Document And Entity Information
Document And Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 30, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | MGT CAPITAL INVESTMENTS INC | ||
Entity Central Index Key | 1,001,601 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 47,597,959 | ||
Entity Common Stock, Shares Outstanding | 66,073,075 | ||
Trading Symbol | MGT | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 9,519 | $ 345 |
Prepaid expenses and other current assets | 894 | 153 |
Investments available for sale | 44 | |
Digital currencies | 48 | 10 |
Total current assets | 10,461 | 552 |
Non-current assets: | ||
Property and equipment, net | 3,116 | 602 |
Intangible assets, net | 468 | |
Investments, at cost | 287 | |
Total assets | 13,577 | 1,908 |
Current liabilities: | ||
Accounts payable | 287 | 66 |
Accrued expenses | 707 | 124 |
Other payables | 710 | 1 |
Total current liabilities | 1,704 | 191 |
Non-current liabilities: | ||
Convertible notes payable, net of discount | 2,300 | |
Total liabilities | 1,704 | 2,491 |
Commitments and Contingencies | ||
Stockholders’ Equity (Deficit) | ||
Common stock, $0.001 par value; 125,000,000 shares authorized; 58,963,009 and 28,722,855 shares issued and outstanding at December 31, 2017 and 2016, respectively. | 59 | 29 |
Additional paid-in capital | 390,736 | 327,943 |
Accumulated other comprehensive loss | (66) | |
Accumulated deficit | (378,900) | (328,467) |
Total equity (deficit) attributable to MGT stockholders | 11,895 | (561) |
Non-controlling interest | (22) | (22) |
Total stockholders’ equity (deficit) | 11,873 | (583) |
Total liabilities, stockholders’ equity (deficit), redeemable convertible preferred stock and non-controlling interest | 13,577 | 1,908 |
Series A Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock - Temporary equity | ||
Preferred stock, Series A Convertible Preferred, $0.001 par value, 1,500,000 shares authorized at December 31, 2017 and 2016. 1,416,160 shares issued and held in treasury as of December 31, 2017 and 2016. No shares outstanding at December 31, 2016 and 2017. | ||
Undesignated Preferred Stock [Member] | ||
Stockholders’ Equity (Deficit) | ||
Undesignated preferred stock, $0.001 par value, 8,500,000 shares authorized at December 2017 and 2016. No shares issued or outstanding at December 31, 2017 and 2016 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 58,963,009 | 28,722,855 |
Common stock, shares outstanding | 58,963,009 | 28,722,855 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares outstanding | ||
Preferred stock shares issued and held in treasury | 1,416,160 | 1,416,160 |
Undesignated Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 8,500,000 | 8,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 3,134 | $ 313 |
Cost of revenue | 1,502 | 209 |
Gross margin | 1,632 | 104 |
Operating expenses: | ||
General and administrative | 22,353 | 17,676 |
Sales and marketing | 238 | 198 |
Research and development | 346 | 297 |
Impairment of goodwill and intangible assets | 303 | 2,169 |
Total operating expenses | 23,240 | 20,340 |
Operating loss | (21,608) | (20,236) |
Other non-operating (expense) / income | ||
Interest (expense) / income, net | (385) | 216 |
Accretion of debt discount | (5,627) | (41) |
Loss on sale of investments | (84) | (1,410) |
Gain on sale of property and equipment | 370 | |
Impairment of investments | (2,787) | (1,358) |
Loss on extinguishment of debt | (2,013) | |
Inducement expense | (20,312) | |
Total other non-operating expenses | (28,825) | (4,606) |
Net loss before non-controlling interest | (50,433) | (24,842) |
Net loss attributable to non-controlling interest | 319 | |
Net loss attributable to Common stockholders | (50,433) | (24,523) |
Other comprehensive loss | ||
Reclassification adjustment for comprehensive loss included in net loss | 66 | 1,453 |
Unrealized holding loss | (313) | |
Comprehensive loss | $ (50,367) | $ (23,383) |
Per-share data | ||
Basic and diluted loss per share | $ (1.34) | $ (1.08) |
Weighted average number of common shares outstanding | 37,744,600 | 22,651,914 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total (Deficit) Equity Attributable to MGT Stockholders [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 18 | $ 311,167 | $ (303,944) | $ (1,206) | $ 6,035 | $ 5 | $ 6,040 | |
Balance, shares at Dec. 31, 2015 | 10,838 | 17,928,221 | ||||||
Stock-based compensation | $ 3 | 9,679 | 9,682 | 9,682 | ||||
Stock-based compensation, shares | 3,151,500 | |||||||
Stock issued for services | $ 1 | 1,106 | 1,107 | 1,107 | ||||
Stock issued for acquisitions of intangible assets | 495 | 495 | 495 | |||||
Stock issued for acquisitions of intangible assets,shares | 150,000 | |||||||
Stock issued for exchange of warrants | $ 1 | 832 | 833 | 833 | ||||
Stock issued for exchange of warrants, shares | 540,000 | |||||||
Exercise of warrants | $ 6 | 2,421 | 2,427 | 2,427 | ||||
Exercise of warrants, shares | 6,177,296 | |||||||
Warrant modification expense | 431 | 431 | 431 | |||||
Acquisition of non-controlling interest | (292) | (292) | 292 | |||||
Conversion of Preferred Series A into Common stock | ||||||||
Conversion of Preferred Series A into Common stock, shares | (10,838) | 10,838 | ||||||
Fair value of warrants issued in connection with notes payable | 761 | 761 | 761 | |||||
Stock issued for acquisitions | $ 495 | |||||||
Stock issued for acquisitions, shares | 150,000 | |||||||
Beneficial conversion feature on convertible notes | 702 | 702 | $ 702 | |||||
Fair value of vested stock options | 641 | 641 | 641 | |||||
Net loss for the period | (24,523) | (24,523) | (319) | (24,523) | ||||
Unrealized holding loss on available for sale investments | (313) | (313) | (313) | |||||
Reclassification adjustment upon sale of available for sale investments into net loss | 1,453 | 1,453 | (319) | 1,134 | ||||
Balance at Dec. 31, 2016 | $ 29 | 327,943 | (328,467) | (66) | (561) | (22) | (583) | |
Balance, shares at Dec. 31, 2016 | 28,722,855 | |||||||
Stock-based compensation | $ 4 | 3,276 | 3,280 | 3,280 | ||||
Stock-based compensation, shares | 4,050,000 | |||||||
Stock issued for services | $ 3 | 4,626 | 4,629 | 4,725 | ||||
Stock issued for services, shares | 2,574,000 | |||||||
Exercise of warrants | $ 8 | 387 | 395 | 395 | ||||
Exercise of warrants, shares | 7,693,588 | |||||||
Warrant modification expense | ||||||||
Stock issued for acquisitions | $ 2 | 2,498 | 2,500 | 2,500 | ||||
Stock issued for acquisitions, shares | 2,000,000 | |||||||
Beneficial conversion feature on convertible notes | 4,593 | 4,593 | 4,593 | |||||
Net loss for the period | (48,861) | (48,861) | (50,433) | |||||
Unrealized holding loss on available for sale investments | ||||||||
Reclassification adjustment upon sale of available for sale investments into net loss | 66 | 66 | 66 | |||||
Stock issued in exchange of notes payables | $ 10 | 8,670 | 8,676 | 8,676 | ||||
Stock issued in exchange of notes payables,shares | 10,191,466 | |||||||
Induced conversion of notes payable | 20,312 | 20,312 | 20,312 | |||||
Stock sold in connection with private placements | $ 3 | 9,147 | 9,150 | 9,150 | ||||
Stock sold in connection with private placements,shares | 2,875,000 | |||||||
Stock issued in exchange of accounts payable | 401 | 401 | 401 | |||||
Stock issued in exchange of accounts payable,shares | 220,000 | |||||||
Sale of common stock warrants | 100 | 100 | 100 | |||||
Stock issued in connection with notes payable amendment | 118 | 118 | 118 | |||||
Stock issued in connection with notes payable amendment, shares | 200,000 | |||||||
Amortization of employee stock options | 7,057 | 7,057 | 7,057 | |||||
Modification of employee stock options | 37 | 37 | 37 | |||||
Stock and warrants issued in connection with Management Agreements | $ 1 | 1,571 | 1,571 | 1,571 | ||||
Stock and warrants issued in connection with Management Agreements,shares | 436,100 | |||||||
Balance at Dec. 31, 2017 | $ 59 | $ 390,739 | $ (378,900) | $ 11,895 | $ (22) | $ 11,873 | ||
Balance, shares at Dec. 31, 2017 | 58,963,009 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net loss | $ (50,433) | $ (24,842) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 946 | 126 |
Amortization of intangible assets | 165 | 83 |
Stock-based compensation expense | 16,574 | 11,662 |
Stock issued for amendment of notes payable | 118 | |
Warrant modification expense | 431 | |
Loss on sale of investments - short term | 84 | 1,410 |
Impairment of investments | 2,787 | 1,358 |
Impairment of goodwill and intangible assets | 303 | 2,169 |
Accretion of debt discount | 5,627 | 41 |
Gain on sale of property and equipment | (370) | |
Inducement expense | 20,312 | |
Change in operating assets and liabilities | ||
Prepaid expenses and other current assets | (581) | (92) |
Digital currencies | (38) | (10) |
Accounts payable | 622 | 3 |
Accrued expenses | 1,507 | 119 |
Net cash used in operating activities | (2,377) | (5,528) |
Cash Flows From Investing Activities | ||
Release of restricted cash and security deposit | 39 | |
Purchase of investments | (679) | |
Purchase of note receivable | (45) | |
Proceeds from sale of investments | 26 | 2,165 |
Purchase of property and equipment | (4,067) | (693) |
Proceeds from sale of property and equipment | 976 | |
Net cash (used in) provided by investing activities | (3,065) | 787 |
Cash Flows From Financing Activities | ||
Proceeds from private placements of common stock | 9,150 | |
Proceeds from issuance of convertible notes payable and warrants | 4,971 | 2,300 |
Proceeds from exercise of warrants | 395 | |
Proceeds from sale of common stock warrants | 100 | 2,427 |
Net cash provided by financing activities | 14,616 | 4,727 |
Net change in cash and cash equivalents | 9,174 | (14) |
Cash and cash equivalents, beginning of year | 345 | 359 |
Cash and cash equivalents, end of year | 9,519 | 345 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 48 | 104 |
Cash paid for income tax | ||
Non-cash investing and financing activities: | ||
Conversion of convertible debt and accrued interest | 8,680 | |
Issuance of L2 commitment note | 160 | |
Transfers from the non-controlling interest | 292 | |
Reclassification adjustment upon sale of available for sale investment in net loss | 66 | 1,453 |
Unrealized gain on available for sale investments | (313) | |
Stock issued for acquisitions of intangible assets | 495 | |
Fair value of warrants issued in connection with Notes payable | 761 | |
Conversion of notes receivable into investments | 1,379 | |
Beneficial conversion feature on convertible debt and warrants issued concurrent with debt | 4,593 | |
Shares issued in satisfaction of accounts payable | $ 401 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Organization MGT Capital Investments, Inc. (“MGT Capital”) is a Delaware corporation, incorporated in 2000. MGT Capital was originally incorporated in Utah in 1977. “MGT” or the “Company” is comprised of the parent company, wholly–owned subsidiaries MGT Cybersecurity, Inc. (“MGT Cybersecurity”), Medicsight, Inc. , MGT Sports, Inc. , MGT Studios, Inc. (“MGT Studios”), MGT Interactive, LLC, MGT Gaming, Inc., MGT Mining One, Inc. and MGT Mining Two, Inc. MGT Studios also owns a controlling minority interest in the subsidiary M2P Americas, Inc. MGT’s corporate office is located in Durham, North Carolina. On March 23, 2018, the Company’s shareholders approved an increase in the Company’s authorized common stock from 75,000,000 shares to 125,000,000 shares. On March 23, 2018, the Company filed an amendment to its Articles of Incorporation with the state of Delaware to reflect this change. On March 23, 2018, the Company’s shareholders approved a 1-for-2 reverse split of the Company’s common stock, to be effected only if needed for the Company’s application to uplist its common stock to a national exchange. As of March 23, 2018, the Company had not amended its Articles of Incorporation to reflect this reverse split and such adjustments are not reflected within these consolidated financial statements. Cryptocurrency mining In September 2016, MGT commenced its Bitcoin mining operations in the Wenatchee Valley area of central Washington. Throughout 2017 the Company expanded its mining capacity with the purchase of additional miners and by entering into hosting and power agreements with Washington facilities owners. The Company also entered into management agreements with third party investors whereby the investors purchased the mining hardware, and the Company will receive both a fee to manage the mining operations plus one-half of the net operating profit. In the year ended December 31, 2017, the Company mined approximately 856 coins and recorded $3,134 in revenue. Due to the lack of availability of adequate electric power in Washington to support the Company’s growth, the Company decided to move its principal operations to northern Sweden at the end of 2017. During the first quarter of 2018, the Company took delivery of additional Bitcoin mining machines in Sweden and moved or sold most of its Bitcoin mining machines from Washington. The Company plans to continue growing its mining capacity in Sweden during 2018. As of March 30, 2018, MGT owned and operated approximately 500 miners located in a leased facility in Quincy, Washington and 4,200 miners located in a leased facility in Sweden. In addition, the Company operates about 2,000 miners in the Sweden location pursuant to management agreements. All miners owned or managed by MGT are S9 Antminers sold by Bitmain Technologies LTD. At full deployment expected in April 2018, our total bitcoin mining capacity, as measured by computational hashing rate, is approximately 90 PH/s. In addition to the S9 Antminers, the Company owns 50 custom designed GPU-based Ethereum mining rigs. Legacy business – cybersecurity On January 26, 2018, the Company announced the end of its business relationship with cybersecurity pioneer John McAfee. Since August 2017, Mr. McAfee had served as Chief Cybersecurity Visionary of the Company, guiding the development of the Company’s cybersecurity business, including Sentinel, an enterprise class network intrusion detector released in October 2017. The Company also owned the intellectual property associated with developing and marketing a mobile privacy phone with extensive privacy and anti-hacking features. On March 19, 2018, the Company announced it has ended its cybersecurity operations by selling the Sentinel product line to a new entity formed by the unit’s management team and stopping development of the privacy phone. The Sentinel assets were sold for consideration of $60 in cash and a $1,000 promissory note, convertible into a 20% equity interest of the buyer. Basis of presentation The accompanying consolidated financial statements for the years ended December 31, 2017 and 2016 have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). |
Going Concern and Management_s
Going Concern and Management’s Plans | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management’s Plans | Note 2. Going Concern and Management’s Plans The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2017, the Company had incurred significant operating losses since inception and continues to generate losses from operations and as of December 31, 2017, has an accumulated deficit of $378,900. At December 31, 2017, MGT’s cash and cash equivalents were $9,519. At March 31, 2018, MGT’s cash and cash equivalents were $460. Management’s plans include putting into service its additional cryptocurrency mining machines, which were installed during early 2018, but for which the facility needs additional outfitting in order to be fully operational. The Company expects this facility to be fully operational during the second quarter of 2018. If there is a further delay in becoming fully operational, the Company may need to raise additional funding to provide liquidity to fund its operations. Based on current budget assumptions the Company believes that it will be able to meet its operating expenses and obligations for one year from the date these consolidated financial statements are issued. There can be no assurance however that the Company will be able to raise additional financing or other additional capital when needed, or at terms that would be considered acceptable to the Company. Such factors raise substantial doubt about the Company’s ability to sustain operations for at least one year from the issuance of these consolidated financial statements. Management’s plans, including the operation of its existing crypto-currency mining machines, the raising of additional capital and potentially curtailing its operations alleviate such substantial doubt. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of MGT and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Non-controlling interest represents the non-controlling equity investment in MGT subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non-controlling interest. Reclassification Certain amounts in prior periods have been reclassified to conform to current period presentation. These reclassifications had no effect on the previously reported net loss. Use of estimates and assumptions and critical accounting estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived assets, determining the potential impairment of intangibles, the fair value of warrants issued, the fair value of stock options, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Fair value of financial instruments The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these instruments. The Company had no Level 3 financial assets or liabilities as of December 31, 2017 and 2016. The Company uses Level 1 of the fair value hierarchy to measure the fair value of investments in certain common equity securities as well as digital currencies. The Company revalues such assets at every reporting period and recognizes gains or losses as revenue and cost of revenue respectively in the consolidated statements of operations that are attributable to the change in the fair value of the digital currencies. The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2017: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Digital currencies $ 48 $ 48 $ – $ – $ 48 The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2016: Carrying Value Level 1 Level 2 Level 3 Total Investments – FNCX common shares $ 44 $ 44 $ – $ – $ 44 Digital currencies 10 10 – – 10 Beneficial conversion feature of convertible notes payable The Company accounts for convertible notes payable in accordance with guidelines established by the FASB ASC Topic 470-20, “Debt with Conversion and Other Options”. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. The beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved. The beneficial conversion feature of a convertible note is measured by first allocating a portion of the note’s proceeds to any warrants, if applicable, as a discount on the carrying amount of the convertible on a relative fair value basis. The discounted face value is then used to measure the effective conversion price of the note. The effective conversion price and the market price of the Company’s common stock are used to calculate the intrinsic value of the conversion feature. The intrinsic value is recorded in the financial statements as a debt discount from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to accretion of debt discount on the Company’s consolidated statement of operations and comprehensive loss. Revenue recognition The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is probable. The Company’s primary revenue stream is related to the mining of digital currencies. The Company derives its revenue by solving “blocks” to be added to the blockchain and providing transaction verification services within the digital currency networks of cryptocurrencies, such as Bitcoin and Ethereum, commonly termed “cryptocurrency mining.” In consideration for these services, the Company receives digital currency (“Coins”). The Coins are recorded as revenue, using the average spot price of Bitcoin on the date of receipt. The Coins are recorded on the balance sheet at their fair value and re–measured at each reporting date. Revaluation gains or losses, as well gains or losses on sale of coins are recorded as revenue and cost of revenue, respectively in the consolidated statements of operations. Expenses associated with running the cryptocurrency mining business, such as equipment depreciation, rent and electricity cost are recorded as costs of revenues. Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 13 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. Loss per share Basic loss per share is calculated by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the net loss attributable to common shareholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of unvested restricted shares, convertible debt stock warrants and stock options, are not reflected in diluted net loss per share because such potential shares are anti–dilutive due to the Company’s net loss. Accordingly, the computation of diluted loss per share for the year ended December 31, 2017, excludes 2,000,000 shares issuable to the investors of the December 2017 private placement, 3,381,816 shares issuable to UAHC Ventures, LLC a Nevada limited liability company (“UAHC”) due to the conversion of the UAHC note payable, 3,850,000 unvested restricted shares, 6,000,000 shares issuable under stock options, and 13,720,742 shares issuable under warrants. The computation of diluted loss per share for the year ended December 31, 2016, excluded 3,000,000 unvested restricted shares, 2,300,000 shares issuable upon the conversion of convertible notes, 6,000,000 shares issuable under stock options and 100,000 shares issuable under warrants. Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer and the chief financial officer. The Company currently operates solely in one operating segment. Stock–based compensation The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award. Restricted stock awards are granted at the discretion of the compensation committee of the Board of Directors of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over an 18 to 24-month period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of the Company’s common stock on the grant date. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s common stock over the expected term of the option. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. The fair value of unvested equity instruments is re-measured each reporting period and such re-measured value is amortized over the requisite remaining service period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505–50, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. Cash & cash equivalents The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions whereby the combined account balances exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage by approximately $9,263 as of December 31, 2017 and, as a result, there is a concentration of credit risk related to amounts on deposit that exceed the FDIC insurance coverage. Investments available for sale Equity security investments available for sale, at market value, reflect unrealized appreciation and depreciation, as a result of temporary changes in market value during the period, in shareholders’ equity, net of income taxes in “accumulated other comprehensive income (loss)” in the consolidated balance sheets. For non–publicly traded securities, market prices are determined through the use of pricing models that evaluate securities. For publicly traded securities, market value is based on quoted market prices or valuation models that use observable market inputs. Property and equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from two to five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation expense relating to the Company’s cryptocurrency mining machines is included in cost of revenue. Intangible assets Intangible assets consisted of the Sentinel network intrusion detection device, all underlying software and firmware, the server contract, and case and circuit board inventory that the Company acquired from Cyberdonix, Inc, an Alabama corporation (“Cyberdonix”), in October 2016. Estimates of future cash flows and timing of events for evaluating long–lived assets for impairment are based upon management’s judgment. If any of our intangible or long–lived assets are considered to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. Applicable long–lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment. As of December 31, 2017, the Company had impaired its remaining intangible assets. Research and development Research and development expenses are charged to operations as incurred. During the years ended December 31, 2017 and 2016, respectively, the Company expensed $346 and $297 in research and development costs. Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements, other than those disclosed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB delayed the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In addition, in March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. Both amendments permit the use of either a retrospective or cumulative effect transition method and are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early application permitted. The Company expects to implement ASU 2014-09, on January 1, 2018 pursuant to which it will utilize the modified retrospective approach. The Company does not believe that ASU 2014-09 will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance for eight specific cash flow issues with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The effective date for ASU 2016-15 is for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company expects to implement ASU 2016-15 on January 1, 2018 and does not believe it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations” (Topic 805), Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company expects to implement ASU 2017-01 on January 1, 2018 and does not believe it will have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company has adopted the ASU beginning with these consolidated financial statements. As a result, the conversion features of certain of its convertible notes payable and equity instruments that contain “down round” provisions were not bifurcated and were not recorded as a derivative liability. Management’s Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, other than what is described in Note 1 – Organization and Basis of Presentation, Note 14 – Commitments and Contingencies and Note 18 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses And Other Current Assets | |
Prepaid Expenses and Other Current Assets | Note 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: As of December 31, 2017 2016 Prepaid expenses $ 734 $ 153 Deferred offering costs (see Note 9) 160 – Total prepaid expenses and other current assets $ 894 $ 153 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Investments [Abstract] | |
Investments | Note 5. Investments The Company’s investments consisted of the following: Investments available for sale As of December 31, 2017 2016 FNCX common shares $ – $ 44 During the year ended December 31, 2017, the Company sold these shares for $26, reclassified the unrealized loss of $66 from accumulated other comprehensive income and recognized a loss on sale of $84 related to its investment in FNCX. During the year ended December 31, 2016, the Company recorded a loss on sale of $86 related to its investment in FNCX. Investments at cost As of December 31, 2017 2016 DDGG common shares $ – $ 287 During the years ended December 31, 2017 and 2016, the Company recognized an impairment charge of $287 and $0, respectively, related to its investment in DDGG. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6. Intangible Assets The Company’s intangible assets consisted of the following: Amount January 1, 2016 $ - Acquisition of intellectual property 495 Amortization (27 ) December 31, 2016 $ 468 Amortization (165 ) Impairment (303 ) December 31, 2017 $ - The net book value of intangible assets as of December 31, 2016 relate to the Sentinel network intrusion detection device, all underlying software and firmware, the server contract, and case and circuit board inventory the Company acquired from Cyberdonix in October 2016 by issuing 150,000 shares of MGT common stock for total cost of $495. In connection with the sale of the Company’s cybersecurity business in March 2018, as described in Note 1, the Company recorded an impairment change equal to the net book value of the intangible assets of $303 as of December 31, 2017. The Company recorded amortization expense of $165 and $27 for the years ended December 31, 2017 and 2016, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 7. Property and Equipment Property and equipment consisted of the following: As of December 31, 2017 2016 Computer hardware and software $ 10 $ 10 Crypto-currency mining machines 3,685 708 Property and equipment, gross 3,695 718 Less: Accumulated depreciation (579 ) (116 ) Property and equipment, net $ 3,116 $ 602 The Company recorded depreciation expense of $946 and $126 for the years ended December 31, 2017 and 2016, respectively. During the year ended December 31, 2017, the Company sold bitcoin machines with an aggregate book value of $606 for gross proceeds of $976 and recorded a gain on sale of $370. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 8. Accrued Expenses Accrued expenses consisted of the following: As of December 31, 2017 2016 Legal, consulting, and other fees $ 707 $ 124 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 9. Notes Payable Notes Payable Summary As of December 31, 2017, the Company had no notes payable outstanding. During the years ended December 31, 2017 and 2016, the Company’s activity in notes payable was as follows: Principal Debt Discount Net Beginning balance, January 1, 2016 $ - $ - $ - Issuance of convertible notes payable 2,300 - 2,300 Balance, December 31, 2016 2,300 - 2,300 Issuance of convertible notes payable 6,165 (5,627 ) 538 Amortization of debt discount - 229 229 Conversion of convertible notes payable (8,465 ) 5,398 (3,067 ) Balance, December 31, 2017 $ - $ - $ - In 2016, the Company issued $2,300 in convertible promissory notes that were converted into 2,566,668 shares of common stock in 2017. In 2017, the Company issued $6,165 in face value convertible promissory notes for net cash proceeds of $4,971, all of which were converted into 7,624,798 shares of common stock in 2017. Significant terms of each convertible debt instrument are described below. 2016 Convertible Debt Financing August 2016 Notes On August 2, 2016, the Company issued $2,300 in unsecured promissory notes in a private placement, which were subsequently exchanged for new notes in the same principal amount (the “August 2016 Notes”). The August 2016 Notes are convertible, at the option of the holder thereof, into shares of the Company’s common stock at a conversion price of $1.00 per share, which was to be adjusted for any future issuances of equity. During the first quarter of 2017, the conversion price of the August 2016 Notes was adjusted down to $0.75 per share. During the year ended December 31, 2017, the holders of the August 2016 Notes converted the aggregate principal balance of $2,300 into 2,566,668 shares of common stock. For each conversion, the net book value of the notes was recorded as equity. 2017 Convertible Debt Financings 10% convertible promissory notes During February and March 2017, the Company issued two $50, 10% convertible promissory notes to accredited investors. Both notes would have matured one year from the date of issuance. Both notes were convertible at a fixed rate of $0.25 per share. Management recorded a beneficial conversion feature on both notes in the aggregate of $100 and recorded that amount to additional paid in capital. The debt discounts were accreted using the effective interest method over the term of the notes. On August 14 and September 6, 2017, the holder of the notes converted the aggregate principal balance $100 into a total of 400,000 shares of the Company’s common stock. In connection with the conversion, the Company charged the remaining discount in the amount of $92 to accretion of debt discount. During the years ended December 31, 2017 and 2016, the Company incurred $100 and $0, respectively, as accretion of debt discount on these notes. Iliad Note On May 18, 2017, the Company issued to Iliad Research and Trading, L.P., (“Iliad”), a Utah limited partnership, a secured convertible note (the “Iliad Note”) in the original principal amount of $1,355, bearing interest at 10% per annum, with an original issuance discount of $225, reimbursed legal and accounting expenses of $5, and a warrant to purchase 1,231,819 shares of common stock of the Company at an exercise price of $1.05 per share. These warrants expire five years from the date of issuance. Management recorded a debt discount for (a) the original issue discount (b) the relative fair value of the warrants issued and (c) the intrinsic value of the beneficial conversion feature on the Iliad Note in the amounts of $230, $202 and $923, respectively. The debt discounts were accreted using the effective interest method over the term of the Iliad Note, provided that at any time on or after the occurrence of an event of default, the interest rate shall be adjusted to 22% per annum. Subject to the terms and conditions set forth in the Iliad Note, the Company may prepay the outstanding balance of the Iliad Note in part or in full in cash of an amount equal to 125% multiplied by the outstanding balance of the Iliad Note. At any time beginning on the date that is six months from the issuance date until the outstanding balance of the Iliad Note has been paid in full, Iliad may, at its option, convert all or any portion of the outstanding balance into shares of common stock of the Company on a cashless basis at a price of $1.05 per share, which will be adjusted for any future issuances of equity that contain a lower per-share exercise price. In addition, beginning three months after the issuance date, Iliad has the right to redeem a portion of the outstanding balance of the Iliad Note in any amount that is less than $90 per calendar month. The Company has the right to fund each redemption using cash or shares of the Company’s common stock at a price that is the lower of $1.05 per share and the price that is 65% of the Company’s market price. On December 7, 2017, the Company entered into a settlement agreement with Iliad (the “Iliad Settlement Agreement”). Under the Iliad Settlement Agreement, the Company induced Iliad to accept 547,660 additional shares of the Company’s common stock in connection with the conversion of the full balance of the Iliad Note outstanding. As part of the Iliad Settlement Agreement, the Company also increased the shares issuable to Iliad under its warrant. Accordingly, on December 7, 2017, Iliad converted the Iliad Note and related accrued interest of $75 into a total of 1,909,863 shares of the Company’s common stock. On the date of conversion, the Company (a) recorded the remaining discount of the note in the amount of $1,348 as accretion of debt discount, and (b) recorded the fair value of the additional shares issued to Iliad and the additional value of the warrants in the amount of $7,517 as inducement expense. During the years ended December 31, 2017 and 2016, the Company incurred $1,355 (accretion of $7 and $1,348 in connection with the conversion of the Iliad Note) and $0, respectively as accretion of debt discount on this note. March 2017 equity purchase agreement On March 10, 2017, the Company and L2 Capital, LLC (“L2 Capital”), a Kansas limited liability company, entered into an equity purchase agreement (the “Equity Purchase Agreement”), pursuant to which the Company may issue and sell to L2 Capital from time to time up to $5,000 of the Company’s common stock that will be registered with the SEC under a registration statement on a form S–1. Pursuant to the Equity Purchase Agreement, the Company may require L2 Capital to purchase shares of common stock in a minimum amount of $25 and maximum of the lesser of (a) $1,000 or (b) 150% of the average daily trading value, upon the Company’s delivery of a put notice to L2 Capital. L2 Capital shall purchase such number of shares of common stock at a per share price that equals to the lowest closing bid price of the common stock during the pricing period multiplied by 90%. In connection with the Equity Purchase Agreement, the Company has issued to L2 Capital an 8% convertible promissory note (the “Commitment Note”) in the principal amount of $160 in consideration of L2 Capital’s contractual commitment to the Equity Purchase Agreement. The Commitment Note matures six months after the issue date. All or part of the Commitment Note is convertible into the common stock of the Company upon the occurrence of any of the events of default at a variable conversion price that equals to 75% of the lowest trading price for the common stock during a thirty–day trading day period immediately prior to the conversion date. The Company also issued to the holders of the First Notes warrants to purchase an aggregate of 400,000 shares of the Company’s common stock at an exercise price of $0.96 per share. These warrants expire seven years from the date of issuance. The Company recorded the Commitment Note as a deferred offering cost as the Company has not yet received equity proceeds from the Equity Purchase Agreement. The Company is yet to file a registration statement on the offering. Management analyzed the contingent variable conversion price and concluded that the contingent conversion features should be bifurcated and accounted for as a derivative liability only upon the triggering of a default event. Because all default events were cured prior to April 15, 2017, no derivative liability was recognized. On May 18, 2017, the Company amended the Equity Purchase Agreement to (a) facilitate the issuance of the Iliad Note and (b) to increase the capacity of the Equity Purchase Agreement to $6,500. On September 6, 2017, the Company further amended the Equity Purchase Agreement to increase the capacity of the Equity Purchase Agreement to the lesser of (a) 12,319,159 shares or (b) the maximum number of shares the Company is able to include in a registration statement. The Company recorded an initial debt discount of $287, representing (a) an original issue discount of $108 and (b) relative fair value of warrants issued to the note holders of $179. The debt discounts were amortized using the effective interest method. March 2017 securities purchase agreement On March 10, 2017, the Company and L2 Capital entered into a securities purchase agreement, which was subsequently amended on March 15, 2017 pursuant to which the Company issued two 10% convertible notes in an aggregate principal amount of $1 million with a 20% original issue discount, of which the first convertible note was funded on March 14, 2017. The Company received gross proceeds of $393 (which represents the deduction of the 20% original discount and $7 for L2 Capital’s legal fees) in exchange for issuance of the first convertible note (the “First Note”) in the Principal Amount of $500. The First Note was due six months from the Issue Date and the accrued and unpaid interest at a rate of 10% per annum is due on such date. At any time on or after the occurrence of an event of default, the holder of the First Note shall have the right to convert all or part of the unpaid and outstanding Principal Amount and the accrued and unpaid interest to shares of common stock at a conversion price that equals 65% multiplied by the lowest trading price for the common stock during a thirty–day trading day period immediately prior to the conversion date. Management analyzed the contingent variable conversion price and concluded that the contingent conversion features should be bifurcated and accounted for as a derivative liability only upon the triggering of a default event. A default event occurred on May 15, 2017. However, on May 18, 2017, the Company and L2 Capital amended the note in order to waive all rights resulting from default events under the note. Therefore, no derivative liability was recognized. The Company received an L2 Capital Back End Note (“L2 Collateralized Note”) secured with the First Note for its issuance of a $500 note to L2 Capital with substantially similar terms to the First Note (the “Second Note”). In accordance with the Second Note, the Company would pay to the order of L2 Capital a Principal Amount of $500 and the accrued and unpaid interest at a rate of 10% per annum on the maturity date, which was eight months from the issue date. At any time on or after the occurrence of an event of default, the holder of the Second Note shall have the right to convert all or part of the unpaid and outstanding principal amount and the accrued and unpaid interest into shares of common stock at a conversion price that is equal to 65% multiplied by the market price. Pursuant to the L2 Collateralized Note, L2 Capital promised to pay the Company the principal amount of $500 (consisting of $393 in cash, legal fees of $7 and an original issue discount of $100) no later than November 10, 2017. In connection with the issuance of the First Note, the Company also issued to L2 Capital warrants to purchase up to 400,000 shares of common stock (the “Warrant Shares”) pursuant to the common stock purchase warrant (the “Common Stock Purchase Warrant”) executed by the Company. The Common Stock Purchase Warrant shall be exercisable at a price of 110% multiplied by the closing bid price of the common stock on the issuance date (the “Exercise Price”), subject to adjustments and exercisable from the issue date until the instrument’s seven–year anniversary. At the time that the Second Note is funded by the holder thereof in cash, then on such funding date, the Warrant Shares would immediately and automatically be increased by the quotient (the “Second Warrant Shares”) of $375 divided by the lesser of (i) the Exercise Price and (ii) 110% multiplied by the closing bid price of the common stock on the funding date of the Second Note. With respect to the Second Warrant Shares, the Exercise Price hereunder shall be redefined to equal the lesser of (i) the Exercise Price and (ii) 110% multiplied by the closing bid price of the common stock on the funding date of the Second Note. L2 Capital may exercise the Common Stock Purchase Warrant on a cashless basis unless the underlying shares of common stock have been registered with the SEC prior to the exercise. The Company recorded an initial debt discount related to L2 Collateralized Note of $287, representing (a) an original issue discount of $108 and (b) relative fair value of warrants issued to the note holders of $179. The debt discounts were amortized using the effective interest method. On September 1, 2017, the Company received net proceeds of $392 for the funding of the Second Note, in satisfaction of the L2 Collateralized Note. Upon receipt of the proceeds, the warrant shares were increased by 417,975. All other terms under the warrant remained the same. The Company recorded an initial debt discount related to the Second Note of $500, representing (a) an original issue discount of $108 and (b) a beneficial conversion feature of $392. The debt discounts were amortized using the effective interest method. On September 5, 2017, L2 notified the Company regarding certain matters which might have impacted the Company’s compliance covenants under the terms of the Commitment Note, the First Note, and the Second Note. The Company discussed these matters with L2 Capital, and without prejudice, induced L2 Capital to accept 2,166,850 additional shares of the Company’s common stock in connection with the conversion of the full balance of the Commitment Note, First Note, and Second Note outstanding. Accordingly, on September 8, 2017, L2 Capital converted all principal under the Commitment Note, First Note, and Second Note and accrued interest of $32 into a total of 3,853,553 shares of the Company’s common stock. On the date of conversion, the Company (a) recorded the remaining discount of the note in the amount of $709 as accretion of debt discount, and (b) recorded the fair value of the additional 2,157,407 shares issued to L2 Capital in the amount of $5,739 as inducement expense. During the years ended December 31, 2017 and 2016, the Company recorded accretion of debt discount of $165 (accretion of $78 and $709 in connection with the conversion of the Note) and $0, respectively, on the Notes. May 2017 Notes On May 1, 2017, the Company issued notes payable to two accredited investors in the aggregate amount of $330 (the “May 2017 Notes”) bearing interest at 10% per annum. The Company also issued to the holders of the May 2017 Notes warrants to purchase an aggregate of 360,000 shares of the Company’s common stock at an exercise price of $0.50 per share. These warrants expire five years from the date of issuance. The May 2017 Notes were convertible into the Company’s common stock only after an event of default. Events of default include failure to pay payments due under the May 2017 Notes, entrance into any bankruptcy or insolvency proceedings, failure to meet the obligations of any other notes payable in an amount exceeding $100, the Company’s stock being suspending for trading or delisted, losing the Company’s ability to deliver shares, or becoming more than 15 days delinquent on any filings required with the SEC. At any time the May 2017 Notes are outstanding the two investors are entitled to convert any outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at variable conversion price as defined in the agreement. The Company recorded an initial debt discount of $165, representing $65 related to an original issue discount and $100 representing the relative fair value of warrants issued to the note holders. The debt discount was amortized using the effective interest method. On September 29, 2017, the holders of the May 2017 Notes converted their notes with principal value of $330 and the related accrued interest of $14 into 327,382 shares of common stock. In connection with the conversion, the Company recorded the remaining note discount of $110 to accretion of debt discount. During the years ended December 31, 2017 and 2016, the Company recorded accretion of debt discount of $165 (accretion of $55 and $110 in connection with the conversion of the May 2017 Note) and $0, respectively, on the May 2017 Notes. August 2017 Notes On August 9, 2017, the Company issued notes payable to two accredited investors in the aggregate amount of $330 (the “August 2017 Notes”), bearing interest at 10% per annum, with an aggregate original issuance discount of $35. The Company also issued to the holders of the August 2017 Notes warrants to purchase an aggregate of 360,000 shares of the Company’s common stock at an exercise price of $1.05 per share. These warrants expire five years from the date of issuance. At any time the August 2017 Notes are outstanding the two investors are entitled to convert any outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at $1.05 per share. The Company recorded a debt discount for (a) the original issue discount, (b) the relative fair value of the warrants issued, and (c) the intrinsic value of the beneficial conversion feature on the August 2017 Notes, in the amounts of $35, $135, and $160, respectively. The Company recorded the intrinsic value of the beneficial conversion feature as the effective conversion price of the August 2017 Notes were less than the fair value of the Company’s common stock on the date of issuance. The debt discounts were accreted using the effective interest method over the term of the August 2017 Notes. On December 8, 2017, the Company induced the holders of the August 2017 Notes to accept 7,600 additional shares of the Company’s common stock in connection with the conversion of the full balance of the August 2017 Notes. Accordingly, on December 8, 2017, the August 2017 Notes and related accrued interest of $11 were converted into a total of 462,000 shares of the Company’s common stock. On the date of conversion, the Company (a) recorded the remaining discount on the notes in the amount of $285 as accretion of debt discount, and (b) recorded the fair value of the additional shares issued to the holders of the August 2017 Notes in the amount of $21 as inducement expense. During the years ended December 31, 2017 and 2016, the Company recorded amortization of debt discount of $330 (accretion of $45 and $285 in connection with the conversion of the August 2017 Note) and $0, respectively, on the August 2017 Notes. UAHC Note On August 18, 2017, the Company issued to UAHC Ventures, LLC, a Nevada limited liability company (“UAHC”), a secured convertible note (the “UAHC Note”) in the original principal amount of $2,410, bearing interest at 10% per annum, with an original issuance discount of $400 and reimbursed legal and accounting expenses of $10, and a warrant to purchase 861,905 shares of common stock of the Company at an exercise price of $1.05 per share. These warrants expire five years from the date of issuance. At any time beginning on the date that is six months from the issuance date until the outstanding balance of the UAHC Note has been paid in full, UAHC may, at its option, convert all or any portion of the outstanding balance into shares of common stock of the Company at a price of $1.05 per share. Management recorded a debt discount for (a) the original issue discount, (b) the relative fair value of the warrants issued and (c) the intrinsic value of the beneficial conversion feature on the UAHC Note in the amounts of $410, $819, and $1,181, respectively. The Company recorded the intrinsic value of the beneficial conversion feature as the effective conversion price of the UAHC Note was less than the fair value of the Company’s common stock on the date of issuance. The debt discounts were accreted using the effective interest method over the term of the UAHC Note. On December 7, 2017, the Company and UAHC entered into a Settlement Agreement (the “UAHC Settlement Agreement”). In accordance with the UAHC Settlement Agreement, the Company induced UAHC to accept 1,016,806 additional shares of the Company’s common stock in connection with the conversion of the full balance of the UAHC Note outstanding. On December 29, 2017, the Company and UAHC entered into a clarification and amendment agreement to clarify that, upon the reservation of the conversion shares with the Company’s transfer agent, the UAHC Note would be deemed converted in full. As part of the UAHC Settlement Agreement, the Company also increased the shares issuable to UAHC under its warrant. Accordingly, on December 7, 2017, UAHC converted the UAHC Note and accrued interest of $73 into a total of 3,381,816 shares of the Company’s common stock. On the date of conversion, the Company (a) recorded the remaining discount on the note of $2,408 as accretion of debt discount, and (b) recorded the fair value of the additional shares issued to UAHC and the additional value of the warrant in the amount of $6,989 as inducement expense. At the date of the inducement, UAHC requested that the shares not yet be issued due to ownership limitations. The conversion meets all of the requirements to be classified as an equity instrument. Accordingly, the conversion was recorded as additional paid-in capital. The shares were subsequently issued to UAHC during the three months ended March 31, 2018. During the years ended December 31, 2017 and 2016, the Company recorded amortization of debt discount of $2,410 (accretion of $2 and $2,408 in connection with the conversion of the UAHC Note) and $0, respectively, on the UAHC Note. September 2017 Note On September 12, 2017, the Company issued a note payable to an accredited investor in the amount of $480 (the “September 2017 Note”), bearing interest at 10% per annum, with an original issue discount of $80, and a warrant to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $2 per share. The warrant expires three years from the date of issuance. The principal and all accrued and unpaid interest on the outstanding balance would have been due on September 12, 2019. Under the initial terms, from March 12, 2018 until the outstanding balance of the September 2017 Note has been paid in full, the holder may, at its option, convert all or any portion of the outstanding balance into shares of common stock of the Company at a price of $1.05 per share, which would be adjusted for any future issuances of equity that contain a lower per-share exercise price. Management recorded a debt discount for (a) the original issue discount, (b) the relative fair value of the warrants issued and (c) the intrinsic value of the beneficial conversion feature on the September 2017 Note in the amounts of $80, $275 and $125, respectively. The Company recorded the intrinsic value of the beneficial conversion feature as the effective conversion price of the September 2017 Note was less than the fair value of the Company’s common stock on the date of issuance. The debt discount was accreted using the effective interest method over the term of the September 2017 Note. On December 8, 2017, the Company induced the holder of the September 2017 Note to accept 16,864 additional shares of the Company’s common stock in connection with the conversion of the full balance of the September 2017 Note. Accordingly, on December 8, 2017, the September 2017 Note and related accrued interest of $11 were converted into a total of 672,000 shares of the Company’s common stock. On the date of the conversion, the Company (a) recorded the remaining discount on the note of $478 as accretion of debt discount, and (b) recorded the fair value of the additional shares issued to the holder of September 2017 Note in the amount of $46 as inducement expense. During the years ended December 31, 2017 and 2016, the Company recorded amortization of debt discount of $480 (accretion of $2 and $478 in connection with the conversion of the September 2017 Note) and $0, respectively, on the September 2017 Note. |
Common Stock and Warrant Issuan
Common Stock and Warrant Issuances | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock and Warrant Issuances | Note 10. Common Stock and Warrant Issuances Sale of common stock During February and March 2017, the Company sold 1,625,000 shares of its common stock to accredited investors at a purchase price of $0.40 per share for total proceeds received of $650. In addition, for every share purchased, the Investors received detachable warrants, as follows: (i) one Series A Warrant; (ii) one Series B Warrant; and (iii) one Series C Warrant. During May 2017, the Company sold 1,250,000 shares of its common stock at a purchase price of $0.40 per share for total proceeds of $500. In addition, for every share purchased, the investors received detachable warrants, as follows: (i) one Series A Warrant; (ii) one Series B Warrant; and (iii) one Series C Warrant. Each Series A Warrant is exercisable for one share of common stock, for a period of three years at a price of $0.50 per share. Each Series B Warrant is exercisable for one share of common stock, for a period of three years at a price of $0.75 per share, and each Series C Warrant is exercisable for one share of common stock, for a period of three years at a price of $1.00 per share. On May 18, 2017, the Company issued 200,000 shares of its common stock in connection with an amendment to the Iliad Note valued at $118. During August and September, 2017, the Company issued 220,000 shares of its common stock in satisfaction of accounts payable of $401. On October 12, 2017 and November 30, 2017, the Company issued 347,400 shares and 88,700 shares, respectively, of its common stock in connection with the Management Agreements, as discussed in Note 14. During the year ended December 31, 2017, the Company received $395 from the exercise of warrants to purchase 665,000 shares of common stock. During the year ended December 31, 2017, the Company issued 7,028,588 shares of its common stock from the cashless exercise of warrants to purchase 3,012,186 shares of common stock. Due to provisions in one of the Company’s warrants that were exercised, it was possible for a cashless exercise to yield more shares than under a standard cash exercise. On December 15, 2017, the Company sold 2,000,000 shares of its common stock at $4.00 per share for total proceeds of $8,000 in a private placement. In addition, for every share purchased, the investors received a detachable warrant to purchase a share of common stock for $4.50 per share, which expires five years from the date of issuance. As of December 31, 2017, the investors requested that these shares not be issued due to ownership limitation provisions. The private placement meets all of the requirements to be classified as an equity instrument. Accordingly, the proceeds from the private placement were recorded as additional paid-in capital. During the years ended December 31, 2017 and 2016, the Company issued 2,574,000 shares and 825,000 shares, respectively, of its common stock to consultants in exchange for services, valued at $4,629 and $1,107, respectively. Warrants During February and March, 2017, the Company issued warrants to purchase 4,875,000 shares of the Company’s common stock in connection with private placements. One third of the warrants have an exercise price of $0.50 per share, one third of the warrants have an exercise price of $0.75 per share and one third of the warrants have an exercise price of $1.00 per share. All of the warrants expire three years from the date of issuance. On March 10, 2017, the Company issued a warrant to purchase 400,000 shares of the Company’s common stock to L2 Capital in connection with the March 2017 Equity Purchase Agreement. These warrants have an exercise price of $0.957 per share and expire on March 10, 2024. On May 1, 2017, the Company issued warrants to purchase 360,000 shares of the Company’s common stock to the holders of the May 2017 Notes. These warrants have an exercise price of $0.50 per share and expire on May 31, 2022. On May 18, 2017, the Company issued warrants to purchase 1,231,819 shares of the Company’s common stock to Iliad, in connection with the issuance of the Iliad Note. These warrants have an exercise price of $1.05 per share and expire on May 31, 2022. On December 8, 2017, in connection with the Iliad Settlement Agreement (see Note 9), the Company increased the number of shares issuable under this warrant to 1,724,547 shares and decreased the exercise price to $0.75 per share. The Company and Iliad also capped the number of shares issuable under a cashless exercise to 5,173,640 shares. On December 14, 2017, Iliad exercised 1,348,186 warrants on a cashless basis and received 5,173,640 shares of common stock. Iliad subsequently forfeited the remaining 376,361 warrant shares as the remaining warrants were no longer able to be exercised. On May 1, 2017, the Company issued warrants to purchase 3,750,000 shares of the Company’s common stock in connection with a private placement. One third of the warrants have an exercise price of $0.50 per share, one third of the warrants have an exercise price of $0.75 per share and one third of the warrants have an exercise price of $1.00 per share. All of the warrants expire three years from the date of issuance. In June 2017, the Company issued warrants to purchase 1,000,000 shares of the Company’s common stock in connection with a private placement. The warrants have an exercise price of $1.25 per share. All of the warrants expire three years from the date of issuance. On August 9, 2017, the Company issued warrants to purchase 360,000 shares of the Company’s common stock to the holders of the August 2017 Notes. The warrants have an exercise price of $1.05 per share and expire five years from the date of issuance. On December 7, 2017, the exercise price of these warrants was decreased to $0.75 per share due to down round provisions in the warrant and accordingly the Company issued additional 144,000 warrants. On August 18, 2017, the Company issued warrants to purchase 861,905 shares of the Company’s common stock to the holder of the UAHC Note. The warrants have an exercise price of $1.05 per share and expire five years from the date of issuance. On December 7, 2017, in connection with the UAHC Settlement Agreement (see Note 9), the Company increased the number of shares issuable under this warrant to 1,206,667 shares and decreased the exercise price to $0.75 per share. The Company and UAHC also capped the number of shares issuable under a cashless exercise to 3,620,001 shares. On September 1, 2017, in accordance with the terms of the warrant (see Note 9) upon the funding of the Second Note, the shares issuable under the warrants issued to L2 Capital on March 10, 2017 increased by 417,975 shares. All other terms remained the same. As described in Note 9, the fair value of the additional warrant shares were recorded as a discount on the Second Note. On September 8, 2017, L2 Capital exercised warrants to purchase 800,000 common shares on a cashless basis and the Company issued 620,282 shares of the Company’s common stock. On September 12, 2017, the Company issued a warrant to purchase 1,000,000 shares of the Company’s common stock to the holder of the September 2017 Note. The warrant has an exercise price of $2.00 per share and expires three years from the date of issuance. On September 29, 2017, the holders of the May 2017 Notes exercised their warrants to purchase 360,000 shares of the Company’s common stock on a cashless basis. The Company issued 226,666 shares of its common stock to these holders. On November 1, 2017, the Company received proceeds of $94 from the exercise of a warrant to purchase 125,000 shares at an exercise price of $0.75 per share. The following table summarizes information about shares issuable under warrants outstanding at December 31, 2017: Warrant shares outstanding Weighted average exercise price Weighted average remaining life Intrinsic value Outstanding at January 1, 2017 100,000 $ 3.75 Issued 17,674,289 $ 1.35 Exercised (3,677,186 ) $ 0.74 Expired or cancelled (376,361 ) $ 0.75 Outstanding at December 31, 2017 13,720,742 $ 1.49 2.90 $ 44,818 Exercisable at December 31, 2017 13,720,742 $ 1.49 2.90 $ 44,818 |
Stock_Based Compensation
Stock–Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 11. Stock–Based Compensation Issuance of restricted common stock – directors, officers and employees During the year ended December 31, 2017, the Company issued an aggregate of 4,150,000 shares of restricted common stock to certain employees and directors. The Company valued each award on its grant date and is expensing the grant date fair value over the 16-24 month vesting period. The Company’s activity in restricted common stock was as follows for the year ended December 31, 2017: Number of shares Weighted average grant date fair value Non–vested at January 1, 2017 1,000,000 $ 2.31 Granted 4,150,000 $ 1.24 Vested (1,300,000 ) $ 1.54 Forfeited – Non–vested at December 31, 2017 3,850,000 $ 1.42 For the years ended December 31, 2017 and 2016, in connection with the vesting of restricted common stock awards, the Company has recorded $3,280 and $9,682 in employee and director stock–based compensation expense, which is a component of selling, general and administrative expense in the consolidated statement of operations and comprehensive loss. As of December 31, 2017, unamortized stock-based compensation costs related to restricted share arrangements was $3,503, and will be recognized over a weighted average period of 1.5 years. Stock options The following is a summary of the Company’s stock option activity for year ended December 31, 2017: Options Weighted Average exercise price Weighted average Grant date fair value Weighted average remaining life Intrinsic value Outstanding – January 1, 2017 6,000,000 $ 0.71 $ 1.28 Granted – Exercised – Forfeited/Cancelled – Outstanding – December 31, 2017 6,000,000 $ 0.71 $ 1.29 4.62 $ 24,310 Exercisable – December 31, 2017 6,000,000 $ 0.71 $ 1.29 4.62 $ 24,310 On August 14, 2017, in connection with the new employment agreement with Mr. McAfee, the Company modified his stock options to (a) extend the term of the stock options to August 14, 2022 and (b) to make the stock options immediately exercisable. In connection with this modification, the Company recognized the incremental value of the modified stock options of $37 as stock-based compensation, which is included below. For the years ended December, 2017 and 2016, the Company has recorded $7,094 and $641, respectively, in stock option related stock-based compensation expense, which is a component of selling, general and administrative expense in the consolidated statement of operations. As of December 31, 2017, there were no unrecognized compensation costs related to non–vested stock options. |
Non-Controlling Interest
Non-Controlling Interest | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interest | Note 12. Non–Controlling Interest At December 31, 2017, the Company’s non–controlling interest was as follows: January 1, 2016 $ 5 Acquisition of non-controlling interest 292 Non-controlling share of net loss (319 ) January 1, 2017 $ (22 ) Non–controlling share of net loss - December 31, 2017 $ (22 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13. Income Taxes Significant components of deferred tax assets were as follows: As of December 31, 2017 2016 U.S. federal tax loss carry–forward $ 10,174 $ 14,632 U.S. State tax loss carry–forward 766 1,505 U.S. federal capital loss carry–forward - 188 Equity based compensation 3,117 3,965 Fixed assets, intangible assets and goodwill 496 821 Long-term investments 870 462 Total deferred tax assets 15,423 21,573 Less: valuation allowance (15,423 ) (21,573 ) Net deferred tax asset $ — $ — As of December 31, 2017, the Company had the following tax attributes: Amount Begins to expire U.S. federal net operating loss carry–forwards $ 48,446 Fiscal 2023 U.S. State net operating loss carry–forwards 32,326 Fiscal 2031 As it is not more likely than not that the resulting deferred tax benefits will be realized, a full valuation allowance has been recognized for such deferred tax assets. For the year ended December 31, 2017, the valuation allowance decreased by $6,150. Federal and state laws impose substantial restrictions on the utilization of tax attributes in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. Currently, the Company does not expect the utilization of tax attributes in the near term to be materially affected as no significant limitations are expected to be placed on these tax attributes as a result of previous ownership changes. If an ownership change is deemed to have occurred as a result of equity ownership changes or offerings, potential near term utilization of these assets could be reduced. As of December 31, 2017, the Company performed a high level review of its changes in ownership and determined that a change of control event likely occurred under Section 382 of the Internal Revenue Code and the Company’s net operating loss carryforwards are likely to be limited. The Company has recorded the necessary provisional adjustments in its consolidated financial statements in accordance with its current understanding of the Tax Act and guidance currently available as of this filing and recorded a provisional reduction of $10,743 to its gross deferred tax assets in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional reduction was fully offset by an equal reduction in the Company’s valuation allowance given the Company’s historical net losses, resulting in no net income tax expense being recorded. The provision for/ (benefit from) income tax differs from the amount computed by applying the statutory federal income tax rate to income before the provision for/(benefit from) income taxes. The sources and tax effects of the differences are as follows: For the Years Ended December 31, 2017 2016 Expected Federal Tax (34.0 )% (34.0 )% State Tax (Net of Federal Benefit) (5.5 ) (5.5 ) Loss on extinguishment - 2.8 Accretion of notes payable discount 4.4 - Inducement expense 15.9 - Stock-based compensation 10.5 Other permanent differences 0.2 0.9 True up of prior year deferred tax assets 1.3 - Change in federal and state tax rates 18.4 - Change in valuation allowance (11.2 ) 35.8 Effective rate of income tax - % - % The Company files income tax returns in the U.S. federal jurisdiction, New York State, North Carolina and New Jersey jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non–U.S. income tax examinations by tax authorities for years before 2013. The Company is currently delinquent in the filing of its U.S. federal and state income tax returns for the year ended December 31, 2016. The Company anticipates filing these returns on or before June 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Operating leases On August 9, 2016, the Company entered into a sublease agreement for an office lease in Durham, North Carolina. The lease commenced on September 1, 2016 and expires on January 31, 2020. Monthly rent was $6 for the first 12–month period and $7 each month thereafter until expiration of the lease. A security deposit of $13 was required upon execution of the sublease. Prior to the sublease, the Company paid $4 per month of office rent. Lease rental expense totaled $110 and $81 during the years ended December 31, 2017 and 2016, respectively. Total future minimum payments required under the sublease agreement are as follows. Years ended December 31, Amount 2018 $ 85 2019 85 2020 7 $ 177 Commitments Employment Agreements Robert B. Ladd On July 7, 2016, the Company entered into an employment agreement with Robert B. Ladd, to act as its President and Chief Operating Officer, at an annual salary of $240. Mr. Ladd is eligible for a cash and/or equity bonus as determined by the Nomination and Compensation Committee. Further, Mr. Ladd received 2,000,000 shares of the Company’s common stock, 1/3 of which shall vest within 12 months from the execution of the agreement, another 1/3 within 18 months, and the remaining 1/3 within 24 months from the execution of the agreement. Lastly, the agreement also provides for certain rights granted to Mr. Ladd in the event of his death, permanent incapacity, voluntary termination or discharge for cause. On August 16, 2017, Mr. Ladd was appointed Chief Executive Officer. John McAfee On November 18, 2016, the Company entered into an employment agreement with John McAfee pursuant to which Mr. McAfee joined the Company as Executive Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. McAfee has a base annual salary of $1.00 per day; payable at such times as the Company customarily pays its other senior level employees. In addition, Mr. McAfee was granted an option to purchase an aggregate of six million (6,000,000) shares of the Company’s common stock, which shall be exercisable for a period of five (5) years as follows: ● options to purchase 1,000,000 shares of the Company’s common stock at a purchase price of $0.25 per share; ● options to purchase 2,000,000 shares of the Company’s common stock at a purchase price of $0.50 per share; and ● options to purchase 3,000,000 shares of the Company’s common stock at a purchase price of $1.00 per share. Mr. McAfee was also eligible to earn a cash and/or equity bonus as the Compensation Committee determined, from time to time, based on meeting performance objectives and bonus criteria to be mutually identified by Mr. McAfee and the Nomination and Compensation Committee. On August 16, 2017, Mr. McAfee resigned as the Executive Chairman of the Board and as the Chief Executive Officer of the Company, effective on August 15, 2017. On August 16, 2017, Mr. McAfee accepted the appointment as the Chief Cybersecurity Visionary of the Company overseeing the design of the Company’s cybersecurity platforms, effective immediately. In connection with Mr. McAfee’s new appointment as Chief Cybersecurity Visionary, Mr. McAfee entered into a new employment, effective August 14, 2017. Mr. McAfee’s new agreement is for a term of 24 months at a rate of $7.25 or the minimum wage of the state of North Carolina, whichever is higher. Upon execution, the Company notified Mr. McAfee’s previously granted stock options to (a) extend their term to August 4, 2022 and (b) cause them to be immediately exercisable. On January 26, 2018, Mr. McAfee resigned from his role as Chief Cybersecurity Visionary. As part of Mr. McAfee’s resignation, the Company paid him a lump sum of $136 and allowed his stock options to remain outstanding and exercisable. Robert S. Lowrey On March 8, 2018, the Company entered into an employment with Mr. Lowrey, effective March 1, 2018. Mr. Lowrey’s employment agreement provides that he has been appointed for an initial term of two years. Mr. Lowrey is entitled to receive an annualized base salary of $240. Mr. Lowrey will also receive a one-time signing bonus of $10. Mr. Lowrey is also eligible for a cash and/or equity bonus as the Compensation Committee may determine, from time to time, based on meeting performance objectives and bonus criteria to be mutually identified by Mr. Lowrey and the Compensation Committee. In connection with the execution of his employment agreement, the Company issued to Mr. Lowrey 750,000 shares of the Company’s restricted common stock, pursuant to the Company’s 2016 Stock Option Plan vesting over a two year period. Operating Commitments The Company entered a 12–month agreement with Hash The Planet (“HTP”) to host, power, connect, monitor and service the machines for $136. The hosting data center is located in Cashmere, WA. MGT launched its bitcoin mining operations and earned its first bitcoin on September 3, 2016. On July 31, 2017, the Company’s agreement with HTP expired and the Company entered into a new agreement with Zoom Hash for the same services expiring July 31, 2018. The cost of those services is $44 per month. Management Agreements On October 12, 2017, MGT entered into two management agreements (each, a “Management Agreement”, collectively “Management Agreements”) with two accredited investors, Deep South Mining LLC and BDLM, LLC. On November 21, 2017, the Company entered into a third management agreement with another accredited investor, Buckhead Crypto, LLC (all three accredited investors together are “Users”). Each of the Users agreed on substantially similar terms to purchase an aggregate of 2,376 Bitmain Antminer S9 mining computers (the “Bitcoin Hardware”) for a total of $3,650 to mine bitcoins with the Company acting as the exclusive manager for each of the Users. In addition, the Users have agreed to pay to the Company, in advance, the first three months of expected electricity costs of the bitcoin mining operations in the sum of $691, which is included in Other Payables on the Company’s consolidated balance sheets as of December 31, 2017. Initial electricity cost for the first three months following delivery of the Bitcoin Hardware shall be reimbursed to User within the first three months of operation. Each Management Agreement is in effect for 24 months from the date that the Bitcoin Hardware begins mining operations, and may be terminated by mutual written agreement. Pursuant to the Management Agreements, the Company shall provide for installation, hosting, maintenance and repair and provide ancillary services necessary to operate the Bitcoin Hardware. In accordance with each of the Management Agreements, each of the Users will gain a portion of the bitcoin mined called the User Distribution Portion. The User Distribution Portion is 50% of the amount of bitcoin mined net of the operating fee (10% of the total bitcoin mined) and the electricity cost. Furthermore, upon execution of the Management Agreements, as an incentive to the Users the Company issued to the Users an aggregate of 436,100 shares of the Company’s common stock and a Series F Warrant to purchase 436,100 shares of the Company’s common stock at an initial exercise price of $2.00 per share exercisable for a period of three years to the Users. The Company issued the shares of common stock and issued all three Series F Warrants for the benefits of the three Users on the respective dates of the execution of the Management Agreements. The Company recorded the fair value of the shares and warrants issued to the Users of $1,572 within general and administrative expenses on the Company’s consolidated statement of operations. Legal On September 2, 2016, the Company and John McAfee filed an action (the “Action”) against Intel Corporation (“Intel”) in the United States District Court for the Southern District of New York (the “Court”) seeking a declaration that the use of or reference to the personal name of John McAfee and/or McAfee in its business, and specifically in the context of renaming the Company to “John McAfee Global Technologies, Inc.,” does not infringe upon Intel’s trademark rights or breach any agreement between the parties. Following a series of motions and counter-motions, both parties agreed to a court-supervised mediation process. On June 30, 2017, the Company entered into a settlement agreement (the “Settlement Agreement”) with Intel in which the Company agreed not to use “John McAfee Global Technologies,” “John McAfee Privacy Phone,” “John McAfee” or “McAfee” as (or as part of) a trademark, logo, trade name, business name, slogan, service mark or brand name in connection with cybersecurity related products or services. Notwithstanding, the Company is permitted to use the name “John McAfee” in promotional and advertising materials and on product packages, provided that the name is used in a descriptive manner and in compliance with the specifications set forth in the Settlement Agreement. Additionally, the Company may use John McAfee’s likeness without restrictions. On July 5, 2017, the Court dismissed with prejudice all claims and counterclaims filed in the Action, based upon a stipulation of voluntary dismissal entered into by the parties of the Action pursuant to the Settlement Agreement dated June 30, 2017. The Court will retain jurisdiction over the Parties for purposes of enforcing this Settlement Agreement. In September 2016, various shareholders in the Company filed putative class action lawsuits against the Company, its president and certain of its individual officers and directors. The cases were filed in the Court and alleged violations of federal securities laws and seek damages. On April 11, 2017 those cases were consolidated into a single action (the “Securities Action”) and two individual shareholders were appointed lead plaintiffs by the Court. On June 30, 2017, the lead plaintiffs filed an amended complaint. On August 29, 2017, the defendants moved to dismiss the amended complaint, which the plaintiffs opposed on October 13, 2017. On November 3, 2017, the defendants filed a reply brief in further support of their motion to dismiss the amended complaint. The Court heard oral argument on the motion to dismiss on February 7, 2018. On February 27, 2018, the Court issued a Memorandum and Order dismissing the case in its entirety, with prejudice. The time for plaintiffs to file a notice of appeal expired on March 30, 2018. On January 24, 2017, the Company was served with a copy of a summons and complaint filed by plaintiff Atul Ojha in New York state court against certain officers and directors of the Company and the Company as a nominal defendant. The lawsuit is styled as a derivative action (the “Derivative Action”) and was originally filed (but not served on any defendant) on October 15, 2016. The Derivative Action substantively alleges that the defendants, collectively or individually, inadequately managed the business and assets of the Company resulting in the deterioration of the Company’s financial condition. The Derivative Action asserts claims including but not limited to breach of fiduciary duties, unjust enrichment and waste of corporate assets. On February 27, 2017, the parties to the Derivative Action executed a stipulated stay of proceedings pending full or partial resolution of the Securities Action. Shortly after issuance of the February 28, 2018 ruling dismissing the Securities Action, the parties to the Derivative Action agreed to extend the stay indefinitely, with the plaintiff having the option to vacate the stay on thirty days’ notice. Should the plaintiff seek to vacate the stay, the Company will address the Derivative Action. On March 3, 2017 and April 4, 2017 respectively, two additional actions were filed against the Company by a former shareholder Barry Honig (“Honig”). The first action was filed in federal court in North Carolina (the “North Carolina Action”) against the Company and its president and alleges claims for libel, slander, conspiracy, interference with prospective economic advantage, and unfair trade practices. The North Carolina Action substantively alleges that the defendants defamed Honig by causing or allowing certain statements to be published about Honig in news blogs and articles authored by a journalist, who is also a defendant in the case. On June 5, 2017, the Company filed a motion to dismiss the lawsuit, and on July 17, 2017 the plaintiff filed on opposition brief to the motion to dismiss. The Company filed its reply on August 18, 2017. On August 24, 2017, the court in North Carolina action issued an order granting in part and denying in part the motion to dismiss. On January 3, 2018, the parties signed a settlement stipulation in which the North Carolina Action was withdrawn with prejudice. The court in the North Carolina Action thereafter dismissed the case on January 18, 2018. The second action was brought by Honig and others in the Court (the “Breach of Contract Action”) against the Company and certain of its officers and directors. The Breach of Contract Action alleges claims for breach of contract, tortious interference with contractual relations, and unjust enrichment related to the Company’s unsuccessful attempt to acquire D–Vasive and Demonsaw in 2016 and the alleged resulting harm to certain D–Vasive, Inc. (“D-Vasive”) and Demonsaw LLC (“Demonsaw”) noteholders. The defendants filed a motion to dismiss on June 5, 2017, but after the plaintiffs filed an amended complaint on June 26, 2017, the defendants filed a motion to dismiss that complaint on July 24, 2017. On September 2, 2017, the plaintiffs and defendants completed their briefing on the defendants’ motion to dismiss the amended complaint. On March 19, 2018, the Court issued a Memorandum Opinion & Order dismissing the breach of contract and tortious interference claims, but permitting the unjust enrichment claim to proceed to discovery. The defendants are considering filing a motion asking the Court to reconsider its decision to permit the unjust enrichment claim to proceed. Should such potential reconsideration motion be denied, the Company and its officers and directors believe that they have meritorious defenses against the remaining claim and intend to defend that claim vigorously. The Company believes that there is little merit to each of the above actions and has no indication or reason to believe that it is or will be liable for any alleged wrongdoing. The Company is consulting with its counsel to determine the appropriate legal strategy but intends to defend against the remaining actions vigorously. The Company cannot presently rule out that adverse developments in one or more of the above actions could have a materially adverse effect on the Company, and has notified its Director’s and Officer’s Liability Insurance carrier. On September 15, 2016, the Company received a subpoena from the SEC and in December 2017 the Company’s President and Chief Executive Officer received a subpoena from the SEC. The Company has cooperated fully with the SEC and its staff in a timely manner. The Company intends to fully comply with any additional requests the Company may receive from the SEC in the future. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15. Related Party Transactions Janice Dyson, wife of John McAfee, the Company’s former Chief Cybersecurity Visionary, is the sole director of Future Tense Secure Systems, Inc. (“FTS”) and owns 33% of the outstanding common shares of FTS. On March 3, 2017, the Company purchased from FTS its 46% ownership interest Demonsaw for 2,000,000 shares of MGT common stock. The Company recorded the purchase using the fair value of the common shares provided of $2,500 and immediately impaired the equity method investment during the three months ended March 31, 2017. On May 9, 2016, the Company entered a consulting agreement with FTS, pursuant to which FTS would provide advice, consultation, information and services to the Company including assistance with executive management, business and product development and potential acquisitions or related transactions. During the years ended December 31, 2017 and 2016, the Company recorded consulting fees of $360 and $902, respectively, to FTS for such services. As of December 31, 2017, the Company owed $100 to FTS. Demonsaw Transaction On May 9, 2016, MGT entered into an asset purchase agreement to acquire certain assets owned by D–Vasive, Inc., a company in the business of developing and marketing certain privacy and anti–spy applications (the “D-Vasive APA”). Pursuant to the terms of the agreement, the Company would purchase assets including applications for use on mobile devices, intellectual property, customer lists, databases, project files and licenses. The proposed purchase price for D–Vasive was $300 in cash and 23.8 million shares of MGT common stock. On May 26, 2016, the Company agreed to acquire certain technology and assets of Demonsaw, a company in the business of developing and marketing secure and anonymous information sharing applications. Pursuant to the terms of this agreement, the Company would purchase assets including the source code for the Demonsaw solution, intellectual property, customer lists, databases, project files and licenses. The proposed purchase price for Demonsaw was 20.0 million shares of MGT common stock. On July 7, 2016, and prior to the closing of either of the above transactions, the Company and Demonsaw terminated their agreement. Simultaneously, D–Vasive entered an agreement with the holders of Demonsaw’s outstanding membership interests, whereby D–Vasive would purchase all such membership interests. Accordingly, the proposed purchase price for D–Vasive (inclusive of the Demonsaw assets) was increased to 43.8 million shares of MGT common stock. Both D-Vasive and Demonsaw were partly owned by FTS, an entity controlled by the wife of cybersecurity pioneer John McAfee, and as part of the acquisition, Mr. McAfee would become Chairman and Chief Executive Officer of MGT. On August 8, 2016, the Company filed a Definitive Proxy Statement to solicit, among other things, shareholder approval of the D–Vasive acquisition, at the Annual Meeting of Stockholders. On September 8, 2016, shareholder approval was obtained. However, on September 19, 2016, the New York Stock Exchange (the “Exchange”) informed the Company that it would not approve for listing on the Exchange the 43.8 million shares required to be issued to complete the closing of the D–Vasive acquisition. Not obtaining this critical closing condition resulted in the termination of the acquisition. In March 2017, MGT purchased 46% of the outstanding membership interests of Demonsaw from FTS for 2.0 million shares of MGT common stock. The Company recorded the purchase using the fair value of the common shares provided and immediately impaired the equity method investment during the three months ended March 31, 2017. On April 3, 2017 the Company terminated the D–Vasive APA dated May 9, 2016, as amended on July 7, 2016, entered into by and among MGT, D–Vasive, the shareholders of D–Vasive and MGT Cybersecurity. The termination of the D–Vasive APA was premised on Section 3.4(b) of the D–Vasive APA which states that the D–Vasive APA may be terminated by either party thereto if the closing contemplated thereunder did not occur on or before a specified date and the same is not otherwise extended by the parties, in writing or otherwise. Pursuant to the D–Vasive APA, as amended, MGT would have acquired certain technology and assets of D–Vasive if the closing had occurred on the terms of the D–Vasive APA, as amended. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 17. Employee Benefit Plans The Company maintains defined contribution benefit plans under Section 401(k) of the Internal Revenue Code covering substantially all qualified employees of the Company (the “401(k) Plan”). Under the 401(k) Plan, the Company may make discretionary contributions of up to 100% of employee contributions. During the years ended December 31, 2017 and 2016, the Company made contributions to the 401(k) Plan of $10 and $10, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18. Subsequent Events The Company has evaluated the impacts of subsequent events through April 2, 2018, and has determined that no such events occurred that were required to be reflected in the consolidated financial statements, except as described within the above notes and described below. Management agreement termination On February 28, 2018, the Company and Buckhead Crypto terminated their Management Agreement. The Company agreed to purchase the Bitcoin mining machines and the prepaid electricity from Buckhead Crypto for an aggregate amount of $767. Management Agreement On February 13, 2018, the Company entered into a new Management Agreement with a third party with substantially the same terms as the other Management Agreements. The third party agreed to purchase 200 Bitmain Antminer S9 mining computers for a total of $428 to mine bitcoins with the Company acting as the exclusive manager. This Management Agreement is in effect for 24 months from the date that the Bitcoin Hardware begins mining operations, and may be terminated by mutual written agreement. Warrant Exercise On January 17, 2018, the Comapny received $225 from the exercise of warrants to purchase 375,000 shares of common stock . Subsequent to December 31, 2017 through April 2, 2018, the Company issued an aggregate of 1,849,250 shares of common stock in exchange for the cashless excercise of warrants to purchase 3,286,750 shares of common stock. Restricted Stock Subsequent to December 31, 2017 through April 2, 2018, the Company issued 100,000 shares of its common stock in connection with the vesting of restricted stock. Shares Issued to Consultants Subsequent to December 31, 2017 through April 2, 2018, the Company issued 454,000 shares of its common stock to consultants in exchange for services. Sale of Shares On March 15, 2018, the Company issued 200,000 shares of its common stock to an investor for $80 in gross proceeds. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the accounts of MGT and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Non-controlling interest represents the non-controlling equity investment in MGT subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non-controlling interest. |
Reclassification | Reclassification Certain amounts in prior periods have been reclassified to conform to current period presentation. These reclassifications had no effect on the previously reported net loss. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | Use of estimates and assumptions and critical accounting estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived assets, determining the potential impairment of intangibles, the fair value of warrants issued, the fair value of stock options, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these instruments. The Company had no Level 3 financial assets or liabilities as of December 31, 2017 and 2016. The Company uses Level 1 of the fair value hierarchy to measure the fair value of investments in certain common equity securities as well as digital currencies. The Company revalues such assets at every reporting period and recognizes gains or losses as revenue and cost of revenue respectively in the consolidated statements of operations that are attributable to the change in the fair value of the digital currencies. The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2017: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Digital currencies $ 48 $ 48 $ – $ – $ 48 The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2016: Carrying Value Level 1 Level 2 Level 3 Total Investments – FNCX common shares $ 44 $ 44 $ – $ – $ 44 Digital currencies 10 10 – – 10 |
Beneficial Conversion Feature of Convertible Notes Payable | Beneficial conversion feature of convertible notes payable The Company accounts for convertible notes payable in accordance with guidelines established by the FASB ASC Topic 470-20, “Debt with Conversion and Other Options”. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued and also records the estimated fair value of any warrants issued with those convertible notes. The beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved. The beneficial conversion feature of a convertible note is measured by first allocating a portion of the note’s proceeds to any warrants, if applicable, as a discount on the carrying amount of the convertible on a relative fair value basis. The discounted face value is then used to measure the effective conversion price of the note. The effective conversion price and the market price of the Company’s common stock are used to calculate the intrinsic value of the conversion feature. The intrinsic value is recorded in the financial statements as a debt discount from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to accretion of debt discount on the Company’s consolidated statement of operations and comprehensive loss. |
Revenue Recognition | Revenue recognition The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is probable. The Company’s primary revenue stream is related to the mining of digital currencies. The Company derives its revenue by solving “blocks” to be added to the blockchain and providing transaction verification services within the digital currency networks of cryptocurrencies, such as Bitcoin and Ethereum, commonly termed “cryptocurrency mining.” In consideration for these services, the Company receives digital currency (“Coins”). The Coins are recorded as revenue, using the average spot price of Bitcoin on the date of receipt. The Coins are recorded on the balance sheet at their fair value and re–measured at each reporting date. Revaluation gains or losses, as well gains or losses on sale of coins are recorded as revenue and cost of revenue, respectively in the consolidated statements of operations. Expenses associated with running the cryptocurrency mining business, such as equipment depreciation, rent and electricity cost are recorded as costs of revenues. |
Income Taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 13 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. |
Loss Per Share | Loss per share Basic loss per share is calculated by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the net loss attributable to common shareholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of unvested restricted shares, convertible debt stock warrants and stock options, are not reflected in diluted net loss per share because such potential shares are anti–dilutive due to the Company’s net loss. Accordingly, the computation of diluted loss per share for the year ended December 31, 2017, excludes 2,000,000 shares issuable to the investors of the December 2017 private placement, 3,381,816 shares issuable to UAHC Ventures, LLC a Nevada limited liability company (“UAHC”) due to the conversion of the UAHC note payable, 3,850,000 unvested restricted shares, 6,000,000 shares issuable under stock options, and 13,720,742 shares issuable under warrants. The computation of diluted loss per share for the year ended December 31, 2016, excluded 3,000,000 unvested restricted shares, 2,300,000 shares issuable upon the conversion of convertible notes, 6,000,000 shares issuable under stock options and 100,000 shares issuable under warrants. |
Segment Reporting | Segment reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer and the chief financial officer. The Company currently operates solely in one operating segment. |
Stock-Based Compensation | Stock–based compensation The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award. Restricted stock awards are granted at the discretion of the compensation committee of the Board of Directors of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over an 18 to 24-month period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of the Company’s common stock on the grant date. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the historical volatility of the Company’s common stock over the expected term of the option. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. The fair value of unvested equity instruments is re-measured each reporting period and such re-measured value is amortized over the requisite remaining service period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505–50, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. |
Cash & Cash Equivalents | Cash & cash equivalents The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions whereby the combined account balances exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage by approximately $9,263 as of December 31, 2017 and, as a result, there is a concentration of credit risk related to amounts on deposit that exceed the FDIC insurance coverage. |
Investments Available for Sale | Investments available for sale Equity security investments available for sale, at market value, reflect unrealized appreciation and depreciation, as a result of temporary changes in market value during the period, in shareholders’ equity, net of income taxes in “accumulated other comprehensive income (loss)” in the consolidated balance sheets. For non–publicly traded securities, market prices are determined through the use of pricing models that evaluate securities. For publicly traded securities, market value is based on quoted market prices or valuation models that use observable market inputs. |
Property and Equipment | Property and equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from two to five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation expense relating to the Company’s cryptocurrency mining machines is included in cost of revenue. |
Intangible Assets | Intangible assets Intangible assets consisted of the Sentinel network intrusion detection device, all underlying software and firmware, the server contract, and case and circuit board inventory that the Company acquired from Cyberdonix, Inc, an Alabama corporation (“Cyberdonix”), in October 2016. Estimates of future cash flows and timing of events for evaluating long–lived assets for impairment are based upon management’s judgment. If any of our intangible or long–lived assets are considered to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value. Applicable long–lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment. As of December 31, 2017, the Company had impaired its remaining intangible assets. |
Research and Development | Research and development Research and development expenses are charged to operations as incurred. During the years ended December 31, 2017 and 2016, respectively, the Company expensed $346 and $297 in research and development costs. |
Recent Accounting Pronouncements | Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements, other than those disclosed below. In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB delayed the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In addition, in March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. Both amendments permit the use of either a retrospective or cumulative effect transition method and are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early application permitted. The Company expects to implement ASU 2014-09, on January 1, 2018 pursuant to which it will utilize the modified retrospective approach. The Company does not believe that ASU 2014-09 will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance for eight specific cash flow issues with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The effective date for ASU 2016-15 is for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company expects to implement ASU 2016-15 on January 1, 2018 and does not believe it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations” (Topic 805), Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company expects to implement ASU 2017-01 on January 1, 2018 and does not believe it will have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company has adopted the ASU beginning with these consolidated financial statements. As a result, the conversion features of certain of its convertible notes payable and equity instruments that contain “down round” provisions were not bifurcated and were not recorded as a derivative liability. |
Management's Evaluation of Subsequent Events | Management’s Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, other than what is described in Note 1 – Organization and Basis of Presentation, Note 14 – Commitments and Contingencies and Note 18 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2017: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Digital currencies $ 48 $ 48 $ – $ – $ 48 The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2016: Carrying Value Level 1 Level 2 Level 3 Total Investments – FNCX common shares $ 44 $ 44 $ – $ – $ 44 Digital currencies 10 10 – – 10 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses And Other Current Assets | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: As of December 31, 2017 2016 Prepaid expenses $ 734 $ 153 Deferred offering costs (see Note 9) 160 – Total prepaid expenses and other current assets $ 894 $ 153 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Investments [Abstract] | |
Schedule of Investment Available for Sale | Investments available for sale As of December 31, 2017 2016 FNCX common shares $ – $ 44 |
Schedule of Investment at Cost | Investments at cost As of December 31, 2017 2016 DDGG common shares $ – $ 287 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets consisted of the following: Amount January 1, 2016 $ - Acquisition of intellectual property 495 Amortization (27 ) December 31, 2016 $ 468 Amortization (165 ) Impairment (303 ) December 31, 2017 $ - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consisted of the following: As of December 31, 2017 2016 Computer hardware and software $ 10 $ 10 Crypto-currency mining machines 3,685 708 Property and equipment, gross 3,695 718 Less: Accumulated depreciation (579 ) (116 ) Property and equipment, net $ 3,116 $ 602 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: As of December 31, 2017 2016 Legal, consulting, and other fees $ 707 $ 124 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable Activity | During the years ended December 31, 2017 and 2016, the Company’s activity in notes payable was as follows: Principal Debt Discount Net Beginning balance, January 1, 2016 $ - $ - $ - Issuance of convertible notes payable 2,300 - 2,300 Balance, December 31, 2016 2,300 - 2,300 Issuance of convertible notes payable 6,165 (5,627 ) 538 Amortization of debt discount - 229 229 Conversion of convertible notes payable (8,465 ) 5,398 (3,067 ) Balance, December 31, 2017 $ - $ - $ - |
Common Stock and Warrant Issu32
Common Stock and Warrant Issuances (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of Warrant Outstanding | The following table summarizes information about shares issuable under warrants outstanding at December 31, 2017: Warrant shares outstanding Weighted average exercise price Weighted average remaining life Intrinsic value Outstanding at January 1, 2017 100,000 $ 3.75 Issued 17,674,289 $ 1.35 Exercised (3,677,186 ) $ 0.74 Expired or cancelled (376,361 ) $ 0.75 Outstanding at December 31, 2017 13,720,742 $ 1.49 2.90 $ 44,818 Exercisable at December 31, 2017 13,720,742 $ 1.49 2.90 $ 44,818 |
Stock_Based Compensation (Table
Stock–Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Incentive Plan and Stock-based Compensation | The Company’s activity in restricted common stock was as follows for the year ended December 31, 2017: Number of shares Weighted average grant date fair value Non–vested at January 1, 2017 1,000,000 $ 2.31 Granted 4,150,000 $ 1.24 Vested (1,300,000 ) $ 1.54 Forfeited – Non–vested at December 31, 2017 3,850,000 $ 1.42 |
Schedule of Stock Options Activity | The following is a summary of the Company’s stock option activity for year ended December 31, 2017: Options Weighted Average exercise price Weighted average Grant date fair value Weighted average remaining life Intrinsic value Outstanding – January 1, 2017 6,000,000 $ 0.71 $ 1.28 Granted – Exercised – Forfeited/Cancelled – Outstanding – December 31, 2017 6,000,000 $ 0.71 $ 1.29 4.62 $ 24,310 Exercisable – December 31, 2017 6,000,000 $ 0.71 $ 1.29 4.62 $ 24,310 |
Non-Controlling Interest (Table
Non-Controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Schedule of Non-Controlling Interest | At December 31, 2017, the Company’s non–controlling interest was as follows: January 1, 2016 $ 5 Acquisition of non-controlling interest 292 Non-controlling share of net loss (319 ) January 1, 2017 $ (22 ) Non–controlling share of net loss - December 31, 2017 $ (22 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | Significant components of deferred tax assets were as follows: As of December 31, 2017 2016 U.S. federal tax loss carry–forward $ 10,174 $ 14,632 U.S. State tax loss carry–forward 766 1,505 U.S. federal capital loss carry–forward - 188 Equity based compensation 3,117 3,965 Fixed assets, intangible assets and goodwill 496 821 Long-term investments 870 462 Total deferred tax assets 15,423 21,573 Less: valuation allowance (15,423 ) (21,573 ) Net deferred tax asset $ — $ — |
Summary of Operating Loss Carryforwards | As of December 31, 2017, the Company had the following tax attributes: Amount Begins to expire U.S. federal net operating loss carry–forwards $ 48,446 Fiscal 2023 U.S. State net operating loss carry–forwards 32,326 Fiscal 2031 |
Schedule of Effective Income Tax Rate Reconciliation | The sources and tax effects of the differences are as follows: For the Years Ended December 31, 2017 2016 Expected Federal Tax (34.0 )% (34.0 )% State Tax (Net of Federal Benefit) (5.5 ) (5.5 ) Loss on extinguishment - 2.8 Accretion of notes payable discount 4.4 - Inducement expense 15.9 - Stock-based compensation 10.5 Other permanent differences 0.2 0.9 True up of prior year deferred tax assets 1.3 - Change in federal and state tax rates 18.4 - Change in valuation allowance (11.2 ) 35.8 Effective rate of income tax - % - % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Total future minimum payments required under the sublease agreement are as follows. Years ended December 31, Amount 2018 $ 85 2019 85 2020 7 $ 177 |
Organization and Basis of Pre37
Organization and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Wenatchee Valley [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Revenue on mining | $ 3,134 | |
Description on Cryptocurrency minig | The Company will receive both a fee to manage the mining operations plus one-half of the net operating profit. In the year ended December 31, 2017, the Company mined approximately 856 coins | |
March 23 2018 [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Common stock reverse split | The Companys shareholders approved a 1-for-2 reverse split of the Companys common stock, to be effected only if needed for the Companys application to uplist its common stock to a national exchange | |
March 23 2018 [Member] | Minimum [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Common stock, shares authorized | 75,000,000 | |
March 23 2018 [Member] | Maximum [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Common stock, shares authorized | 125,000,000 | |
March 19 2018 [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Sale of asset in consideration | $ 60 | |
Conversion convertible interest percentage | 20.00% | |
March 19 2018 [Member] | Promissory Note [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Sale of asset in consideration | $ 1,000 | |
March 30, 2018 [Member] | Quincy [Member] | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||
Description on Cryptocurrency minig | MGT owned and operated approximately 500 miners located in a leased facility in Quincy, Washington and 4,200 miners located in a leased facility in Sweden. In addition, the Company operates about 2,000 miners in the Sweden location pursuant to management agreements. All miners owned or managed by MGT are S9 Antminers sold by Bitmain Technologies LTD. At full deployment expected in April 2018, our total bitcoin mining capacity, as measured by computational hashing rate, is approximately 90 PH/s. In addition to the S9 Antminers, the Company owns 50 custom designed GPU-based Ethereum mining rigs. |
Going Concern and Management_38
Going Concern and Management’s Plans (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accumulated deficit | $ 378,900 | $ 328,467 | |
Cash and cash equivalents | 9,519 | $ 345 | $ 359 |
March 31 2018 [Member] | |||
Cash and cash equivalents | $ 460 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Effective U.S. federal corporate tax rate | (34.00%) | (34.00%) |
Research and development expenses | $ 346 | $ 297 |
Cash, FDIC insured amount | $ 9,263 | |
Options [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 6,000,000 | 6,000,000 |
Warrant [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 13,720,742 | 100,000 |
Unvested Restricted Stock [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 3,850,000 | 3,000,000 |
Conversion of Convertible Notes [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,300,000 | |
Notes Payable [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 3,381,816 | |
Private Placement [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,000,000 | |
Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Effective U.S. federal corporate tax rate | 35.00% | |
Estimated useful lives of property and equipment | 5 years | |
Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Effective U.S. federal corporate tax rate | 21.00% | |
Estimated useful lives of property and equipment | 2 years |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments - FNCX Common Shares [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 44 | |
Carrying Value [Member] | Investments - FNCX Common Shares [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 44 | |
Fair Value, Inputs, Level 1 [Member] | Investments - FNCX Common Shares [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 44 | |
Fair Value, Inputs, Level 2 [Member] | Investments - FNCX Common Shares [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Investments - FNCX Common Shares [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | ||
Digital Currencies [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | $ 48 | 10 |
Digital Currencies [Member] | Carrying Value [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 48 | 10 |
Digital Currencies [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | 48 | 10 |
Digital Currencies [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments | ||
Digital Currencies [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments |
Prepaid Expenses and Other Cu41
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses And Other Current Assets | ||
Prepaid expenses | $ 734 | $ 153 |
Deferred offering costs (See note 9) | 160 | |
Total prepaid expenses and other current assets | $ 894 | $ 153 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) $ in Thousands | Dec. 15, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Sale of shares | 2,000,000 | 26 | |
Reclassification adjustment for comprehensive loss | $ 66 | $ 1,453 | |
Impairment charge on investment | 2,787 | 1,358 | |
FNCX [Member] | |||
Loss on sale of investment | 84 | 86 | |
DDGG [Member] | |||
Impairment charge on investment | $ 287 | $ 0 |
Investments - Schedule of Inves
Investments - Schedule of Investment Available for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments available for sale | $ 44 | |
FNCX Common Shares [Member ] | ||
Investments available for sale | $ 44 |
Investments - Schedule of Inv44
Investments - Schedule of Investment at Cost (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments, at cost | $ 287 | |
DDGG Common Shares [Member] | ||
Investments, at cost | $ 287 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Stock issued during period, shares, acquisitions | 150,000 | |
Stock issued during period, value, acquisitions | $ 2,500 | $ 495 |
Impairment of intangible assets | 303 | 2,169 |
Amortization expense | $ 165 | $ 83 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Balance | $ 468 | |
Amortization | 165 | $ 83 |
Balance | 468 | |
Finite Lived Intangible Assets [Member] | ||
Balance | 468 | |
Acquisition of intellectual property | 495 | |
Amortization | (165) | (27) |
Impairment | (303) | |
Balance | $ 468 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation expense | $ 946 | $ 126 |
Bitcoin Machines [Member] | ||
Book value machines | 606 | |
Proceeds from sale of machinery | 976 | |
Gain on sale of machines | $ 370 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Computer hardware and software | $ 10 | $ 10 |
Crypto-currency mining machines | 3,685 | 708 |
Property and equipment, gross | 3,695 | 718 |
Less: Accumulated depreciation | (579) | (116) |
Property and equipment, net | $ 3,116 | $ 602 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Legal, consulting, and other fees | $ 707 | $ 124 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 18, 2017 | Dec. 15, 2017 | Dec. 08, 2017 | Dec. 07, 2017 | Nov. 30, 2017 | Oct. 12, 2017 | Sep. 30, 2017 | Sep. 29, 2017 | Sep. 12, 2017 | Sep. 08, 2017 | Sep. 06, 2017 | Sep. 02, 2017 | Aug. 31, 2017 | Aug. 18, 2017 | Aug. 14, 2017 | Aug. 09, 2017 | May 18, 2017 | May 02, 2017 | Mar. 10, 2017 | Mar. 10, 2017 | Aug. 02, 2016 | Jul. 07, 2016 | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 02, 2017 |
Debt converted into shares, value | $ 8,680 | ||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | 4,971 | 2,300 | |||||||||||||||||||||||||
Convertible principal amount | 2,300 | ||||||||||||||||||||||||||
Amortization of debt discount | 5,627 | 41 | |||||||||||||||||||||||||
Discount on notes payable | |||||||||||||||||||||||||||
Warrant exercise price | $ 0.50 | $ 0.75 | |||||||||||||||||||||||||
Additional shares of common stock issued | 88,700 | 347,400 | 220,000 | 220,000 | 200,000 | ||||||||||||||||||||||
Inducement expense | $ (20,312) | ||||||||||||||||||||||||||
Number of shares purchases | 2,000,000 | 26 | |||||||||||||||||||||||||
Number of warrant shares increased | 761 | ||||||||||||||||||||||||||
Notes payable | 2,300 | ||||||||||||||||||||||||||
Second Warrant Shares [Member] | |||||||||||||||||||||||||||
Issuance of warrants for dividend | 375 | ||||||||||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||||||||||
Debt converted into shares, value | $ 6,165 | $ 2,300 | |||||||||||||||||||||||||
Debt converted into shares | 7,624,798 | 2,566,668 | |||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 4,971 | ||||||||||||||||||||||||||
Second Note [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 500 | ||||||||||||||||||||||||||
Common stock market price, percentage | 65.00% | ||||||||||||||||||||||||||
Legal fees | $ 7 | ||||||||||||||||||||||||||
Debt instrument accrued interest rate | 10.00% | ||||||||||||||||||||||||||
Iliad Settlement Agreement [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 1,909,863 | ||||||||||||||||||||||||||
Amortization of debt discount | $ 1,348 | $ 7 | $ 1,348 | ||||||||||||||||||||||||
Warrant exercise price | $ 0.75 | ||||||||||||||||||||||||||
Additional shares of common stock issued | 547,660 | ||||||||||||||||||||||||||
Inducement expense | $ 7,517 | ||||||||||||||||||||||||||
Accrued interest | $ 75 | ||||||||||||||||||||||||||
Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Amortization of debt discount | $ 287 | ||||||||||||||||||||||||||
Original issue discount | 108 | ||||||||||||||||||||||||||
Fair value of warrants | $ 179 | ||||||||||||||||||||||||||
Number of shares purchases | 12,319,159 | ||||||||||||||||||||||||||
March 2017 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 3,853,553 | ||||||||||||||||||||||||||
Amortization of debt discount | 165 | 0 | |||||||||||||||||||||||||
Additional shares of common stock issued | 2,157,407 | ||||||||||||||||||||||||||
Inducement expense | $ 5,739 | ||||||||||||||||||||||||||
Accretion of debt discount | $ 78 | 709 | |||||||||||||||||||||||||
Accrued interest | $ 32 | ||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||
Additional shares of common stock issued | 43,800,000 | ||||||||||||||||||||||||||
L2 Capital, LLC [Member] | March 2017 Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Purchase shares of common stock | $ 5,000 | ||||||||||||||||||||||||||
L2 Capital, LLC [Member] | Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Percentage of average daily trading value | 150.00% | 150.00% | |||||||||||||||||||||||||
Number of common stock price per share percentage | 90.00% | 90.00% | |||||||||||||||||||||||||
Maximum borrowing capacity | $ 6,500 | ||||||||||||||||||||||||||
L2 Capital, LLC [Member] | March 2017 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 2,166,850 | ||||||||||||||||||||||||||
Amortization of debt discount | $ 709 | ||||||||||||||||||||||||||
L2 Capital, LLC [Member] | Minimum [Member] | Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Purchase shares of common stock | $ 25 | ||||||||||||||||||||||||||
L2 Capital, LLC [Member] | Maximum [Member] | Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Purchase shares of common stock | 1,000 | ||||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||
Warrant exercise price | $ 4.50 | ||||||||||||||||||||||||||
August 2016 Notes [Member] | |||||||||||||||||||||||||||
Convertible, conversion price | $ 1 | $ .75 | |||||||||||||||||||||||||
August 2016 Notes [Member] | Private Placement [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 2,566,668 | ||||||||||||||||||||||||||
Proceeds from issuance of promissory notes | $ 2,300 | ||||||||||||||||||||||||||
Convertible principal amount | $ 2,300 | ||||||||||||||||||||||||||
10% Convertible Promissory Notes [Member] | |||||||||||||||||||||||||||
Convertible, conversion price | $ 0.25 | $ 0.25 | |||||||||||||||||||||||||
Convertible principal amount | $ 50 | $ 50 | |||||||||||||||||||||||||
Debt interest rate | 10.00% | 10.00% | |||||||||||||||||||||||||
Debt term | 1 year | 1 year | |||||||||||||||||||||||||
Beneficial conversion feature | $ 100 | $ 100 | |||||||||||||||||||||||||
Amortization of debt discount | 100 | 0 | |||||||||||||||||||||||||
10% Convertible Promissory Note [Member] | |||||||||||||||||||||||||||
Debt converted into shares, value | $ 100 | $ 100 | |||||||||||||||||||||||||
Debt converted into shares | 400,000 | 400,000 | |||||||||||||||||||||||||
Amortization of debt discount | $ 92 | $ 92 | |||||||||||||||||||||||||
Secured Convertible Note [Member] | Iliad Research and Trading, L.P [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 1,355 | ||||||||||||||||||||||||||
Debt interest rate | 10.00% | ||||||||||||||||||||||||||
Discount on notes payable | $ 225 | ||||||||||||||||||||||||||
Reimbursed legal and accounting expenses | $ 5 | ||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 1,231,819 | ||||||||||||||||||||||||||
Original issue discount | $ 230 | ||||||||||||||||||||||||||
Fair value of warrants | 202 | ||||||||||||||||||||||||||
Intrinsic value of beneficial conversion feature | $ 923 | ||||||||||||||||||||||||||
Warrant exercise price | $ 1.05 | ||||||||||||||||||||||||||
Warrant expire term | 5 years | ||||||||||||||||||||||||||
Adjusted interest rate | 22.00% | ||||||||||||||||||||||||||
Description on debt instrument | Subject to the terms and conditions set forth in the Iliad Note, the Company may prepay the outstanding balance of the Iliad Note in part or in full in cash of an amount equal to 125% multiplied by the outstanding balance of the Iliad Note. | ||||||||||||||||||||||||||
Redeem a portion of outstanding balance per calendar month | $ 90 | ||||||||||||||||||||||||||
Percentage of market price | 65.00% | ||||||||||||||||||||||||||
Shares issued, price per share | $ 1.05 | ||||||||||||||||||||||||||
Iliad Note [Member] | |||||||||||||||||||||||||||
Amortization of debt discount | 1,355 | 0 | |||||||||||||||||||||||||
Accretion of debt discount | 7 | 1,348 | |||||||||||||||||||||||||
Commitment Note [Member] | L2 Capital, LLC [Member] | Equity Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 160 | ||||||||||||||||||||||||||
Common stock market price, percentage | 75.00% | ||||||||||||||||||||||||||
Issuance of convertible promissory note percentage | 8.00% | ||||||||||||||||||||||||||
Convertible Notes [Member] | L2 Capital, LLC [Member] | Security Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||
Issuance of convertible promissory note percentage | 10.00% | ||||||||||||||||||||||||||
Debt instrument original issue of discount percentage | 20.00% | 20.00% | |||||||||||||||||||||||||
Proceeds from debt | $ 393 | ||||||||||||||||||||||||||
Legal fees | 7 | ||||||||||||||||||||||||||
First Note [Member] | |||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 400,000 | ||||||||||||||||||||||||||
Original issue discount | $ 108 | ||||||||||||||||||||||||||
Warrant exercisable price percentage | 110.00% | ||||||||||||||||||||||||||
First Note [Member] | L2 Capital, LLC [Member] | Security Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 500 | $ 500 | |||||||||||||||||||||||||
Debt term | 6 months | ||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 400,000 | 400,000 | |||||||||||||||||||||||||
Warrant exercise price | $ 0.96 | $ 0.96 | |||||||||||||||||||||||||
Common stock market price, percentage | 65.00% | ||||||||||||||||||||||||||
Debt instrument accrued interest rate | 10.00% | 10.00% | |||||||||||||||||||||||||
L2 Collateralized Note [Member] | |||||||||||||||||||||||||||
Convertible principal amount | $ 500 | ||||||||||||||||||||||||||
Beneficial conversion feature | $ 392 | ||||||||||||||||||||||||||
Amortization of debt discount | 287 | ||||||||||||||||||||||||||
Discount on notes payable | 500 | ||||||||||||||||||||||||||
Original issue discount | 108 | 100 | |||||||||||||||||||||||||
Fair value of warrants | 179 | ||||||||||||||||||||||||||
Proceeds from debt | 392 | ||||||||||||||||||||||||||
Cash | $ 393 | ||||||||||||||||||||||||||
Maturity date of notes | Nov. 10, 2017 | ||||||||||||||||||||||||||
Number of warrant shares increased | $ 417,975 | ||||||||||||||||||||||||||
May 2017 Notes [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 327,382 | ||||||||||||||||||||||||||
Convertible principal amount | $ 330 | ||||||||||||||||||||||||||
Amortization of debt discount | 110 | $ 165 | 0 | ||||||||||||||||||||||||
Discount on notes payable | $ 165 | ||||||||||||||||||||||||||
Original issue discount | 65 | ||||||||||||||||||||||||||
Fair value of warrants | $ 100 | ||||||||||||||||||||||||||
Accretion of debt discount | 55 | 110 | |||||||||||||||||||||||||
Accrued interest | $ 14 | ||||||||||||||||||||||||||
Debt instrument, debt default, description | Events of default include failure to pay payments due under the May 2017 Notes, entrance into any bankruptcy or insolvency proceedings, failure to meet the obligations of any other notes payable in an amount exceeding $100, the Companys stock being suspending for trading or delisted, losing the Companys ability to deliver shares, or becoming more than 15 days delinquent on any filings required with the SEC. | ||||||||||||||||||||||||||
May 2017 Notes [Member] | Two Investors [Member] | |||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 36,000 | ||||||||||||||||||||||||||
Warrant exercise price | $ 0.50 | ||||||||||||||||||||||||||
Debt instrument accrued interest rate | 10.00% | ||||||||||||||||||||||||||
Notes payable | $ 330 | ||||||||||||||||||||||||||
August 2017 Notes [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 462,000 | ||||||||||||||||||||||||||
Convertible, conversion price | $ 1.05 | ||||||||||||||||||||||||||
Amortization of debt discount | $ 285 | 330 | 0 | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 360,000 | ||||||||||||||||||||||||||
Original issue discount | $ 35 | ||||||||||||||||||||||||||
Fair value of warrants | 135 | ||||||||||||||||||||||||||
Intrinsic value of beneficial conversion feature | $ 160 | ||||||||||||||||||||||||||
Warrant expire term | 5 years | ||||||||||||||||||||||||||
Additional shares of common stock issued | 7,600 | ||||||||||||||||||||||||||
Inducement expense | $ 21 | ||||||||||||||||||||||||||
Accretion of debt discount | 45 | 285 | |||||||||||||||||||||||||
Accrued interest | $ 11 | ||||||||||||||||||||||||||
August 2017 Notes [Member] | Two Investors [Member] | |||||||||||||||||||||||||||
Original issue discount | $ 35 | ||||||||||||||||||||||||||
Debt instrument accrued interest rate | 10.00% | ||||||||||||||||||||||||||
Notes payable | $ 330 | ||||||||||||||||||||||||||
UAHC Note [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 1,016,806 | 3,381,816 | |||||||||||||||||||||||||
Amortization of debt discount | $ 2,408 | 2,410 | 0 | ||||||||||||||||||||||||
Original issue discount | $ 410 | ||||||||||||||||||||||||||
Fair value of warrants | 819 | ||||||||||||||||||||||||||
Intrinsic value of beneficial conversion feature | $ 1,181 | ||||||||||||||||||||||||||
Inducement expense | 6,989 | ||||||||||||||||||||||||||
Accretion of debt discount | 2 | 2,408 | |||||||||||||||||||||||||
Accrued interest | $ 73 | ||||||||||||||||||||||||||
UAHC Note [Member] | UAHC Ventures, LLC [Member] | |||||||||||||||||||||||||||
Convertible, conversion price | $ 1.05 | ||||||||||||||||||||||||||
Convertible principal amount | $ 2,410 | ||||||||||||||||||||||||||
Debt interest rate | 10.00% | ||||||||||||||||||||||||||
Reimbursed legal and accounting expenses | $ 10 | ||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 861,905 | ||||||||||||||||||||||||||
Original issue discount | $ 400 | ||||||||||||||||||||||||||
Warrant expire term | 5 years | ||||||||||||||||||||||||||
Common stock cashless basis | $ 1.05 | ||||||||||||||||||||||||||
September 2017 Note [Member] | Investor [Member] | |||||||||||||||||||||||||||
Convertible, conversion price | $ 2 | ||||||||||||||||||||||||||
Warrant to purchase shares of common stock | 1,000,000 | ||||||||||||||||||||||||||
Original issue discount | $ 80 | ||||||||||||||||||||||||||
Fair value of warrants | 275 | ||||||||||||||||||||||||||
Intrinsic value of beneficial conversion feature | $ 125 | ||||||||||||||||||||||||||
Warrant expire term | 3 years | ||||||||||||||||||||||||||
Debt instrument accrued interest rate | 10.00% | ||||||||||||||||||||||||||
Maturity date of notes | Sep. 12, 2019 | ||||||||||||||||||||||||||
Notes payable | $ 480 | ||||||||||||||||||||||||||
September 2017 Notes [Member] | |||||||||||||||||||||||||||
Debt converted into shares | 672,000 | ||||||||||||||||||||||||||
Amortization of debt discount | $ 478 | 480 | 0 | ||||||||||||||||||||||||
Additional shares of common stock issued | 16,864 | ||||||||||||||||||||||||||
Inducement expense | $ 46 | ||||||||||||||||||||||||||
Proceeds from debt | $ 2 | $ 478 | |||||||||||||||||||||||||
Accrued interest | $ 11 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable Activity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Notes Payable, Principal | $ 2,300 | |
Notes Payable, Debt Discount | ||
Notes Payable, Net | 2,300 | |
Issuance of Convertible Notes Payable [Member] | ||
Notes Payable, Principal | 6,165 | 2,300 |
Notes Payable, Debt Discount | (5,627) | |
Notes Payable, Net | 538 | $ 2,300 |
Amortization of Debt Discount [Member] | ||
Notes Payable, Principal | ||
Notes Payable, Debt Discount | 229 | |
Notes Payable, Net | 229 | |
Conversion of Convertible Notes Payable [Member] | ||
Notes Payable, Principal | (8,465) | |
Notes Payable, Debt Discount | 5,398 | |
Notes Payable, Net | $ (3,067) |
Common Stock and Warrant Issu52
Common Stock and Warrant Issuances (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 15, 2017 | Dec. 15, 2017 | Dec. 07, 2017 | Nov. 30, 2017 | Nov. 02, 2017 | Oct. 12, 2017 | Sep. 30, 2017 | Sep. 29, 2017 | Sep. 12, 2017 | Sep. 08, 2017 | Sep. 02, 2017 | Aug. 31, 2017 | Aug. 18, 2017 | Aug. 09, 2017 | Jun. 30, 2017 | May 18, 2017 | May 02, 2017 | Mar. 10, 2017 | Jul. 07, 2016 | May 31, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 14, 2017 | Dec. 08, 2017 |
Number of common stock shares issued during the period | 88,700 | 347,400 | 220,000 | 220,000 | 200,000 | |||||||||||||||||||||
Purchase price per share | $ 4 | $ 4 | ||||||||||||||||||||||||
Common stock shares issued during period, value | $ 118 | |||||||||||||||||||||||||
Accounts payable | $ 401 | $ 401 | ||||||||||||||||||||||||
Proceeds from sale of equity | $ 94 | $ 650 | ||||||||||||||||||||||||
Warrant exercisable shares | 125,000 | 360,000 | 665,000 | |||||||||||||||||||||||
Warrant exercisable price per share | $ 0.75 | $ 0.50 | ||||||||||||||||||||||||
Value of common stock shares issued for services | $ 4,725 | $ 1,107 | ||||||||||||||||||||||||
Sale of stock, number of shares issued | 2,000,000 | 26 | ||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 395 | |||||||||||||||||||||||||
Warrant expiration date | May 31, 2022 | |||||||||||||||||||||||||
L2 Capital, LLC [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 800,000 | |||||||||||||||||||||||||
Number of shares issuable under warrants issued | 620,282 | |||||||||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||||||||
Number of common stock shares issued during the period | 43,800,000 | |||||||||||||||||||||||||
Iliad Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 5,173,640 | 5,173,640 | ||||||||||||||||||||||||
Number of warrants forfeited | 376,361 | |||||||||||||||||||||||||
Iliad Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1,231,819 | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 1.05 | |||||||||||||||||||||||||
Warrant expiration date | May 31, 2022 | |||||||||||||||||||||||||
August 2017 Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 144,000 | 360,000 | ||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.75 | $ 1.05 | ||||||||||||||||||||||||
UAHC Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1,206,667 | 861,905 | ||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.75 | $ 1.05 | ||||||||||||||||||||||||
Second Note [Member] | Maximum [Member] | ||||||||||||||||||||||||||
Number of shares issuable under warrants issued | 417,975 | |||||||||||||||||||||||||
September 2017 Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1,000,000 | |||||||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 2 | |||||||||||||||||||||||||
May 2017 Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 360,000 | |||||||||||||||||||||||||
Number of shares issuable under warrants issued | 226,666 | |||||||||||||||||||||||||
Equity Purchase Agreement [Member ] | ||||||||||||||||||||||||||
Warrant exercisable shares | 400,000 | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.957 | |||||||||||||||||||||||||
Warrant expiration date | Mar. 10, 2024 | |||||||||||||||||||||||||
Iliad Settlement Agreement [Member] | ||||||||||||||||||||||||||
Number of common stock shares issued during the period | 547,660 | |||||||||||||||||||||||||
Warrant exercisable shares | 1,724,547 | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.75 | |||||||||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 3,750,000 | 4,875,000 | 4,875,000 | |||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 4.50 | $ 4.50 | ||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 8,000 | |||||||||||||||||||||||||
Series C Warrant [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1 | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 1 | |||||||||||||||||||||||||
Series A Warrant [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1 | |||||||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.50 | |||||||||||||||||||||||||
Series B Warrant [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1 | |||||||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.75 | |||||||||||||||||||||||||
Series C Warrant [Member] | ||||||||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 3,012,186 | |||||||||||||||||||||||||
Number of common stock shares issued for services | 2,574,000 | |||||||||||||||||||||||||
Value of common stock shares issued for services | $ 3 | $ 1 | ||||||||||||||||||||||||
Common Stock One [Member] | ||||||||||||||||||||||||||
Number of common stock shares issued for services | 2,574,000 | 825,000 | ||||||||||||||||||||||||
Value of common stock shares issued for services | $ 4,629 | $ 1,107 | ||||||||||||||||||||||||
One Third of Warrant One [Member] | Private Placement [Member] | ||||||||||||||||||||||||||
Warrant exercisable price per share | $ 0.50 | $ 0.50 | $ 0.50 | |||||||||||||||||||||||
One Third of Warrant Two [Member] | Private Placement [Member] | ||||||||||||||||||||||||||
Warrant exercisable price per share | 0.75 | 0.75 | 0.75 | |||||||||||||||||||||||
One Third of Warrant Three [Member] | Private Placement [Member] | ||||||||||||||||||||||||||
Warrant exercisable price per share | $ 1 | $ 1 | $ 1 | |||||||||||||||||||||||
Warrant [Member] | Iliad Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1,348,186 | |||||||||||||||||||||||||
Warrant [Member] | UAHC Note [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 3,620,001 | |||||||||||||||||||||||||
Warrant [Member] | Private Placement [Member] | ||||||||||||||||||||||||||
Warrant exercisable shares | 1,000,000 | |||||||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||||||||
Warrant exercisable price per share | $ 1.25 | |||||||||||||||||||||||||
Investor [Member] | ||||||||||||||||||||||||||
Number of common stock shares issued during the period | 1,250,000 | 1,625,000 | 1,625,000 | |||||||||||||||||||||||
Purchase price per share | $ 0.40 | $ 0.40 | $ 0.40 | |||||||||||||||||||||||
Proceeds from sale of equity | $ 500 |
Common Stock and Warrant Issu53
Common Stock and Warrant Issuances - Summary of Warrant Outstanding (Details) - Warrant [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Warrants outstanding beginning | shares | 100,000 |
Warrants outstanding Issued | shares | 17,674,289 |
Warrants outstanding Exercised | shares | (3,677,186) |
Warrants outstanding Expired or cancelled | shares | (376,361) |
Warrants outstanding ending | shares | 13,720,742 |
Warrants exercisable ending | shares | 13,720,742 |
Weighted average exercise price beginning | $ / shares | $ 3.75 |
Weighted average exercise price Issued | $ / shares | 1.35 |
Weighted average exercise price Exercised | $ / shares | 0.74 |
Weighted average exercise price Expired | $ / shares | 0.75 |
Weighted average exercise price ending | $ / shares | 1.49 |
Weighted average exercise price exercisable ending | $ / shares | $ 1.49 |
Weighted average remaining life outstanding | 2 years 10 months 24 days |
Weighted average remaining life exercisable | 2 years 10 months 24 days |
Intrinsic value outstanding ending | $ | $ 44,818 |
Intrinsic value exercisable ending | $ | $ 44,818 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | Aug. 14, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 16,574 | $ 11,662 | |
Unrecognized compensation costs related to non-vested stock options | |||
Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation of weighted average period term | 4 years 7 months 13 days | ||
Employment Agreement [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 37 | ||
Stock option extended term | Extend the term of the stock options to August 14, 2022 | ||
Directors, Officers and Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued during period restricted shares | 4,150,000 | ||
Directors, Officers and Employees [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unamortized stock-based compensation costs | $ 3,503 | ||
Share based compensation of weighted average period term | 1 year 6 months | ||
Directors, Officers and Employees [Member] | Selling General and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 3,280 | 9,682 | |
Directors, Officers and Employees [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option vesting period | 16 months | ||
Directors, Officers and Employees [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option vesting period | 24 months | ||
Employee and Director [Member] | Selling General and Administrative Expenses [Member] | Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 7,094 | $ 641 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Incentive Plan and Stock-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares Non-vested, Beginning Balance | shares | 1,000,000 |
Number of Shares, Granted | shares | 4,150,000 |
Number of Shares, Vested | shares | (1,300,000) |
Number of Shares, Forfeited | shares | |
Number of Shares Non-vested, Ending Balance | shares | 3,850,000 |
Weighted Average Grant Date Fair Value Non-vested, Beginning Balance | $ / shares | $ 2.31 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 1.24 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 1.54 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value Non-vested, Ending Balance | $ / shares | $ 1.42 |
Stock-Based Compensation - Sc56
Stock-Based Compensation - Schedule of Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Options Outstanding, Granted | shares | 4,150,000 |
Weighted Average Grant Date Fair Value Outstanding, Beginning Balance | $ 1.24 |
Stock Option [Member] | |
Options Outstanding, Beginning Balance | shares | 6,000,000 |
Options Outstanding, Granted | shares | |
Options Outstanding, Exercised | shares | |
Options Outstanding, Forfeited/cancelled | shares | |
Options Outstanding, Ending Balance | shares | 6,000,000 |
Options Exercisable, Ending Balance | shares | 6,000,000 |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 0.71 |
Weighted Average Exercise Price Outstanding, Granted | |
Weighted Average Exercise Price Outstanding, Ending Balance | 0.71 |
Weighted Average Exercise Price Exercisable, Ending Balance | 0.71 |
Weighted Average Grant Date Fair Value Outstanding, Beginning Balance | 1.28 |
Weighted Average Grant Date Fair Value Outstanding, Ending Balance | 1.29 |
Weighted Average Grant Date Fair Value Exercisable, Ending Balance | $ 1.29 |
Weighted Average Remaining Life Outstanding, Ending Balance | 4 years 7 months 13 days |
Weighted Average Remaining Life Exercisable, Ending Balance | 4 years 7 months 13 days |
Intrinsic Value Outstanding, Ending Balance | $ | $ 24,310 |
Intrinsic Value Exercisable, Ending Balance | $ | $ 24,310 |
Non-Controlling Interest - Sche
Non-Controlling Interest - Schedule of Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | ||
Non-controlling interest at beginning | $ (22) | $ 5 |
Acquisition of non-controlling interest | 292 | |
Non-controlling share of net loss | (319) | |
Non-controlling interest at ending | $ (22) | $ (22) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Decrease in valuation allowance | $ 6,150 |
Provisional reduction gross deferred tax assets | $ 10,743 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
U.S. federal tax loss carry-forward | $ 10,174 | $ 14,632 |
U.S. State tax loss carry-forward | 766 | 1,505 |
U.S. federal capital loss carry-forward | 188 | |
Equity based compensation | 3,117 | 3,956 |
Fixed assets, intangible assets and goodwill | 496 | 821 |
Long-term investments | 870 | 462 |
Total deferred tax assets | 15,423 | 21,573 |
Less: valuation allowance | (15,423) | (21,573) |
Net deferred tax asset |
Income Taxes - Summary of Opera
Income Taxes - Summary of Operating Loss Carryforwards (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Federal Tax [Member] | |
Operating Loss Carryforwards | $ 48,446 |
Operating Loss Carry Forwards Expiation Dates | Fiscal 2,023 |
Domestic Tax [Member] | |
Operating Loss Carryforwards | $ 32,326 |
Operating Loss Carry Forwards Expiation Dates | Fiscal 2,031 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Expected Federal Tax | (34.00%) | (34.00%) |
State Tax (Net of Federal Benefit) | (5.50%) | (5.50%) |
Loss on extinguishment | 0.028 | |
Accretion of notes payable discount | 4.40% | |
Inducement expense | 15.90% | |
Stock-based compensation | 10.50% | |
Other permanent differences | 0.002 | 0.009 |
True up of prior year deferred tax assets | 1.30% | |
Change in federal and state tax rates | 18.40% | |
Change in valuation allowance | (11.20%) | 35.80% |
Effective rate of income tax |
Commitments and Contingencies62
Commitments and Contingencies (Details Narrative) $ / shares in Units, $ in Thousands | Oct. 12, 2017USD ($)Bitcoin$ / sharesshares | Aug. 16, 2017$ / shares | Jul. 31, 2017USD ($) | Nov. 18, 2016USD ($)$ / sharesshares | Aug. 09, 2016USD ($) | Jul. 07, 2016USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 15, 2017$ / shares |
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Lease expiration date | Jul. 31, 2018 | ||||||||
Operating leases, rent expense, net | $ 110 | $ 81 | |||||||
Number of common stock purchase during period | shares | 436,100 | ||||||||
Sale price per share | $ / shares | $ 4 | ||||||||
Services cost | $ 44 | ||||||||
Cash paid advance | $ 734 | $ 153 | |||||||
Option Shares [Member] | Year One [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Number of common stock purchase during period | shares | 1,000,000 | ||||||||
Sale price per share | $ / shares | $ 0.25 | ||||||||
Option Shares [Member] | Year Two [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Number of common stock purchase during period | shares | 2,000,000 | ||||||||
Sale price per share | $ / shares | $ 0.50 | ||||||||
Option Shares [Member] | Year Three [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Number of common stock purchase during period | shares | 3,000,000 | ||||||||
Sale price per share | $ / shares | $ 1 | ||||||||
Mr. Ladd [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Officers' compensation | $ 240 | ||||||||
Number common stock issued | shares | 2,000,000 | ||||||||
Employment agreement description | Company entered into an employment agreement with Robert B. Ladd, to act as its President and Chief Operating Officer, at an annual salary of $240. Mr. Ladd is eligible for a cash and/or equity bonus as determined by the Nomination and Compensation Committee. Further, Mr. Ladd received 2,000,000 shares of the Companys common stock, 1/3 of which shall vest within 12 months from the execution of the agreement, another 1/3 within 18 months, and the remaining 1/3 within 24 months from the execution of the agreement. Lastly, the agreement also provides for certain rights granted to Mr. Ladd in the event of his death, permanent incapacity, voluntary termination or discharge for cause. | ||||||||
Mr. McAfee [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Lease expiration date | Aug. 4, 2022 | ||||||||
Number common stock issued | shares | 6,000,000 | ||||||||
Employment agreement description | In connection with Mr. McAfees new appointment as Chief Cybersecurity Visionary, Mr. McAfee entered into a new employment, effective August 14, 2017. Mr. McAfees new agreement is for a term of 24 months at a rate of $7.25 or the minimum wage of the state of North Carolina, whichever is higher | ||||||||
Base annual salary per day | $ 1 | ||||||||
Common stock option exercisable period | 5 years | ||||||||
Rate of minimum wages | $ / shares | $ 7.25 | ||||||||
Mr. McAfee [Member] | January 26, 2018 [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Common stock option exercisable amount | 136 | ||||||||
Mr. Lowrey [Member] | March 8, 2018 [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Officers' compensation | $ 240 | ||||||||
Employment agreement description | Company entered into an employment with Mr. Lowrey, effective March 1, 2018. Mr. Lowreys employment agreement provides that he has been appointed for an initial term of two years | ||||||||
One time signing bonus | $ 10 | ||||||||
Number of restricted common stock, shares | shares | 750,000 | ||||||||
Stock option vesting period | 2 years | ||||||||
Sublease Agreement [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Lease expiration date | Jan. 31, 2020 | ||||||||
Monthly rent | $ 4 | ||||||||
Security deposit | 13 | ||||||||
Sublease Agreement [Member] | First 12 Month Period [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Monthly rent | 6 | ||||||||
Sublease Agreement [Member] | There After Months Until Expiration of Lease [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Monthly rent | $ 7 | ||||||||
12-month agreement [Member] | Hash The Planet [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Purchase of assets | $ 136 | ||||||||
Two Management Agreements [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Common stock option exercisable period | 3 years | ||||||||
Number of common stock purchase during period | shares | 435,700 | ||||||||
Purchase of assets | $ 3,650 | ||||||||
Number of bitcoin mining machines purchased | Bitcoin | 2,376 | ||||||||
Cash paid advance | $ 691 | ||||||||
User distribution portion description | The User Distribution Portion is 50% of the amount of bitcoin mined net of the operating fee (10% of the total bitcoin mined) and the electricity cost | ||||||||
Initial exercise price | $ / shares | $ 2 | ||||||||
Two Management Agreements [Member] | Selling General and Administrative Expenses [Member] | |||||||||
Operating Leases Commitments And Security Deposit [Line Items] | |||||||||
Fair value of the shares and warrants issued | $ 1,572 |
Commitments and Contingencies -
Commitments and Contingencies - Shedule of Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 85 |
2,019 | 85 |
2,020 | 7 |
Operating lease, net | $ 177 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Nov. 30, 2017 | Oct. 12, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | May 18, 2017 | Sep. 19, 2016 | Jul. 07, 2016 | May 26, 2016 | May 09, 2016 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Shares issued for common stock | 88,700 | 347,400 | 220,000 | 220,000 | 200,000 | |||||||
Fair value of common shares issued | $ 118 | |||||||||||
Shares issued for the exchange | 43,800,000 | |||||||||||
Maximum [Member] | ||||||||||||
Shares issued for common stock | 43,800,000 | |||||||||||
FTS [Member] | ||||||||||||
Outstanding shares of common stock ownership percentage | 33.00% | |||||||||||
Shares issued for common stock | 2,000,000 | |||||||||||
Consulting fees | $ 360 | $ 902 | ||||||||||
Due to related party | $ 100 | |||||||||||
Demonsaw LLC [Member] | ||||||||||||
Outstanding shares of common stock ownership percentage | 46.00% | 46.00% | ||||||||||
Shares issued for common stock | 20,000,000 | 2,000,000 | ||||||||||
Fair value of common shares issued | $ 2,500 | |||||||||||
DVasive, Inc [Member] | ||||||||||||
Shares issued for common stock | 23,800,000 | |||||||||||
Payments to acquire assets | $ 300 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - 401(k) Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee contribution amount | $ 10 | $ 10 |
Maximum [Member] | ||
Employee contribution percentage | 100.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) $ in Thousands | Mar. 15, 2018USD ($)shares | Feb. 28, 2018USD ($)Bitcoin | Jan. 17, 2018USD ($)shares | Dec. 15, 2017shares | Nov. 30, 2017shares | Oct. 12, 2017shares | Sep. 30, 2017shares | Aug. 31, 2017shares | May 18, 2017shares | May 31, 2017shares | Mar. 31, 2017shares | Feb. 28, 2017shares | Apr. 02, 2018shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Nov. 02, 2017shares | May 02, 2017shares |
Number of exercise warrant received | $ | $ 100 | $ 2,427 | |||||||||||||||
Number of warrant to purchase shares of common stock | 665,000 | 125,000 | 360,000 | ||||||||||||||
Shares issued for common stock | 88,700 | 347,400 | 220,000 | 220,000 | 200,000 | ||||||||||||
Sale of stock, number of shares issued | 2,000,000 | 26 | |||||||||||||||
Investor [Member] | |||||||||||||||||
Shares issued for common stock | 1,250,000 | 1,625,000 | 1,625,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||||
Number of exercise warrant received | $ | $ 225 | ||||||||||||||||
Number of warrant to purchase shares of common stock | 375,000 | 3,286,750 | |||||||||||||||
Shares issued for common stock | 1,849,250 | ||||||||||||||||
Subsequent Event [Member] | Restricted Stock [Member] | |||||||||||||||||
Stock issued during period restricted shares | 100,000 | ||||||||||||||||
Subsequent Event [Member] | Consultants [Member] | |||||||||||||||||
Number of common stock shares issued for services | 454,000 | ||||||||||||||||
Subsequent Event [Member] | Investor [Member] | |||||||||||||||||
Sale of stock, number of shares issued | 200,000 | ||||||||||||||||
Gross proceeds from sale shares | $ | $ 80 | ||||||||||||||||
Subsequent Event [Member] | Management Agreement Termination [Member] | |||||||||||||||||
Payment to acquire mining assets | $ | $ 767 | ||||||||||||||||
Subsequent Event [Member] | Management Agreement Termination [Member] | Third Party [Member] | |||||||||||||||||
Payment to acquire mining assets | $ | $ 428 | ||||||||||||||||
Number of bitcoin mining machines purchased | Bitcoin | 200 |