Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Marathon Patent Group, Inc. | |
Entity Central Index Key | 1,507,605 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,747,931 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 122,172 | $ 4,998,314 |
Restricted Cash | 3,919,718 | |
Total cash | 4,041,890 | 4,998,314 |
Accounts receivable - net of allowance for bad debt of $387,976 and $387,976 for September 30, 2017 and December 31, 2016 | 123,630 | 95,069 |
Note receivable | 588,864 | 225,982 |
Prepaid expenses and other current assets, net of discounts of $2,659 for September 30, 2017 and $3,724 for December 31, 2016 | 108,878 | 202,067 |
Total current assets | 4,863,262 | 5,521,432 |
Other assets: | ||
Property and equipment, net of accumulated depreciation of $133,224 and $108,407 for September 30, 2017 and December 31, 2016 | 9,803 | 28,329 |
Intangible assets, net of accumulated amortization of $12,813,915 and $11,323,185 for September 30, 2017 and December 31, 2016 | 7,590,213 | 12,314,628 |
Other non current assets, net of discounts of $797 for December 31, 2016 | 201,203 | |
Goodwill | 228,401 | 222,843 |
Total other assets | 7,828,417 | 12,767,003 |
Total Assets | 12,691,679 | 18,288,435 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,954,836 | 7,217,078 |
Clouding IP earn out - current portion | 32,637 | 81,930 |
Revenue share liability | 1,225,000 | |
Warrant liability | 2,411,750 | |
Notes payable, net of discounts of $5,837,363 and $852,404 for September 30, 2017 and December 31, 2016 | 15,582,156 | 13,162,007 |
Total current liabilities | 21,206,379 | 20,461,015 |
Long-term liabilities | ||
Notes Payable, net of discount of $57,763 for December 31, 2016 | 4,670,502 | |
Clouding IP earn out | 681,175 | 1,400,082 |
Revenue share liability | 1,000,000 | |
Other long term liability | 37,236 | 43,978 |
Total long-term liabilities | 718,411 | 7,114,562 |
Total liabilities | 21,924,790 | 27,575,577 |
Stockholders' Deficit: | ||
Preferred stock Series B, $.0001 par value, 50,000,000 shares authorized: 195,501 issued and outstanding at September 30, 2017 and December 31, 2016 | 78 | 78 |
Common stock, $.0001 par value; 200,000,000 shares authorized; 7,776,016 and 4,638,118 at September 30, 2017 and December 31, 2016 | 3,111 | 1,856 |
Additional paid-in capital | 61,833,077 | 49,877,710 |
Accumulated other comprehensive income (loss) | (450,623) | (1,060,390) |
Accumulated deficit | (70,427,472) | (57,942,548) |
Total Marathon Patent Group stockholders' equity | (9,041,829) | (9,123,294) |
Noncontrolling interests | (191,282) | (163,848) |
Total deficit | (9,233,111) | (9,287,142) |
Total liabilities and stockholders' deficit | $ 12,691,679 | $ 18,288,435 |
Consolidated Condensed Balance3
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for bad debt | $ 387,976 | $ 387,976 |
Discounts on prepaid expenses and other current assets | 2,659 | 3,724 |
Accumulated depreciation of property and equipment | 133,224 | 108,407 |
Accumulated amortization of intangible assets | 12,813,915 | 11,323,185 |
Discount on other non current assets | 797 | |
Discount on notes payable, current | 5,837,363 | 852,404 |
Discount on notes payable, long-term | $ 57,763 | |
Preferred stock, par value | $ 0.0001 | |
Preferred stock, shares authorized | 50,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 7,776,016 | 4,638,118 |
Common stock, shares outstanding | 7,776,016 | 4,638,118 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ .0001 | $ .0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 195,501 | 195,501 |
Preferred stock, shares outstanding | 195,501 | 195,501 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 162,713 | $ 43,113 | $ 609,650 | $ 36,452,551 |
Expenses | ||||
Cost of revenues | 64,836 | 1,094,378 | 1,544,322 | 19,202,118 |
Amortization of patents and website | 457,419 | 2,030,886 | 1,803,264 | 6,018,196 |
Compensation and related taxes | 1,871,946 | 1,252,571 | 3,718,034 | 3,406,841 |
Consulting fees | 133,018 | 257,420 | 189,819 | 903,032 |
Professional fees | 616,125 | 432,496 | 1,686,955 | 1,336,201 |
General and administrative | 213,130 | 183,771 | 599,416 | 612,284 |
Goodwill impairment | 0 | 83,000 | 0 | 83,000 |
Patent impairment | 723,218 | 5,531,383 | 723,218 | 6,525,273 |
Total operating expenses | 4,079,092 | 10,782,905 | 10,265,028 | 38,086,945 |
Operating loss from continuing operations | (3,916,979) | (10,739,792) | (9,655,378) | (1,634,394) |
Other income (expenses) | ||||
Other income (expense) | 2,252,886 | (37,116) | 3,151,418 | (68,647) |
Foreign exchange (loss) | (480,240) | (175,850) | (463,191) | (238,073) |
Loss on debt extinguishment | (283,237) | (283,237) | ||
Loss on sale of company | (1,519,875) | (1,519,875) | ||
Change in fair value adjustment of Clouding IP earn out | 754,321 | 1,954,378 | 768,200 | 2,122,208 |
Warrant income (expense) | (1,909,879) | (1,914,786) | ||
Interest income | 931 | 931 | 2,793 | 2,793 |
Interest expense | (1,283,223) | (649,065) | (2,416,722) | (2,500,321) |
Total other income (expenses) | (2,468,316) | 1,093,278 | (2,675,400) | (682,040) |
Loss from continuing operations before benefit for income taxes | (6,385,295) | (9,646,514) | (12,330,778) | (2,316,434) |
Income tax benefit (expense) | (12,191) | 3,347,909 | (29,433) | 26,974 |
Net Income (loss) | (6,397,486) | (6,298,605) | (12,360,211) | (2,289,460) |
Net income (loss) attributable to Noncontrolling interests | (280,000) | 24,195 | (124,714) | 27,918 |
Net (loss) attributable to common shareholders | $ (6,677,486) | $ (6,274,410) | $ (12,484,925) | $ (2,261,542) |
Income (loss) per common share: | ||||
Basic | $ (1.06) | $ (1.67) | $ (2.24) | $ (0.61) |
Diluted | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic | 6,270,299 | 3,761,786 | 5,564,465 | 3,736,213 |
Net loss | $ (6,677,486) | $ (6,274,410) | $ (12,484,925) | $ (2,261,542) |
Other comprehensive loss: | ||||
Unrealized gain on foreign currency translation | 482,622 | 209,159 | 609,768 | 306,411 |
Comprehensive loss | (6,194,864) | (6,065,251) | (11,875,157) | (1,955,131) |
Less: comprehensive income (loss) related to non-controlling interest | (280,000) | 24,195 | (124,714) | 27,918 |
Comprehensive loss attributable to Marathon Patent Group, Inc. | $ (6,474,864) | $ (6,041,056) | $ (11,999,871) | $ (1,927,213) |
Consolidated Condensed Stateme5
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (12,484,925) | $ (2,261,542) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 1,248 | 3,780 |
Amortization of patents and website | 1,803,264 | 6,018,196 |
Deferred tax asset | 531,757 | |
Deferred tax liability | (638,268) | |
Loss on sale of companies | 1,519,875 | |
Warrant liability | ||
Impairment of intangible assets | 704,678 | 6,525,273 |
Impairment of goodwill | 0 | 83,000 |
Stock based compensation | 1,523,187 | 1,541,615 |
Stock issued for services | 136,000 | |
Non-cash interest, discount, and financing costs | (4,397,381) | 952,231 |
Change in fair value of Clouding earnout | (768,200) | (2,122,198) |
Allowance for doubtful accounts | 12,226 | |
Beneficial conversion feature | 4,017,729 | |
Noncontrolling interest | (27,435) | (27,918) |
Other non-cash adjustments | 182,024 | 96,996 |
Changes in operating assets and liabilities | ||
Accounts receivable | (28,561) | 43,763 |
Bonds posted with courts | 883,695 | |
Prepaid expenses and other assets | (269,693) | 6,652 |
Other non current assets | 201,203 | |
Accounts payable and accrued expenses | (5,262,242) | 557,832 |
Net cash and restricted cash provided by (used in) operating activities | (14,805,103) | 11,214,122 |
Cash flows from investing activities: | ||
Acquisition of patents | (3,522,656) | |
Disposal of patents | 2,771,757 | |
Purchase of property, equipment, and other intangible assets | (6,291) | (8,387) |
Net cash provided by (used in) investing activities | 2,765,466 | (3,561,043) |
Cash flows from financing activities: | ||
Cash received upon issuance of equity (net of issuance costs) | 5,158,906 | |
Issuance of warrants | 2,549,084 | |
Issuance of convertible notes payable | 5,500,000 | |
Payments on notes payable, net | (103,000) | (578,804) |
Net cash provided (used in) by financing activities | 11,066,704 | (8,911,688) |
Effect of exchange rate changes on cash | 16,509 | (1,592) |
Net decrease in cash | (956,424) | (1,260,201) |
Cash at beginning of period | 4,998,314 | 2,555,151 |
Cash and restricted cash at end of period | 4,041,890 | 1,294,950 |
Cash paid for: | ||
Interest expense | 368,923 | 1,187,074 |
Taxes paid | 29,433 | 27,682 |
Cash invested in 3D Nano | 115,000 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Revenue share liability incurred in conjunction with note payable | 225,000 | |
Warrant issued in conjunction with common stock issuance | 257,957 | |
Note payable issued in conjunction with the acquisition of Munitech patents | 1,755,635 | |
Medtech and Orthophoenix [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (2,953,779) | |
Fortress Note Payable [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (63,286) | (5,379,105) |
3D Nano License Note Payable [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (100,000) | |
Medtronic Note Payable [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (600,000) | |
Proceeds from notes payable | 600,000 | |
Siemen's Notes Payable [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (1,750,000) | |
Vendors Notes Payable [Member] | ||
Cash flows from financing activities: | ||
Payments on notes payable | (125,000) | |
Munitech Patents [Member] | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Note payable issued in conjunction with the acquisition of Munitech patents | 1,755,635 | |
SE Patent [Member] | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Note payable issued in conjunction with the acquisition of Munitech patents | 100,000 | |
3D Nano License [Member] | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Note payable issued in conjunction with the acquisition of Munitech patents | $ 200,000 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Organization Marathon Patent Group, Inc.’s (the “Company”) business is to acquire patents and patent rights and to monetize the value of those assets to generate revenue and profit for the Company. We acquire patents and patent rights from their owners, who range from individual inventors to Fortune 500 companies. Part of our acquisition strategy is to acquire or invest in patents and patent rights that cover a wide-range of subject matter, which allows us to achieve the benefits of a growing diversified portfolio of assets. Generally, the patents and patent rights that we acquire are characterized by having large identifiable companies who are or have been using technology that infringes our patents and patent rights. We generally monetize our portfolio of patents and patent rights by entering into license discussions, and if that is unsuccessful, initiating enforcement activities against any infringing parties with the objective of entering into a standard form of comprehensive settlement and license agreement that may include the granting of non-exclusive retroactive and future rights to use the patented technology, a covenant not to sue, a release of the party from certain claims, the dismissal of any pending litigation and other terms that are appropriate in the circumstances. Our strategy has been developed with the expectation that it will result in a long-term, diversified revenue stream for the Company. The Company was incorporated in the State of Nevada on February 23, 2010 under the name Verve Ventures, Inc. On December 7, 2011, we changed our name to American Strategic Minerals Corporation and were engaged in the business of exploration and potential development of uranium and vanadium minerals business. In June 2012, we discontinued our minerals business and began to invest in real estate properties in Southern California. In October 2012, we discontinued our real estate business when our CEO joined the firm and we commenced our current business, at which time the Company’s name was changed to Marathon Patent Group, Inc. On October 1, 2012, the shareholders holding a majority of the Company’s voting capital had voted and authorized the Company to change the name of the Company to Marathon Patent Group, Inc. (the “Name Change”). The Board of Directors approved the Name Change on October 1, 2012. The Board of Directors determined the name “Marathon Patent Group, Inc.” better reflected the long-term strategy in exploring other opportunities and the identity of the Company going forward. On February 15, 2013, the Company filed the Certificate of Amendment with the Secretary of State of the State of Nevada in order to effectuate the Name Change. On July 18, 2017, shareholders of record holding a majority of the outstanding voting capital of the Company approved a reverse stock split of the Company’s issued and outstanding common stock by a ratio of not less than one-for-four and not more than one-for-twenty-five, with such ratio to be determined by the Board of Directors, in its sole discretion. On October 25, 2017, the reverse stock split ratio of one (1) for four (4) basis was approved by the Board of Directors. On October 30, 2017, the Company filed a certificate of amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock, par value $0.0001 per share on a one (1) for four (4) basis. On September 6, 2017, the Board of Directors approved and adopted, subject to shareholder approval on or prior to September 6, 2018, the Company’s 2017 Equity Incentive Plan. The Company’s 2017 Equity Incentive Plan was approved by the shareholders of the Company at a special meeting held on September 29, 2017. All share and per share values for all periods presented in the accompanying consolidated financial statements have been retroactively adjusted to reflect the Reverse Split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. These consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Use of Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, but are not limited to, estimating the useful lives of patent assets, the assumptions used to calculate fair value of warrants and options granted, goodwill impairment, realization of long-lived assets, deferred income taxes, unrealized tax positions and business combination accounting. Cash The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation and restricted cash, held in escrow pursuant to the terms of the Unit Purchase Agreement entered into on August 14, 2017, with another financial institution that is also insured by the Federal Deposit Insurance Corporation. The Company’s accounts held at this institution, up to a limit of $250,000, are insured by the Federal Deposit Insurance Corporation (“FDIC”). As of September 30, 2017, the Company had bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. Accounts Receivable The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At each of September 30, 2017 and December 31, 2016, the Company had recorded an allowance for bad debts in the amount of $387,976 and $387,976, respectively. Accounts receivable, net at September 30, 2017 and December 31, 2016, amounted to $123,630 and $95,069, respectively. Concentration of Revenue and Geographic Area Revenue from the Company’s patent enforcement activities is considered United States revenue as any payments for licenses included in that revenue are for United States operations irrespective of the location of the licensee’s or licensee’s parent home domicile. The Company had $0 in revenues from newly issued patent licenses for both the three months ended September 30, 2017 and the three months ended September 30, 2016. The revenue for the three months ended September 30, 2017 is attributable to a non-enforcement technology access license for one of the Company’s subsidiaries and running royalties from the Company’s Medtech portfolio and for the three months ended September 30, 2016, the revenue is attributable to running royalties from the Company’s Medtech portfolio. At the current time, we define customers as firms that obtain licenses to the Company’s patents, either prior to or during enforcement litigation. These firms generally enter into non-recurring, non-exclusive, non-assignable license agreements with the Company, and these customers do not generally engage in ongoing, recurring business activity with the Company. The Company has historically had a small number of customers enter into such agreements, resulting in higher levels of revenue concentration. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed, (iii) amounts are fixed or determinable and (iv) collectability of amounts is reasonably assured. In general, revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. These rights typically include some combination of the following: (i) the grant of a non-exclusive, perpetual license to use patented technologies owned or controlled by the Company, (ii) a covenant-not-to-sue, (iii) the dismissal of any pending litigation. The intellectual property rights granted typically are perpetual in nature. Pursuant to the terms of these agreements, the Company has no further obligation with respect to the grant of the non-exclusive licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company’s part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, and when all other revenue recognition criteria have been met. The Company also considers the revenue generated from its settlement and licensing agreements as one unit of accounting under ASC 605-25, “Multiple-Element Arrangements” as the delivered items do not have value to customers on a standalone basis, there are no undelivered elements and there is no general right of return relative to the license. Under ASC 605-25, the appropriate recognition of revenue is determined for the combined deliverables as a single unit of accounting and revenue is recognized upon delivery of the final elements, including the license for past and future use and the release. Also, since the settlement element and license element for past and future use are the Company’s major central business, the Company presents these two elements as one revenue category in its statement of operations. The Company does not expect to provide licenses that do not provide some form of settlement or release. There was no revenue from newly issued patent licenses for the three months ended September 30, 2017 and September 30, 2016, respectively. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets of $108,878 and $202,067 at September 30, 2017 and December 31, 2016, respectively, consist primarily of costs paid for future services, which will occur within a year. Prepaid expenses include prepayments in cash and equity instruments for public relation services, business advisory, consulting, and prepaid insurance, which are being amortized over the terms of their respective agreements. Bonds Posted with Courts Under certain circumstances related to litigations in Germany, the Company is either required to or may decide to enter a bond with the courts. As of September 30, 2017 and December 31, 2016, the Company had no outstanding bonds posted with the German courts. Related Party Transactions Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. On May 13, 2013, we entered into a nine-year advisory services agreement (the “Advisory Services Agreement”) with IP Navigation Group, LLC (“IP Nav”), of which Erich Spangenberg is founder and former Chief Executive Officer. Mr. Spangenberg is an affiliate of the Company. The terms of the Advisory Services Agreement provide that, in consideration for its services as intellectual property licensing agent, the Company will pay to IP Navigation Group, LLC between 10% and 20% of the gross proceeds of certain licensing campaigns in which IP Navigation Group, LLC acts as intellectual property licensing agent. On November 18, 2013, we entered into a consulting agreement with Jeff Feinberg (“Feinberg Agreement”), pursuant to which we agreed to grant Mr. Feinberg 25,000 shares of our restricted Common Stock, 50% of which shall vest on the one-year anniversary of the Feinberg Agreement and the remaining 50% of which shall vest on the second-year anniversary of the Feinberg Agreement. Mr. Feinberg is the trustee of The Feinberg Family Trust and holds voting and dispositive power over shares held by The Feinberg Family Trust, which is a 10% beneficial owner of our Common Stock. On May 2, 2014, the Company completed the acquisition of certain ownership rights (the “Acquired Intellectual Property”) from TechDev, Granicus and SFF pursuant to the terms of three purchase agreements between: (i) the Company, TechDev, SFF and DA Acquisition LLC, a newly formed Texas limited liability company and wholly-owned subsidiary of the Company; (ii) the Company, Granicus, SFF and IP Liquidity Ventures Acquisition LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company; and (iii) the Company, TechDev, SFF and Sarif Biomedical Acquisition LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company. TechDev, SFF and Granicus are owned or controlled by Erich Spangenberg or family members or associates. ● Pursuant to the DA Agreement, the Company acquired 100% of the limited liability company membership interests of Dynamic Advances, LLC, a Texas limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the DA Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the IP Liquidity Agreement, the Company acquired 100% of the limited liability company membership interests of IP Liquidity Ventures, LLC, a Delaware limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the IP Liquidity Agreement, Granicus and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the Sarif Agreement, the Company acquired 100% of the limited liability company membership interests of Sarif Biomedical, LLC, a Delaware limited liability company, in consideration for two cash payments of $250,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $300,000 if not made on or before June 30, 2014. The remaining cash payment was made on February 24, 2015 and is fully paid. Under the terms of the Sarif Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the Pay Proceeds Agreement, the Company may pay the sellers a percentage of the net recoveries (gross revenues minus certain defined expenses) that the Company makes with respect to the assets held by the entities that the Company acquired pursuant to the DA Agreement, the IP Liquidity Agreement and the Sarif Agreement. Under the terms of the Pay Proceeds Agreement, as amended in 2016, if the Company recovers $10,000,000 or less with regard to the IP Assets, then nothing is due to the sellers; if the Company recovers between $13,000,000 and $40,000,000 with regard to the IP Assets, then the Company shall pay 40% of the cumulative gross proceeds of such recoveries to the sellers; and if the Company recovers over $40,000,000 with regard to the IP Assets, the Company shall pay 50% of the cumulative gross proceeds of such recoveries to the sellers. Pursuant to the amendment to the Pay Proceeds Agreement, the Company paid TechDev, Granicus and SFF $2.4 million. In no event will the total payments made by the Company under the Pay Proceeds Agreement exceed $250,000,000. On May 2, 2014, we entered into an opportunity agreement (the “Marathon Opportunity Agreement”) with Erich Spangenberg, who is an affiliate of the Company. The terms of the Marathon Opportunity Agreement provide that we have ten business days after receiving notice from Mr. Spangenberg to provide up to 50% of the funding for certain opportunities relating to the licensing, intellectual property acquisitions and/or intellectual property enforcement actions in which Mr. Spangenberg, IP Nav or any entity controlled by Mr. Spangenberg, other than: (i) IP Nav or any of its affiliates, and (ii) Medtech Development, LLC or any of its affiliates. On June 17, 2014, Selene Communication Technologies Acquisition LLC (“Acquisition LLC”), a Delaware limited liability company and newly formed wholly-owned subsidiary of the Company, entered into a merger agreement with Selene Communication Technologies, LLC (“Selene”). Selene owned a patent portfolio consisting of three United States patents in the field of search and network intrusion that relate to tools for intelligent searches applied to data management systems as well as global information networks such as the internet. IP Nav provided patent monetization and support services under an existing agreement with Selene prior to the return of the patents to Stanford Research Institute (“SRI”), the original owners of the patents. On August 29, 2014, the Company entered into a patent purchase agreement to acquire a portfolio of patents from Clouding IP, LLC for an aggregate purchase price of $2.4 million, of which $1.4 million was paid in cash and $1.0 million was paid in the form of a promissory note issued by the Company that matured on October 31, 2014 and was fully paid prior to the maturation date. The Company also issued 6,250 shares of its restricted common stock in connection with the acquisition. Clouding IP, LLC is also entitled to certain possible future cash payments. Clouding IP LLC is owned or controlled by Erich Spangenberg or family members or associates. On October 10, 2014, the Company entered into an interest sale agreement with MedTech Development, LLC (“MedTech”) to acquire from MedTech 100% of the limited liability membership interests of OrthoPhoenix and TLIF as well as 100% of the shares of MedTech GmbH. In connection with the transaction, the Company is obligated to pay to MedTech $1 million at closing and $1 million on each of the following nine (9) month anniversary dates of the closing. On July 16, 2015, the Company entered into a forbearance agreement (the “Agreement”) with MedTech Development, the holder of a Promissory Note issued by the Company, dated October 10, 2014. Pursuant to the Agreement, the term of the Note was extended to October 1, 2015 and the Note began accruing interest starting from May 13, 2015. In addition, the Company agreed to make certain mandatory prepayments under certain circumstances and issue to MedTech Development 500,000 shares of restricted common stock of the Company. In accordance with ASC 470-50, the Company recorded this agreement as debt extinguishment and $654,000 was recorded as loss on debt extinguishment during the year ended September 30, 2015. On October 23, 2015, the Company entered into Amendment No. 1 to the Forbearance Agreement (the “Amendment”) entered into with MedTech Development on July 16, 2015. Pursuant to the Amendment, the due date of the Promissory Note was extended to October 23, 2016 in return for which the Company made a payment of $100,000 on October 23, 2015 and modified the terms under which the Company agreed to make mandatory prepayments under certain circumstances. The acquired subsidiaries are also obligated to make certain additional payments to MedTech from recoveries following the receipt by the acquired subsidiaries of 200% of the purchase payments, plus recovery of out of pocket expenses in connection with patent claims. The participation payments may be paid, at the election of the Company, in common stock of Marathon at the market price on the date of issuance. In connection with the transaction, the Company entered into a promissory note, common interest agreement and in the event of issuance of common stock to MedTech, will enter into a lockup and registration rights agreement. Approximately forty-five percent (45%) of MedTech is owned or controlled by Erich Spangenberg or family members or associates. On October 1, 2016, one of the Company’s subsidiaries, PG Technologies S.a.r.l. entered into an advisory services agreement with Granicus IP, LLC, an entity owned or controlled by one of the Company’s employees, whereby Granicus receives a percentage of pre-tax return from PG Technologies after certain revenue thresholds have been met. During 2016, certain officers and directors of the Company received restricted common stock in the Company’s 3D Nanocolor Corp. (“3D Nano”) subsidiary. At December 31, 2016, ‘‘Other noncurrent assets’’ in the Balance Sheets consists of a note receivable from an entity controlled by one of the Company’s employees that is uncollateralized. The note receivable does not carry interest and is repayable to the Company at the earlier of March 31, 2022 or based on certain milestones. The note receivable balance has been classified as current assets because the Company believes that it will be collected within one year from the Balance Sheet dates. On September 29, 2017, the Company entered into an Irrevocable Stock Power whereby the Company sold the shares it owns in the Company’s subsidiary, 3D Nano to Doug Croxall, the Company’s Chief Executive Officer with such assignment including the assumption of all of 3D Nano’s liabilities. The Company engaged a third party to value the assignment, the results of which were that the valuation and assignment were deemed to be at fair value. Fair Value of Financial Instruments The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The carrying amounts reported in the consolidated condensed balance sheet for cash, accounts receivable, bonds posted with courts, accounts payable, and accrued expenses, approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying value of notes payable and other long-term liabilities approximates fair value as the related interest rates approximate rates currently available to the Company. Clouding IP earn out liability was determined as a Level 3 liability, which requires an assessment of fair value at each period end by using discounted cash flow as a valuation technique using unobservable inputs, such as revenue and expenses forecasts, timing of proceeds, and discount rate. Based on reassessment of fair value as of September 30, 2017, the Company determined that there was a reduction in the Clouding IP earn out liability during the three and nine months ended September 30, 2017 in the amounts of $754,321and $754,321, respectively and a reduction in the carrying value of the Clouding IP intangible assets during the three and nine months ended September 30, 2017 in the amounts of $723,218 and $723,218, respectively. The Company determined that the Warrants issued pursuant to the Unit Purchase Agreement should be treated as a Level 2 liability, which determine the value based on observable market-based inputs. in this instance, the Warrants were valued using a Monte-Carlo simulation utilizing market-based inputs for volatility and risk-free rate of interest, which resulted in the Warrants issued pursuant to the August 31, 2017 close being fair valued at $0.0364 per share and the Warrants issued pursuant to the September 29, 2017 close being fair valued at $0.0877 per share. Accounting for Acquisitions In the normal course of its business, the Company makes acquisitions of patent assets and may also make acquisitions of businesses. With respect to each such transaction, the Company evaluates facts of the transaction and follows the guidelines prescribed in accordance with ASC 805 — Business Combinations to determine the proper accounting treatment for each such transaction and then records the transaction in accordance with the conclusions reached in such analysis.The Company performs such analysis with respect to each material acquisition within the consolidated group of entities. Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions will more likely than not be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service and state taxing authorities, generally for three years after they were filed. The Company is in the process of filing the 2016 tax returns. After review of the prior year financial statements and the results of operations through December 31, 2016, the Company has recorded a full valuation allowance on its deferred tax asset. Basic and Diluted Net Loss per Share Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive. The Company has options to purchase 613,195 shares of Common Stock, warrants to purchase 7,487,894 shares of Common Stock, Convertible Notes convertible into up to 13,750,000 shares of Common Stock and shares of Series B Convertible Preferred Stock convertible into 195,501 shares of Common Stock outstanding at September 30, 2017, which were excluded from the computation of diluted shares outstanding, as they would have had an anti-dilutive impact on the Company’s net loss. The following table sets forth the computation of basic and diluted loss per share: For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016 For the Nine Months September 30, 2017 For the Nine Months September 30, 2016 Net income (loss) attributable to Common shareholders $ (6,677,485 ) $ (6,274,410 ) $ (12,484,924 ) $ (2,261,542 ) Denominator Weighted average common shares – Basic and Diluted 6,270,299 3,761,786 5,564,465 3,736,213 Earnings (loss) per common share: Earnings (loss) – Basic and Diluted $ (1.06 ) $ (1.67 ) $ (2.24 ) $ (0.60 ) Intangible Assets - Patents Intangible assets include patents purchased and patents acquired in lieu of cash in licensing transactions. The patents purchased are recorded based on the cost to acquire them and patents acquired in lieu of cash are recorded at their fair market value. The costs of these assets are amortized over their remaining useful lives. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. The Company recorded impairment charges to its intangible assets during the three and nine months ended September 30, 2017 in the amount of $723,218 and $723,218, respectively, compared to impairment charges associated with the end of life of a number of the Company’s portfolios during the three and nine months ended September 30, 2016 in the amounts of $5,531,383 and $6,525,273, respectively. Goodwill Goodwill is tested for impairment at the reporting unit level at least annually in accordance with ASC 350, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When conducting its annual goodwill impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that goodwill is impaired. If it is determined by a qualitative evaluation that it is more likely than not that goodwill is impaired, the Company then applies a two-step impairment test. The two-step impairment test first compares the fair value of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of the reporting unit exceeds its fair value, the Company determines the implied fair value of the reporting unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded in the consolidated condensed statement of operations. The Company performs the annual testing for impairment of goodwill at the reporting unit level during the quarter ended September 30. For the three and nine months ended September 30, 2017 the Company recorded no impairment charge to its goodwill and for the three and nine months ended September 30, 2016, the Company recorded an impairment charge to its goodwill in the amount of $0 and $83,000, respectively. Other Intangible Assets In accordance with ASC 350-30, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: (1) significant underperformance relative to expected historical or projected future operating results; (2) significant changes in the manner of use of the acquired assets or the strategy for the overall business; and (3) significant negative industry or economic trends. When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. For the three and nine months ended September 30, 2017 and September 30, 2016, the Company recorded no impairment charge to its other intangible assets. Impairment of Long-lived Assets The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3 — ACQUISITIONS Clouding Corp. On August 29, 2014, the Company entered into a patent purchase agreement (the “Clouding Agreement”) between Clouding Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (“Clouding”) and Clouding IP, LLC, a Delaware limited liability company (“Clouding IP”), pursuant to which Clouding acquired a portfolio of patents from Clouding IP. The Clouding Agreement included an earn out payable to Clouding IP, which was booked as an earn out liability on the balance sheet in accordance with the appraisal of the consideration and intangible value. The Clouding IP earn out liability was determined to be a Level 3 liability, which requires assessment of fair value at each period end by using a discounted cash flow model as the valuation methodology, using unobservable inputs, such as revenue and expenses forecasts, timing of proceeds, and discount rates. Based on the reassessment of fair value as of September 30, 2017, the Company determined the Clouding IP earn out liability to be $32,637 (current portion) and $681,175 (long-term portion) and as of December 31, 2016, the Company determined the Clouding IP earn out liability to be $81,930 (current portion) and $1,400,082 (long-term portion). Munitech IP S.a.r.l. (“Munitech”) On June 27, 2016, Munitech S.a.r.l. (“Munitech”), a Luxembourg limited liability company and newly formed wholly-owned subsidiary of the Company, entered into two Patent Purchase Agreements (the “PPA” or together, the “PPAs”) to purchase 221 patents from Siemens Aktiengesellschaft. The patents purchased by Munitech relate to W-CDMA and GSM cellular technology and cover all the major global economies including China, France, Germany, the United Kingdom and the United States. Significantly, many of the patent families have been declared to be Standard Essential Patents (“SEPs”) with the European Telecommunications Standard Institute (“ETSI”) and/or the Association of Radio Industries and Businesses (“ARIB”) related to Long Term Evolution (“LTE”), Universal Mobile Telecommunications System (“UMTS”), and/or General Packet Radio Service (“GPRS”). Pursuant to the terms of the PPAs, Munitech (i) paid Siemens Aktiengesellschaft $1,150,000 in cash upon closing and (ii) agreed to two future payments, one in the amount of $1,000,000 payable on December 31, 2016 and the second in the amount of $750,000 payable on September 30, 2017. After evaluating the facts and circumstances of the purchase, the Company determined that this was an asset purchase. In coming to its conclusion, the Company reviewed the status of the assets, the historical activity and the absence of any employees, licensing activity, vendors associated with the patents, any royalties, and any other assets other than the patents. On September 1, 2017, the Company entered into a Share Purchase Agreement with GPat Technologies, LLC (“GPat”) whereby the Company sold its 100% interest in Munitech to GPat. Magnus IP GmbH (“Magnus”) On July 5, 2016, Marathon IP GmbH (“Marathon IP”), a German corporate entity and newly formed wholly-owned subsidiary of the Company, entered into a Patent Purchase Agreements (the “PPA”) to purchase 86 patents from Siemens Switzerland Ltd and Siemens Industry Inc., (together, “Siemens”). On September 15, 2016, the patents were assigned by Marathon IP to Magnus, both of which are wholly-owned subsidiaries of the Company. The patents purchased by Marathon IP relate to Internet-of-Things (IOT) technology. Generally, the portfolio’s subject matter is directed toward self-healing control networks for automation systems. The patents are relevant to wireless mesh or home area networks for use in IOT, or connected home devices and enable simple commissioning, application level security, simplified bridging, and end-to-end IP security. The technology can support a wide variety of IOT enabled devices including lighting, sensors, appliances, security, and more. Pursuant to the terms of the PPA, Marathon IP paid Siemens $250,000 in cash upon closing. Pursuant to the terms of the PPAs, Munitech (i) paid Siemens $250,000 in cash upon closing and (ii) will pay a percentage of gross proceeds in excess of a reserve threshold on behalf of Marathon IP. After evaluating the facts and circumstances of the purchase, the Company determined that this was an asset purchase. In coming to its conclusion, the Company reviewed the status of the assets, the historical activity and the absence of any employees, licensing activity, vendors associated with the patents, any royalties, and any other assets other than the patents. On October 20, 2017, the Company assigned the patents held by Magnus to DBD, pursuant to the First Amendment to Amended and Restated Revenue Sharing and Securities Purchase Agreement and Restructuring Agreement (the “First Amendment and Restructuring Agreement”) entered into with DBD. In exchange for the assignment of three of the Company’s portfolios, of which Magnus was one, DBD cancelled all indebtedness owed by the Company to DBD. Traverse Technologies Corp. (“Traverse”) On August 3, 2016, Traverse Technologies Corp. (“Traverse”), a United States corporation and newly formed wholly-owned subsidiary of the Company, entered into a Patent Purchase Agreement (the “PPA”) to purchase 12 patents from CPT IP Holdings (“CPT”). The patents purchased by Traverse relate to batteries and principally cover various Asian and the United States markets. Pursuant to the terms of the PPAs, Traverse (i) paid CPT $1,300,000 in cash upon closing and (ii) will pay a percentage of net recoveries in excess of a reserve threshold on behalf of Traverse. After evaluating the facts and circumstances of the purchase, the Company determined that this was an asset purchase. In coming to its conclusion, the Company reviewed the status of the assets, the historical activity and the absence of any employees, licensing activity, vendors associated with the patents, any royalties, and any other assets other than the patents. On October 20, 2017, the Company assigned the patents held by Traverse to DBD, pursuant to the First Amendment and Restructuring Agreement entered into with DBD. In exchange for the assignment of three of the Company’s portfolios, of which Traverse was one, DBD cancelled all indebtedness owed by the Company to DBD. PG Technologies S.a.r.l. (“PG Tech”) On August 11, 2016, PG Technologies S.a.r.l. (“PG Tech”), a Luxembourg limited liability company jointly owned with a large litigation financing fund, entered into a Patent Funding and Exclusive License Agreement (the “ELA”) to manage the monetization of greater than 10,000 patents in a single industry vertical with a Fortune 50 company. The patents cover all the major global economies including China, France, Germany, the United Kingdom and the United States. The Company determined that its ownership in PG Tech constitutes a VIE and that the Company is the primary beneficiary, as a result of which, the Company consolidated PG Tech in its financial statements. Pursuant to the terms of the ELA, PG Tech agreed with the Fortune 50 company to pay (i) $1,000,000 in cash upon closing, (ii) a future payment in the amount of $1,000,000 payable on or before December 31, 2016, (iii) minimum quarterly payments of $250,000 starting on April 1, 2017 and (iv) split 50% of the net licensing revenues. After evaluating the facts and circumstances of the purchase, the Company determined that this was an asset purchase. In coming to its conclusion, the Company reviewed the status of the assets, the historical activity and the absence of any employees, licensing activity, vendors associated with the patents, any royalties, and any other assets other than the patents. On October 27, 2017, the Company entered into an Assignment and Confirmation Agreement (the “Assignment”) with Luxone Ventures S.a.r.l. (“Luxone”) whereby the Company assigned all of its ownership interest in PG Technologies, S.a.r.l. (“PG Tech”) to Luxone. Pursuant to the Assignment, Luxone assumed the Company’s ownership interest in PG Tech and the Company removed from its balance sheet all the liabilities and debt associated with PG Tech and received in return a revenue share associated with future earnings from the PG Tech portfolio. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 4 – INTANGIBLE ASSETS Intangible assets include patents purchased and patents acquired in lieu of cash in licensing transactions. Patents purchased are recorded based at their acquisition cost and patents acquired in lieu of cash are recorded at their fair market value. Intangible assets consisted of the following: September 30, 2017 December 31, 2016 Intangible Assets $ 20,403,408 $ 23,637,813 Accumulated Amortization & Impairment (12,813,195 ) (11,323,185 ) Intangible assets, net $ 7,590,213 $ 12,314,628 Intangible assets are comprised of patents with estimated useful lives between approximately 1 to 16 years. Once placed in service, the Company will amortize the costs of intangible assets over their estimated useful lives on a straight-line basis. During the three and nine months ended September 30, 2017, respectively, the Company capitalized a total of $0 and $0 in patent acquisition costs and during the three and nine months ended September 30, 2016, respectively, the Company capitalized a total of $3,550,000 and $6,450,000 in patent acquisition costs. Costs incurred to acquire patents, including legal costs, are also capitalized as long-lived assets and amortized on a straight-line basis with the associated patent. Amortization of patents is included as an operating expense as reflected in the accompanying consolidated condensed statements of operations. The Company assesses fair market value for any impairment to the carrying values. The Company recorded impairment charges to its intangible assets during the three and nine months ended September 30, 2017 in the amount of $723,218 and $723,218, respectively, compared to impairment charges associated with the end of life of a number of the Company’s portfolios during the three and nine months ended September 30, 2016 in the amounts of $5,531,383 and $6,525,273, respectively. Patent amortization expense for the three and nine months ended September 30, 2017 was $457,419 and $1,803,264, respectively, and for the three and nine months ended September 30, 2016, patent amortization expense was $2,030,886 and $6,018,196, respectively. All patent amortization expense figures are net of foreign currency translation adjustments. Future amortization of intangible assets, net of foreign currency translation adjustments is as follows: 2017 $ 401,804 2018 1,517,219 2019 1,447,660 2020 1,154,767 2021 1,004,600 2022 and thereafter 2,064,163 Total $ 7,590,213 As of September 30, 2017, our operating subsidiaries owned 170 patents, as set forth below, and had economic rights to over 10,000 additional patents, both of which include U.S. patents and certain foreign counterparts. In the aggregate, the earliest date for expiration of a patent in the Company’s patent portfolio has passed (the patent is expired, but patent rules allow for nine-year look-back for royalties), the median expiration date for patents in the Company’s portfolio is September 13, 2021, and the latest expiration date for a patent in any of the Company’s patent portfolios is February 27, 2033. A summary of the Company’s patent portfolios is as follows: Subsidiary Number of Patents Earliest Expiration Date Median Expiration Date Latest Expiration Date Subject Matter Clouding Corp. 25 2/3/18 9/10/21 5/29/29 Network and data management CRFD Research, Inc. 5 5/25/21 9/17/21 8/19/23 Web page content translator and device-to-device transfer system Dynamic Advances, LLC 2 11/6/21 9/7/23 7/9/25 Natural language interface Magnus IP 55 1/28/22 9/27/25 12/9/31 Network Management/Connected Home Devices Medtech Group Acquisition Corp. 45 Expired 12/8/18 8/9/29 Medical technology Signal IP, Inc. 2 8/28/20 8/17/21 8/6/22 Automotive Traverse Technologies 20 2/27/22 2/25/29 2/27/33 Li-Ion Battery/High Capacity Electrodes Soems Acquisition 16 11/11/17 4/6/19 7/18/24 N/A Median 09/13/21 On October 20, 2017, the Company assigned the patent held by Dynamic Advances LLC, Magnus IP GmbH and Traverse Technologies Corp. (all wholly-owned subsidiaries of the Company) to DBD. On October 27, 2017, the Company assigned the economic rights to its more than 10,000 patents to Luxone. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 5 - STOCKHOLDERS’ EQUITY The Company has authorized capital to 200,000,000 shares of Common Stock with par value to $0.0001 per share, and has authorized capital of 50,000,000 shares of preferred stock, par value $0.0001 per share. On July 18, 2017, shareholders of record holding a majority of the outstanding voting capital of the Company approved a reverse stock split of the Company’s issued and outstanding common stock by a ratio of not less than one-for-four and not more than one-for-twenty-five, with such ratio to be determined by the Board of Directors, in its sole discretion. On October 25, 2017, the reverse stock split ratio of one (1) for four (4) basis was approved by the Board of Directors. On October 30, 2017, the Company filed a certificate of amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock, par value $0.0001 per share on a one (1) for four (4) basis. Series B Convertible Preferred Stock The terms of the Series B Convertible Preferred Stock are summarized below: Dividend Liquidation Preference Voting Rights Conversion Series D Convertible Preferred Stock The Company issued Series D Convertible Preferred Stock in exchange for the outstanding convertible note issued in October 2014 and prior to September 30, 2017, all of the Series D Convertible Preferred Stock was converted to the Company’s Common Stock and no shares of the Series D Convertible Preferred Stock remain outstanding. The terms of the Series D Convertible Preferred Stock are summarized below: Dividend Liquidation Preference Voting Rights Conversion Common Stock On May 11, 2016, the Company entered into a consulting agreement with the Cooper Law Firm, LLC (“Cooper”), pursuant to which the Company agreed to issue 20,000 shares of the Company’s Common Stock. In connection with this transaction, the Company valued the shares at the quoted market price on the date of grant at $6.80 per share or $136,000. On December 9, 2016, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors for the sale of an aggregate of 870,500 shares of the Company’s common stock, at a purchase price of $6.00 per share, and warrants to purchase 435,249 shares of common stock for a purchase price of $0.01 per warrant, or $17,019.95 in total. None of the warrants were purchased prior to December 31, 2016, and all were subsequently purchased prior to the date of this report. On February 1, 2017, the Company issued 187,500 shares of common stock pursuant to an At-The-Market (“ATM”) securities offering with certain institutional investors at an average price of $6.96 per share, yielding gross proceeds of $1,301,923. On April 12, 2017, pursuant to an amendment entered into on March 6, 2017 to the settlement agreement entered into on October 29, 2015 between the Company and Dominion Harbor, the Company issued 31,250 shares of common stock to Dominion Harbor. In connection with this transaction, the Company valued the shares at the quoted market price on the date of grant at $0.83 per share or $103,750. On April 18, 2017, the Company entered into a securities purchase agreement (the “April Purchase Agreement”) with certain institutional investors for the sale of an aggregate of 950,000 shares of the Company’s common stock at a purchase price of $2.80per share and warrants to purchase 570,000 shares of common stock at a purchase price of $3.32 per share. On April 24, 2017, the Company issued one of its vendors 7,500 shares of Common Stock in exchange for cancellation of the vendor’s outstanding invoices. In connection with this transaction, the Company valued the shares at the quoted market price on the date of grant at $3.32 per share or $24,897. On August 9, 2017, the Company issued 250,000 shares of the Company’s Common Stock pursuant to the conversion of 200,000 shares of Series D Convertible Preferred Stock. On August 29, 2017, the Company issued 200,000 shares in total of the Company’s Common Stock to four different vendors in partial or total payment of outstanding invoices. On September 5, 2017, the Company issued 62,500 shares of the Company’s Common Stock pursuant to the conversion of 50,000 shares of Series D Convertible Preferred Stock. On September 6, 2017, the Company issued 534,710 shares of the Company’s Common Stock pursuant to the conversion of $427,768 in principal amount invested in the Convertible Note. On September 13, 2017, the Company issued 315,925 shares of the Company’s Common Stock pursuant to the conversion of 252,750 shares of Series D Convertible Preferred Stock. On September 29, 2017, the Company issued 598,500 shares of the Company’s Common Stock to holders of the warrants issued pursuant to the April Purchase Agreement following approval by the Company’s shareholders of the warrant exchange at a special meeting held on September 29, 2017. Common Stock Warrants Pursuant to the sales of securities underlying the Purchase Agreement entered into on December 9, 2016, the Company issued a warrant to the underwriter (“Underwriter’s Warrant”) to purchase 43,525 shares of Common Stock on December 9, 2016. The Underwriter’s Warrant has an exercise price of $6.92 per share. In addition, in a series of issuances in January 2017, the Company issued warrants to the investors (“Investor Warrants”) pursuant to the Purchase Agreement to purchase 435,249 shares of the Company’s Common Stock. The Investor Warrants have an exercise price of $6.80 per share. The warrants were issued in a series of transaction during January 2017 and were valued based on the Black-Scholes model, using the strike price of $6.80 per share, market prices ranging from $7.00 to $8.52 per share, an expected term of 3.25 years, volatility ranging from 38% to 39%, based on the average volatility of comparable companies over the comparable prior period, and a discount rate as published by the Federal Reserve ranging from 1.50% to 1.56%. The Company reviewed the issuance of the Underwriter and Investor Warrants and determined that pursuant to ASC 480 and ASC 815, the Underwriter and Investor Warrants should be classified as a liability and marked to market every reporting period. Following acceptance by the SEC of the Company’s registration statement registering these warrants, the warrants were reclassified from a liability to equity. On January 10, 2017, pursuant to the amendment to the Fortress debt, the Company issued a five-year warrant to DBD to purchase 46,875 shares of the Company’s Common Stock, exercisable at $6.80 per share, subject to adjustment. The warrant was valued based on the Black-Scholes model, using the strike and market prices of $6.80 and $7.60 per share, respectively, an expected term of 3.00 years, volatility of 39% based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.52%. The Company reviewed the issuance of the Underwriter and Investor Warrants and determined that pursuant to ASC 480 and ASC 815, the Underwriter and Investor Warrants met the requirement to be classified as equity and were booked as Additional Paid-in Capital. Pursuant to the sales of securities underlying the April Purchase Agreement entered into on April 18, 2017, the Company issued a warrant to the underwriter (“Underwriter’s Warrant”) to purchase 14,250 shares of Common Stock. The Underwriter’s Warrant has an exercise price of $3.08 per share. In addition, also associated with the April Purchase Agreement, the Company issued warrants to the investors (“April Investor Warrants”) pursuant to the Purchase Agreement to purchase 570,000 shares of the Company’s Common Stock. The Investor Warrants have an exercise price of $3.32 per share. The Investor Warrants were valued based on the Black-Scholes model, using the strike price of $3.08 per share, an expected term of 2.5 years, volatility of 39%, based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.60%. The Underwriter’s Warrant was valued based on the Black-Scholes model, using the strike price of $3.32 per share, an expected term of 3.25 years, volatility of 38%, based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.72%. The Company reviewed the issuance of the Underwriter and Investor Warrants and determined that pursuant to ASC 480 and ASC 815, the Underwriter and Investor Warrants should be classified as equity. Pursuant to the Unit Purchase Agreement entered into on August 14, 2017, the Company, in two closings, issued warrants to the investors (“Note Investor Warrants”) to purchase 6,875,000 shares of the Company’s Common Stock. The Note Investor Warrants have an exercise price of $1.20 per share. The Note Investor Warrants from the first close were valued based on a Monte Carlo simulation model, using the strike price of $1.20 per share, remaining term of 5.50 years, volatility of 100%, based on the terms of the Unit Purchase Agreement which set the volatility at the greater 100% or the 100-day volatility immediately following certain events and a discount rate as published by the Federal Reserve of 1.76%. The Note Investor Warrants from the second close were valued based on a Monte Carlo simulation model, using the strike price of $1.20 per share, remaining term of 5.50 years, volatility of 100%, based on the methodology set forth above and a discount rate as published by the Federal Reserve of 1.98%. The Company reviewed the issuance of the Note Investor Warrants and determined that pursuant to ASC 480 and ASC 815, the Note Investor Warrants should be classified as a liability. At September 30, 2017, the Company had warrants outstanding to purchase 7,487,894 shares of Common Stock with a weighted average remaining life of 5.35 years. A summary of the status of the Company’s outstanding stock warrants and changes during the period then ended is as follows: Number of Warrants Weighted Average Exercise Price Weighted Life Balance at December 31, 2016 116,520 $ 15.17 3.25 Granted 7,941,374 1.70 5.01 Cancelled - - - Forfeited - - - Exercised 570,000 3.32 - Balance at September 30, 2017 7,487,894 $ 1.86 5.35 Warrants exercisable at September 30, 2017 612,894 Weighted average fair value of warrants granted during the period $ 0.09 Warrant Amendment Letter On March 11, 2016, the Company entered into an agreement with the remaining investor in the Company’s convertible debt issued on October 9, 2014 to revise the strike price of their warrant, which could be exercised for the purchase of 5,834 shares of Common Stock, in exchange for permanent waiver of certain consent rights held by the holder of the convertible debt. As a result of the amendment, the strike price was reduced from $16.50 to the lower of 1) $8.00 per share or 2) the same gross per share price as the Company sells shares of its Common Stock in any future public offering of the Company’s Common Stock. Common Stock Options On May 10, 2016, the Company entered into an executive employment agreement with Erich Spangenberg (“Spangenberg Agreement”) pursuant to which Mr. Spangenberg would serve as the Company’s Director of Acquisitions, Licensing and Strategy. As part of the consideration, the Company agreed to grant Mr. Spangenberg a ten-year stock option to purchase an aggregate of 125,000 shares of Common Stock, with a strike price of $7.48 per share, vesting in twenty-four (24) equal installments on each monthly anniversary of the date of the Spangenberg Agreement. The options were valued based on the Black-Scholes model, using the strike and market prices of $7.48 per share, an expected term of 5.75 years, volatility of 47% based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.32%. On May 20, 2016, the Company entered into an employment agreement with Kathy Grubbs (“Grubbs Agreement”) pursuant to which Ms. Grubbs would serve as an analyst. As part of the consideration, the Company agreed to grant Ms. Grubbs a ten-year stock option to purchase an aggregate of 12,500 shares of Common Stock, with a strike price of $9.00 per share, vesting in thirty-nine (36) equal installments on each monthly anniversary of the date of the Grubbs Agreement. The options were valued based on the Black-Scholes model, using the strike and market prices of $9.00 per share, an expected term of 6.50 years, volatility of 47% based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.88%. On July 1, 2016, in conjunction with an executive employment agreement with David Liu (“Liu Agreement”) pursuant to which Mr. Liu would serve as the Company’s CTO, entered into on June 29, 2016, the Company granted Mr. Liu a ten-year stock option to purchase an aggregate of 37,500 shares of Common Stock, with a strike price of $11.16 per share, vesting in thirty-nine (36) equal installments on each monthly anniversary of the date of the Liu Agreement. The options were valued based on the Black-Scholes model, using the strike and market prices of $11.16 per share, an expected term of 6.50 years, volatility of 47% based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.20%. On October 13, 2016, the Company issued its independent board members ten-year options to purchase an aggregate of 20,000 shares of the Company’s Common Stock with an exercise price of $9.64 per share, subject to adjustment, which shall vest monthly over twelve (12) months commencing on the date of grant. The options were valued based on the Black-Scholes model, using the strike and market prices of $9.64 per share, an expected term of 5.5 years, volatility of 46% based on the average volatility of comparable companies over the comparable prior period and a discount rate as published by the Federal Reserve of 1.21%. As there were not sufficient shares in the Company’s equity incentive plans to accommodate these grants, Mr. Croxall forfeited a portion of one of his options to purchase 20,000 shares. At September 30, 2017, there was a total of $7,072 of unrecognized compensation expenses related to non-rested option-based compensation arrangements entered into during the year. A summary of the stock options as of September 30, 2017 and changes during the period are presented below: Number of Options Weighted Average Exercise Price Weighted Life Balance at December 31, 2016 879,034 $ 17.84 6.80 Granted - - - Cancelled 48,542 - - Forfeited 217,298 16.71 - Exercised - - - Balance at September 30, 2017 613,194 $ 17.04 3.06 Options Exercisable at September 30, 2017 591,841 $ 13.83 2.91 Options expected to vest 21,354 $ 20.33 7.23 Weighted average fair value of options granted during the period $ - |
Debt, Commitments and Contingen
Debt, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
DEBT, COMMITMENTS AND CONTINGENCIES | |
Debt, Commitments and Contingencies | NOTE 6 – DEBT, COMMITMENTS AND CONTINGENCIES Debt consists of the following: Maturity Interest September 30, December 31, Date Rate 2017 2016 Senior secured term notes 9-Jul-20 LIBOR + 9.75 % $ 15,881,493 $ 15,620,759 Less: debt discount (1,686,090 ) (1,425,167 ) Total senior-term notes, net of discount $ 14,195,403 $ 14,195,592 Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 10-Oct-18 11 % $ 0 $ 500,000 Maturity Late September 30, December 31, Date Fee 2017 2016 iRunway trade payable On Demand 1.5% per month $ 0 $ 191,697 Maturity Interest September 30, December 31, Date Rate 2017 2016 Note payable 31-Jan-17 NA $ - $ 103,000 Maturity Interest September 30, December 31, Date Rate 2017 2016 Siemens 30-Sep-17 NA $ - $ 1,672,924 Maturity Interest September 30, December 31, Date Rate 2017 2016 Dominion Harbor 15-Oct-17 NA $ - $ 125,000 Maturity Interest September 30, December 31, Date Rate 2017 2016 Oil & Gas On Demand NA $ 1,000,000 $ 944,296 Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 10-May-18 0 $ 1,876,300 $ - Less: debt discount (1,851,171 ) - Total Convertible notes, net of discount $ 25,129 $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 31-May-18 5 % $ 3,195,932 $ - Less: debt discount (2,834,308 ) - Total Convertible notes, net of discount $ 361,624 $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 Medtech Note 1-May-18 NA $ - $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 3D Nano License Fee 31-Jan-17 NA $ - $ 100,000 September 30, 2017 December 31, 2016 Total $ 15,582,156 $ 17,832,509 Less: current portion (15,582,156 ) (13,162,007 ) Total, net of current portion $ - $ 4,670,502 Senior Secured Term Notes On January 29, 2015, the Company and certain of its subsidiaries entered into a series of Agreements including a Securities Purchase Agreement with DBD Credit Funding LLC, (“DBD”) an affiliate of Fortress Credit Corp., under which the terms of the notes were: (i) $15,000,000 original principal amount of Fortress Notes (the “Initial Note”); (ii) a right to receive a portion of certain proceeds from monetization net revenues received by the Company (the “Revenue Stream”, after receipt by the Company of $15,000,000 of monetization net revenues and repayment of the Fortress Notes); (iii) a five-year Fortress Warrant to purchase 25,000 shares of the Company’s Common Stock exercisable at $29.76 per share, subject to adjustment; and (iv) 33,603 shares of the Issuer’s Common Stock (the “Fortress Shares”). On February 12, 2015, the Company issued an additional $5,000,000 of Notes (which increase proportionately the Revenue Stream). The Initial Note matures on July 29, 2018. Additional Notes issued pursuant to the Fortress Purchase Agreement mature 42 months after issuance. The unpaid principal amount of the Initial Note plus the additional $5,000,000 note (including any PIK Interest, as defined below) bear cash interest at a rate equal to LIBOR plus 9.75% per annum payable on the last business day of each month. Interest is paid in cash except that 2.75% per annum of the interest due on each Interest Payment Date shall be paid-in-kind, by increasing the principal amount of the Notes by the amount of such interest. Monthly principal payments are due commencing one year after the anniversary dates of the loans. The terms of the Fortress Warrant provide that until January 29, 2020, the Warrant may be exercised for cash or on a cashless basis. Exercisability of the Fortress Warrant is limited if, upon exercise, the holder would beneficially own more than 4.99% of the Company’s Common Stock. The exercise price of the warrant is $29.76 and the warrant fair value was determined to be $318,679 utilizing the Black-Scholes model, with the fair value of the warrants recorded as additional paid-in capital and reducing the carrying value of the Notes. As of September 30, 2017 and December 31, 2016, the unamortized discount on the Notes was $1,686,090 and $1,425,167, respectively. Senior Secured Term Note Amendment On January 10, 2017 the Company and certain of its subsidiaries entered into the Amended and Restated Revenue Sharing and Securities Purchase Agreement (“ARRSSPA”) with DBD Credit Funding LLC, under which the Company and DBD amended and restated the Revenue Sharing and Securities Purchase Agreement dated January 29, 2015 (the “Original Agreement”) pursuant to which (i) Fortress purchased $20,000,000 in promissory notes, of which $15,881,493 is outstanding as of September 30, 2017, (ii) an interest in the Company’s revenues from certain activities and warrants to purchase 25,000 shares of the Company’s common stock. The ARRSSPA amends and restates the Original Agreement to provide for (i) the sale by the Company of a $4,500,000 promissory note (the “New Note”) and (ii) the insurance of additional warrants to purchase 46,875 shares of common stock (the “New Warrant”). Pursuant to the ARRSSPA, Fortress acquired an increased revenue stream right to certain revenues generated by the Company through monetization of our patent portfolio (“Monetization Revenues”). The ARRSSPA increases the revenue stream basis to $1,225,000. The ARRSSPA provides for the potential issuance of up to $7,500,000 of additional notes (the “Additional Notes”), of which not more than $3,750,000 shall be made prior to June 30, 2017 and of which not more than $3,750,000 shall be made available during the period following June 30, 2017 and on or prior to December 31, 2017 and not more than two such issuances shall occur under the ARRSSPA. The unpaid principal amount of the New Note (including any PIK Interest, as defined below) shall bear cash interest at a rate equal to LIBOR plus 9.75% per annum; provided that upon and during the continuance of an Event of Default (as defined in the Initial Note), the interest rate shall increase by an additional 2% per annum. Interest on the Initial Note shall be paid on the last business day of each calendar month (the “Interest Payment Date”), commencing January 31, 2017. Interest shall be paid in cash except that 2.75% per annum of the interest due on each Interest Payment Date shall be paid-in-kind, by increasing the principal amount of the Notes by the amount of such interest, effective as of the applicable Interest Payment Date (“PIK Interest”). PIK Interest shall be treated as added principal of the New Note for all purposes, including interest accrual and the calculation of any prepayment premium. The Company paid a structuring fee of 2.0% of the New Note and would pay a 2.0% fee upon the issuance of any Additional Notes. The proceeds of the New Note and any Additional Notes may be used for working capital purposes, portfolio acquisitions, growth capital and other general corporate purposes. The ARRSSPA contains certain customary events of default, and also contains certain covenants including a requirement that the Company maintain minimum liquidity of $1,250,000 in unrestricted cash and cash equivalents. The terms of the New Warrants provide that from July 10, 2017 until January 10, 2022, the Warrant may be exercised for cash or on a cashless basis. Exercisability of the Warrant is limited if, upon exercise, the holder would beneficially own more than 4.99% of the Issuer’s Common Stock. Pursuant to the ARSSPA, as security for the payment and performance in full of the Secured Obligations (as defined in the Security Agreement entered in favor of the Note purchasers (the “Security Agreement”) the Company and certain subsidiaries executed and delivered in favor of the purchasers a Security Agreement and a Patent Security Agreement, including a pledge of the Company’s interests in certain of its subsidiaries. As further set forth in the Security Agreement, repayment of the Note Obligations (as defined in the Notes) is secured by a first priority lien and security interest in all the assets of the Company, subject to certain permitted liens. Certain subsidiaries of the Company also executed guarantees in favor of the purchasers (each, a “Guaranty”), guaranteeing the Note Obligations. Amendment to Senior Secured Term Note Amendment On August 3, 2017, the Company and certain of its operating subsidiaries entered into a First Amendment to Amended and Restated Revenue Sharing and Securities Purchase Agreement and Restructuring Agreement (the “First Amendment and Restructuring Agreement”) with DBD to cancel the indebtedness and other obligations of the Company under that certain ARRSSPA, dated January 10, 2017, which was originally entered into by the Company and DBD on January 29, 2015. Pursuant to the First Amendment and Restructuring Agreement, certain intellectual property owned by the Company (the “Designated IP”) is to be assigned to one or more newly created special purpose entities (the “SPE”) as elected by DBD, which to be formed SPE shall be under the management and control of an affiliate of DBD (the “IP Monetization Manager”). All intellectual property owned by the Company that will not be assigned to one or more newly created special purpose entities shall be referred to as “Non- Designated IP.” The patents that are part of the Designated IP are referred to as the “Designated Patents”. Until shareholder approval and the close of the First Amendment and Restructuring Agreement (the “Restructuring”), all Monetization Revenues arising from the Designated IP and Non-Designated IP shall be paid to an account that is under the sole and exclusive control of the Collateral Agent as the IP Monetization Manager. In addition, until the Restructuring, the Company shall be responsible for the expenses associated with the maintenance, prosecution and enforcement of all of the Company’s intellectual property including the Designated IP and the other IP owned by the Company which is not to be transferred to the SPE, and for any expenses associated with the pursuit of monetization activities relating to both the Designated IP and the Non-Designated IP. From and after the Restructuring, the SPE shall have sole responsibility for the expenses associated with the Designated IP and the Company shall have sole responsibility for the expenses associated with the Non-Designated IP. On October 20, 2017, the Company and DBD satisfied all the closing conditions related to the First Amendment and Restructuring Agreement. With the close of the First Amendment and Restructuring Agreement, the Company exchanged the patent portfolios held by Dynamic Advances LLC, Magnus IP GmbH and Traverse Technologies Corp. (all wholly-owned subsidiaries of the Company) in exchange for the cancelation of all indebtedness and obligations to DBD. As of September 30, 2017 and December 31, 2016, the outstanding balances were $15,881,493 and $15,620,759, respectively. Convertible Note In two transactions, on October 9, 2014 and October 16, 2014, the Company sold an aggregate $5,550,000 of principal amount of convertible notes (“Convertible Notes”) along with two-year warrants to purchase 32,375 shares of the Company’s Common Stock. The Convertible Notes are convertible into shares of the Company’s Common Stock at $30.00 per share and the Warrants have an exercise price of $33.00 per share. The Notes mature on October 10, 2018 and bear interest at the rate of 11% per annum, payable quarterly in cash on each of the three, nine, nine and twelve-month anniversaries of the issuance date and on each conversion date. The Notes may become secured by a security interest granted to the holder in certain future assets under certain circumstances. In the event the Company’s Common Stock trades at a price of at least $108.00 per share for four out of eight trading days, the Notes will be mandatorily converted into Common Stock of the Company at the then applicable conversion price per share. The Company repaid the Convertible Notes for all but one holder in early 2015, and exchanged the remaining balance for Series D Convertible Preferred Stock on August 7, 2017, with the Series D Convertible Preferred Stock converted in its entirety prior to September 30, 2017. The balance was $0 and $500,000 as of September 30, 2017 and December 31, 2016, respectively. iRunway The Company converted a set of outstanding invoices related to work performed by one of the Company’s vendors to a short-term payable whereby the Company agreed to pay iRunway over time for the open invoices, subject to a payment schedule as defined. To the extent that the Company does not make payments according to that schedule, the remaining balance accrues interest at 1.5% per month. On August 20, 2017, the Company entered into a release agreement with iRunway pursuant to which the Company made an immediate cash payment to iRunway in return for a release of the remaining amount outstanding. As of September 30, 2017 and December 31, 2016, the principal balance was $0 and $191,697, respectively. Note Payable The Company entered into a short-term advance with an officer related to funds the Company was transferring from its European subsidiaries. The advance carried no interest and as of September 30, 2017 and December 31, 2016, the outstanding balance was $0 and $103,000, respectively. Siemens Purchase Payment The Company entered into a purchase agreement to acquire ownership of certain patents. As part of the purchase agreement, the Company agreed to certain future payments of cash consideration. The payment obligation bears no interest. On September 1, 2017, the Company entered into Share Purchase Agreement with GPat whereby the Company sold its 100% interest in Munitech, the wholly-owned subsidiary holding these patents, to GPat. As of September 30, 2017 and December 31, 2016, the outstanding balances were $0 and $1,672,924, respectively. Dominion Harbor Settlement Note The Company entered into a settlement agreement with Dominion Harbor, a former licensing agent for some of the Company’s subsidiaries, on October 29, 2015 whereby the Company agreed to issue 75,000 shares of the Company’s Common Stock to Dominion Harbor and make eight (8) payments of $25,000 each ending on October 15, 2017. The shares issued to Dominion Harbor were valued at the quoted market price on the date of the grant of $6.84 per share or $513,000. As of September 30, 2017 and December 31, 2016, $0 and $125,000, respectively, remained outstanding, following an agreement between the Company and Dominion wherein the Company paid $25,000 and issued 31,250 shares of Common Stock to Dominion in full resolution of the outstanding obligation. Oil& Gas Purchase Payment The Company entered into a purchase agreement to acquire monetization rights to certain patents. As part of the purchase agreement, the Company agreed to certain future payments of cash consideration. The payment obligation bears no interest and as of September 30, 2017 and December 31, 2016, the Company had an outstanding obligation for purchase of certain Siemens patents in the amount of $1,000,000 and $944,296, respectively, with such payments expected to be made by December 31, 2017. Convertible Note On August 14, 2017, the Company entered into a unit purchase agreement (the “Unit Purchase Agreement”) with certain accredited investors providing for the sale of up to $5,500,000 of 5% secured convertible promissory notes (the “Convertible Notes”), which are convertible into shares of the Corporation’s common stock, and the issuance of warrants to purchase 6,875,000 shares of the Company’s Common Stock (the “Warrants”). The Convertible Notes are convertible into shares of the Company’s Common Stock at the lesser of (i) $0.80 per share or (ii) the closing bid price of the Company’s common stock on the day prior to conversion of the Convertible Note; provided that such conversion price may not be less than $0.40 per share. The Warrants have an exercise price of $1.20 per share. The Convertible Notes mature on May 31, 2018 and bear interest at the rate of 5% per annum. In two closings of the Unit Purchase Agreement, the Company issued all $5,500,000 in Convertible Notes to the investors. As of September 30, 2017, the Company had an outstanding obligation pursuant to the Convertible Notes in the amount of $5,072,232. 3D Nano Purchase Payment 3D Nano entered into a license and purchase agreement with HP Inc. (“HP”) to acquire the rights to use if 3D Nano chooses, the right to exercise an option to acquire, ownership of certain patents, trade secrets and other intellectual property (the “Technology”). As part of the purchase agreement, the Company agreed to license the Technology for two payments of $100,000 each, with the first payment made in April 2016 and the second payment due by January 31, 2017. Under the original agreement, the payment obligations bear no interest and as of September 30, 2017 and December 31, 2016, 3D Nano had an outstanding obligation in the amount of $0 and $100,000, respectively. On May 1, 2017, 3D Nano entered into an amendment with HP whereby the agreement was extended for two years. While 3D Nano does not have the obligation under the amendment to make additional payments, should 3D Nano desire to do so, payments in the amount of $100,000 in each of 2018 and 2019 would be due to HP for the agreement to remain in effect. Medtech Note On May 31, 2017, the Company entered into a note payable with Medtronic, Inc. (“Medtronic”), the original owner of the patents in the Company’s Medtech portfolio, whereby the Company agreed to pay Medtronic a total of $750,000 in ten equal monthly installments for patent enforcement related expenses incurred by Medtronic. Following two payments of $75,000 each in May and June 2017, the Company entered into an agreement on August 29, 2017 to pay a discounted amount in return for a full release from the remaining obligations. The note payable carries no interest and since the note payable arose after December 31, 2016 and was repaid in full prior to September 30, 2016, as of September 30, 2017 and December 31, 2016, the outstanding balance, was $0 and $0, respectively. Total Future Minimum Principal Payments Future minimum principal payments for all items set forth above are as follows: 2017 $ 16,881,493 2018 5,072,232 Total $ 21,953,725 Office Lease In October 2013, the Company entered into a net-lease for its current office space in Los Angeles, California. The lease will commence on May 1, 2014 and runs for seven years through April 30, 2021, with monthly lease payment escalating each year of the lease. In addition, to paying a deposit of $7,564 and the monthly base lease cost, the Company is required to pay pro rata share of operating expenses and real estate taxes. Under the terms of the lease, the Company will not be required to pay rent for the first five months but must remain in compliance with the terms of the lease to continue to maintain that benefit. In addition, the Company has a one-time option to terminate the lease in the 42th month of the lease. Minimum future lease payments under this lease at September 30, 2017, for the next five years are as follows: 2017 (Three Months) $ 18,081 2018 74,540 2019 77,872 2020 81,336 2021 27,504 Total $ 297,333 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS On October 20, 2017, the Company and DBD satisfied all the closing conditions related to the First Amendment and Restructuring Agreement. With the close of the First Amendment and Restructuring Agreement, the Company exchanged the patent portfolios held by Dynamic Advances LLC, Magnus IP GmbH and Traverse Technologies Corp. (all wholly-owned subsidiaries of the Company) in exchange for the cancelation of all indebtedness and obligations to DBD. On October 27, 2017, the Company entered into the Assignment with Luxone whereby the Company assigned all of its ownership interest in PG Tech to Luxone. Pursuant to the Assignment, Luxone assumed the Company’s ownership interest in PG Tech and the Company removed from its balance sheet all the liabilities and debt associated with PG Tech and received in return a revenue share associated with future earnings from the PG Tech portfolio. Luxone is owner or controlled by a former affiliate of the Company. On November 1, 2017, the Company entered into an agreement to acquire, through its wholly-owned subsidiary, Global Bit Ventures Acquisition Corp., a Nevada corporation (“GBVAC”), 100% of the Capital Stock of Global Bit Ventures, Inc., a Nevada corporation (“GBV”), which currently secures and powers digital asset blockchains by running specialized servers. Under the terms of the Agreement and Plan of Merger (the “Merger Agreement”), the Company will issue 126,674,557 shares of the Company’s Common Stock in exchange for one-hundred (100%) percent of the shares of GBV’s capital stock. At the closing of the merger, GBVAC shall be merged with and into GBV pursuant to the Merger Agreement and the separate existence of GBVAC shall cease and GBV shall be the surviving company. The closing of the acquisition is subject to certain closing conditions including approval of the Merger Agreement by the Company’s Shareholders. |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. These consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, but are not limited to, estimating the useful lives of patent assets, the assumptions used to calculate fair value of warrants and options granted, goodwill impairment, realization of long-lived assets, deferred income taxes, unrealized tax positions and business combination accounting. |
Cash | Cash The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation and restricted cash, held in escrow pursuant to the terms of the Unit Purchase Agreement entered into on August 14, 2017, with another financial institution that is also insured by the Federal Deposit Insurance Corporation. The Company’s accounts held at this institution, up to a limit of $250,000, are insured by the Federal Deposit Insurance Corporation (“FDIC”). As of September 30, 2017, the Company had bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. |
Accounts Receivable | Accounts Receivable The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At each of September 30, 2017 and December 31, 2016, the Company had recorded an allowance for bad debts in the amount of $387,976 and $387,976, respectively. Accounts receivable, net at September 30, 2017 and December 31, 2016, amounted to $123,630 and $95,069, respectively. |
Concentration of Revenue and Geographic Area | Concentration of Revenue and Geographic Area Revenue from the Company’s patent enforcement activities is considered United States revenue as any payments for licenses included in that revenue are for United States operations irrespective of the location of the licensee’s or licensee’s parent home domicile. The Company had $0 in revenues from newly issued patent licenses for both the three months ended September 30, 2017 and the three months ended September 30, 2016. The revenue for the three months ended September 30, 2017 is attributable to a non-enforcement technology access license for one of the Company’s subsidiaries and running royalties from the Company’s Medtech portfolio and for the three months ended September 30, 2016, the revenue is attributable to running royalties from the Company’s Medtech portfolio. At the current time, we define customers as firms that obtain licenses to the Company’s patents, either prior to or during enforcement litigation. These firms generally enter into non-recurring, non-exclusive, non-assignable license agreements with the Company, and these customers do not generally engage in ongoing, recurring business activity with the Company. The Company has historically had a small number of customers enter into such agreements, resulting in higher levels of revenue concentration. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed, (iii) amounts are fixed or determinable and (iv) collectability of amounts is reasonably assured. In general, revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. These rights typically include some combination of the following: (i) the grant of a non-exclusive, perpetual license to use patented technologies owned or controlled by the Company, (ii) a covenant-not-to-sue, (iii) the dismissal of any pending litigation. The intellectual property rights granted typically are perpetual in nature. Pursuant to the terms of these agreements, the Company has no further obligation with respect to the grant of the non-exclusive licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company’s part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, and when all other revenue recognition criteria have been met. The Company also considers the revenue generated from its settlement and licensing agreements as one unit of accounting under ASC 605-25, “Multiple-Element Arrangements” as the delivered items do not have value to customers on a standalone basis, there are no undelivered elements and there is no general right of return relative to the license. Under ASC 605-25, the appropriate recognition of revenue is determined for the combined deliverables as a single unit of accounting and revenue is recognized upon delivery of the final elements, including the license for past and future use and the release. Also, since the settlement element and license element for past and future use are the Company’s major central business, the Company presents these two elements as one revenue category in its statement of operations. The Company does not expect to provide licenses that do not provide some form of settlement or release. There was no revenue from newly issued patent licenses for the three months ended September 30, 2017 and September 30, 2016, respectively. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets of $108,878 and $202,067 at September 30, 2017 and December 31, 2016, respectively, consist primarily of costs paid for future services, which will occur within a year. Prepaid expenses include prepayments in cash and equity instruments for public relation services, business advisory, consulting, and prepaid insurance, which are being amortized over the terms of their respective agreements. |
Bonds Posted with Courts | Bonds Posted with Courts Under certain circumstances related to litigations in Germany, the Company is either required to or may decide to enter a bond with the courts. As of September 30, 2017 and December 31, 2016, the Company had no outstanding bonds posted with the German courts. |
Related Party Transactions | Related Party Transactions Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. On May 13, 2013, we entered into a nine-year advisory services agreement (the “Advisory Services Agreement”) with IP Navigation Group, LLC (“IP Nav”), of which Erich Spangenberg is founder and former Chief Executive Officer. Mr. Spangenberg is an affiliate of the Company. The terms of the Advisory Services Agreement provide that, in consideration for its services as intellectual property licensing agent, the Company will pay to IP Navigation Group, LLC between 10% and 20% of the gross proceeds of certain licensing campaigns in which IP Navigation Group, LLC acts as intellectual property licensing agent. On November 18, 2013, we entered into a consulting agreement with Jeff Feinberg (“Feinberg Agreement”), pursuant to which we agreed to grant Mr. Feinberg 25,000 shares of our restricted Common Stock, 50% of which shall vest on the one-year anniversary of the Feinberg Agreement and the remaining 50% of which shall vest on the second-year anniversary of the Feinberg Agreement. Mr. Feinberg is the trustee of The Feinberg Family Trust and holds voting and dispositive power over shares held by The Feinberg Family Trust, which is a 10% beneficial owner of our Common Stock. On May 2, 2014, the Company completed the acquisition of certain ownership rights (the “Acquired Intellectual Property”) from TechDev, Granicus and SFF pursuant to the terms of three purchase agreements between: (i) the Company, TechDev, SFF and DA Acquisition LLC, a newly formed Texas limited liability company and wholly-owned subsidiary of the Company; (ii) the Company, Granicus, SFF and IP Liquidity Ventures Acquisition LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company; and (iii) the Company, TechDev, SFF and Sarif Biomedical Acquisition LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company. TechDev, SFF and Granicus are owned or controlled by Erich Spangenberg or family members or associates. ● Pursuant to the DA Agreement, the Company acquired 100% of the limited liability company membership interests of Dynamic Advances, LLC, a Texas limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the DA Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the IP Liquidity Agreement, the Company acquired 100% of the limited liability company membership interests of IP Liquidity Ventures, LLC, a Delaware limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the IP Liquidity Agreement, Granicus and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the Sarif Agreement, the Company acquired 100% of the limited liability company membership interests of Sarif Biomedical, LLC, a Delaware limited liability company, in consideration for two cash payments of $250,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $300,000 if not made on or before June 30, 2014. The remaining cash payment was made on February 24, 2015 and is fully paid. Under the terms of the Sarif Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below. ● Pursuant to the Pay Proceeds Agreement, the Company may pay the sellers a percentage of the net recoveries (gross revenues minus certain defined expenses) that the Company makes with respect to the assets held by the entities that the Company acquired pursuant to the DA Agreement, the IP Liquidity Agreement and the Sarif Agreement. Under the terms of the Pay Proceeds Agreement, as amended in 2016, if the Company recovers $10,000,000 or less with regard to the IP Assets, then nothing is due to the sellers; if the Company recovers between $13,000,000 and $40,000,000 with regard to the IP Assets, then the Company shall pay 40% of the cumulative gross proceeds of such recoveries to the sellers; and if the Company recovers over $40,000,000 with regard to the IP Assets, the Company shall pay 50% of the cumulative gross proceeds of such recoveries to the sellers. Pursuant to the amendment to the Pay Proceeds Agreement, the Company paid TechDev, Granicus and SFF $2.4 million. In no event will the total payments made by the Company under the Pay Proceeds Agreement exceed $250,000,000. On May 2, 2014, we entered into an opportunity agreement (the “Marathon Opportunity Agreement”) with Erich Spangenberg, who is an affiliate of the Company. The terms of the Marathon Opportunity Agreement provide that we have ten business days after receiving notice from Mr. Spangenberg to provide up to 50% of the funding for certain opportunities relating to the licensing, intellectual property acquisitions and/or intellectual property enforcement actions in which Mr. Spangenberg, IP Nav or any entity controlled by Mr. Spangenberg, other than: (i) IP Nav or any of its affiliates, and (ii) Medtech Development, LLC or any of its affiliates. On June 17, 2014, Selene Communication Technologies Acquisition LLC (“Acquisition LLC”), a Delaware limited liability company and newly formed wholly-owned subsidiary of the Company, entered into a merger agreement with Selene Communication Technologies, LLC (“Selene”). Selene owned a patent portfolio consisting of three United States patents in the field of search and network intrusion that relate to tools for intelligent searches applied to data management systems as well as global information networks such as the internet. IP Nav provided patent monetization and support services under an existing agreement with Selene prior to the return of the patents to Stanford Research Institute (“SRI”), the original owners of the patents. On August 29, 2014, the Company entered into a patent purchase agreement to acquire a portfolio of patents from Clouding IP, LLC for an aggregate purchase price of $2.4 million, of which $1.4 million was paid in cash and $1.0 million was paid in the form of a promissory note issued by the Company that matured on October 31, 2014 and was fully paid prior to the maturation date. The Company also issued 6,250 shares of its restricted common stock in connection with the acquisition. Clouding IP, LLC is also entitled to certain possible future cash payments. Clouding IP LLC is owned or controlled by Erich Spangenberg or family members or associates. On October 10, 2014, the Company entered into an interest sale agreement with MedTech Development, LLC (“MedTech”) to acquire from MedTech 100% of the limited liability membership interests of OrthoPhoenix and TLIF as well as 100% of the shares of MedTech GmbH. In connection with the transaction, the Company is obligated to pay to MedTech $1 million at closing and $1 million on each of the following nine (9) month anniversary dates of the closing. On July 16, 2015, the Company entered into a forbearance agreement (the “Agreement”) with MedTech Development, the holder of a Promissory Note issued by the Company, dated October 10, 2014. Pursuant to the Agreement, the term of the Note was extended to October 1, 2015 and the Note began accruing interest starting from May 13, 2015. In addition, the Company agreed to make certain mandatory prepayments under certain circumstances and issue to MedTech Development 500,000 shares of restricted common stock of the Company. In accordance with ASC 470-50, the Company recorded this agreement as debt extinguishment and $654,000 was recorded as loss on debt extinguishment during the year ended September 30, 2015. On October 23, 2015, the Company entered into Amendment No. 1 to the Forbearance Agreement (the “Amendment”) entered into with MedTech Development on July 16, 2015. Pursuant to the Amendment, the due date of the Promissory Note was extended to October 23, 2016 in return for which the Company made a payment of $100,000 on October 23, 2015 and modified the terms under which the Company agreed to make mandatory prepayments under certain circumstances. The acquired subsidiaries are also obligated to make certain additional payments to MedTech from recoveries following the receipt by the acquired subsidiaries of 200% of the purchase payments, plus recovery of out of pocket expenses in connection with patent claims. The participation payments may be paid, at the election of the Company, in common stock of Marathon at the market price on the date of issuance. In connection with the transaction, the Company entered into a promissory note, common interest agreement and in the event of issuance of common stock to MedTech, will enter into a lockup and registration rights agreement. Approximately forty-five percent (45%) of MedTech is owned or controlled by Erich Spangenberg or family members or associates. On October 1, 2016, one of the Company’s subsidiaries, PG Technologies S.a.r.l. entered into an advisory services agreement with Granicus IP, LLC, an entity owned or controlled by one of the Company’s employees, whereby Granicus receives a percentage of pre-tax return from PG Technologies after certain revenue thresholds have been met. During 2016, certain officers and directors of the Company received restricted common stock in the Company’s 3D Nanocolor Corp. (“3D Nano”) subsidiary. At December 31, 2016, ‘‘Other noncurrent assets’’ in the Balance Sheets consists of a note receivable from an entity controlled by one of the Company’s employees that is uncollateralized. The note receivable does not carry interest and is repayable to the Company at the earlier of March 31, 2022 or based on certain milestones. The note receivable balance has been classified as current assets because the Company believes that it will be collected within one year from the Balance Sheet dates. On September 29, 2017, the Company entered into an Irrevocable Stock Power whereby the Company sold the shares it owns in the Company’s subsidiary, 3D Nano to Doug Croxall, the Company’s Chief Executive Officer with such assignment including the assumption of all of 3D Nano’s liabilities. The Company engaged a third party to value the assignment, the results of which were that the valuation and assignment were deemed to be at fair value. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The carrying amounts reported in the consolidated condensed balance sheet for cash, accounts receivable, bonds posted with courts, accounts payable, and accrued expenses, approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying value of notes payable and other long-term liabilities approximates fair value as the related interest rates approximate rates currently available to the Company. Clouding IP earn out liability was determined as a Level 3 liability, which requires an assessment of fair value at each period end by using discounted cash flow as a valuation technique using unobservable inputs, such as revenue and expenses forecasts, timing of proceeds, and discount rate. Based on reassessment of fair value as of September 30, 2017, the Company determined that there was a reduction in the Clouding IP earn out liability during the three and nine months ended September 30, 2017 in the amounts of $754,321and $754,321, respectively and a reduction in the carrying value of the Clouding IP intangible assets during the three and nine months ended September 30, 2017 in the amounts of $723,218 and $723,218, respectively. The Company determined that the Warrants issued pursuant to the Unit Purchase Agreement should be treated as a Level 2 liability, which determine the value based on observable market-based inputs. in this instance, the Warrants were valued using a Monte-Carlo simulation utilizing market-based inputs for volatility and risk-free rate of interest, which resulted in the Warrants issued pursuant to the August 31, 2017 close being fair valued at $0.0364 per share and the Warrants issued pursuant to the September 29, 2017 close being fair valued at $0.0877 per share. |
Accounting for Acquisitions | Accounting for Acquisitions In the normal course of its business, the Company makes acquisitions of patent assets and may also make acquisitions of businesses. With respect to each such transaction, the Company evaluates facts of the transaction and follows the guidelines prescribed in accordance with ASC 805 — Business Combinations to determine the proper accounting treatment for each such transaction and then records the transaction in accordance with the conclusions reached in such analysis.The Company performs such analysis with respect to each material acquisition within the consolidated group of entities. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions will more likely than not be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service and state taxing authorities, generally for three years after they were filed. The Company is in the process of filing the 2016 tax returns. After review of the prior year financial statements and the results of operations through December 31, 2016, the Company has recorded a full valuation allowance on its deferred tax asset. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss per Share Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive. The Company has options to purchase 613,195 shares of Common Stock, warrants to purchase 7,487,894 shares of Common Stock, Convertible Notes convertible into up to 13,750,000 shares of Common Stock and shares of Series B Convertible Preferred Stock convertible into 195,501 shares of Common Stock outstanding at September 30, 2017, which were excluded from the computation of diluted shares outstanding, as they would have had an anti-dilutive impact on the Company’s net loss. The following table sets forth the computation of basic and diluted loss per share: For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016 For the Nine Months September 30, 2017 For the Nine Months September 30, 2016 Net income (loss) attributable to Common shareholders $ (6,677,485 ) $ (6,274,410 ) $ (12,484,924 ) $ (2,261,542 ) Denominator Weighted average common shares – Basic and Diluted 6,270,299 3,761,786 5,564,465 3,736,213 Earnings (loss) per common share: Earnings (loss) – Basic and Diluted $ (1.06 ) $ (1.67 ) $ (2.24 ) $ (0.60 ) |
Intangible Assets - Patents | Intangible Assets - Patents Intangible assets include patents purchased and patents acquired in lieu of cash in licensing transactions. The patents purchased are recorded based on the cost to acquire them and patents acquired in lieu of cash are recorded at their fair market value. The costs of these assets are amortized over their remaining useful lives. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable. The Company recorded impairment charges to its intangible assets during the three and nine months ended September 30, 2017 in the amount of $723,218 and $723,218, respectively, compared to impairment charges associated with the end of life of a number of the Company’s portfolios during the three and nine months ended September 30, 2016 in the amounts of $5,531,383 and $6,525,273, respectively. |
Goodwill | Goodwill Goodwill is tested for impairment at the reporting unit level at least annually in accordance with ASC 350, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When conducting its annual goodwill impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that goodwill is impaired. If it is determined by a qualitative evaluation that it is more likely than not that goodwill is impaired, the Company then applies a two-step impairment test. The two-step impairment test first compares the fair value of the Company’s reporting unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of the reporting unit exceeds its fair value, the Company determines the implied fair value of the reporting unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded in the consolidated condensed statement of operations. The Company performs the annual testing for impairment of goodwill at the reporting unit level during the quarter ended September 30. For the three and nine months ended September 30, 2017 the Company recorded no impairment charge to its goodwill and for the three and nine months ended September 30, 2016, the Company recorded an impairment charge to its goodwill in the amount of $0 and $83,000, respectively. |
Other Intangible Assets | Other Intangible Assets In accordance with ASC 350-30, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: (1) significant underperformance relative to expected historical or projected future operating results; (2) significant changes in the manner of use of the acquired assets or the strategy for the overall business; and (3) significant negative industry or economic trends. When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. For the three and nine months ended September 30, 2017 and September 30, 2016, the Company recorded no impairment charge to its other intangible assets. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment charges on its long-lived assets during the three and nine months ended September 30, 2017 and September 30, 2016. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. As stock-based compensation expense is recognized based on awards expected to vest, forfeitures are also estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For the three and nine months ended September 30, 2017, the expected forfeiture rate was 12.75%, which resulted in an expense of $60,115 and $108,748, for the three and nine months ended September 30, 2017, respectively, recognized in the Company’s compensation expenses. For the three and nine months ended September 30, 2016, the expected forfeiture rate was 11.03%, which resulted in an expense of $9,570 and $36,832 for the three and nine months ended September 30, 2016, respectively, recognized in the Company’s compensation expenses. The Company will continue to re-assess the impact of forfeitures if actual forfeitures increase in future quarters. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Liquidity and Capital Resources | Liquidity and Capital Resources At September 30, 2017, we had approximately $0.1 million in unrestricted cash and cash equivalents, $3.9 million in restricted cash and an unrestricted working capital deficit of approximately $20.3 million. Based on the Company’s current revenue and profit projections, management is uncertain that the Company’s existing cash and accounts receivables will be sufficient to fund its operations through at least the next twelve months from the issuance date of the financial statements, raising substantial doubt regarding the Company’s ability to continue operating as a going concern. If we do not meet our revenue and profit projections or the business climate turns negative, then we will need to: ● raise additional funds to support the Company’s operations; provided, however, there is no assurance that the Company will be able to raise such additional funds on acceptable terms, if at all. If the Company raises additional funds by issuing securities, existing stockholders may be diluted; and ● review strategic alternatives. If adequate funds are not available, we may be required to curtail our operations or other business activities or obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain technologies or potential markets. The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlements of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815),” which 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. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 with early adoption permitted. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) In October 2016, the FASB issued ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2014, the FASB Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, as a new Topic, (ASC) Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. This ASU must be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We are considering the alternatives of adoption of this ASU and we are conducting our review of the likely impact to the existing portfolio of customer contracts entered into prior to adoption. After completing our review, we will continue to evaluate the effect of adopting this guidance upon our results of operations, cash flows and financial position. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted loss per share: For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016 For the Nine Months September 30, 2017 For the Nine Months September 30, 2016 Net income (loss) attributable to Common shareholders $ (6,677,485 ) $ (6,274,410 ) $ (12,484,924 ) $ (2,261,542 ) Denominator Weighted average common shares – Basic and Diluted 6,270,299 3,761,786 5,564,465 3,736,213 Earnings (loss) per common share: Earnings (loss) – Basic and Diluted $ (1.06 ) $ (1.67 ) $ (2.24 ) $ (0.60 ) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: September 30, 2017 December 31, 2016 Intangible Assets $ 20,403,408 $ 23,637,813 Accumulated Amortization & Impairment (12,813,195 ) (11,323,185 ) Intangible assets, net $ 7,590,213 $ 12,314,628 |
Schedule of Future Amortization of Intangible Assets, Net of Foreign Currency Translation Adjustments | Future amortization of intangible assets, net of foreign currency translation adjustments is as follows: 2017 $ 401,804 2018 1,517,219 2019 1,447,660 2020 1,154,767 2021 1,004,600 2022 and thereafter 2,064,163 Total $ 7,590,213 |
Summary of the Company's Patent Portfolios | A summary of the Company’s patent portfolios is as follows: Subsidiary Number of Patents Earliest Expiration Date Median Expiration Date Latest Expiration Date Subject Matter Clouding Corp. 25 2/3/18 9/10/21 5/29/29 Network and data management CRFD Research, Inc. 5 5/25/21 9/17/21 8/19/23 Web page content translator and device-to-device transfer system Dynamic Advances, LLC 2 11/6/21 9/7/23 7/9/25 Natural language interface Magnus IP 55 1/28/22 9/27/25 12/9/31 Network Management/Connected Home Devices Medtech Group Acquisition Corp. 45 Expired 12/8/18 8/9/29 Medical technology Signal IP, Inc. 2 8/28/20 8/17/21 8/6/22 Automotive Traverse Technologies 20 2/27/22 2/25/29 2/27/33 Li-Ion Battery/High Capacity Electrodes Soems Acquisition 16 11/11/17 4/6/19 7/18/24 N/A Median 09/13/21 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Summary of the Company's Outstanding Stock Warrants and Changes During the Period | A summary of the status of the Company’s outstanding stock warrants and changes during the period then ended is as follows: Number of Warrants Weighted Average Exercise Price Weighted Life Balance at December 31, 2016 116,520 $ 15.17 3.25 Granted 7,941,374 1.70 5.01 Cancelled - - - Forfeited - - - Exercised 570,000 3.32 - Balance at September 30, 2017 7,487,894 $ 1.86 5.35 Warrants exercisable at September 30, 2017 612,894 Weighted average fair value of warrants granted during the period $ 0.09 |
Summary of Stock Options and Changes During the Period | A summary of the stock options as of September 30, 2017 and changes during the period are presented below: Number of Options Weighted Average Exercise Price Weighted Life Balance at December 31, 2016 879,034 $ 17.84 6.80 Granted - - - Cancelled 48,542 - - Forfeited 217,298 16.71 - Exercised - - - Balance at September 30, 2017 613,194 $ 17.04 3.06 Options Exercisable at September 30, 2017 591,841 $ 13.83 2.91 Options expected to vest 21,354 $ 20.33 7.23 Weighted average fair value of options granted during the period $ - |
Debt, Commitments and Conting17
Debt, Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT, COMMITMENTS AND CONTINGENCIES | |
Schedule of Debt | Debt consists of the following: Maturity Interest September 30, December 31, Date Rate 2017 2016 Senior secured term notes 9-Jul-20 LIBOR + 9.75 % $ 15,881,493 $ 15,620,759 Less: debt discount (1,686,090 ) (1,425,167 ) Total senior-term notes, net of discount $ 14,195,403 $ 14,195,592 Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 10-Oct-18 11 % $ 0 $ 500,000 Maturity Late September 30, December 31, Date Fee 2017 2016 iRunway trade payable On Demand 1.5% per month $ 0 $ 191,697 Maturity Interest September 30, December 31, Date Rate 2017 2016 Note payable 31-Jan-17 NA $ - $ 103,000 Maturity Interest September 30, December 31, Date Rate 2017 2016 Siemens 30-Sep-17 NA $ - $ 1,672,924 Maturity Interest September 30, December 31, Date Rate 2017 2016 Dominion Harbor 15-Oct-17 NA $ - $ 125,000 Maturity Interest September 30, December 31, Date Rate 2017 2016 Oil & Gas On Demand NA $ 1,000,000 $ 944,296 Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 10-May-18 0 $ 1,876,300 $ - Less: debt discount (1,851,171 ) - Total Convertible notes, net of discount $ 25,129 $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 Convertible Note 31-May-18 5 % $ 3,195,932 $ - Less: debt discount (2,834,308 ) - Total Convertible notes, net of discount $ 361,624 $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 Medtech Note 1-May-18 NA $ - $ - Maturity Interest September 30, December 31, Date Rate 2017 2016 3D Nano License Fee 31-Jan-17 NA $ - $ 100,000 September 30, 2017 December 31, 2016 Total $ 15,582,156 $ 17,832,509 Less: current portion (15,582,156 ) (13,162,007 ) Total, net of current portion $ - $ 4,670,502 |
Schedule of Future Minimum Principal Payments | Future minimum principal payments for all items set forth above are as follows: 2017 $ 16,881,493 2018 5,072,232 Total $ 21,953,725 |
Schedule of Future Minimum Lease Payments | Minimum future lease payments under this lease at September 30, 2017, for the next five years are as follows: 2017 (Three Months) $ 18,081 2018 74,540 2019 77,872 2020 81,336 2021 27,504 Total $ 297,333 |
Organization and Description 18
Organization and Description of Business (Details Narrative) - $ / shares | Jul. 18, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Reverse stock split ratio | On July 18, 2017, shareholders of record holding a majority of the outstanding voting capital of the Company approved a reverse stock split of the Companys issued and outstanding common stock by a ratio of not less than one-for-four and not more than one-for-twenty-five, with such ratio to be determined by the Board of Directors, in its sole discretion. | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
October 25 2017 [Member] | |||
Reverse stock split ratio | On October 25, 2017, the reverse stock split ratio of one (1) for four (4) basis was approved by the Board of Directors. | ||
October 30 2017 [Member] | |||
Reverse stock split ratio | On October 30, 2017, the Company filed a certificate of amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.0001 per share on a one (1) for four (4) basis. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details Narrative) | Oct. 23, 2015USD ($) | Oct. 10, 2014USD ($)Paymentsshares | Aug. 29, 2014USD ($)shares | Jun. 17, 2014Patents | May 02, 2014USD ($)PaymentsIntegershares | Nov. 18, 2013shares | May 13, 2013 | Sep. 30, 2017USD ($)Institutions | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Institutionsshares | Sep. 30, 2016USD ($) | Sep. 29, 2017$ / shares | Aug. 31, 2017$ / shares | Dec. 31, 2016USD ($) |
Significant Accounting Policies [Line Items] | ||||||||||||||
Number of financial institutions | Institutions | 1 | 1 | ||||||||||||
Allowance for bad debt | $ 387,976 | $ 387,976 | $ 387,976 | |||||||||||
Accounts receivable, net | 123,630 | 123,630 | 95,069 | |||||||||||
Prepaid expenses and other current assets | 108,878 | 108,878 | 202,067 | |||||||||||
Outstanding litigation bonds | ||||||||||||||
Clouding ip earn out liability | 754,321 | 754,321 | ||||||||||||
Reduction in intangible assets | 723,218 | 723,218 | ||||||||||||
Impairment of intangible assets | 723,218 | $ 5,531,383 | $ 723,218 | $ 6,525,273 | ||||||||||
Warrant fair value price per share | $ / shares | $ 0.0877 | $ 0.0364 | ||||||||||||
Income tax benefit percentage | 50.00% | |||||||||||||
Goodwill impairment | 0 | 83,000 | $ 0 | 83,000 | ||||||||||
Impairment of long-lived assets | ||||||||||||||
Expected forfeiture rate | 12.75% | 11.03% | 12.75% | 11.03% | ||||||||||
Compensation expenses | $ 60,115 | $ 9,570 | $ 108,748 | $ 36,832 | ||||||||||
Cash and cash equivalents | 122,172 | 122,172 | $ 4,998,314 | |||||||||||
Restricted cash | 3,900,000 | 3,900,000 | ||||||||||||
Working capital | 20,300,000 | $ 20,300,000 | ||||||||||||
Options [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Anti-dilutive securities excluded from computation of diluted shares | shares | 613,195 | |||||||||||||
Warrant [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Anti-dilutive securities excluded from computation of diluted shares | shares | 7,487,894 | |||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Anti-dilutive securities excluded from computation of diluted shares | shares | 195,501 | |||||||||||||
Affiliated Entity [Member] | Dynamic Advances, LLC [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Ownership interest held | 100.00% | |||||||||||||
Number of cash payments made | Payments | 2 | |||||||||||||
Payments to acquire businesses, net of cash acquired | $ 2,375,000 | |||||||||||||
Second payment amount on or before June 30, 2014 | $ 2,850,000 | |||||||||||||
Preferred stock, shares issued | shares | 97,750 | |||||||||||||
Maximum possible amount of future payments | $ 250,000,000 | |||||||||||||
Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Number of purchase agreements | Integer | 3 | |||||||||||||
Affiliated Entity [Member] | IP Liquidity Ventures, LLC [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Ownership interest held | 100.00% | |||||||||||||
Number of cash payments made | Payments | 2 | |||||||||||||
Payments to acquire businesses, net of cash acquired | $ 2,375,000 | |||||||||||||
Second payment amount on or before June 30, 2014 | $ 2,850,000 | |||||||||||||
Preferred stock, shares issued | shares | 97,750 | |||||||||||||
Maximum possible amount of future payments | $ 250,000,000 | |||||||||||||
Affiliated Entity [Member] | Sarif Biomedical, LLC [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Ownership interest held | 100.00% | |||||||||||||
Number of cash payments made | Payments | 2 | |||||||||||||
Payments to acquire businesses, net of cash acquired | $ 250,000 | |||||||||||||
Second payment amount on or before June 30, 2014 | 300,000 | |||||||||||||
Maximum possible amount of future payments | 250,000,000 | |||||||||||||
Advisory Services Agreement [Member] | Navigation Group LLC [Member] | Founder And Former Chief Executive Officer [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Length of agreement | 9 years | |||||||||||||
Feinberg Agreement [Member] | Beneficial Owner [Member] | Trustee [Member] | Restricted Common Stock [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Common stock issued | shares | 25,000 | |||||||||||||
Vesting on first anniversary | 50.00% | |||||||||||||
Vesting on second anniversary | 50.00% | |||||||||||||
Feinberg Agreement [Member] | Beneficial Owner [Member] | Trustee [Member] | Restricted Common Stock [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Beneficial ownership percentage | 10.00% | |||||||||||||
Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Reimbursement revenue | $ 250,000,000 | |||||||||||||
Marathon Opportunity Agreement [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Net recovery proceeds due to sellers | 50.00% | |||||||||||||
Number of business days to respond | 10 days | |||||||||||||
Merger Agreement [Member] | Selene Communication Technologies, LLC [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Number of patents | Patents | 3 | |||||||||||||
Patent Purchase Agreement [Member] | Clouding IP, LLC [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Payments to acquire businesses, net of cash acquired | $ 2,400,000 | |||||||||||||
Cash | 1,400,000 | |||||||||||||
Patent Purchase Agreement [Member] | Clouding IP, LLC [Member] | Affiliated Entity [Member] | Promissory Note [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Promissory note issued | $ 1,000,000 | |||||||||||||
Debt maturity date | Oct. 31, 2014 | |||||||||||||
Patent Purchase Agreement [Member] | Clouding IP, LLC [Member] | Restricted Common Stock [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Stock issued in acquisition | shares | 6,250 | |||||||||||||
Interest Sale Agreement [Member] | MedTech Development, LLC [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Ownership interest held | 45.00% | |||||||||||||
Number of cash payments made | Payments | 9 | |||||||||||||
Payments to acquire businesses, net of cash acquired | $ 100,000 | $ 1,000,000 | ||||||||||||
Monthly payment obligation | $ 1,000,000 | |||||||||||||
Shares granted | shares | 500,000 | |||||||||||||
Debt extinguishment | $ 654,000 | |||||||||||||
Interest Sale Agreement [Member] | MedTech Development, LLC [Member] | MedTech GmbH [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Percentage of shares | 100.00% | |||||||||||||
Interest Sale Agreement [Member] | MedTech Development, LLC [Member] | OrthoPhoenix and TLIF [Member] | Affiliated Entity [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Percentage of shares | 100.00% | |||||||||||||
Sales Revenue Net [Member] | License Agreements [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
License revenue amount | 0 | $ 0 | ||||||||||||
Maximum [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Insured by FDIC | $ 250,000 | $ 250,000 | ||||||||||||
Anti-dilutive securities excluded from computation of diluted shares | shares | 13,750,000 | |||||||||||||
Maximum [Member] | Advisory Services Agreement [Member] | Navigation Group LLC [Member] | Founder And Former Chief Executive Officer [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Percent of gross proceeds | 20.00% | |||||||||||||
Maximum [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | Range Two [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Reimbursement revenue | $ 40,000,000 | |||||||||||||
Maximum [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | Range Three [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Reimbursement revenue | 40,000,000 | |||||||||||||
Minimum [Member] | Advisory Services Agreement [Member] | Navigation Group LLC [Member] | Founder And Former Chief Executive Officer [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Percent of gross proceeds | 10.00% | |||||||||||||
Minimum [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | Range Two [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Reimbursement revenue | 13,000,000 | |||||||||||||
Range One [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Reimbursement revenue | $ 10,000,000 | |||||||||||||
Range Two [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Net recovery proceeds due to sellers | 40.00% | |||||||||||||
Range Three [Member] | Pay Proceeds Agreement [Member] | Affiliated Entity [Member] | Dynamic Advances, IP Liquidity And Sarif Biomedical [Member] | Acquired Intellectual Property [Member] | ||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||
Net recovery proceeds due to sellers | 50.00% | |||||||||||||
Payments of reimbursement revenue | $ 2,400,000 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Schedule of Computation of Basic and Diluted Loss Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Net income (loss) attributable to Common shareholders | $ (6,677,486) | $ (6,274,410) | $ (12,484,925) | $ (2,261,542) |
Weighted Average Common Shares - Basic and Diluted | 6,270,299 | 3,761,786 | 5,564,465 | 3,736,213 |
Earnings (loss) - Basic and Diluted | $ 1.06 | $ 1.67 | $ 2.24 | $ 0.60 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Sep. 01, 2017 | Aug. 11, 2016USD ($)Patents | Aug. 03, 2016USD ($)Patents | Jul. 27, 2016USD ($)InstallmentsPatents | Jul. 05, 2016USD ($)Patents | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Earnout liability, short-term | $ 32,637 | $ 81,930 | |||||
Earnout liability, long-term | 681,175 | 1,400,082 | |||||
Patent Purchase Agreement [Member] | Munitech S.a.r.l [Member] | |||||||
Number of patents | Patents | 221 | ||||||
Consideration paid | $ 1,150,000 | ||||||
Number of installments | Installments | 2 | ||||||
Sale of stock percentage | 100.00% | ||||||
Patent Purchase Agreement [Member] | Munitech S.a.r.l [Member] | Future Payment One [Member] | |||||||
Consideration paid | 1,000,000 | ||||||
Patent Purchase Agreement [Member] | Munitech S.a.r.l [Member] | Future Payment Two [Member] | |||||||
Consideration paid | 750,000 | ||||||
Patent Purchase Agreement [Member] | Magnus IP GmbH [Member] | |||||||
Number of patents | Patents | 86 | ||||||
Consideration paid | $ 250,000 | ||||||
Patent Purchase Agreement [Member] | Traverse Technologies Corp [Member] | CPT IP Holdings [Member] | |||||||
Number of patents | Patents | 12 | ||||||
Consideration paid | $ 1,300,000 | ||||||
Patent Funding and Exclusive License Agreement [Member] | PG Technologies S.a.r.l [Member] | |||||||
Consideration paid | $ 1,000,000 | ||||||
Net licensing revenue percentage | 50.00% | ||||||
Patent Funding and Exclusive License Agreement [Member] | PG Technologies S.a.r.l [Member] | Minimum [Member] | |||||||
Number of patents | Patents | 10,000 | ||||||
Patent Funding and Exclusive License Agreement [Member] | PG Technologies S.a.r.l [Member] | Future Payment One [Member] | |||||||
Consideration paid | $ 1,000,000 | ||||||
Patent Funding and Exclusive License Agreement [Member] | PG Technologies S.a.r.l [Member] | Future Payment Two [Member] | |||||||
Consideration paid | $ 250,000 | ||||||
Clouding Corp [Member] | |||||||
Earnout liability, short-term | 32,637 | 81,930 | |||||
Earnout liability, long-term | $ 681,175 | $ 1,400,082 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Patents | Sep. 30, 2016USD ($) | |
Intangible assets capitalized | $ 0 | $ 3,550,000 | $ 0 | $ 6,450,000 |
Impairment of intangible assets | 723,218 | 5,531,383 | 723,218 | 6,525,273 |
Amortization of intangible assets | $ 457,419 | $ 2,030,886 | $ 1,803,264 | $ 6,018,196 |
Patents [Member] | ||||
Number of patents | Patents | 170 | |||
Number of additional patents | Patents | 10,000 | |||
Minimum [Member] | ||||
Weighted average useful life, intangibles | 1 year | |||
Maximum [Member] | ||||
Weighted average useful life, intangibles | 16 years |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Assets | $ 20,403,408 | $ 23,637,813 |
Accumulated Amortization & Impairment | (12,813,195) | (11,323,185) |
Intangible assets, net | $ 7,590,213 | $ 12,314,628 |
Intangible Assets - Schedule 24
Intangible Assets - Schedule of Future Amortization of Intangible Assets, Net of Foreign Currency Translation Adjustments (Details) | Sep. 30, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 401,804 |
2,018 | 1,517,219 |
2,019 | 1,447,660 |
2,020 | 1,154,767 |
2,021 | 1,004,600 |
2022 and thereafter | 2,064,163 |
Total | $ 7,590,213 |
Intangible Assets - Summary of
Intangible Assets - Summary of the Company's Patent Portfolios (Details) | 9 Months Ended |
Sep. 30, 2017Patents | |
Earliest Expiration Date | Median |
Median Expiration Date | 09/13/21 |
Network and Data Management [Member] | Clouding Corp [Member] | |
Number of patents | 25 |
Earliest Expiration Date | 2/3/18 |
Median Expiration Date | 9/10/21 |
Latest Expiration Date | 5/29/29 |
Web Page Content Translator and Device-to-Device Transfer System [Member] | CRFD Research, Inc. [Member] | |
Number of patents | 5 |
Earliest Expiration Date | 5/25/21 |
Median Expiration Date | 9/17/21 |
Latest Expiration Date | 8/19/23 |
Natural Language Interface [Member] | Dynamic Advances, LLC [Member] | |
Number of patents | 2 |
Earliest Expiration Date | 11/6/21 |
Median Expiration Date | 9/7/23 |
Latest Expiration Date | 7/9/25 |
Network Management/Connected Home Devices [Member] | Magnus IP [Member] | |
Number of patents | 55 |
Earliest Expiration Date | 1/28/22 |
Median Expiration Date | 9/27/25 |
Latest Expiration Date | 12/9/31 |
Medical Technology [Member] | Medtech Group Acquisition Corp. [Member] | |
Number of patents | 45 |
Earliest Expiration Date | Expired |
Median Expiration Date | 12/8/18 |
Latest Expiration Date | 8/9/29 |
Automotive [Member] | Signal IP, Inc. [Member] | |
Number of patents | 2 |
Earliest Expiration Date | 8/28/20 |
Median Expiration Date | 8/17/21 |
Latest Expiration Date | 8/6/22 |
Li-Ion Battery/High Capacity Electrodes [Member] | Traverse Technologies [Member] | |
Number of patents | 20 |
Earliest Expiration Date | 2/27/22 |
Median Expiration Date | 2/25/29 |
Latest Expiration Date | 2/27/33 |
N/A [Member] | Soems Acquistio [Member] | |
Number of patents | 16 |
Earliest Expiration Date | 11/11/17 |
Median Expiration Date | 4/6/19 |
Latest Expiration Date | 7/18/24 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) | Sep. 29, 2017$ / sharesshares | Sep. 13, 2017shares | Sep. 06, 2017shares | Sep. 05, 2017shares | Aug. 29, 2017shares | Aug. 09, 2017shares | Jul. 18, 2017$ / shares | Apr. 24, 2017USD ($)$ / sharesshares | Apr. 18, 2017$ / sharesshares | Apr. 12, 2017USD ($)$ / sharesshares | Feb. 02, 2017USD ($)$ / sharesshares | Jan. 10, 2017$ / sharesshares | Dec. 09, 2016USD ($)$ / sharesshares | Oct. 13, 2016$ / sharesshares | Jul. 02, 2016Installments$ / sharesshares | May 20, 2016Installments$ / sharesshares | May 11, 2016USD ($)$ / sharesshares | May 10, 2016Installments$ / sharesshares | Jan. 31, 2017$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Aug. 31, 2017$ / shares | Dec. 31, 2016$ / sharesshares | Mar. 11, 2016$ / sharesshares |
Common stock, shares authorized | shares | 200,000,000 | 200,000,000 | |||||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Preferred stock, shares authorized | shares | 50,000,000 | ||||||||||||||||||||||
Preferred stock, par value | $ 0.0001 | ||||||||||||||||||||||
Reverse stock split ratio | On July 18, 2017, shareholders of record holding a majority of the outstanding voting capital of the Company approved a reverse stock split of the Companys issued and outstanding common stock by a ratio of not less than one-for-four and not more than one-for-twenty-five, with such ratio to be determined by the Board of Directors, in its sole discretion. | ||||||||||||||||||||||
Exercise price of warrants | $ 0.0877 | $ 0.0364 | |||||||||||||||||||||
Conversion of shares issued | shares | 598,500 | 534,710 | 200,000 | ||||||||||||||||||||
Conversion of converted shares | shares | 427,768 | ||||||||||||||||||||||
Unrecognized compensation | $ | $ 7,072 | ||||||||||||||||||||||
Employee Stock Option [Member] | Independent Board Member [Member] | |||||||||||||||||||||||
Volatility rate | 46.00% | ||||||||||||||||||||||
Discount rate | 1.21% | ||||||||||||||||||||||
Option term | 10 years | ||||||||||||||||||||||
Option to purchase shares of common stock | shares | 20,000 | ||||||||||||||||||||||
Option price per share | $ 9.64 | ||||||||||||||||||||||
Expected term | 5 years 6 months | ||||||||||||||||||||||
Forfeited number of shares | shares | 20,000 | ||||||||||||||||||||||
Spangenberg Agreement [Member] | Employee Stock Option [Member] | Director of Acquisitions, Licensing and Strategy [Member] | |||||||||||||||||||||||
Volatility rate | 47.00% | ||||||||||||||||||||||
Discount rate | 1.32% | ||||||||||||||||||||||
Option term | 10 years | ||||||||||||||||||||||
Option to purchase shares of common stock | shares | 125,000 | ||||||||||||||||||||||
Option price per share | $ 7.48 | ||||||||||||||||||||||
Number of monthly installments | Installments | 24 | ||||||||||||||||||||||
Expected term | 5 years 9 months | ||||||||||||||||||||||
Grubbs Agreement [Member] | Employee Stock Option [Member] | Analyst [Member] | |||||||||||||||||||||||
Volatility rate | 47.00% | ||||||||||||||||||||||
Discount rate | 1.88% | ||||||||||||||||||||||
Option term | 10 years | ||||||||||||||||||||||
Option to purchase shares of common stock | shares | 12,500 | ||||||||||||||||||||||
Option price per share | $ 9 | ||||||||||||||||||||||
Number of monthly installments | Installments | 36 | ||||||||||||||||||||||
Expected term | 6 years 6 months | ||||||||||||||||||||||
Liu Agreement [Member] | Employee Stock Option [Member] | Chief Technology Officer [Member] | |||||||||||||||||||||||
Volatility rate | 47.00% | ||||||||||||||||||||||
Discount rate | 1.20% | ||||||||||||||||||||||
Option term | 10 years | ||||||||||||||||||||||
Option to purchase shares of common stock | shares | 37,500 | ||||||||||||||||||||||
Option price per share | $ 11.16 | ||||||||||||||||||||||
Number of monthly installments | Installments | 36 | ||||||||||||||||||||||
Expected term | 6 years 6 months | ||||||||||||||||||||||
Common Stock [Member] | Consulting Agreement [Member] | Cooper Law Firm, LLC [Member] | |||||||||||||||||||||||
Stock issued for services | shares | 20,000 | ||||||||||||||||||||||
Stock market price per share | $ 6.80 | ||||||||||||||||||||||
Value of stock issued for services | $ | $ 136,000 | ||||||||||||||||||||||
Common Stock [Member] | Securities Purchase Agreement [Member] | Institutional Investors [Member] | |||||||||||||||||||||||
Number of common stock shares issued | shares | 950,000 | 870,500 | |||||||||||||||||||||
Price per share | $ 2.80 | $ 6 | |||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 570,000 | ||||||||||||||||||||||
Exercise price of warrants | $ 3.32 | ||||||||||||||||||||||
Common Stock [Member] | At-The-Market Offering [Member] | |||||||||||||||||||||||
Number of common stock shares issued | shares | 187,500 | ||||||||||||||||||||||
Price per share | $ 6.96 | ||||||||||||||||||||||
Value of shares issued | $ | $ 1,301,923 | ||||||||||||||||||||||
Common Stock [Member] | Settlement Agreement [Member] | Dominion Harbor Group [Member] | |||||||||||||||||||||||
Number of common stock shares issued | shares | 31,250 | ||||||||||||||||||||||
Price per share | $ 0.83 | ||||||||||||||||||||||
Value of shares issued | $ | $ 103,750 | ||||||||||||||||||||||
Common Stock [Member] | Cancellation of Invoices [Member] | Vendors [Member] | |||||||||||||||||||||||
Number of common stock shares issued | shares | 7,500 | ||||||||||||||||||||||
Price per share | $ 3.32 | ||||||||||||||||||||||
Value of shares issued | $ | $ 24,897 | ||||||||||||||||||||||
Common Stock Warrants [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 6,875,000 | ||||||||||||||||||||||
Exercise price of warrants | $ 1.20 | ||||||||||||||||||||||
Warrant outstanding | shares | 7,487,894 | ||||||||||||||||||||||
Weighted average remaining life | 5 years 4 months 6 days | ||||||||||||||||||||||
Common Stock Warrants [Member] | Investors [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 5,834 | ||||||||||||||||||||||
Common Stock Warrants [Member] | Investors [Member] | Minimum [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ 8 | ||||||||||||||||||||||
Common Stock Warrants [Member] | Investors [Member] | Maximum [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ 16.50 | ||||||||||||||||||||||
Common Stock Warrants [Member] | Securities Purchase Agreement [Member] | Underwriter [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 43,525 | ||||||||||||||||||||||
Exercise price of warrants | $ 6.92 | ||||||||||||||||||||||
Common Stock Warrants [Member] | Securities Purchase Agreement [Member] | Institutional Investors [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 435,249 | 435,249 | |||||||||||||||||||||
Exercise price of warrants | $ 0.01 | $ 6.80 | |||||||||||||||||||||
Warrants issued, total value | $ | $ 17,020 | ||||||||||||||||||||||
Expected term of warrants | 3 years 2 months 30 days | ||||||||||||||||||||||
Common Stock Warrants [Member] | Securities Purchase Agreement [Member] | Institutional Investors [Member] | Minimum [Member] | |||||||||||||||||||||||
Share price | $ 7 | ||||||||||||||||||||||
Volatility rate | 38.00% | ||||||||||||||||||||||
Discount rate | 1.50% | ||||||||||||||||||||||
Common Stock Warrants [Member] | Securities Purchase Agreement [Member] | Institutional Investors [Member] | Maximum [Member] | |||||||||||||||||||||||
Share price | $ 8.52 | ||||||||||||||||||||||
Volatility rate | 39.00% | ||||||||||||||||||||||
Discount rate | 1.56% | ||||||||||||||||||||||
Common Stock Warrants [Member] | Fortress Purchase Agreement Amended and Restated [Member] | DBD Credit Funding LLC [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 46,875 | ||||||||||||||||||||||
Exercise price of warrants | $ 6.80 | ||||||||||||||||||||||
Share price | $ 7.60 | ||||||||||||||||||||||
Expected term of warrants | 3 years | ||||||||||||||||||||||
Volatility rate | 39.00% | ||||||||||||||||||||||
Discount rate | 1.52% | ||||||||||||||||||||||
Term of warrants | 5 years | ||||||||||||||||||||||
Common Stock Warrants [Member] | April Purchase Agreement [Member] | Underwriter [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 14,250 | ||||||||||||||||||||||
Exercise price of warrants | $ 3.08 | ||||||||||||||||||||||
Share price | $ 3.32 | ||||||||||||||||||||||
Expected term of warrants | 3 years 2 months 30 days | ||||||||||||||||||||||
Volatility rate | 38.00% | ||||||||||||||||||||||
Discount rate | 1.72% | ||||||||||||||||||||||
Common Stock Warrants [Member] | April Purchase Agreement [Member] | Investors [Member] | |||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 570,000 | ||||||||||||||||||||||
Exercise price of warrants | $ 3.32 | ||||||||||||||||||||||
Share price | $ 3.08 | ||||||||||||||||||||||
Expected term of warrants | 2 years 6 months | ||||||||||||||||||||||
Volatility rate | 39.00% | ||||||||||||||||||||||
Discount rate | 1.60% | ||||||||||||||||||||||
Warrant First Close [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ 1.20 | ||||||||||||||||||||||
Volatility rate | 100.00% | ||||||||||||||||||||||
Discount rate | 1.76% | ||||||||||||||||||||||
Expected term | 5 years 6 months | ||||||||||||||||||||||
Warrant Second Close [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ 1.20 | ||||||||||||||||||||||
Volatility rate | 100.00% | ||||||||||||||||||||||
Discount rate | 1.98% | ||||||||||||||||||||||
Expected term | 5 years 6 months | ||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||||||||
Percentage of common stock outstanding | 9.99% | ||||||||||||||||||||||
Series D Convertible Preferred Stock [Member] | |||||||||||||||||||||||
Percentage of common stock outstanding | 9.99% | ||||||||||||||||||||||
Conversion of shares issued | shares | 315,925 | 62,500 | 250,000 | ||||||||||||||||||||
Conversion of converted shares | shares | 252,750 | 50,000 | 200,000 | ||||||||||||||||||||
October 25 2017 [Member] | |||||||||||||||||||||||
Reverse stock split ratio | On October 25, 2017, the reverse stock split ratio of one (1) for four (4) basis was approved by the Board of Directors. | ||||||||||||||||||||||
October 30 2017 [Member] | |||||||||||||||||||||||
Reverse stock split ratio | On October 30, 2017, the Company filed a certificate of amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.0001 per share on a one (1) for four (4) basis. |
Stockholders_ Equity - Summary
Stockholders’ Equity - Summary of the Company's Outstanding Stock Warrants and Changes During the Period (Details) - Warrants [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Warrants Balance Beginning | shares | 116,520 |
Number of Warrants Granted | shares | 7,941,374 |
Number of Warrants Cancelled | shares | |
Number of Warrants Forfeited | shares | |
Number of Warrants Exercised | shares | 570,000 |
Number of Warrants Balance Ending | shares | 7,487,894 |
Weighted Average Exercise Price Balance Beginning | $ / shares | $ 15.17 |
Weighted Average Exercise Price Granted | $ / shares | 1.70 |
Weighted Average Exercise Price Cancelled | $ / shares | |
Weighted Average Exercise Price Forfeited | $ / shares | |
Weighted Average Exercise Price Exercised | $ / shares | 3.32 |
Weighted Average Exercise Price Balance Ending | $ / shares | $ 1.86 |
Weighted Average Remaining Life Balance Beginning | 3 years 2 months 30 days |
Weighted Average Remaining Life, Granted | 5 years 4 days |
Weighted Average Remaining Life Balance Ending | 5 years 4 months 6 days |
Warrants exercisable | shares | 612,894 |
Weighted average fair value of warrants granted during the period | $ / shares | $ 0.09 |
Stockholders_ Equity - Summar28
Stockholders’ Equity - Summary of Stock Options and Changes During the Period (Details) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Options, Beginning Balance | shares | 879,034 |
Number of Options, Granted | shares | |
Number of Options, Cancelled | shares | 48,542 |
Number of Options, Forfeited | shares | 217,298 |
Number of Options, Exercised | shares | |
Number of Options, Ending Balance | shares | 613,194 |
Number of Options Exercisable | shares | 591,841 |
Number of Options expected to vest | shares | 21,354 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 17.84 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | 16.71 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 17.04 |
Weighted Average Exercise Price, Options Exercisable | $ / shares | 13.83 |
Weighted Average Exercise Price, Options expected to vest | $ / shares | $ 20.33 |
Weighted Average Remaining Life, Beginning Balance | 6 years 9 months 18 days |
Weighted Average Remaining Life, Ending Balance | 3 years 22 days |
Weighted Average Remaining Life, Options Exercisable | 2 years 10 months 28 days |
Weighted Average Remaining Life, Options expected to vest | 7 years 2 months 23 days |
Debt, Commitments and Conting29
Debt, Commitments and Contingencies (Details Narrative) | Sep. 30, 2017USD ($) | Aug. 14, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | May 31, 2017USD ($) | May 02, 2017USD ($) | Jan. 10, 2017USD ($)shares | Dec. 31, 2016USD ($) | Oct. 29, 2015USD ($)Payments$ / sharesshares | Jan. 29, 2015USD ($)$ / sharesshares | Oct. 16, 2014USD ($)$ / sharesshares | Oct. 09, 2014USD ($)$ / sharesshares | May 02, 2014USD ($) | Jan. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Sep. 29, 2017$ / shares | Sep. 01, 2017 | Aug. 31, 2017$ / shares | Feb. 12, 2015USD ($) |
Warrant exercise price per share | $ / shares | $ 0.0877 | $ 0.0364 | ||||||||||||||||||||
Lease term | 7 years | |||||||||||||||||||||
Lease expiry date | Apr. 30, 2021 | |||||||||||||||||||||
Security deposit | $ 7,564 | |||||||||||||||||||||
Rent payment grace period | 5 months | |||||||||||||||||||||
Lease termination option available | 42th month of the lease | |||||||||||||||||||||
Officer [Member] | ||||||||||||||||||||||
Short-term advance to an officer | $ 0 | $ 103,000 | $ 0 | $ 103,000 | ||||||||||||||||||
iRunway [Member] | ||||||||||||||||||||||
Monthly interest rate | 1.50% | 1.50% | ||||||||||||||||||||
Short-term payable | $ 0 | 191,697 | $ 0 | $ 191,697 | ||||||||||||||||||
Medtech Note [Member] | ||||||||||||||||||||||
Debt maturity date | May 1, 2018 | May 1, 2018 | ||||||||||||||||||||
HP Inc [Member] | 3D Nano Purchase Payment [Member] | ||||||||||||||||||||||
Agreement extended term | 2 years | |||||||||||||||||||||
HP Inc [Member] | 3D Nano Purchase Payment [Member] | 2018 [Member] | ||||||||||||||||||||||
Amount of individual payments under the extended term | $ 100,000 | |||||||||||||||||||||
HP Inc [Member] | 3D Nano Purchase Payment [Member] | 2019 [Member] | ||||||||||||||||||||||
Amount of individual payments under the extended term | $ 100,000 | |||||||||||||||||||||
Medtronic, Inc [Member] | Medtech Note [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 750,000 | |||||||||||||||||||||
Amount of individual payments | $ 75,000 | $ 75,000 | ||||||||||||||||||||
Debt payments | 0 | 0 | ||||||||||||||||||||
Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Warrants [Member] | ||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 25,000 | |||||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 29.76 | |||||||||||||||||||||
Beneficially ownership percentage | 4.99% | |||||||||||||||||||||
Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | New Warrant [Member] | ||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 46,875 | |||||||||||||||||||||
Beneficially ownership percentage | 4.99% | |||||||||||||||||||||
Siemens Purchase Payment Arrangement [Member] | ||||||||||||||||||||||
Debt maturity date | Sep. 30, 2017 | Sep. 30, 2017 | ||||||||||||||||||||
Beneficially ownership percentage | 100.00% | |||||||||||||||||||||
Purchase obligation for patents | 0 | 1,672,924 | $ 0 | $ 1,672,924 | ||||||||||||||||||
Settlement Agreement [Member] | Dominion Harbor Settlement Note [Member] | ||||||||||||||||||||||
Number of common stock shares issued | shares | 75,000 | 31,250 | ||||||||||||||||||||
Number of payments | Payments | 8 | |||||||||||||||||||||
Installment payment amount | $ 25,000 | |||||||||||||||||||||
Share issued price per share | $ / shares | $ 6.84 | |||||||||||||||||||||
Value of common stock shares issued | $ 513,000 | $ 25,000 | ||||||||||||||||||||
Outstanding amount | 0 | 125,000 | 0 | 125,000 | ||||||||||||||||||
Oil & Gas Purchase Payment Arrangement [Member] | ||||||||||||||||||||||
Purchase obligation for patents | 1,000,000 | 944,296 | 1,000,000 | 944,296 | ||||||||||||||||||
License and Purchase Agreement [Member] | HP Inc [Member] | 3D Nano Purchase Payment [Member] | ||||||||||||||||||||||
Purchase obligation for patents | 0 | 100,000 | 0 | 100,000 | ||||||||||||||||||
Amount of individual payments | $ 100,000 | $ 100,000 | ||||||||||||||||||||
Senior Secured Term Notes [Member] | ||||||||||||||||||||||
Interest rate on paid-in-kind interest | 2.75% | |||||||||||||||||||||
Unamortized discount | 1,686,090 | 1,425,167 | 1,686,090 | 1,425,167 | ||||||||||||||||||
Term notes, gross | 15,881,493 | $ 15,620,759 | $ 15,881,493 | $ 15,620,759 | ||||||||||||||||||
Senior Secured Term Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||||||||||
Debt bears cash interest rate | 9.75% | |||||||||||||||||||||
Increase in interest rate | 2.00% | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | ||||||||||||||||||||||
Monetization of net revenues | $ 15,000,000 | |||||||||||||||||||||
Note term | 5 years | |||||||||||||||||||||
Number of common stock shares issued | shares | 33,603 | |||||||||||||||||||||
Warrant expiration date | Jan. 29, 2020 | |||||||||||||||||||||
Fair value of warrant | $ 318,679 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Initial Note [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 15,000,000 | |||||||||||||||||||||
Note term | 42 months | |||||||||||||||||||||
Debt maturity date | Jul. 29, 2018 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Fortress Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | ||||||||||||||||||||||
Interest rate on paid-in-kind interest | 2.75% | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Fortress Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||||||||||
Debt bears cash interest rate | 9.75% | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Fortress Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Additional Notes [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 5,000,000 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 20,000,000 | |||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 25,000 | |||||||||||||||||||||
Term notes, gross | $ 15,881,493 | |||||||||||||||||||||
Cash collateral account | 4,500,000 | |||||||||||||||||||||
Increase in revenue stream basis | 1,225,000 | |||||||||||||||||||||
Minimum liquidity requirement in unrestricted cash and cash equivalents | 1,250,000 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Additional Notes [Member] | ||||||||||||||||||||||
Maximum borrowing capacity | 7,500,000 | |||||||||||||||||||||
Structuring fee percentage | 2.00% | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Additional Notes One [Member] | ||||||||||||||||||||||
Principal amount of debt | 3,750,000 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | Additional Notes Two [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 3,750,000 | |||||||||||||||||||||
Senior Secured Term Notes [Member] | Amended and Restated Revenue Sharing and Securities Purchase Agreement [Member] | DBD Credit Funding LLC [Member] | New Note [Member] | ||||||||||||||||||||||
Structuring fee percentage | 2.00% | |||||||||||||||||||||
Convertible Note [Member] | ||||||||||||||||||||||
Principal amount of debt | $ 5,550,000 | $ 5,550,000 | ||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 32,375 | 32,375 | ||||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 33 | $ 33 | ||||||||||||||||||||
Debt maturity date | Oct. 10, 2018 | Oct. 10, 2018 | ||||||||||||||||||||
Debt bears cash interest rate | 11.00% | 11.00% | ||||||||||||||||||||
Warrant term | 2 years | 2 years | ||||||||||||||||||||
Debt instrument outstanding | 0 | $ 0 | $ 500,000 | |||||||||||||||||||
Debt conversion price per share | $ / shares | $ 30 | $ 30 | ||||||||||||||||||||
Common stock trade price per share | $ / shares | $ 108 | $ 108 | ||||||||||||||||||||
Convertible Note One [Member] | Unit Purchase Agreement [Member] | ||||||||||||||||||||||
Number of warrant to purchase shares of common stock | shares | 6,875,000 | |||||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 1.20 | |||||||||||||||||||||
Debt maturity date | May 31, 2018 | |||||||||||||||||||||
Debt bears cash interest rate | 5.00% | |||||||||||||||||||||
Debt instrument outstanding | $ 5,072,232 | $ 5,072,232 | ||||||||||||||||||||
Debt conversion price per share | $ / shares | $ 0.80 | |||||||||||||||||||||
Proceeds from issuance of secured debt | $ 5,500,000 |
Debt, Commitments and Conting30
Debt, Commitments and Contingencies - Schedule of Debt (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Total | $ 15,582,156 | $ 17,832,509 |
Less current portion | (15,582,156) | (13,162,007) |
Total, net of current portion | $ 4,670,502 | |
Siemens Purchase Payment Arrangement [Member] | ||
Maturity date | Sep. 30, 2017 | Sep. 30, 2017 |
Interest rate | ||
Total debt, net | $ 1,672,924 | |
Dominion Harbor Settlement Agreement [Member] | ||
Maturity date | Oct. 15, 2017 | Oct. 15, 2017 |
Interest rate | ||
Total debt, net | $ 125,000 | |
Oil & Gas Purchase Payment Arrangement [Member] | ||
Maturity date description | On Demand | On Demand |
Interest rate | ||
Total debt, net | $ 1,000,000 | $ 944,296 |
3D Nano License and Purchase Agreement [Member] | ||
Maturity date | Jan. 31, 2017 | Jan. 31, 2017 |
Interest rate | ||
Total debt, net | $ 100,000 | |
Senior Secured Term Notes [Member] | ||
Maturity date | Jul. 9, 2020 | Jul. 9, 2020 |
Long-term debt, gross | $ 15,881,493 | $ 15,620,759 |
Less: debt discount | (1,686,090) | (1,425,167) |
Total debt, net | $ 14,195,403 | $ 14,195,592 |
Senior Secured Term Notes [Member] | LIBOR [Member] | ||
Debt variable interest rate | 9.75% | 9.75% |
Convertible Note [Member] | ||
Maturity date | Oct. 10, 2018 | Oct. 10, 2018 |
Interest rate | 11.00% | 11.00% |
Total debt, net | $ 0 | $ 500,000 |
iRunway Trade Payable [Member] | ||
Maturity date description | On Demand | On Demand |
Interest rate | 1.50% | 1.50% |
Total debt, net | $ 0 | $ 191,697 |
Note Payable [Member] | ||
Maturity date | Jan. 31, 2017 | Jan. 31, 2017 |
Interest rate | ||
Total debt, net | $ 103,000 | |
Convertible Note One [Member] | ||
Maturity date | May 10, 2018 | May 10, 2018 |
Interest rate | 0.00% | 0.00% |
Long-term debt, gross | $ 1,876,300 | |
Less: debt discount | (1,851,171) | |
Total debt, net | $ 25,129 | |
Convertible Note Two [Member] | ||
Maturity date | May 18, 2018 | May 18, 2018 |
Interest rate | 5.00% | 5.00% |
Long-term debt, gross | $ 3,195,932 | |
Less: debt discount | (2,834,308) | |
Total debt, net | $ 361,624 | |
Medtech Note [Member] | ||
Maturity date | May 1, 2018 | May 1, 2018 |
Interest rate | ||
Total debt, net |
Debt, Commitments and Conting31
Debt, Commitments and Contingencies - Schedule of Future Minimum Principal Payments (Details) - Senior and Junior Debt [Member] | Sep. 30, 2017USD ($) |
2,017 | $ 16,881,493 |
2,018 | 5,072,232 |
Total, net | $ 21,953,725 |
Debt, Commitments and Conting32
Debt, Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Sep. 30, 2017USD ($) |
DEBT, COMMITMENTS AND CONTINGENCIES | |
2017 (Three Months) | $ 18,081 |
2,018 | 74,540 |
2,019 | 77,872 |
2,020 | 81,336 |
2,021 | 27,504 |
Total | $ 297,333 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Nov. 01, 2017shares |
Merger Agreement [Member] | |
Number of common stock shares issued | 126,674,557 |
Exchange of common stock percentage | 1 |
Global Bit Ventures Acquisition Corp [Member] | |
Ownership percentage | 100.00% |