closing and the remaining 50% payable over the term of the 10% Convertible Note. | |||||||||||||||||||||||||||
Third 10% Convertible Notes [Member] | Non-Cash Interest Expense [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 135,144 | |||||||||||||||||||||||||||
10% Convertible Notes And Second 10% Convertible Note [Member] | Non-Cash Interest Expense [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | 1,356,960 | |||||||||||||||||||||||||||
Alliance Global Partners [Member] | ||||||||||||||||||||||||||||
Professional fees | 300,000 | |||||||||||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||||||||||
Debt discount | $ 2,169,613 | |||||||||||||||||||||||||||
Warrants [Member] | Risk Free Interest Rate [Member] | ||||||||||||||||||||||||||||
Debt instrument measurement input | Number | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Warrants [Member] | Option Volatility [Member] | ||||||||||||||||||||||||||||
Debt instrument measurement input | Number | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
Warrants [Member] | Black-Scholes Option Pricing Model [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 73,750 | |||||||||||||||||||||||||||
Debt discount | $ 356,691 | $ 1,397,389 | ||||||||||||||||||||||||||
Warrants [Member] | Alliance Global Partners [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 7,500 | |||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 20 | |||||||||||||||||||||||||||
Warrants [Member] | Black-Scholes Option Pricing Model [Member] | ||||||||||||||||||||||||||||
Debt discount | $ 539,360 | $ 539,360 | $ 167,203 | |||||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 92,583 | |||||||||||||||||||||||||||
Fair value of common stock | $ 128,524 | $ 128,524 | ||||||||||||||||||||||||||
Number of additional shares issued | shares | 27,174 | |||||||||||||||||||||||||||
Payment of debt | $ 1,111,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||
Description of debt instrument conversion price terms | But could only be converted if an event of default thereunder had occurred and not been cured on a timely basis. | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 5% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 7,500 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 12 | |||||||||||||||||||||||||||
Debt instrument interest rate | 5.00% | |||||||||||||||||||||||||||
Principal amount | $ 550,000 | |||||||||||||||||||||||||||
Debt discount | $ 550,000 | |||||||||||||||||||||||||||
Debt instrument maturity date | Aug. 13, 2018 | |||||||||||||||||||||||||||
Number of convertible share issued | shares | 46,082 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 244,260 | 244,260 | ||||||||||||||||||||||||||
Number of shares issued, value | 25,740 | |||||||||||||||||||||||||||
Original issue discount | 50,000 | $ 50,000 | ||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 500,000 | |||||||||||||||||||||||||||
Interest payment maturity terms | Jun. 3, 2018 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 5% Convertible Notes [Member] | Non-Cash Interest Expense [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | 380,769 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 49,679 | 49,679 | ||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 26 | $ 26 | ||||||||||||||||||||||||||
Warrants maturity terms | 5 years | 5 years | ||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 18,438 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 14 | $ 14 | $ 11 | |||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | |||||||||||||||||||||||||||
Debt instrument accrued interest | $ 103,333 | $ 4,818 | ||||||||||||||||||||||||||
Amortization of debt issuance costs | 211,658 | |||||||||||||||||||||||||||
Principal amount | $ 1,722,222 | $ 1,722,222 | $ 198,000 | $ 400,000 | ||||||||||||||||||||||||
Debt instrument maturity date | Oct. 16, 2018 | Aug. 13, 2018 | ||||||||||||||||||||||||||
Number of convertible share issued | shares | 18,884 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 186,797 | |||||||||||||||||||||||||||
Original issue discount | $ 172,222 | 40,000 | ||||||||||||||||||||||||||
Net proceeds from issuance of debt | 1,550,000 | $ 360,000 | ||||||||||||||||||||||||||
Interest payment maturity terms | Aug. 3, 2018 | |||||||||||||||||||||||||||
Payment of debt | $ 1,722,222 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 885,106 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 27,174 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 40 | |||||||||||||||||||||||||||
Principal amount | $ 1,250,000 | |||||||||||||||||||||||||||
Number of convertible share issued | shares | 31,250 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 5% Convertible Note [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 7,407 | 7,407 | 7,407 | |||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 15,000 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 12 | $ 12 | $ 12 | |||||||||||||||||||||||||
Amortization of debt issuance costs | $ 828,668 | |||||||||||||||||||||||||||
Principal amount | $ 1,111,000 | $ 1,111,000 | $ 1,111,000 | |||||||||||||||||||||||||
Debt discount | 722,868 | 722,868 | 722,868 | |||||||||||||||||||||||||
Debt issuance costs | 105,800 | $ 105,800 | $ 105,800 | $ 106 | ||||||||||||||||||||||||
Original issue discount | $ 101,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 5% Convertible Note [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 15,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 77,871 | |||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 73,750 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 13.20 | |||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 54,450 | |||||||||||||||||||||||||||
Principal amount | $ 880,000 | |||||||||||||||||||||||||||
Debt instrument maturity date | Feb. 10, 2018 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 326,809 | |||||||||||||||||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 12 | |||||||||||||||||||||||||||
Original issue discount | $ 80,000 | |||||||||||||||||||||||||||
Net proceeds from issuance of debt | 800,000 | |||||||||||||||||||||||||||
Payment of debt | $ 880,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 7% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 92,607 | |||||||||||||||||||||||||||
Principal amount | $ 250,000 | |||||||||||||||||||||||||||
Debt discount | $ 93,607 | |||||||||||||||||||||||||||
Debt instrument maturity date | Jun. 2, 2017 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 31,304 | |||||||||||||||||||||||||||
Payment of debt | $ 144,000 | |||||||||||||||||||||||||||
Number of convertible notes | Number | 2 | |||||||||||||||||||||||||||
Additional interest expense | 17,226 | |||||||||||||||||||||||||||
Additional non cash expense | $ 2,641 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 17,241 | 34,597 | ||||||||||||||||||||||||||
Principal amount | $ 565,000 | $ 1,212,000 | ||||||||||||||||||||||||||
Description of interest on the principal amount | The Company was required to pay $27,500 of interest. | |||||||||||||||||||||||||||
Debt instrument maturity date | Dec. 8, 2018 | Feb. 15, 2019 | ||||||||||||||||||||||||||
Net proceeds from issuance of debt | $ 510,000 | $ 1,010,000 | ||||||||||||||||||||||||||
Outstanding principal balance and accured interest | $ 1,383,884 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 7,500 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | Second 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 200,000 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||
Principal amount | $ 1,000,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | Third 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 31,000 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 8 | |||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||
Principal amount | $ 2,000,000 | |||||||||||||||||||||||||||
Description of interest on the principal amount | as to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. | |||||||||||||||||||||||||||
Debt issuance costs | $ 200,500 | |||||||||||||||||||||||||||
Debt instrument maturity date | Feb. 15, 2019 | |||||||||||||||||||||||||||
Number of convertible share issued | shares | 250,000 | |||||||||||||||||||||||||||
Number of additional shares issued | shares | 31,000 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 910,419 | |||||||||||||||||||||||||||
Number of shares issued, value | $ 259,919 | |||||||||||||||||||||||||||
Number of restricted stock issued | shares | 31,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 10,046 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Principal amount | $ 1,000,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Principal amount | 800,000 | |||||||||||||||||||||||||||
Debt discount | $ 763,500 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 33,333 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Aegis Capital Corp. [Member] | 5% Convertible Note [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 7,407 | |||||||||||||||||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 13.20 | $ 13.20 | $ 13.20 | |||||||||||||||||||||||||
Cash fee | $ 80,800 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Five Year Warrants [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 55,556 | |||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 27 | |||||||||||||||||||||||||||
Warrants maturity terms | 5 years | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Five Year Warrants [Member] | Common Stock Class A [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 86,207 | |||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 17.40 | |||||||||||||||||||||||||||
Warrants maturity terms | 5 years | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 33,333 | 33,333 | ||||||||||||||||||||||||||
Exercise price of warrants | $ / shares | $ 14 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 11 | |||||||||||||||||||||||||||
Debt discount | $ 394,000 | |||||||||||||||||||||||||||
Original issue discount | $ 40,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 73,750 | 73,750 | ||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 12 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 326,809 | |||||||||||||||||||||||||||
Number of shares issued, value | 356,961 | |||||||||||||||||||||||||||
Original issue discount | $ 80,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | 7% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 83,334 | 8,333 | ||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 18 | |||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 31,304 | |||||||||||||||||||||||||||
Number of shares issued, value | $ 61,304 | |||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | 12% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt discount | 885,106 | $ 885,106 | ||||||||||||||||||||||||||
Debt issuance costs | $ 45,000 | $ 45,000 | ||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | 10% Senior Convertible Promissory Note [Member] | ||||||||||||||||||||||||||||
Number of warrants purchased | shares | 31,250 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 44 | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 1,131,960 | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | 10% Convertible Notes [Member] | Thirteen Monthly Payments [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 309,193 | |||||||||||||||||||||||||||
Debt instrument frequency of periodic payment | Monthly | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | 10% Convertible Notes [Member] | Fourteen Monthly Payments [Member] | ||||||||||||||||||||||||||||
Amortization of debt issuance costs | $ 1,011,427 | |||||||||||||||||||||||||||
Debt instrument frequency of periodic payment | Monthly | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | Second 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Debt instrument beneficial conversion feature | $ 225,000 | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | 10% Convertible Notes And Second 10% Convertible Note [Member] | ||||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 8 | |||||||||||||||||||||||||||
Loss on Extinguishment of Debt | $ 665,346 | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | Institutional Investor [Member] | Second 10% Convertible Notes [Member] | ||||||||||||||||||||||||||||
Description of interest on the principal amount | As to fifty percent (50%) of the amount due thereunder, and the remaining fifty percent (50%) due thereunder to May 15, 2019. | |||||||||||||||||||||||||||
Debt instrument maturity date | Feb. 15, 2019 | |||||||||||||||||||||||||||
Securities Purchase Agreement Amendment [Member] | Investor [Member] | ||||||||||||||||||||||||||||
Number of shares issued (in shares) | shares | 109,724 | |||||||||||||||||||||||||||
Debt instrument, conversion price (in dollars per share) | $ / shares | $ 8 | |||||||||||||||||||||||||||
Principal amount | $ 309,193 | $ 877,793 | ||||||||||||||||||||||||||
Number of shares issued, value | $ 304,608 | |||||||||||||||||||||||||||
Percentage of net proceeds | 103.00% | |||||||||||||||||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 8 | |||||||||||||||||||||||||||
True-Up Payment due | $ 599,519 |
CONVERTIBLE NOTES (Details Na_2
CONVERTIBLE NOTES (Details Narrative 1) - USD ($) | Jul. 28, 2017 | Apr. 26, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 15, 2017 | Dec. 31, 2016 |
Number of shares issued, value | $ 2,204,365 | ||||||
Share price (in dollars per share) | $ 2 | ||||||
Number of warrants purchased | 9,000 | ||||||
Exercise price of warrants | $ 18 | $ 12 | |||||
Debt discount | $ 151,499 | ||||||
Common Stock [Member] | |||||||
Outstanding balance (in shares) | 4,036,407 | 1,511,115 | 383,882 | ||||
Warrants [Member] | |||||||
Debt discount | $ 2,169,613 | ||||||
Exchange Agreement [Member] | |||||||
Extinguishment of Debt | $ 54,583 | ||||||
Additional non cash expense | $ 110,421 | ||||||
Exchange Agreement [Member] | Common Stock [Member] | Private Placement [Member] | |||||||
Number of shares issued (in shares) | 3,180 | ||||||
Number of shares issued, value | $ 35,000 | ||||||
Share price (in dollars per share) | $ 11 | ||||||
Number of shares purchased through cancellatoin of Exchange note (in shares) | 3,180 | ||||||
Number of shares purchased through cancellatoin of Exchange note , value | $ 35,000 | ||||||
Exchange Agreement [Member] | Warrants [Member] | Common Stock [Member] | Private Placement [Member] | |||||||
Number of shares issued (in shares) | 6,000 | ||||||
Share price (in dollars per share) | $ 11 | ||||||
Number of shares purchased through cancellatoin of Exchange note , value | $ 34,000 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes due on August 1, 2017 [Member] | |||||||
Principal amount | $ 110,000 | ||||||
Debt instrument maturity date | Aug. 1, 2017 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes due on August 1, 2017 [Member] | |||||||
Principal amount | $ 35,000 | ||||||
Debt instrument maturity date | Aug. 1, 2017 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes due on August 8, 2017 [Member] | |||||||
Principal amount | $ 34,000 | ||||||
Debt instrument maturity date | Aug. 8, 2017 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes [Member] | |||||||
Principal amount | $ 104,000 | ||||||
Extinguishment of Debt | $ 125,000 | ||||||
Additional non cash expense | 51,424 | ||||||
Description of exchange | (i) the change in the fair value of the warrants due to the exchange of the warrant with an exercise price of $18.00 per share with a new warrant with an exercise price of $11.00 per share, (ii) the fair value of the warrant to purchase 6,000 shares of common stock and (iii) the value of the shares of cash and common stock in excess of the amount owed pursuant to the 7% Convertible Note. | ||||||
Debt discount | 24,912 | ||||||
Debt instrument beneficial conversion feature | $ 26,512 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes [Member] | Common Stock [Member] | |||||||
Number of shares issued (in shares) | 4,167 | ||||||
Share price (in dollars per share) | $ 11 | ||||||
Warrants maturity terms | 5 years | ||||||
Number of warrants purchased | 8,000 | ||||||
Exercise price of warrants | $ 16 | ||||||
Exchange Agreement [Member] | 7% Convertible Notes [Member] | Warrants [Member] | |||||||
Debt discount | $ 51,424 | ||||||
Debt instrument beneficial conversion feature | $ 26,512 | ||||||
Risk-free rate | 1.84% | ||||||
Volatility | 104.70% | ||||||
Exchange Agreement [Member] | 7% Convertible Notes [Member] | Warrants [Member] | Common Stock [Member] | |||||||
Share price (in dollars per share) | $ 18 | ||||||
Number of warrant cancelled | 4,167 | ||||||
Subscription Agreement [Member] | Common Stock [Member] | |||||||
Number of shares issued (in shares) | 10,000 | ||||||
Number of shares issued, value | $ 110,000 | ||||||
Share price (in dollars per share) | $ 11 | ||||||
Number of shares purchased through cancellatoin of Exchange note (in shares) | 10,000 | ||||||
Number of shares purchased through cancellatoin of Exchange note , value | $ 110,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,272,957 |
2020 | 1,032,302 |
2021 | 801,305 |
2022 | 501,411 |
2023 | 514,895 |
Thereafter | 1,582,120 |
Total | $ 5,704,990 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Nov. 28, 2018USD ($) | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Jun. 01, 2018 | Nov. 30, 2012 | Sep. 30, 2009 |
Rent expense | $ 1,086,031 | $ 291,092 | ||||
Operating Lease Agreement [Member] | UNITED STATES [Member] | ||||||
Operating lease term | 7 years | |||||
Additional operating lease term | 5 years | |||||
Operating Lease Agreement [Member] | UNITED KINGDOM [Member] | ||||||
Operating lease term | 15 years | |||||
Operating Lease Agreement [Member] | California and Connecticut [Member] | ||||||
Area of land | ft² | 43,062 | |||||
Annual base rent | $ 1,272,000 | |||||
Description of leases expiration | These leases expire between May 2019 and January 2028. | |||||
Operating Lease Agreement [Member] | ISRAEL [Member] | ||||||
Operating lease term | 10 years | |||||
Blockchain Mining Supply And Services, Ltd [Member] | ||||||
Damages amount | $ 1,388,495 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Oct. 11, 2018 | Oct. 05, 2018 | Sep. 13, 2018 | Aug. 16, 2018 | Aug. 10, 2018 | Jul. 02, 2018 | Jun. 02, 2018 | May 15, 2018 | May 08, 2018 | Feb. 27, 2018 | Feb. 09, 2018 | Jan. 31, 2018 | Jan. 12, 2018 | Jan. 10, 2018 | Jan. 03, 2018 | Oct. 05, 2017 | Jun. 19, 2017 | May 24, 2017 | Apr. 24, 2017 | Mar. 15, 2017 | Mar. 09, 2017 | Sep. 30, 2018 | Jun. 19, 2017 | Jun. 02, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 |
Preferred stock, authorized | 23,121,224 | 23,121,224 | |||||||||||||||||||||||||||
Issuance of Series B preferred stock for conversion of short-term advances (in shares) | 500 | ||||||||||||||||||||||||||||
Issuance of Series B preferred stock for conversion of short-term advances | $ 500 | ||||||||||||||||||||||||||||
Number of warrants purchased | 9,000 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 12 | $ 18 | |||||||||||||||||||||||||||
Accrued interest | 1,353,411 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 3,000 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | $ 97,800 | 97,800 | $ 557,017 | ||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants (in shares) | 93,324 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants | $ 867,166 | 867,166 | 2,245,938 | ||||||||||||||||||||||||||
Issuance of common stock in connection with convertible notes | 1,541,108 | 399,511 | |||||||||||||||||||||||||||
Number of shares issued for services (in shares) | 25,000 | ||||||||||||||||||||||||||||
Number of shares issued for services | $ 300,000 | $ 3,740,888 | 1,662,702 | ||||||||||||||||||||||||||
Treasury stock (in shares) | 2,750 | ||||||||||||||||||||||||||||
Treasury stock (in dollars per share) | $ 57,748 | ||||||||||||||||||||||||||||
Proceeds From warrant exercises | $ 867,166 | $ 2,245,938 | |||||||||||||||||||||||||||
Preferred stock price per share (in dollar per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||
Divine Capital Markets, LLC [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 9,100 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14.40 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants (in shares) | 13,958 | ||||||||||||||||||||||||||||
10% Convertible Notes [Member] | |||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 1,938 | ||||||||||||||||||||||||||||
Accrued interest | $ 23,250 | ||||||||||||||||||||||||||||
12% Convertible Note [Member] | |||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 377,678 | ||||||||||||||||||||||||||||
Principal amount | $ 202,000 | ||||||||||||||||||||||||||||
Accrued interest | $ 5,723 | ||||||||||||||||||||||||||||
5% Convertible Note [Member] | |||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 46,082 | ||||||||||||||||||||||||||||
Principal amount | $ 550,000 | ||||||||||||||||||||||||||||
Accrued interest | $ 2,987 | ||||||||||||||||||||||||||||
10% Convertible Note [Member] | |||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 34,597 | 109,724 | |||||||||||||||||||||||||||
Principal amount | $ 1,250,000 | $ 18,865 | |||||||||||||||||||||||||||
Accrued interest | 133,884 | $ 259,408 | |||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 211,225 | 337,990 | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 3,000 | 18,073 | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | $ 3 | $ 18 | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants (in shares) | 107,282 | 177,305 | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants | $ 107 | $ 177 | |||||||||||||||||||||||||||
Issuance of common stock in connection with convertible notes (in shares) | 136,961 | 22,500 | |||||||||||||||||||||||||||
Issuance of common stock in connection with convertible notes | $ 136 | $ 23 | |||||||||||||||||||||||||||
Number of shares issued for services (in shares) | 184,153 | 108,067 | |||||||||||||||||||||||||||
Number of shares issued for services | $ 184 | $ 108 | |||||||||||||||||||||||||||
Conversion of preferred stock | 37,878 | ||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 91,000 | 91,000 | 50,000 | 1,166,681 | 431,543 | ||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 22 | $ 19.80 | $ 16.60 | ||||||||||||||||||||||||||
Number of shares sold | 21,667 | ||||||||||||||||||||||||||||
Ault & Company [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 3,750 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 12 | ||||||||||||||||||||||||||||
Number of shares sold | 3,750 | ||||||||||||||||||||||||||||
Ault & Company [Member] | Warrant [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 3,750 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 12 | ||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 45,000 | ||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||
Principal amount | $ 5,999,584 | $ 5,999,584 | $ 5,999,584 | ||||||||||||||||||||||||||
Issuances of Common Stock for cash and cancellation of short-term advances | 3,225,000 | 2,774,584 | |||||||||||||||||||||||||||
Number of shares sold | 384,589 | ||||||||||||||||||||||||||||
Cash | $ 206,730 | ||||||||||||||||||||||||||||
Short-term advances | 177,858 | ||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | January 2018 10% Convertible Note [Member] | |||||||||||||||||||||||||||||
Principal amount | $ 1,250,000 | ||||||||||||||||||||||||||||
Issuance of restricted common stock (in shares) | 27,174 | ||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 12% April 2018 Convertible Note [Member] | |||||||||||||||||||||||||||||
Principal amount | $ 1,722,222 | ||||||||||||||||||||||||||||
Issuance of restricted common stock (in shares) | 10,046 | ||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 10% Convertible Note [Member] | |||||||||||||||||||||||||||||
Principal amount | $ 565,000 | $ 1,272,600 | $ 1,000,000 | $ 6,000,000 | $ 789,473 | $ 789,473 | $ 789,473 | ||||||||||||||||||||||
Issuance of restricted common stock (in shares) | 20,000 | 20,000 | 31,000 | 20,000 | 17,241 | 22,500 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Philou [Member] | |||||||||||||||||||||||||||||
Issuance of Series B preferred stock for conversion of short-term advances (in shares) | 25,000 | ||||||||||||||||||||||||||||
Issuance of Series B preferred stock for conversion of short-term advances | $ 250 | ||||||||||||||||||||||||||||
Number of warrants purchased | 102,041 | 102,041 | |||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | $ 14 | |||||||||||||||||||||||||||
Additional number of warrants purchased | 25,510 | ||||||||||||||||||||||||||||
Exercise price of warrants,conversion rate | $ 14 | ||||||||||||||||||||||||||||
Number of warrants purchased in black scholes option pricing model | 401,399 | ||||||||||||||||||||||||||||
Addition number of warrants purchased in black scholes option pricing model | 141,951 | ||||||||||||||||||||||||||||
Purchase and Sale Agreement [Member] | HCW [Member] | |||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 20.31 | ||||||||||||||||||||||||||||
Number of shares issued for services (in shares) | 184,153 | ||||||||||||||||||||||||||||
Number of shares issued for services | $ 3,740,888 | ||||||||||||||||||||||||||||
Number of shares sold | 1,062,096 | ||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 50,000,000 | $ 19,022,416 | |||||||||||||||||||||||||||
Number of shares issue (in shares) | 500,000 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 1,092,000 | ||||||||||||||||||||||||||||
Subscription Agreement [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 4,333 | ||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||
Convertible preferred stock, authorized | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||
Convertible preferred stock, issued | 1,434 | ||||||||||||||||||||||||||||
Convertible preferred stock, outstanding | 1,434 | ||||||||||||||||||||||||||||
Percentage relative rights | 10.00% | ||||||||||||||||||||||||||||
Dividends annual rate | 10.00% | ||||||||||||||||||||||||||||
Preferred stock price per share (in dollar per share) | $ 2.50 | ||||||||||||||||||||||||||||
Preferred stock liquidation, preference value | $ 25 | ||||||||||||||||||||||||||||
Preferred stock redemption terms | On and after September 30, 2023, the Company may, at its option, upon not less than thirty (30) days nor more than sixty (60) days’ written notice, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share of Series A Preferred Stock, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. In addition, upon the occurrence of a change of control, subject to certain restrictions, the Company may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice, redeem the Series A Preferred Stock, in whole or in part, within one hundred twenty (120) days after the first date on which such change of control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. | ||||||||||||||||||||||||||||
Redemption price per share | $ 25 | ||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||
Convertible preferred stock, authorized | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | ||||||||||||||||||||||||
Convertible preferred stock, issued | 125,000 | 125,000 | 125,000 | 125,000 | 100,000 | ||||||||||||||||||||||||
Convertible preferred stock, outstanding | 125,000 | 125,000 | 125,000 | 125,000 | 100,000 | ||||||||||||||||||||||||
Series B Preferred Stock [Member] | Warrant [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 71,429 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | ||||||||||||||||||||||||||||
Number of shares sold | 100,000 | ||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | Philou [Member] | |||||||||||||||||||||||||||||
Exercise price of warrants,conversion rate | $ 14 | ||||||||||||||||||||||||||||
Number of warrants purchased in black scholes option pricing model | 1,000,000 | ||||||||||||||||||||||||||||
Addition number of warrants purchased in black scholes option pricing model | 250,000 | ||||||||||||||||||||||||||||
Issuance of common stock for conversion of debt (in shares) | 108,049 | 265,054 | |||||||||||||||||||||||||||
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member] | Philou [Member] | |||||||||||||||||||||||||||||
Description of stock purchase agreement term | In the Company through the purchase of Series B Preferred Stock over the term of 36 months. | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 10 | ||||||||||||||||||||||||||||
Exercise price of warrants,conversion rate | $ 14 | ||||||||||||||||||||||||||||
Gross revenues | $ 10,000 | ||||||||||||||||||||||||||||
Conversion basis | In addition, for each share of Series B Preferred Stock purchased, Philou will receive warrants to purchase shares of common stock in a number equal to the stated value of each share of Series B Preferred Stock purchased divided by $0.70, at an exercise price equal to $14.00 per share of common stock. The warrants do not require a net cash-settlement or provide the holder with a choice of net-cash settlement. The warrants also do not contain a variable settlement provision. Accordingly, any warrants issued to Philou pursuant to the terms of the Preferred Stock Purchase Agreement shall be classified as equity instruments. | ||||||||||||||||||||||||||||
Terms of conversion | Further, Philou shall have the right to participate in the Company’s future financings under substantially the same terms and conditions as other investors in those respective financings in order to maintain its then percentage ownership interest in the Company. Philou’s right to participate in such financings shall accrue and accumulate provided that it still owns at least 100,000 shares of Series B Preferred Stock. | ||||||||||||||||||||||||||||
Number of shares sold | 5,000 | ||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||
Convertible preferred stock, authorized | 2,500 | ||||||||||||||||||||||||||||
Conversion of preferred stock | 455,002 | ||||||||||||||||||||||||||||
Dividends receivable | $ 0.24 | ||||||||||||||||||||||||||||
Proceeds From warrant exercises | $ 1,603,000 | ||||||||||||||||||||||||||||
Warrant issued | 3,545 | ||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||
Conversion of preferred stock | 91,000 | ||||||||||||||||||||||||||||
Warrant issued | 4,333 | ||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Warrant [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 4,333 | 4,333 | |||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 20 | $ 20 | |||||||||||||||||||||||||||
Number of shares sold | 21,667 | ||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Subscription Agreement [Member] | |||||||||||||||||||||||||||||
Number of warrants purchased | 21,667 | ||||||||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 2.40 | ||||||||||||||||||||||||||||
Conversion of preferred stock | 91,000 | ||||||||||||||||||||||||||||
Sale of stock price per share | $ 52,000 | $ 52,000 | |||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Subscription Agreement [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||
Conversion of preferred stock | 80,167 | ||||||||||||||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||
Convertible preferred stock, authorized | 378,776 | 378,776 | |||||||||||||||||||||||||||
Convertible preferred stock, issued | 378,776 | ||||||||||||||||||||||||||||
Convertible preferred stock, outstanding | 378,776 | ||||||||||||||||||||||||||||
Number of shares issued for services | $ 37,878 | ||||||||||||||||||||||||||||
Conversion of preferred stock | 378,776 | ||||||||||||||||||||||||||||
Common stock, issued | 1,603,434 | ||||||||||||||||||||||||||||
Common stock, outstanding | 1,603,434 | ||||||||||||||||||||||||||||
Common stock conversion | Company of 92,122 shares of the Company’s Common Stock, 378,776 shares of the Company’s Series D Preferred Stock and warrants to purchase an aggregate of 50,000 shares of the Company’s Common Stock. | ||||||||||||||||||||||||||||
Common stock stated value | $ 0.01 | ||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Share Exchange Agreement [Member] | |||||||||||||||||||||||||||||
Number of shares issued for services | $ 30,000 | ||||||||||||||||||||||||||||
Common stock conversion | On June 2, 2017, pursuant to the terms of the Share Exchange Agreement and in consideration of legal services, Microphase issued a $450,000 8% promissory note with a maturity date of November 25, 2017 to an unsecured creditor, Lucosky Brookman, LLP (the “Lucosky Note”). In conjunction with the issuance of the Lucosky Note, the Company issued Lucosky Brookman 10,000 shares of Series E Preferred Stock with a stated value equal to forty-five dollars ($45.00) per share. The Company, at its option, may redeem for cash, in whole or in part, at any time and from time to time, the shares of Series E Preferred Stock at the time outstanding, upon written notice to the holder of the shares, at a cash redemption price equal to $45 multiplied by the number of shares being redeemed. Any such optional redemption by the Company shall be credited against the Lucosky Note. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax asset: | ||
Net operating loss | $ 6,924,325 | $ 3,543,284 |
Reserves and allowances | 1,724,446 | 568,866 |
Equity Compensation | 425,603 | 155,565 |
Tax credit carryforward | 142,484 | 162,794 |
Property and equipment | 300,240 | 231,148 |
Total deferred tax asset | 9,517,098 | 4,661,657 |
Deferred tax liability: | ||
Intangible assets, net | (567,923) | (653,139) |
Total deferred tax liability | (567,923) | (653,139) |
Valuation allowance | (9,054,147) | (4,166,999) |
Deferred tax asset (liability), net | $ (104,972) | $ (158,481) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Foreign | $ 134,017 | |
Federal | ||
State | ||
Total Current | 134,017 | |
Deferred | ||
Foreign | (52,134) | |
Federal | (158,482) | (78,393) |
State | ||
Total Deferred | (210,616) | (78,393) |
Income tax (benefit) | $ (76,599) | $ (78,393) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at U.S. Federal statutory tax rate | (21.00%) | (34.00%) |
Increase (decrease) in tax rate resulting from: | ||
Effect of change in tax rates | 1.80% | 12.00% |
Effect of Section 382 limitation | 4.90% | 0.00% |
Increase in valuation allowance | 15.10% | 17.00% |
Nondeductible meals & entertainment expense and other | 0.90% | 6.10% |
State taxes, net of federal benefit | (2.40%) | (4.50%) |
Foreign rate differential | 0.30% | 0.70% |
Stock compensation expense | (0.10%) | 1.90% |
Effective tax rate | (0.30%) | (0.80%) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Previous corporate income tax rate | 35.00% | |
Corporate income tax rate | 21.00% | 34.00% |
Income tax expenses | $ 1,138,845 | |
Net operating loss carryforwards | $ 43,051,999 | $ 7,960,184 |
Net operating loss carryforwards, limitations on use | Expiring at various times starting in 2022 through 2039. | |
Operating loss carryforwards limitation | $ 157,433 | |
Increased in valuation allowance | 4,887,148 | |
Foreign income tax loss | $ 1,808,466 | |
Effective tax rates | (0.30%) | (0.80%) |
UNITED KINGDOM | ||
Foreign statutory tax rates | 20.00% | |
ISRAEL | ||
Foreign statutory tax rates | 7.50% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jun. 17, 2018 | Apr. 24, 2018 | Apr. 13, 2018 | Mar. 22, 2018 | Mar. 31, 2017 | Mar. 09, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Dec. 05, 2017 | Sep. 06, 2017 | Apr. 05, 2017 | Mar. 15, 2017 |
Amount of shares issued | $ 2,204,365 | ||||||||||||
Revenues | 3,887,000 | 3,887,000 | |||||||||||
Number of warrants purchased | 9,000 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||||||||||
Number of shares issued upon conversion, value | $ 2,446,117 | $ 4,036,601 | |||||||||||
AVLP [Member] | |||||||||||||
Number of shares issued (in shares) | 221,333 | ||||||||||||
Market price of common stock | $ 0.90 | $ 1.75 | |||||||||||
Unrealized gain | $ 0 | ||||||||||||
Philou [Member] | Series B Preferred Stock [Member] | |||||||||||||
Issuance of common stock for conversion of debt (in shares) | 108,049 | 265,054 | |||||||||||
Milton C. Ault [Member] | |||||||||||||
Repayment of sale of advances on future receipts | $ 8,218,000 | ||||||||||||
Repayment of sale of the promissory notes | $ 4,781,000 | ||||||||||||
Percentage obligation of non-cash compensation | 1.50% | ||||||||||||
Alzamend Neuro, Inc. [Member] | |||||||||||||
Loan | $ 44,000 | ||||||||||||
Number of warrants purchased | 22,000 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 0.30 | ||||||||||||
MTIX Limited [Member] | Multiplex Laser Surface Enhancement [Member] | |||||||||||||
Purchase order | $ 50,000,000 | ||||||||||||
Contractual maturity terms | 3 years | ||||||||||||
MTIX Ltd. [Member] | |||||||||||||
Revenues | |||||||||||||
Loan And Security Agreement [Member] | AVLP [Member] | |||||||||||||
Maximum amount of non-revolving credit facility | $ 10,000,000 | ||||||||||||
Contractual interest receivable | 324,000 | ||||||||||||
Loan And Security Agreement [Member] | AVLP [Member] | Convertible Promissory Notes [Member] | |||||||||||||
Principal amount | $ 119,329 | ||||||||||||
Interest rate | 12.00% | ||||||||||||
Number of warrants purchased | 0 | ||||||||||||
Amended And Restated Consulting Agreement [Member] | Mr. Ault [Member] | |||||||||||||
Consideration fee | $ 33,333 | ||||||||||||
Executive Employment Agreement [Member] | Mr. Ault [Member] | |||||||||||||
Agreement term | Ten-year | ||||||||||||
Base salary | $ 400,000 | ||||||||||||
Services fees paid | $ 400,000 | 207,500 | |||||||||||
Preferred Stock Purchase Agreement [Member] | |||||||||||||
Number of shares issued (in shares) | 1,750,000 | ||||||||||||
Number of warrants purchased | 62,500 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 23 | ||||||||||||
Preferred Stock Purchase Agreement [Member] | Series B Preferred Stock [Member] | |||||||||||||
Number of shares issued (in shares) | 25,000 | ||||||||||||
Number of warrants purchased | 25,510 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 14 | ||||||||||||
Preferred Stock Purchase Agreement [Member] | Philou [Member] | |||||||||||||
Description of stock purchase agreement term | Philou may invest up to $5,000,000 in the Company through the purchase of Series B Preferred Stock over 36 months. | ||||||||||||
Preferred Stock Purchase Agreement [Member] | Philou [Member] | Series B Preferred Stock [Member] | |||||||||||||
Number of shares issued (in shares) | 25,000 | 125,000 | |||||||||||
Exchange Agreement [Member] | MTIX Limited [Member] | Convertible Promissory Notes A [Member] | |||||||||||||
Promissory note receivable | 600,000 | ||||||||||||
Exchange Agreement [Member] | MTIX Limited [Member] | Promissory Notes [Member] | |||||||||||||
Promissory note receivable | $ 2,667,766 | ||||||||||||
Exchange Agreement [Member] | WT Johnson [Member] | Convertible Promissory Notes A [Member] | |||||||||||||
Principal amount | $ 600,000 | ||||||||||||
Issuance of common stock for conversion of debt (in shares) | 30,000 | ||||||||||||
Proceeds from sale of shares | $ 2,267,766 | ||||||||||||
Value added tax | $ 400,500 | ||||||||||||
Exchange Agreement [Member] | WT Johnson [Member] | Convertible Promissory Notes B [Member] | |||||||||||||
Principal amount | $ 1,667,766 | ||||||||||||
Exchange Agreement [Member] | WT Johnson And Sons [Member] | Convertible Promissory Notes A [Member] | |||||||||||||
Issuance of common stock for conversion of debt (in shares) | 30,000 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative 1) - USD ($) | Jul. 24, 2017 | Jun. 28, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 15, 2017 |
Number of warrants purchased | 9,000 | ||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | |||||
Number of shares issued upon conversion, value | $ 2,446,117 | $ 4,036,601 | |||||
Short-term loans | 762,000 | 2,439,000 | |||||
Payment to acquire property | $ 8,919,532 | 402,779 | |||||
Amos Kohn [Member] | ISRAEL | Real Property [Member] | |||||||
Payment to acquire property | $ 300,000 | ||||||
Four Accredited Investors [Member] | |||||||
Short-term loans | $ 140,000 | ||||||
Four Accredited Investors [Member] | Warrants [Member] | |||||||
Number of warrants purchased | 11,219 | ||||||
Exercise price of warrants (in dollars per share) | $ 15.40 | ||||||
Warrants maturity terms | 5 years | ||||||
Corporate Counsel [Member] | |||||||
Short-term loans | $ 75,000 | ||||||
Related Party [Member] | Series C Preferred Stock Units [Member] | |||||||
Short-term loans | $ 52,000 | ||||||
Six Investors [Member] | Short-Term Loans [Member] | |||||||
Issuance of common stock for conversion of debt (in shares) | 2,091 | ||||||
Number of shares issued upon conversion, value | $ 23,000 | ||||||
Undivided Interest [Member] | ISRAEL | Real Property [Member] | |||||||
Percentage of ownership in property | 28.00% | ||||||
Roni Kohn [Member] | ISRAEL | Real Property [Member] | Common Agreement [Member] | |||||||
Percentage of ownership in property | 72.00% | ||||||
Roni Kohn [Member] | ISRAEL | Real Property [Member] | Trust Agreement [Member] | |||||||
Percentage of ownership in property | 28.00% |
SEGMENT, CUSTOMERS AND GEOGRA_2
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 17,762,217 | $ 10,000,749 |
Revenue, cryptocurrency mining | 1,675,549 | |
Revenue, related party | 3,907,280 | 173,751 |
Revenue, restaurant operations | 3,462,140 | |
Revenue, lending activities | 347,033 | |
Inter-segment revenues | ||
Total revenues | 27,154,219 | 10,174,500 |
Depreciation and amortization expense | 2,906,685 | 254,006 |
Loss from operations | (19,605,456) | (5,983,045) |
Capital expenditures for segment assets | 8,919,532 | 402,779 |
Identifiable assets | 49,425,880 | 30,508,894 |
Operating Segments [Member] | DPC [Member] | ||
Revenues | 10,499,612 | 7,889,731 |
Revenue, cryptocurrency mining | ||
Revenue, related party | 3,907,280 | 173,751 |
Revenue, restaurant operations | ||
Revenue, lending activities | 347,033 | |
Inter-segment revenues | 36,833 | 53,501 |
Total revenues | 14,790,758 | 8,116,983 |
Depreciation and amortization expense | 300,326 | 183,252 |
Loss from operations | (3,608,828) | (5,558,272) |
Capital expenditures for segment assets | 44,190 | 382,250 |
Identifiable assets | 28,623,729 | 28,780,371 |
Operating Segments [Member] | DPL [Member] | ||
Revenues | 2,036,530 | 2,111,018 |
Revenue, cryptocurrency mining | ||
Revenue, related party | ||
Revenue, restaurant operations | ||
Revenue, lending activities | ||
Inter-segment revenues | ||
Total revenues | 2,036,530 | 2,111,018 |
Depreciation and amortization expense | 65,046 | 70,754 |
Loss from operations | (586,107) | (424,773) |
Capital expenditures for segment assets | 1,301 | 20,529 |
Identifiable assets | 1,458,699 | 1,728,523 |
Operating Segments [Member] | Enertec [Member] | ||
Revenues | 5,226,075 | |
Revenue, cryptocurrency mining | ||
Revenue, related party | ||
Revenue, restaurant operations | ||
Revenue, lending activities | ||
Inter-segment revenues | ||
Total revenues | 5,226,075 | |
Depreciation and amortization expense | 389,808 | |
Loss from operations | (431,320) | |
Capital expenditures for segment assets | 48,826 | |
Identifiable assets | 10,251,816 | |
Operating Segments [Member] | Digital Farms [Member] | ||
Revenues | ||
Revenue, cryptocurrency mining | 1,675,549 | |
Revenue, related party | ||
Revenue, restaurant operations | ||
Revenue, lending activities | ||
Inter-segment revenues | ||
Total revenues | 1,675,549 | |
Depreciation and amortization expense | 2,151,505 | |
Loss from operations | (6,369,138) | |
Capital expenditures for segment assets | 8,891,928 | |
Identifiable assets | 7,018,958 | |
Operating Segments [Member] | I. AM, Inc. [Member] | ||
Revenues | ||
Revenue, cryptocurrency mining | ||
Revenue, related party | ||
Revenue, restaurant operations | 3,462,140 | |
Revenue, lending activities | ||
Inter-segment revenues | ||
Total revenues | 3,462,140 | |
Depreciation and amortization expense | ||
Loss from operations | (81,264) | |
Capital expenditures for segment assets | 184,377 | |
Identifiable assets | 2,072,678 | |
Intersegment Eliminations [Member] | ||
Revenues | ||
Revenue, cryptocurrency mining | ||
Revenue, related party | ||
Revenue, restaurant operations | ||
Revenue, lending activities | ||
Inter-segment revenues | (36,833) | (53,501) |
Total revenues | (36,833) | (53,501) |
Depreciation and amortization expense | ||
Loss from operations | ||
Capital expenditures for segment assets | ||
Identifiable assets |
SEGMENT, CUSTOMERS AND GEOGRA_3
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Revenues by Major Customer | $ 27,154,219 | $ 10,174,500 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||
Total Revenues by Major Customer | $ 3,907,280 | |
Percentage of Total Company Revenues | 14.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer B [Member] | ||
Total Revenues by Major Customer | $ 1,340,766 | |
Percentage of Total Company Revenues | 13.00% |
SEGMENT, CUSTOMERS AND GEOGRA_4
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 27,154,219 | $ 10,174,500 |
Commercial Products [Member] | ||
Revenues | 10,597,256 | 5,488,657 |
Defense Products [Member] | ||
Revenues | $ 16,556,963 | $ 4,685,843 |
SEGMENT, CUSTOMERS AND GEOGRA_5
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 27,154,219 | $ 10,174,500 |
North America [Member] | ||
Revenues | 19,113,226 | 6,636,954 |
Europe [Member] | ||
Revenues | 1,765,991 | 2,634,166 |
Middle East [Member] | ||
Revenues | 5,226,075 | 672,256 |
Other [Member] | ||
Revenues | $ 1,048,927 | $ 231,124 |
SEGMENT, CUSTOMERS AND GEOGRA_6
SEGMENT, CUSTOMERS AND GEOGRAPHICAL INFORMATION (Details Narrative) | 12 Months Ended |
Dec. 31, 2018Number | |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Mar. 29, 2019 | Mar. 14, 2019 | Jan. 09, 2019 | Dec. 31, 2018 | Jan. 03, 2019 | Dec. 31, 2017 | Apr. 05, 2017 | Mar. 15, 2017 |
Preferred stock, authorized | 23,121,224 | 23,121,224 | ||||||
Exercise price of warrants (in dollars per share) | $ 18 | $ 12 | ||||||
Proceeds from public offering | $ 7,000,000 | |||||||
Subsequent Event [Member] | ||||||||
Common stock, authorized | 550,000,000 | |||||||
Preferred stock, authorized | 25,000,000 | |||||||
Reverse stock split | one-for-twenty | |||||||
Stock issued during period, reverse stock splits | Each twenty (20) shares of Common Stock issued and outstanding prior to the Reverse Stock Split were converted into one (1) share of Common Stock, with no change in authorized shares or par value per share. | |||||||
Subsequent Event [Member] | A.G.P./Alliance Global Partners [Member] | Common Warrants [Member] | Maximum [Member] | ||||||||
Number of shares issued | 622,220 | |||||||
Exercise price of warrants (in dollars per share) | $ 0.50 | |||||||
Warrant tem | 5 years | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | ||||||||
Number of shares issued | 2,855,500 | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Maximum [Member] | ||||||||
Number of shares issued | 428,325 | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Public Offering [Member] | ||||||||
Offering price (in dollars per share) | $ 0.44 | |||||||
Proceeds from public offering | $ 6,000,000 | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Common Warrants [Member] | ||||||||
Number of shares issued | 2,855,500 | |||||||
Offering price (in dollars per share) | $ 0.01 | |||||||
Exercise price of warrants (in dollars per share) | $ 0.45 | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Common Warrants [Member] | Maximum [Member] | ||||||||
Number of shares issued | 2,333,325 | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Pre-Funded Warrants [Member] | ||||||||
Number of shares issued | 12,700,000 | |||||||
Offering price (in dollars per share) | $ 0.01 | |||||||
Description of warrant | The Pre-Funded Warrants were offered to each purchaser whose purchase of the Shares and the Common Warrant in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of the Company’s outstanding common stock immediately following the consummation of the Offering. | |||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | A.G.P./Alliance Global Partners [Member] | Pre-Funded Warrants [Member] | Maximum [Member] | ||||||||
Number of shares issued | 1,905,000 | |||||||
Subsequent Event [Member] | 10% Convertible Note [Member] | ||||||||
Principal amount | $ 309,193 | |||||||
Description of note | The shares of common stock shall be issued at a price equal to the greater of (i) $2.40 per share (the closing price of the Company’s common stock on January 9, 2019) or (ii) 80% of the lowest daily VWAP in the three days prior to the date of issuance, but not to exceed $8.00 per share. However, the Company shall have the right to pay the monthly amortization payment in cash within 72 hours by advising the investor via email within two hours of receipt of any conversion notice. | |||||||
Common Class A [Member] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
Common stock, authorized | 500,000,000 | 500,000,000 | ||||||
Common Class A [Member] | Subsequent Event [Member] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Common stock, authorized | 500,000,000 | |||||||
Common Class B [Member] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
Common stock, authorized | 25,000,000 | 25,000,000 | ||||||
Common Class B [Member] | Subsequent Event [Member] | ||||||||
Common stock, authorized | 25,000,000 |
SUBSEQUENT EVENTS (Details Na_2
SUBSEQUENT EVENTS (Details Narrative 1) - USD ($) | Apr. 12, 2019 | Mar. 22, 2019 | Feb. 27, 2019 | Feb. 23, 2019 | Feb. 20, 2019 | Feb. 11, 2019 | Jan. 23, 2019 | Jan. 09, 2019 | Dec. 28, 2018 | Apr. 30, 2018 | Dec. 14, 2017 | Mar. 15, 2017 | Feb. 21, 2019 | Mar. 20, 2019 | Apr. 12, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||
Revenue from related parties | $ 3,907,280 | $ 173,751 | |||||||||||||||
Share price (in dollars per share) | $ 2 | ||||||||||||||||
Number of share issued for services | 25,000 | ||||||||||||||||
Value of share issued for services | $ 300,000 | $ 3,740,888 | 1,662,702 | ||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||
Number of shares issued | 92,583 | ||||||||||||||||
Enertec [Member] | 10% Secured Promissory Note [Member] | |||||||||||||||||
Principal amount | $ 500,000 | ||||||||||||||||
Promissory note issuance date | Jan. 15, 2019 | ||||||||||||||||
Promissory note maturity date | Jun. 15, 2019 | ||||||||||||||||
Microphase [Member] | 10% Secured Promissory Note [Member] | |||||||||||||||||
Principal amount | $ 200,000 | ||||||||||||||||
Promissory note issuance date | Jan. 15, 2019 | ||||||||||||||||
Promissory note maturity date | Mar. 31, 2019 | ||||||||||||||||
MTIX Ltd. [Member] | |||||||||||||||||
Revenue from related parties | $ 3,907,280 | $ 173,751 | |||||||||||||||
Multiplex Laser Surface Enhancement [Member] | |||||||||||||||||
Revenue from related parties | $ 2,676,220 | ||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||
Total number of common stock issued | 12,555,500 | ||||||||||||||||
Exercise of pre-funded warrants | 9,700,000 | ||||||||||||||||
Subsequent Event [Member] | WDCO ATM Offering [Member] | |||||||||||||||||
Total number of common stock issued | 4,791,642 | ||||||||||||||||
Net proceeds from issued of common stock | $ 4,469,630 | ||||||||||||||||
Subsequent Event [Member] | 10% Convertible Note [Member] | |||||||||||||||||
Principal amount | $ 309,193 | ||||||||||||||||
Description of promissory note | The shares of common stock shall be issued at a price equal to the greater of (i) $2.40 per share (the closing price of the Company’s common stock on January 9, 2019) or (ii) 80% of the lowest daily VWAP in the three days prior to the date of issuance, but not to exceed $8.00 per share. However, the Company shall have the right to pay the monthly amortization payment in cash within 72 hours by advising the investor via email within two hours of receipt of any conversion notice. | ||||||||||||||||
Subsequent Event [Member] | Consultant [Member] | |||||||||||||||||
Share price (in dollars per share) | $ 1.29 | ||||||||||||||||
Number of share issued for services | 375,000 | ||||||||||||||||
Value of share issued for services | $ 482,500 | ||||||||||||||||
Subsequent Event [Member] | Investor [Member] | 10% Convertible Note [Member] | |||||||||||||||||
Principal amount | $ 1,053,351 | ||||||||||||||||
Share price (in dollars per share) | $ 1.96 | ||||||||||||||||
Value received from sale of common stock | $ 660,337 | ||||||||||||||||
True-up payment due | $ 393,014 | ||||||||||||||||
Number of share issued for services | 336,486 | ||||||||||||||||
Subsequent Event [Member] | Investor [Member] | January 2019 Exchange Agreement [Member] | 8% Two Promissory Notes [Member] | |||||||||||||||||
Principal amount | $ 1,043,799 | ||||||||||||||||
Promissory note issuance date | Aug. 16, 2018 | ||||||||||||||||
Description of promissory note | The number of shares of Common Stock issuable upon delivery of issuance notices by the investor to the Company shall be determined by dividing the amount of the New Note to be drawn down by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the acquisition of the Common Stock. | ||||||||||||||||
Number of shares issued | 102,041 | 436,753 | |||||||||||||||
Subsequent Event [Member] | Investor [Member] | January 2019 Exchange Agreement [Member] | 8% Convertible Note [Member] | |||||||||||||||||
Promissory note issuance date | Apr. 15, 2019 | ||||||||||||||||
Description of promissory note | The number of shares of Common Stock issuable upon conversion of the Convertible Note shall be determined by dividing the amount to be converted by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the conversion, subject to certain conditions. | ||||||||||||||||
Promissory note maturity date | Jul. 15, 2019 | ||||||||||||||||
Reduction in note | $ 876,324 | ||||||||||||||||
Remaining balance due | $ 183,822 | ||||||||||||||||
Subsequent Event [Member] | Investor [Member] | February 2019 Exchange Agreement [Member] | 8% New Promissory Note [Member] | |||||||||||||||||
Principal amount | $ 433,884 | ||||||||||||||||
Promissory note issuance date | Aug. 16, 2018 | ||||||||||||||||
Description of promissory note | The number of shares of Common Stock issuable upon delivery of issuance notices by the investor to the Company shall be determined by dividing the amount of the New Note to be drawn down by the greater of $2.40 or 80% of the lowest daily VWAP in the three trading days prior to the acquisition of the Common Stock. | ||||||||||||||||
Subsequent Event [Member] | Ault & Company, Inc. [Member] | Securities Purchase Agreement [Member] | Series C Convertible Redeemable Preferred Stock [Member] | |||||||||||||||||
Value for the convertible stock | $ 2,500,000 | ||||||||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 1,000 | ||||||||||||||||
Conversion of stock, new issuance | 2,500 | ||||||||||||||||
Conversion price (in dollars per share) | $ 2.40 |