Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019 | |
Document And Entity Information | |
Entity Registrant Name | SRAX, Inc. |
Entity Central Index Key | 0001538217 |
Document Type | S-1/A |
Document Period End Date | Jun. 30, 2019 |
Amendment Flag | true |
Amendment description | THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 2,465,639 | $ 2,784,865 | $ 1,017,299 |
Accounts receivable, net | 780,187 | 1,828,940 | 4,348,305 |
Prepaid expenses | 550,003 | 466,823 | 468,336 |
Other current assets | 300,898 | 387,085 | 300,898 |
Total current assets | 4,096,727 | 5,467,713 | 6,134,838 |
Property and equipment - net | 211,240 | 192,065 | 154,546 |
Goodwill | 15,644,957 | 15,644,957 | 15,644,957 |
Intangibles - net | 1,811,044 | 1,762,605 | 1,642,760 |
Right-of-Use Asset - Long Term Portion | 466,253 | ||
Other assets | 107,454 | 51,153 | 28,598 |
Total non-current assets | 18,240,948 | 17,650,780 | |
Total assets | 22,337,675 | 23,118,493 | 23,605,699 |
Current liabilities: | |||
Accounts payable and accrued expenses | 1,456,965 | 3,574,926 | 5,010,815 |
Debenture warrant liability | 8,215,035 | 4,323,499 | 7,256,864 |
Leapfrog warrant liability | 1,161,350 | 622,436 | 1,873,107 |
Derivative liability | 902,915 | 496,260 | 2,026,031 |
Other current liabilities | 894,686 | ||
Total current liabilities | 12,630,951 | 9,017,121 | 16,166,817 |
Secured convertible debentures, net | 1,524,592 | ||
Non-current liabilities: | |||
Lease Obligation - Long Term Portion | 326,471 | ||
Total non-current liabilities | 326,471 | ||
Total liabilities | 12,957,422 | 9,017,121 | 17,691,409 |
Commitments and contingencies (Note 7) | |||
Stockholders' equity: | |||
Preferred stock | |||
Common stock to be issued | 879,500 | ||
Additional paid in capital | 42,030,110 | 32,869,611 | 32,546,820 |
Accumulated deficit | (32,662,403) | (18,778,348) | (27,521,941) |
Total stockholders' equity | 9,380,253 | 14,101,372 | 5,914,290 |
Total liabilities and stockholders' equity | 22,337,675 | 23,118,493 | 23,605,699 |
Common Class A [Member] | |||
Stockholders' equity: | |||
Common stock | 12,546 | 10,109 | 9,911 |
Common Class B [Member] | |||
Stockholders' equity: | |||
Common stock | |||
Big Token, Inc. [Member] | |||
Current assets: | |||
Cash and cash equivalents | |||
Prepaid expenses | 37,500 | 65,630 | |
Digital Currency Asset | 34,900 | 1,877 | |
Paypal Exchange - BIGtoken | 22,453 | ||
Total current assets | 59,953 | 100,530 | 1,877 |
Property and equipment - net | 2,876 | 3,647 | |
Intangibles - net | 296,556 | 199,162 | 12,054 |
Total assets | 359,385 | 303,339 | 13,931 |
Current liabilities: | |||
Accounts payable and accrued expenses | 48,178 | 99,076 | |
BIGtoken Point Liability | 186,800 | ||
Due to Parent Entity | 4,141,732 | 2,456,940 | 222,554 |
Total current liabilities | 4,376,710 | 2,556,016 | 222,554 |
Non-current liabilities: | |||
Total liabilities | 4,376,710 | 2,556,016 | 222,554 |
Commitments and contingencies (Note 7) | |||
Stockholders' equity: | |||
Preferred stock | |||
Common stock to be issued | |||
Accumulated deficit | (4,018,325) | (2,253,677) | (209,623) |
Total stockholders' equity | (4,017,325) | (2,252,677) | (208,623) |
Total liabilities and stockholders' equity | 359,385 | 303,339 | 13,931 |
Big Token, Inc. [Member] | Common Class A [Member] | |||
Stockholders' equity: | |||
Common stock | |||
Total stockholders' equity | |||
Big Token, Inc. [Member] | Common Class B [Member] | |||
Stockholders' equity: | |||
Common stock | 1,000 | 1,000 | 1,000 |
Total stockholders' equity | $ 1,000 | $ 1,000 | $ 1,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common Stock, shares authorized | 259,000,000 | 259,000,000 | |
Big Token, Inc. [Member] | |||
Preferred Stock, shares authorized | 398,000,000 | 398,000,000 | 398,000,000 |
Preferred Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common Class A [Member] | |||
Common Stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 12,546,022 | 10,109,530 | 9,910,565 |
Common Stock, shares outstanding | 12,546,022 | 10,109,530 | 9,910,565 |
Common Class A [Member] | Big Token, Inc. [Member] | |||
Common Stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 0 | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 | 0 |
Common Class B [Member] | |||
Common Stock, shares authorized | 9,000,000 | 9,000,000 | 9,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 0 | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 | 0 |
Common Class B [Member] | Big Token, Inc. [Member] | |||
Common Stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 |
Common Stock, shares outstanding | 1,000,000 | 1,000,000 | 1,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 904,222 | $ 4,697,351 | $ 1,495,977 | $ 6,808,201 | $ 9,880,608 | $ 23,348,714 | |
Cost of revenue | 410,892 | 1,320,464 | 753,239 | 2,138,569 | 3,156,920 | 9,328,893 | |
Gross profit | 493,330 | 3,376,887 | 742,738 | 4,669,632 | 6,723,688 | 14,019,821 | |
Operating expense | |||||||
General, selling and administrative expense | 5,114,115 | 5,392,625 | 9,605,377 | 9,522,883 | 18,442,839 | 17,016,789 | |
Write-off of non-compete agreement | 468,750 | ||||||
Restructuring costs | 377,961 | ||||||
Total operating expense, net | 18,442,839 | 17,863,500 | |||||
Loss from operations | (4,620,785) | (2,015,738) | (8,862,639) | (4,853,251) | (11,719,151) | (3,843,679) | |
Other income (expense) | |||||||
Interest income (expense) | (183,257) | (486,758) | (250,944) | (921,543) | (2,030,321) | (2,782,047) | |
Amortization of debt issuance costs | (482,588) | (918,254) | (1,026,220) | (1,082,829) | |||
Total interest expense | (183,257) | (969,346) | (250,944) | (1,839,797) | (3,056,541) | (3,864,876) | |
Gain on sale of SRAXmd, net | (77,373) | (22,165) | 395,106 | (22,165) | 22,108,028 | ||
Exchange Gain or Loss | (596) | 13,509 | (5,260) | ||||
Loss on repricing of equity warrants | (341,682) | (341,682) | |||||
Accretion of conversion feature | (3,085,822) | (925,748) | |||||
Accretion of debt discount and warrants | (1,208,524) | (263,648) | |||||
Gain (loss) on settlement | (3,240,126) | ||||||
Other Income | (8,204) | ||||||
Change in fair value of warrant liability | (2,875,554) | (1,013,565) | (4,837,405) | 2,710,129 | 8,953,933 | (4,134,166) | |
Other non-operating income (expense) | (3,294,609) | (1,036,326) | (4,770,472) | 2,682,704 | (5,323,562) | ||
Total other income (expense) | (3,477,866) | (2,005,672) | (5,021,416) | 842,907 | 20,462,744 | (9,188,438) | |
Income (loss) before provision for income taxes | (8,098,651) | (4,021,410) | (13,884,055) | (4,010,344) | 8,743,593 | (13,032,117) | |
Provision for income taxes | |||||||
Net income (loss) | $ (8,098,651) | $ (4,021,410) | $ (13,884,055) | $ (4,010,344) | $ 8,743,593 | $ (13,032,117) | |
Net (loss) income per share, basic | $ 0.86 | $ (1.58) | |||||
Net (loss) income per share, diluted | $ 0.86 | (1.58) | |||||
Net loss per share, basic and diluted | $ (0.67) | $ (0.39) | $ (1.24) | $ (0.4) | $ (1.58) | ||
Weighted average shares outstanding | |||||||
Weighted average shares outstanding, basic | 12,129,787 | 10,213,618 | 11,210,810 | 10,126,247 | 10,121,408 | 8,253,851 | |
Weighted average shares outstanding, diluted | 12,129,787 | 10,213,618 | 11,210,810 | 10,126,247 | 10,121,408 | 8,253,851 | |
Big Token, Inc. [Member] | |||||||
Revenues | |||||||
Cost of revenue | |||||||
Gross profit | |||||||
Operating expense | |||||||
General, selling and administrative expense | 209,181 | 1,012,528 | 614,760 | 1,707,211 | 913,229 | 1,970,677 | $ 209,181 |
Depreciation | 442 | 30,654 | 6,465 | 55,665 | 9,727 | 37,903 | |
Total operating expense, net | 209,623 | 1,043,182 | 621,225 | 1,762,876 | 922,956 | 2,008,580 | |
Loss from operations | (209,623) | (1,043,182) | (621,225) | (1,762,876) | (922,956) | (2,008,580) | |
Other income (expense) | |||||||
Cryptocurrency impairment | (596) | (1,772) | (5,260) | (35,474) | 0 | ||
Exchange Gain or Loss | |||||||
Other non-operating income (expense) | |||||||
Total other income (expense) | (596) | (1,772) | (5,260) | (35,474) | |||
Income (loss) before provision for income taxes | (209,623) | (1,043,182) | (621,821) | (1,764,648) | (928,216) | (2,044,054) | |
Provision for income taxes | |||||||
Net income (loss) | $ (209,623) | $ (1,043,182) | $ (621,821) | $ (1,764,648) | $ (928,216) | $ (2,044,054) | $ (209,623) |
Net (loss) income per share, basic | $ (0.21) | $ (1.04) | $ (0.62) | $ (1.76) | $ (0.93) | $ (2.04) | |
Net (loss) income per share, diluted | $ (0.21) | $ (1.04) | $ (0.62) | $ (1.76) | $ (0.93) | $ (2.04) | |
Weighted average shares outstanding | |||||||
Weighted average shares outstanding, basic | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |
Weighted average shares outstanding, diluted | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Common stock to be issued [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 6,951 | $ 678,000 | $ 22,529,303 | $ (14,390,004) | $ 8,824,250 | |
Balance, shares at Dec. 31, 2016 | 6,951,077 | 100,000 | ||||
Sale of common stock and warrants for cash | $ 762 | 3,979,239 | 3,980,001 | |||
Sale of common stock and warrants for cash, shares | 761,905 | |||||
Fair value of put option | (3,038,344) | (3,038,344) | ||||
Cost of sale of common stock | (160,000) | (160,000) | ||||
Share based compensation, related to employees | 444,051 | 444,051 | ||||
Vested shares issued | $ 52 | (52) | ||||
Vested shares issued, shares | 51,667 | |||||
Shares issued as collateral | $ 75 | 97,425 | 97,500 | |||
Shares issued as collateral, shares | 75,000 | |||||
Common stock issued for services | $ 300 | $ (678,000) | 1,197,700 | 520,000 | ||
Common stock issued for services, shares | 300,000 | (100,000) | ||||
Executive Bonus Shares | $ 20 | 99,980 | 100,000 | |||
Executive Bonus Shares, shares | 20,409 | |||||
Common stock issued for software asset | $ 200 | 279,800 | 280,000 | |||
Common stock issued for software asset, shares | 200,000 | |||||
Shares issued for services | $ 879,500 | 879,500 | ||||
Shares issued for services, shares | 150,000 | |||||
Conversion of debentures | $ 1,112 | 3,333,888 | 3,335,000 | |||
Conversion of debentures, shares | 1,111,670 | |||||
Common stock issued to directors | $ 10 | 44,977 | 44,987 | |||
Common stock issued to directors, shares | 10,368 | |||||
Exercise of warrants | $ 429 | 1,284,975 | 1,285,404 | |||
Exercise of warrants, shares | 428,469 | |||||
October debenture BCF | 1,405,540 | 1,405,540 | ||||
Placement agent warrants | 948,518 | 948,518 | ||||
Repricing of warrants | 99,820 | (99,820) | ||||
Net income (loss) | (13,032,117) | (13,032,117) | ||||
Balance at Dec. 31, 2017 | $ 9,911 | $ 879,500 | 32,546,820 | (27,521,941) | 5,914,290 | |
Balance, shares at Dec. 31, 2017 | 9,910,565 | 150,000 | ||||
Balance at Dec. 13, 2017 | ||||||
Balance, shares at Dec. 13, 2017 | ||||||
Balance at Dec. 31, 2017 | $ 9,911 | $ 879,500 | 32,546,820 | (27,521,941) | 5,914,290 | |
Balance, shares at Dec. 31, 2017 | 9,910,565 | 150,000 | ||||
Stock based compensation | $ 129 | 286,001 | 286,130 | |||
Stock based compensation, shares | 6,667 | |||||
Common stock issued for services, shares | 150,000 | |||||
Shares issued for services | $ 150 | $ (859,500) | 859,350 | |||
Shares issued for services, shares | 150,000 | (150,000) | ||||
Common stock issued to directors | $ 23 | $ (10,000) | 39,977 | 30,000 | ||
Common stock issued to directors, shares | 22,556 | |||||
Net income (loss) | 11,068 | 11,068 | ||||
Balance at Mar. 31, 2018 | $ 10,213 | $ 10,000 | 33,732,148 | (27,510,873) | 6,241,488 | |
Balance, shares at Mar. 31, 2018 | 10,089,788 | |||||
Balance at Dec. 31, 2017 | $ 9,911 | $ 879,500 | 32,546,820 | (27,521,941) | 5,914,290 | |
Balance, shares at Dec. 31, 2017 | 9,910,565 | 150,000 | ||||
Loss on repricing of equity warrants | ||||||
Exercise of warrants, shares | 61,482 | |||||
Net income (loss) | (4,010,344) | |||||
Balance at Jun. 30, 2018 | $ 10,274 | $ 869,500 | 33,918,216 | (31,532,283) | 3,265,706 | |
Balance, shares at Jun. 30, 2018 | 10,151,270 | 150,000 | ||||
Balance at Dec. 31, 2017 | $ 9,911 | $ 879,500 | 32,546,820 | (27,521,941) | 5,914,290 | |
Balance, shares at Dec. 31, 2017 | 9,910,565 | 150,000 | ||||
Proceeds from the sale of common stock units | ||||||
Proceeds from the sale of common stock units, shares | ||||||
Stock based compensation | $ 79 | 988,979 | 989,058 | |||
Stock based compensation, shares | 79,534 | |||||
Vested stock awards issued | $ 6 | (6) | ||||
Vested stock awards issued, shares | 6,667 | |||||
Shares issued for services | $ 423 | $ (859,500) | 1,868,577 | $ 1,009,500 | ||
Shares issued for services, shares | 422,950 | (150,000) | 100,000 | |||
Conversion of debentures | $ 100 | 299,900 | $ 300,000 | |||
Conversion of debentures, shares | 100,002 | |||||
Common stock issued to directors | $ 27 | $ (20,000) | 49,973 | 30,000 | ||
Common stock issued to directors, shares | 26,330 | |||||
Exercise of warrants | $ 78 | 99,922 | 100,000 | |||
Exercise of warrants, shares | 78,149 | |||||
Common stock repurchase with SRAX Md sale | $ (515) | (2,984,554) | (2,985,069) | |||
Common stock repurchase with SRAX Md sale, shares | (514,667) | |||||
Net income (loss) | 8,743,593 | 8,743,593 | ||||
Balance at Dec. 31, 2018 | $ 10,109 | 32,869,611 | (18,778,348) | 14,101,372 | ||
Balance, shares at Dec. 31, 2018 | 10,109,530 | |||||
Balance at Mar. 31, 2018 | $ 10,213 | $ 10,000 | 33,732,148 | (27,510,873) | 6,241,488 | |
Balance, shares at Mar. 31, 2018 | 10,089,788 | |||||
Stock based compensation | 136,130 | 136,130 | ||||
Stock based compensation, shares | ||||||
Loss on repricing of equity warrants | ||||||
Shares issued for services | $ 859,500 | 859,500 | ||||
Shares issued for services, shares | 150,000 | |||||
Exercise of warrants | $ 61 | 49,938 | 49,999 | |||
Exercise of warrants, shares | 61,482 | |||||
Net income (loss) | (4,021,410) | (4,021,410) | ||||
Balance at Jun. 30, 2018 | $ 10,274 | $ 869,500 | 33,918,216 | (31,532,283) | 3,265,706 | |
Balance, shares at Jun. 30, 2018 | 10,151,270 | 150,000 | ||||
Balance at Dec. 31, 2018 | $ 10,109 | 32,869,611 | (18,778,348) | 14,101,372 | ||
Balance, shares at Dec. 31, 2018 | 10,109,530 | |||||
Share based compensation, related to employees | 120,885 | 120,885 | ||||
Net income (loss) | (5,785,404) | (5,785,404) | ||||
Balance at Mar. 31, 2019 | $ 10,109 | 32,990,496 | (24,563,752) | 8,436,853 | ||
Balance, shares at Mar. 31, 2019 | 10,109,530 | |||||
Balance at Dec. 31, 2018 | $ 10,109 | 32,869,611 | (18,778,348) | 14,101,372 | ||
Balance, shares at Dec. 31, 2018 | 10,109,530 | |||||
Sale of common stock and warrants for cash, shares | 1,687,825 | |||||
Loss on repricing of equity warrants | 341,682 | |||||
Share of common stock in private placement, shares | 200,000 | |||||
Exercise of warrants, shares | 328,667 | |||||
Net income (loss) | (13,884,055) | |||||
Balance at Jun. 30, 2019 | $ 12,546 | 42,030,110 | (32,662,403) | 9,380,253 | ||
Balance, shares at Jun. 30, 2019 | 12,546,022 | |||||
Balance at Mar. 31, 2019 | $ 10,109 | 32,990,496 | (24,563,752) | 8,436,853 | ||
Balance, shares at Mar. 31, 2019 | 10,109,530 | |||||
Sale of common stock and warrants for cash | $ 1,688 | 6,227,021 | 6,228,709 | |||
Sale of common stock and warrants for cash, shares | 1,687,825 | |||||
Share based compensation, related to employees | 325,511 | 325,511 | ||||
Shares issued as collateral | $ 220 | (220) | ||||
Shares issued as collateral, shares | 220,000 | |||||
Loss on repricing of equity warrants | 341,682 | 341,682 | ||||
Share of common stock in private placement | $ 200 | 999,800 | 1,000,000 | |||
Share of common stock in private placement, shares | 200,000 | |||||
Exercise of warrants | $ 329 | 1,145,820 | 1,146,149 | |||
Exercise of warrants, shares | 328,667 | |||||
Net income (loss) | (8,098,651) | (8,098,651) | ||||
Balance at Jun. 30, 2019 | $ 12,546 | $ 42,030,110 | $ (32,662,403) | $ 9,380,253 | ||
Balance, shares at Jun. 30, 2019 | 12,546,022 |
STATEMENT OF STOCKHOLDERS (DEFI
STATEMENT OF STOCKHOLDERS (DEFICIT) EQUITY (BIG TOKEN, INC) - USD ($) | Total | Big Token, Inc. [Member] | Big Token, Inc. [Member]Common Class A [Member] | Big Token, Inc. [Member]Common Class B [Member] | Preferred Stock [Member] | Preferred Stock [Member]Big Token, Inc. [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Big Token, Inc. [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Big Token, Inc. [Member] |
Balance at Dec. 31, 2016 | $ 8,824,250 | $ 22,529,303 | $ (14,390,004) | |||||||
Balance, shares at Dec. 31, 2016 | ||||||||||
Net income (loss) | (13,032,117) | $ (209,623) | (13,032,117) | |||||||
Balance at Dec. 31, 2017 | 5,914,290 | (208,623) | $ 1,000 | 32,546,820 | (27,521,941) | |||||
Balance, shares at Dec. 31, 2017 | 1,000,000 | |||||||||
Balance at Dec. 13, 2017 | ||||||||||
Balance, shares at Dec. 13, 2017 | ||||||||||
Shares issued to Parent Company | 1,000 | $ 1,000 | ||||||||
Shares issued to Parent Company, shares | 1,000,000 | |||||||||
Net income (loss) | (209,623) | (2,044,054) | ||||||||
Balance at Dec. 31, 2017 | 5,914,290 | (208,623) | $ 1,000 | 32,546,820 | (27,521,941) | |||||
Balance, shares at Dec. 31, 2017 | 1,000,000 | |||||||||
Net income (loss) | 11,068 | (306,395) | 11,068 | (306,395) | ||||||
Balance at Mar. 31, 2018 | 6,241,488 | (515,018) | $ 1,000 | 33,732,148 | (27,510,873) | (516,018) | ||||
Balance, shares at Mar. 31, 2018 | 1,000,000 | |||||||||
Balance at Dec. 31, 2017 | 5,914,290 | (208,623) | $ 1,000 | 32,546,820 | (27,521,941) | |||||
Balance, shares at Dec. 31, 2017 | 1,000,000 | |||||||||
Net income (loss) | (4,010,344) | (928,216) | ||||||||
Balance at Jun. 30, 2018 | 3,265,706 | 1,137,839 | $ 1,000 | 33,918,216 | (31,532,283) | 1,137,839 | ||||
Balance, shares at Jun. 30, 2018 | 1,000,000 | |||||||||
Balance at Dec. 31, 2017 | 5,914,290 | (208,623) | $ 1,000 | 32,546,820 | (27,521,941) | |||||
Balance, shares at Dec. 31, 2017 | 1,000,000 | |||||||||
Net income (loss) | 8,743,593 | (2,044,054) | 8,743,593 | |||||||
Balance at Dec. 31, 2018 | 14,101,372 | (2,252,677) | $ 1,000 | 32,869,611 | (18,778,348) | (2,253,677) | ||||
Balance, shares at Dec. 31, 2018 | 1,000,000 | |||||||||
Balance at Mar. 31, 2018 | 6,241,488 | (515,018) | $ 1,000 | 33,732,148 | (27,510,873) | (516,018) | ||||
Balance, shares at Mar. 31, 2018 | 1,000,000 | |||||||||
Net income (loss) | (4,021,410) | (621,821) | (4,021,410) | (621,821) | ||||||
Balance at Jun. 30, 2018 | 3,265,706 | 1,137,839 | $ 1,000 | 33,918,216 | (31,532,283) | 1,137,839 | ||||
Balance, shares at Jun. 30, 2018 | 1,000,000 | |||||||||
Balance at Dec. 31, 2018 | 14,101,372 | (2,252,677) | $ 1,000 | 32,869,611 | (18,778,348) | (2,253,677) | ||||
Balance, shares at Dec. 31, 2018 | 1,000,000 | |||||||||
Net income (loss) | (5,785,404) | (721,466) | (5,785,404) | (721,466) | ||||||
Balance at Mar. 31, 2019 | 8,436,853 | (2,974,143) | $ 1,000 | 32,990,496 | (24,563,752) | (2,975,143) | ||||
Balance, shares at Mar. 31, 2019 | 1,000,000 | |||||||||
Balance at Dec. 31, 2018 | 14,101,372 | (2,252,677) | $ 1,000 | 32,869,611 | (18,778,348) | (2,253,677) | ||||
Balance, shares at Dec. 31, 2018 | 1,000,000 | |||||||||
Net income (loss) | (13,884,055) | (1,764,648) | ||||||||
Balance at Jun. 30, 2019 | 9,380,253 | (4,017,325) | $ 1,000 | 42,030,110 | (32,662,403) | (4,018,325) | ||||
Balance, shares at Jun. 30, 2019 | 1,000,000 | |||||||||
Balance at Mar. 31, 2019 | 8,436,853 | (2,974,143) | $ 1,000 | 32,990,496 | (24,563,752) | (2,975,143) | ||||
Balance, shares at Mar. 31, 2019 | 1,000,000 | |||||||||
Net income (loss) | (8,098,651) | (1,043,182) | (8,098,651) | (1,043,182) | ||||||
Balance at Jun. 30, 2019 | $ 9,380,253 | $ (4,017,325) | $ 1,000 | $ 42,030,110 | $ (32,662,403) | $ (4,018,325) | ||||
Balance, shares at Jun. 30, 2019 | 1,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||||
Net income (loss) | $ (13,884,055) | $ (4,010,344) | $ 8,743,593 | $ (13,032,117) | |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Stock based compensation | 446,395 | 1,161,760 | 1,878,611 | 2,085,988 | |
Amortization of debt issuance costs | 300,185 | 1,026,219 | 1,082,830 | ||
Gain on sale of SRAXmd | (395,106) | (22,108,028) | |||
Gain/loss on valuation of warrant derivatives | 4,837,406 | (2,710,129) | (8,953,933) | 4,134,166 | |
Loss on repricing of equity warrants | 341,682 | ||||
Loss on settlement of debt | 3,240,126 | ||||
Non-cash financing costs | 2,068,221 | ||||
Accretion of debenture discount and warrants | 618,069 | 4,294,346 | 1,189,396 | ||
Write off of non-compete agreement | 468,751 | ||||
Digital currency assets impairment loss | 31,861 | ||||
Provision for bad debts | 241,753 | (5,426) | (11,611) | (195,172) | |
Depreciation expense | 33,749 | 20,036 | 43,999 | 22,908 | |
Amortization of intangibles | 495,178 | 350,165 | 723,823 | 505,712 | |
Changes in operating assets and liabilities: | |||||
Accounts receivable | 807,000 | 1,630,258 | 959,848 | 4,261,574 | |
Prepaid expenses | (83,480) | (47,061) | (214,968) | (135,834) | |
Other assets | 29,886 | (2,672) | (214,042) | (288,349) | |
Accounts payable and accrued expenses | (1,363,056) | 2,140,856 | (3,102,439) | (6,535,152) | |
Net cash used in operating activities | (8,492,648) | (554,303) | (13,662,595) | (4,367,078) | |
Cash flows from investing activities | |||||
Proceeds from sale of SRAXmd | 395,106 | 22,980,824 | |||
Purchase of equipment | (52,924) | (20,793) | (81,518) | (121,962) | |
Purchase of Digital Currency Assets | (63,000) | ||||
Internally developed software | (543,617) | (451,168) | (960,988) | (634,914) | |
Net cash provided by (used in) investing activities | (201,435) | (471,961) | 21,875,318 | (756,876) | |
Cash flows from financing activities | |||||
Proceeds from the issuance of common stock units | 7,228,709 | 4,020,401 | |||
Proceeds from the issuance of common stock in conjunction with warrant exercised | 1,146,148 | 50,001 | 100,000 | 1,085,004 | |
Proceeds from secured convertible debentures, net | 6,066,406 | ||||
Repayments of notes payable | (6,545,157) | (3,996,928) | |||
Payment of Financing Warrant | (1,500,000) | ||||
Debt issuance costs | (582,392) | ||||
Net cash (used in) provided by financing activities | 8,374,857 | 50,001 | (6,445,157) | 5,092,491 | |
Net increase / (decrease) in cash and cash equivalents | (319,226) | (976,263) | 1,767,566 | (31,463) | |
Cash and cash equivalents | |||||
Beginning of year | 2,784,865 | 1,017,299 | 1,017,299 | 1,048,762 | |
End of year | $ 1,017,299 | 2,465,639 | 41,036 | 2,784,865 | 1,017,299 |
Supplemental schedule of cash flow information | |||||
Cash paid for interest | 100,278 | 313,791 | 1,530,479 | 1,217,716 | |
Cash paid for taxes | |||||
Supplemental schedule of noncash financing activities | |||||
Recorded right-of-use asset | (466,253) | ||||
Recorded lease obligation | 466,253 | ||||
Vesting of common stock award | 150,000 | ||||
Issuance of treasury shares for purposes of loan collateralization | 220 | ||||
Common stock issued for preferred stock conversion and vesting grants | 150,000 | ||||
Issuance of common stock to be issued | 869,500 | 879,500 | |||
Shares issued for convertible note conversions | 300,000 | 3,335,000 | |||
Repricing of warrants | 99,820 | ||||
Common stock and warrants issued for asset purchase arrangements | 617,069 | ||||
Debt and warrants discount on convertible debentures issuance | 5,126,340 | ||||
Repurchase of series B warrants and accounts payable balances directly paid by debenture holder on behalf of Company | 4,113,753 | ||||
Big Token, Inc. [Member] | |||||
Cash flows from operating activities | |||||
Net income (loss) | (209,623) | (1,764,648) | (928,216) | (2,044,054) | (209,623) |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Depreciation expense | 442 | 55,665 | 9,727 | ||
Cryptocurrency impairment | 1,772 | 5,260 | 35,474 | 0 | |
Amortization of intangibles | 37,903 | 442 | |||
Changes in operating assets and liabilities: | |||||
Prepaid expenses | 28,130 | (65,630) | |||
Other assets | (22,453) | ||||
Accounts payable and accrued expenses | 135,902 | 64,604 | 99,076 | ||
Net cash used in operating activities | (209,181) | (1,565,632) | (848,625) | (1,937,231) | |
Cash flows from investing activities | |||||
Cryptocurrency holdings | 33,128 | (5,000) | |||
Purchase of equipment | (3,647) | ||||
Purchase of Digital Currency Assets | (1,877) | (68,497) | |||
Internally developed software | (12,496) | (152,288) | (78,415) | (225,011) | (12,496) |
Net cash provided by (used in) investing activities | (14,373) | (119,160) | (83,415) | (297,155) | |
Cash flows from financing activities | |||||
Intercompany advances from parent entity | 222,554 | 1,684,792 | 932,040 | 2,234,386 | |
Sale of Shares | 1,000 | ||||
Net cash (used in) provided by financing activities | 223,554 | 1,684,792 | 932,040 | 2,234,386 | |
Net increase / (decrease) in cash and cash equivalents | |||||
Cash and cash equivalents | |||||
Beginning of year | |||||
End of year | |||||
Supplemental schedule of cash flow information | |||||
Cash paid for interest | |||||
Cash paid for taxes |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES The accompanying unaudited interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to prevent the information presented from being misleading. These financial statements should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and the notes thereto included in the Companys Annual Report on Form 10-K, which contains audited financial information for the two years in the period ended December 31, 2018. Description of Business We are a digital marketing and data technology company with tools to reach and reveal valuable audiences with marketing and advertising communication. Our machine-learning technology analyzes marketing data to identify brands and content owners' core consumers and their characteristics across marketing channels. In addition to our business services and technologies, we also operate a direct to consumer platform, BIGToken, which enables consumers to own, manage and sell access to their digital identity and data. This provides us with a direct consumer relationship and gives us valuable proprietary data. We derive our revenues from: · sales of digital advertising campaigns to advertising agencies and brands; · sales of media inventory through real-time bidding, or RTB, exchanges; · sale and licensing of our SRAX Social · creation of custom platforms for buying media on SRAX · sales of proprietary consumer data. The core elements of our business are: · Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation SRAX · SRAXauto · SRAXcore is our generalized services and technologies supporting brands and agencies in data management, audience optimization, and multi-channel and omnichannel media and marketing services · SRAXshopper · SRAXir · BIGToken Basis of Presentation The accompanying unaudited condensed consolidated financial statements and notes thereto are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in the Companys annual financial statements have been condensed or omitted. The December 31, 2018 condensed balance sheet data was derived from financial statements, but does not include all disclosures required by GAAP. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three and six month periods ended June 30, 2019 and 2018. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 or for any future period. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2018, included in the Company's annual report on Form 10-K filed with the SEC on April 16, 2019. Uses and Sources of Liquidity Going Concern Although we believe that the foregoing actions will assist with our liquidity needs during the 12 months following the issuance of the financial statements, there is no assurance that the outcome of our actions will result in liquidity. If we continue to experience operating losses, we may need to raise additional capital through the sale of our equity and/or debt securities. Although historically we have funded our operations through the sale of our debt and equity securities, there is no assurance that we will be able to raise additional capital or that if such capital is raised, it will be on favorable terms. A failure to generate additional liquidity could negatively impact our business, including our access to critical business services. Additionally, if we require additional capital and are not able to secure it, we may need to greatly curtail our current and planned business initiatives. In connection with preparing consolidated financial statements for the year ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Companys ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: · Operating losses of $11,648,703 and $13,884,055 for the year ended December 31, 2018 and the year to date period ended June 30, 2019, respectively. · Negative cash flow from operating activities for 2019 and 2018. · At June 30, 2019 the Company had an accumulated deficit of $32,662,403. · Revenue decline in the six months period ended June 30, 2019 from the same period in the prior year of $5,312,224. Ordinarily, conditions or events that raise substantial doubt about an entitys ability to continue as a going concern relate to the entitys ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: · The Company has no debt as of June 30, 2019 · The Company has historically raised funds from debt and equity financings. · The Companys sale of the SRAXmd vertical for $43.5 million in consideration. · In 2018, the Company is in compliance with NASDAQ Capital Markets listing requirements. · In 2018, the Company redeemed $6.5 million of convertible debentures. · Revenue declines were largely the result of a strategic shift away from lower margin sales the produced little to no positive cash flow benefit for the Company. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: · Raise additional capital through short-term loans. · Implement restructuring and cost reductions. · Raise additional capital through a private placement. · Secure a commercial bank line of credit. · Dispose of one or more product lines. · Sell or license intellectual property. At June 30, 2019 the Company had $2,465,639 in cash and cash equivalents and negative working capital of $8,534,224. Impact of Recently Issued Accounting Standards Leases In February 2016, the FASB issued ASU No. 2016-02 (ASC 842), Leases, to require lessees to recognize all leases, with certain exceptions, on the balance sheet, while recognition on the statement of operations will remain similar to current lease accounting. Subsequently, the FASB issued ASU No.2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Targeted Improvements, ASU No. 2018-20, Narrow-Scope Improvements for Lessors, and ASU 2019-01, Codification Improvements, to clarify and amend the guidance in ASU No. 2016-02. ASC 842 eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. This standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We are using a modified retrospective adoption approach, is required to recognize and measure leases existing at the beginning of the adoption period, with certain practical expedients available. We adopted the standard effective January 1, 2019. The standard allows a number of optional practical expedients to use for transition. The Company choose the certain practical expedients allowed under the transition guidance which permitted us to not to reassess any existing or expired contracts to determine if they contain embedded leases, to not to reassess our lease classification on existing leases, to account for lease and non-lease components as a single lease component for equipment leases, and whether initial direct costs previously capitalized would qualify for capitalization under FASB ASC 842. The new standard also provides practical expedients and recognition exemptions for an entity's ongoing accounting policy elections. The Company has elected the short-term lease recognition for all leases that qualify, which means that we do not recognize a ROU asset and lease liability for any lease with a term of twelve months or less. The most significant impact of adopting the standard was the recognition of ROU assets and lease liabilities for operating leases on the Company's consolidated balance sheet but it did not have an impact on the Company's consolidated statements of operations or consolidated statements of cash flows. We recorded a ROU and the related operating lease liability for our long-term facilities lease. The below table summarizes these lease asset and liability accounts presented on our accompanying Condensed Consolidated Balance Sheets: Operating Leases* Condensed Consolidated Balance Sheet Caption Balance as of June 30, Operating lease right-of-use assets - non-current Right of Use Asset $ 466,253 Operating lease liabilities - current Accrued liabilities $ 139,782 Operating lease liabilities - non-current Lease Obligation Long-Term $ 326,471 Total operating lease liabilities $ 466,253 * As of June 30, 2019, we have no finance leases as defined in Topic 842 Components of Lease Expense We recognize lease expense on a straight-line basis over the term of our operating leases, as reported within selling, general and administrative expense on the accompanying Condensed Consolidated Statement of Operations. The components of our aggregate lease expense is summarized below: Three Months Ended Six Months Ended Operating lease cost 76,277 152,842 Variable lease cost Short-term lease cost Total lease cost 76,277 152,842 Weighted Average Remaining Lease Term and Applied Discount Rate Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of June 30, 2019 4.25 years 18 % Future Contractual Lease Payments as of June 30, 2019 The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments: Operating Leases - future payments 2019 (remaining) $ 81,609 2020 163,218 2021 163,218 2022 163,218 2023 133,296 Total future lease payments, undiscounted 704,559 Less: Implied interest (238,306 ) Present value of operating lease payments 466,253 Effective January 1, 2018, we adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) In February 2018, the FASB issued ASU 2018-02: Income Statement Reporting Comprehensive Income (Topic 220) In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, Accounting Guidance Issued but Not Adopted at June 30, 2019 In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information for credit loss estimates. In addition, new disclosures are required. The ASU is effective for fiscal years beginning after December 15, 2019. We are currently evaluating the impact of adopting this guidance. During the six months ended June 30, 2019, the Financial Accounting Standards Board (FASB) has not issued any Accounting Standard Updates which are expected to have a material retrospective or future effect on the consolidated financial statements. | |
Big Token, Inc. [Member] | ||
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Big Token, Inc. (we, us, "BIG", BigToken, or the Company) is a Delaware corporation formed on December 14, 2017, and the fiscal year end is December 31. The Company is a wholly owned subsidiary of SRAX, Inc. (f/k/a Social Reality, Inc.,) and has no direct subsidiaries. We are headquartered in Los Angeles, California. We are a pre-revenue stage business, currently in an open Beta stage of launch of the BigToken application. The Company anticipates it will begin generating revenue in the third quarter of 2019, once a significant user base is developed on the BigToken platform, through the sale of advertising to advertising agencies and brands. Currently the working capital needs of Big Token are funded by the parents. Basis of Presentation These Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of SRAX, Inc. (SRAX) (NASDAQ: SRAX). The Stand-alone Financial Statements reflect the Companys financial position, results of operations and cash flows as it was historically managed, in conformity with accounting principles generally accepted in the United States of America, or GAAP. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Our stand-alone Financial Statements does not fully include expense allocations for: (1) certain corporate functions historically provided by SRAX including, but not limited to, finance, legal, information technology, human resources, communications, ethics and compliance, and any shared services; (2) employee benefits and incentives; and (3) share-based compensation. These expenses have not been allocated to us. Since our formation on December 14, 2017, the Companys parent has allocated resources to BIGtoken in the areas of general administrative, sales, engineering and operations. Actual costs that may have been incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. SRAX uses a centralized approach to cash management and financing of its operations, excluding debt if we are the legal obligor. SRAX funds our operating and investing activities as needed. Cash transfers to and from SRAXs cash management accounts are reflected in intercompany payable to SRAX. The cash and cash equivalents held by SRAX at the corporate level are not specifically identifiable to us and therefore were not allocated to us for any of the periods presented. Any SRAX third-party debt, and the related interest expense has not been allocated to us for any of the periods presented as we were not the legal obligor of the debt and were not directly attributable to our business. The unaudited financial statement presented as of and for the three and six months ended June 30, 2019 reflect all normal recurring adjustments, which in the opinion of management, are necessary to fairly present the financial position, results of operations, and cash flows for the periods ended in accordance with GAAP. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of results for the entire year ending December 31, 2019. Uses and Sources of Liquidity Going Concern These carve-out financial statements have been prepared on a going concern basis in accordance with US GAAP. The going concern basis of presentation assumes that Big Token will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities, contingent or otherwise, and commitments in the normal course of business. Because of Big Tokens dependency on its parent, SRAX. for financing, and as Big Token has experienced losses and negative cash flows from its inception the parent company will support Big Token for its working capital needs over the next twelve months. Big Tokens ability to generate revenue, profitable operations and positive operating cash flow in the future is dependent on its ability to execute its current business plan. In the event Big Token is unable to achieve its current business plan, it will require additional financing until it is able to sustain profitable operations and positive operating cash flows. Given Big Tokens reliance on its parent, it will require additional financing to meet its short-term obligations as well as ongoing operating costs. In addition, Big Token continues to invest in the business through the development of sales channel for its products which management believes will result in growth in revenue, profitability and cash flows. However, there can be no assurance regarding the timing of or ultimate achievement of profitability or positive cash flows. BIGTokens primary need for liquidity is currently to fund working capital requirements of our business and the development of the BIGToken platform. Once the BIGToken platform is complete, we anticipate generating revenue through the platform. Our general, selling and administrative expenses for the three and six months ended June 30, 2019 were $1,012,528 and $1,707,211 respectively. We generated a net losses for the three and six months ended June 30, 2019 of $1,043,182 and $1,764,648 respectively. At June 30, 2019 we had an accumulated deficit of $4,018,325. We had a working capital deficit of $4,316,757 at June 30, 2019 | NOTE 1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Big Token, Inc. (we, us, "BIG", BigToken, or the Company) is a Delaware corporation formed on December 14, 2017, and the fiscal year end is December 31. The Company is a wholly owned subsidiary of SRAX, Inc., and has no direct subsidiaries. We are headquartered in Los Angeles, California. We are a pre-revenue stage business, currently in an open Beta stage of launch of the BigToken application. The Company began generating revenue in the third quarter of 2019, once a significant user base is developed on the BigToken platform, through the sale of advertising to advertising agencies and brands. Currently the working capital needs of Big Token are funded by the parents. The accompanying carve-out financial statements present the historical financial position, results of operations, changes in stockholders equity and cash flows of BigToken, Inc., which reflects an operating line of activities of SRAX, Inc. (Parent or SRAX). Basis of Presentation These Financial Statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of SRAX, Inc. (SRAX) (NASDAQ: SRAX). The Stand-alone Financial Statements reflect the Companys financial position, results of operations and cash flows as it was historically managed, in conformity with accounting principles generally accepted in the United States of America, or GAAP. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Our stand-alone Financial Statements does not fully include expense allocations for: (1) certain corporate functions historically provided by SRAX including, but not limited to, finance, legal, information technology, human resources, communications, ethics and compliance, and any shared services; (2) employee benefits and incentives; and (3) share-based compensation. These expenses have not been allocated to us. Actual costs that may have been incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. SRAX uses a centralized approach to cash management and financing of its operations, excluding debt if we are the legal obligor. SRAX funds our operating and investing activities as needed. Cash transfers to and from SRAXs cash management accounts are reflected in intercompany payable to SRAX. The cash and cash equivalents held by SRAX at the corporate level are not specifically identifiable to us and therefore were not allocated to us for any of the periods presented. Any SRAX third-party debt, and the related interest expense has not been allocated to us for any of the periods presented as we were not the legal obligor of the debt and were not directly attributable to our business. The financial information included herein may not necessarily reflect the financial position and results of operations of the BigToken in the future or what they would have been had BigToken been a separate, stand-alone entity during the periods presented. |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation SRAX, Inc. (f/k/a Social Reality, Inc.) (SRAX, "Social Reality", "we", "us", our or the "Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired 100% of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009 which began business in May of 2010, in exchange for 2,465,753 shares of our Class A common stock. The former members of Social Reality, LLC owned 100% of our Class A common stock after the acquisition. At SRAX, we sell digital advertising campaigns to advertising agencies and brands. We have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to many different digital advertising buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: · sales of digital advertising campaigns to advertising agencies and brands; · sales of media inventory owned by our publishing partners through real-time bidding ( “ ” · sale and licensing of our SRAX Social · creation of custom platforms for buying media on SRAX The core elements of this business are: · Social Reality Ad Exchange or "SRAX" – Real Time Bidding sell side and buy side representation SRAX · SRAX Social · SRAXshopper · SRAXauto We are headquartered in Los Angeles, California. Presentation of Financial Statements Going Concern Going Concern Evaluation In connection with preparing consolidated financial statements for the year ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Companys ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: · Net Income of $8.7 million for the year-ended December 31, 2018 · Negative cash flow from operating activities for 2018 and 2017. · At December 31, 2018, the Company had an accumulated deficit of $18,778,348. · Revenue decline in 2018 of $13,468,106. Ordinarily, conditions or events that raise substantial doubt about an entitys ability to continue as a going concern relate to the entitys ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: · The Company has no debt as of December 31, 2018 · On April 10, 2019 the Company raised $6.2 million through the sale of common stock in a direct shelf offering. · The Companys sale of the SRAXmd vertical for $33.5 million in cash consideration. · In 2018, the Company is in compliance with NASDAQ Capital Markets listing requirements. · In 2018, the Company redeemed $6.5 million of convertible debentures. · Revenue declines were largely the result of a sale of a lower margin sales the produced little to no positive cash flow benefit for the Company. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: · Raise additional capital through short-term loans. · Implement restructuring and cost reductions. · Raise additional capital through a private placement of equity. · Secure a commercial bank line of credit. · Dispose of one or more product lines. · Sell or license intellectual property. At December 31, 2018, the Company had $2,784,865 in cash and cash equivalents. In April 2019 the Company concluded a private placement sale of its common stock for approximately $6.5 million. We believe we have sufficient working capital to pay our expenses for the next twelve months. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control of the subsidiary. Use of Estimates The consolidated financial statements have been prepared in conformity with generally accepted accounting principles accepted in the United States of America (GAAP) and requires management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, purchase price for acquisition, goodwill, other intangible assets, put rights and valuation of other assets and liabilities. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition The Company adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ASC Topic 606 is a comprehensive revenue recognition model that requires revenue to be recognized when control of the promised goods or services are transferred to our customers at an amount that reflects the consideration that we expect to receive. Application of ASC Topic 606 requires us to use more judgment and make more estimates than under former guidance. Application of ASC Topic 606 requires a five-step model applicable to all product offereing revenue streams as follows: Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each partys rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customers intent and ability to pay the promised consideration. We apply judgment in determining the customers ability and intention to pay, which is based on a variety of factors including the customers historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Variable consideration is described in detail below. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative Stand-Alone Selling Price (SSP,) basis. We determine SSP based on the price at which the performance obligation would be sold separately. If the SSP is not observable, we estimate the SSP based on available information, including market conditions and any applicable internally approved pricing guidelines. Recognition of revenue when, or as, we satisfy a performance obligation We recognize revenue at the point in time that the related performance obligation is satisfied by transferring the promised goods or services to our customer. Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have risk before the specified good or service have been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. Contract Liabilities Contract liabilities consist of customer advance payments and billings in excess of revenue recognized. We may receive payments from our customers in advance of completing our performance obligations. We record contract liabilities equal to the amount of payments received in excess of revenue recognized, including payments that are refundable if the customer cancels the contract according to the contract terms. Contract liabilities have been historically low historically recorded as current liabilities on our consolidated financial statements when the time to fulfill the performance obligations under terms of our contracts is less than one year. We have no Long-term contract liabilities which would represent the amount of payments received in excess of revenue earned, including those that are refundable, when the time to fulfill the performance obligation is greater than one year. Practical Expedients and Exemptions We have elected certain practical expedients and policy elections as permitted under ASC Topic 606 as follows: · We applied the transitional guidance to contracts that were not complete at the date of our initial application of ASC Topic 606 on January 1, 2018. · We adopted the practical expedient related to not adjusting the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; · We made the accounting policy election to not assess promised goods or services as performance obligations if they are immaterial in the context of the contract with the customer; · We made the accounting policy election to exclude any sales and similar taxes from the transaction price; and · We adopted the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying consolidated statements of operations. Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Allowance for doubtful accounts was $48,741 and $59,703 at December 31, 2018 and 2017, respectively. Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with financial institutions within the United States. The balances maintained at these financial institutions are generally more than the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any loss on these accounts. At December 31, 2018, two customers accounted for more than 10% of the accounts receivable balance, for a total of 75.1%. At December 31, 2017, four customers accounted for more than 10% of the accounts receivable balance, for a total of 59.5%. Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as 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, based on the Companys principal or, in absence of a principal, most advantageous market for the specific asset or liability. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: · Level 1Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; · Level 2Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and · Level 3Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At December 31, 2018 and 2017, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. The Company measures certain non-financial assets, liabilities, and equity issuances at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets and goodwill for impairment; allocating value to assets in an acquired asset group; and applying accounting for business combinations. Derivative instruments are carried at fair value, generally estimated using the Black-Scholes Merton model. As of December 31, 2018 the Company included $2,723,264 of United States Treasury bills with maturities less than 90 days within cash and cash equivalents. Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. Intangible assets Intangible assets consist of intellectual property, a non-complete agreement, and internally developed software and are stated at cost less accumulated amortization. Amortization is provided for on the straight-line basis over the estimated useful lives of the assets of five to six years. Costs Incurred to Develop Software for Internal Use Costs incurred to develop computer software for internal use are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a specific software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Post-implementation costs related to the internal use computer software, are expensed as incurred. Internal use software development costs are amortized using the straight-line method over its estimated useful life which ranges up to three years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the years ended December 31, 2018, and 2017 there has been no impairment associated with internal use software. For the years ended December 31, 2018, and 2017, the Company capitalized software development costs of $960,157 and $694,914 respectively. During 2016, the Company began capitalizing the costs of developing internal-use computer software, including directly related payroll costs. The Company amortizes costs associated with its internally developed software over periods up to three years, beginning when the software is ready for its intended use. The Company capitalizes costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value are recognized in earnings until settlement and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test as of December 31, 2018 using market data and discounted cash flow analysis. Based on this analysis, it was determined that the fair value exceeded the carrying value of its reporting units. The Company concluded the fair value of the goodwill exceed the carrying value accordingly there were no indicators of impairment for the years ended December 31, 2018 and 2017. The Company had historically performed its annual goodwill and impairment assessment on December 31 st When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company's products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company's reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the impairment testing methodology primarily using the income approach (discounted cash flow method). We compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, then the amount of impairment to be recognized. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the years ended December 31, 2018 or 2017, respectively. Accounting for discontinued operations We regularly review underperforming assets (product offereings) to determine if a sale or disposal might be a better way to monetize the assets. When a product line or other asset group is considered for sale or disposal, we review the transaction to determine if or when the entity qualifies as a discontinued operation in accordance with the criteria of FASB ASC Topic 205-20 Discontinued Operations. The FASB has issued authoritative guidance that raises the threshold for disposals to qualify as discontinued operations. Under the this guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity's operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. We operate as a single reporting unit that has multiple product offerings. All our product offerings are in the same geographic market, sharing the same building, equipment, and managed by a single general manager. The product level is the lowest level for which discrete financial information related solely to revenue and related accounts recievalbe is available and the level reviewed by management to analyze operating results. Our senior management is compensated based on the results of all the product offerings as a whole, not the results of any individual product line We have determined that the sale of the SRAXmd prodcut line did not qualify for as a discontinued operation pursuant to guidance in ASC 205-20. During 2018, based on revenue results management and board decided to accept the offer for the sale of the SRAXmd product line. The Company decided to monetize the SRAXmd product line via a sale rather than continue to offer the SRAXmd product to its customers. We have retained an approximatley 30% interest in the purchaser of the SRAXmd product line, however, based on the operating agreement covering our ownerhisp we have no ongoing or further involvement in the operations of the purschaser of SRAXmd. The sale of the SRAXmd product line is not considered to be discontinued operations pursuant to the guidance in ASC 205-20. Derivatives The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, Distinguishing Liabilities From Equity Derivatives and Hedging The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend, which will reduce the income available to common stockholders. Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using a Black-Scholes option pricing model, at each measurement date. Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options Earnings Per Share We use ASC 260, " Earnings Per Share There were 4,853,085 common share equivalents at December 31, 2018 and 5,246,692 at December 31, 2017. For the year ended December 31, 2018 these potential shares were excluded from the shares used to calculate diluted. These securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive. Income Taxes We utilize ASC 740 Income Taxes The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Stock-Based Compensation We account for our stock-based compensation under ASC 718 " Compensation Stock Compensation We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Common stock awards The Company grants common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded in accordance with ASC 505-50 on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash. Warrants In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 4, Stockholders Equity . Registration Rights The Company accounts for registration rights agreements in accordance with the Accounting Standards Codification subtopic 825-20, Registration Payment Arraignments ("ASC 825-20"). Under ASC 825-20, the Company is required to disclose the nature and terms of the arraignment, the maximum potential amount and to assess each reporting period the probable liability under these arraignments and, if exists, to record or adjust the liability to current period operations. On November 29, 2018, the Company in |
Big Token, Inc. [Member] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Uses and Sources of Liquidity Going Concern These carve-out financial statements have been prepared on a going concern basis in accordance with US GAAP. The going concern basis of presentation assumes that Big Token will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities, contingent or otherwise, and commitments in the normal course of business. Because of Big Tokens dependency on its parent, SRAX. for financing, and as Big Token has experienced losses and negative cash flows from its inception the parent company will support Big Token for its working capital needs over the next twelve months. Big Tokens ability to generate revenue, profitable operations and positive operating cash flow in the future is dependent on its ability to execute its current business plan. In the event Big Token is unable to achieve its current business plan, it will require additional financing until it is able to sustain profitable operations and positive operating cash flows. Given Big Tokens reliance on its parent, it will require additional financing to meet its short-term obligations as well as ongoing operating costs. In addition, Big Token continues to invest in the business through the development of sales channel for its products which management believes will result in growth in revenue, profitability and cash flows. However, there can be no assurance regarding the timing of or ultimate achievement of profitability or positive cash flows. BIGTokens primary need for liquidity is currently to fund working capital requirements of our business and the development of the BIGToken platform, user acquisition and sales and marketing efforts. We began to generate revenue in the third quarter of 2019. Our general, selling and administrative expenses for the periods ended December 31, 2018 and 2017 were $1,970,677 and $209,181, respectively. We generated a net losses of $2,044,054 and $209,623 for the periods ended December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, we had an accumulated deficit of $2,253,677 and $209,623, respectively. We had a working capital deficit of $2,455,486 and $220,677 at December 31, 2018 and 2017, respectively. We have completed our initial development states and the Company facing a challenging competitive environment. While we continue to build out our platform to begin targeting revenue generating opportunities, we reported losses and have historically funded all of our operations and investing activities with cash provided by our parent company, SRAX, Inc. We anticipate that our parent company will fund our operational requirements for the next 12 months. We expect our parent company will fund our operations for the next twelve months through cash on hand, cash generated from its core operations and potential sales of other non-core assets. SRAX had cash and equivalents of $2.8 million as of December 31, 2018. Use of Estimates The financial statements have been prepared in conformity with GAAP and requires management of the Company to make estimates and assumptions in the preparation of these financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from these estimates and assumptions. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Companys critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern and liquidity (ii) Valuation allowance for deferred tax assets (iii) Estimates and assumptions used in valuation of intangible assets : Management estimates These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on their experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company held no financial instruments as of December 31, 2018 and 2017. Cash and Cash Equivalents As of December 31, 2018 and 2017, the Company had no cash accounts. In the future, the Company will consider all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Concentration of Credit Risk, Significant Customers and Supplier Risk The Company does not have any bank accounts as of December 31, 2018 and 2017. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a.) affiliates of the Company (Affiliate means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) 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; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Internal use software The Business capitalizes eligible costs of internally developed software as capital expenditures if the costs meet the criteria established under ASC 350: Intangibles - Goodwill and Other. Amounts capitalized are amortized on a straight line basis over the estimated useful life of the software, which is three years beginning in 2017. Generally, costs incurred during the application development stage (for example, costs incurred for designing the software configuration and interfaces, coding, installation, and testing) are capitalized. Costs incurred during the preliminary project stage (for example, costs incurred to develop, evaluate, and select alternatives) and costs incurred during the post implementation and operation stage (for example, costs incurred for training and application maintenance) are expensed as incurred. Capitalized software development costs were $225,011 during the year ended December 31, 2018 The Company regularly evaluates capitalized software for potential impairment. Impairment is recognized when events or changes in circumstances occur related to computer software being developed or currently in use, which indicate that the carrying amount may not be recoverable. There were no impairment charges for the year ended December 31, 2018. In accordance with the authoritative guidance, we capitalize application development stage costs associated with the development of new functionality for internal-use software and software developed related to our planned product offerings. The capitalized costs are then amortized over the estimated useful life of the software, which is generally three to five years, and are included in property and equipment in the accompanying balance sheet. The Company's intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives of three years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Amortization expense of intangible assets during the period ended December 31, 2018 was $37,000. For the period ended December 31, 2017 amortization was not material. Digital Currency Assets Digital Currency Assets are included in current assets in the balance sheet. Digital Currency Assets are recorded at cost less impairment. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Realized gain (loss) on sale of Digital Currency Assets are included in other income (expense) in the statements of operations. The Company had no realized gain or loss on sale of digital currency during the periods ending December 31, 2018 and 2017. The Company assesses impairment of Digital Currency Assets quarterly if the fair value of Digital Currency Assets is less than its cost basis. The Company recognizes impairment losses on Digital Currency Assets caused by decreases in fair value using the average U.S. dollar spot price of the related Digital Asset as of each impairment date. Such impairment in the value of Digital Currency Assets are recorded as a component of costs and expenses in our statements of operations. The Company recorded impartment charges of $35,474 and $0 during the periods ended December 31, 2018 and 2017. Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the periods ended December 31, 2018 and 2017. Revenue Recognition The Company has adopted the provisions of ASC Topic 606, Revenue from Contracts with Customers ("Topic 606") as of January 1, 2018. For the periods ended December 31, 2018 and 2017, the Company had no revenue or cost of sales. Advertising Advertising costs are expensed as incurred. Advertising costs incurred amounted to $4,491 and $0 for the periods ended December 31, 2018 and 2017, respectively. Earnings (Loss) Per Share We use Accounting Standards Codification (ASC) 260, " Earnings Per Share There were no common share equivalents at December 31, 2018 and 2017. Income taxes Our income taxes as presented are calculated on a separate tax return basis and may not be reflective of the results that would have occurred on a standalone basis. Our operations have historically been included in SRAXs U.S. federal and state tax returns. We do not maintain taxes payable to/from our parent and we are deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions, if applicable. These settlements are reflected as changes in parent company investment. We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company did not recognize any tax benefits in the stand-alone Financial Statements because tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Fair Value Measurements Non-recurring fair value measurements. Certain assets are measured at fair value on a non-recurring basis such as property and equipment and intangible assets. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Financial instruments not carried at fair value. The carrying values of our short-term financial instruments, including a, accounts payable, and accrued liabilities, approximate fair value due to the relatively short maturity of such instruments. The Company does not hold any financial instruments that are measured at fair value on a recurring basis. Tax years that remain subject to examination by major tax jurisdictions The Company discloses tax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15. Major tax jurisdictions generally have the right to examine and audit the previous three or four years of tax returns filed. Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in selling, general and administrative expenses. A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income, and (3) the impact of tax planning strategies. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding the Businesss forecasts. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. Taxable loss generated by BigToken has been included in the consolidated federal income tax returns of SRAX and its state income tax returns. SRAX has allocated income tax/loss to Big Token in the accompanying stand-alone financial statements as if Big Token were held in a separate corporation which filed separate income tax returns. SRAX believes the assumptions underlying its allocation of income taxes on a separate return basis are reasonable. However, the amounts allocated for income taxes in the accompanying stand-alone financial statements are not necessarily indicative of the actual amount of income taxes that would have been recorded had Big Token been a completely separate stand-alone entity. Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, which classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (the Indirect Method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. |
BIGTOKEN POINT LIABILITY
BIGTOKEN POINT LIABILITY | 12 Months Ended |
Dec. 31, 2018 | |
Big Token, Inc. [Member] | |
BIGTOKEN POINT LIABILITY | NOTE 2 BIGTOKEN POINT LIABILITY During the three months ended March 31, 2019 the Company instituted a policy that allows BIGtoken user to redeem outstanding BIGtoken points for cash if their account and point balances meet certain criteria. As of June 30, 2019, the Company has estimated the future liability for point redemptions to be $186,800. The Company considered the total number of points outstanding, the conversion rate in which points are redeemable for cash. Due to the recency of the BIGtoken platform and the ability for users to redeem points for cash, the Company does not have sufficient history to estimate account attrition and the associate breakage rates for outstanding points. Therefore, the Company utilized a breakage factor of zero percent as of June 30, 2019 in determining the estimated liability. |
IMPACT OF RECENTLY ISSUED ACCOU
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2018 | |
Big Token, Inc. [Member] | |
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS | NOTE 3 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS Changes to accounting principles are established by the FASB in the form of ASUs to the FASBs Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. Described below are ASUs that are not yet effective, but may be applicable to our financial position, results of operations, cash flows, or presentation thereof. ASUs not listed below were assessed and determined to not be applicable to our financial position, results of operations, cash flows, or presentation thereof. In November 2018, the FASB issued ASU 2018-18 , Collaborative Arrangements (Tope 818): Clarifying the Interaction Between Topic 808 and Topic 606 In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. In July 2018, the FASB issued ASU 2018-09, Codification Improvements In June 2018, the FASB issued ASU 2018-07, CompensationStock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | NOTE 2 ACQUISITIONS AND DIVESTITURES Sale of SRAXmd: On August 6, 2018, we completed the sale of substantially all of the assets related to our SRAXmd product line for aggregate consideration of up to $52,500,000. The purchase price consists of (i) $33,000,000 in cash, (ii) 30% interest in the purchaser of SRAXmd assets and (iii) an earn-out of up to $9,000,000 upon the SRAXmd product line achieving certain gross profit thresholds (the Earn-Out). A total of $762,500 of the purchase price was placed into escrow accounts subject to future release. Given the Company will retain an ongoing equity interest in the purchaser of SRAXmd, the Company evaluated the potential existence of variable interest entity accounting treatment under ASC 810. Given the Company had no input into the design of the purchasing entity, is not a primary beneficiary of the purchaser entity and has no ongoing role in management or governance other than that of a passive, minority investor, the Company determined that the presence of a variable interest entity was not present. Assets transferred to the purchaser in the transaction included $3,536,503 of accounts receivable and $216,479 of prepaid expense items. The purchaser also assumed $191,164 of accounts payable obligations and $333,014 of additional accrued expense items. The Company received a credit to the purchase price of $196,055 for over-delivery of working capital beyond a contractual $3 million working capital target. The Company has recorded a zero value for the interest retained in the purchaser of SRAXmd assets. The Company paid $1,709,500 of advisory fees and $351,089 of legal fees at closing. An additional $164,028 was also paid by the Company at closing for insurance premiums and escrow related fees. During the fourth quarter of 2018, the Company recognized an additional $1,870,361 in costs associated with the transaction. The Company recorded a gain on sale of assets totaling $22,108,028. Less escrow holdbacks and other reimbursements, the Company received net proceeds from the transaction totaling $22,980,824. Below are the major components of the gain we recorded on the sale of the SRAX md assets: GAIN ON SALE OF SRAXmd: Cash Proceeds $ 32,966,303 Fair Value of Interest Retained Carrying amount of Assets Sold Fixed Assets (117,000 ) Working Capital (3,228,803 ) Transactions Fees & Sales Commissions (7,512,472 ) Gain on Sale $ 22,108,028 Components of operating results for the SRAXmd product group have not been classified as discontinued operations. Pursuant to guidance in ASC 205-20, Discontinued Operations, we noted that the SRAXmd product line was not a reportable segment or a separate operating segment and nor was it deemed to be a strategic shift. Under this guidance, an entity presents a disposal as a discontinued operation if it represents a strategic shift that has (or will have) a major effect on an entitys operations and financial results. ASC Topic 205-20-45 does not clearly define on a quantitative basis as to how an entity would establish whether a component, business activity is individually significant. Additionally, the sale of the SRAXmd product line did not qualify under ASC Topic 360-10-35 to 45 for determination of the gain or loss. The sale of the SRAXmd product group does not constitute a shift in our corporate strategy or purpose as we continue to operate a diversified product group of digital advertising tools, as we have done since inception in 2010. The core technology and other key elements of the SRAX advertising platform will remain owned by us, with certain license agreements for use of our software granted to the purchaser as part of the transaction. SRAXmd was a product developed from our core technology. In addition to the assets, 12 of our existing employees also transferred. The Company have not assigned any goodwill upon disposal of a SRAXmd. SRAXmd, like each of the remaining SRAX product groups/offerings, has not historically operated as a discrete business entity or division within our company. As such, it along with the other product groups rely upon shared employees and a shared technology platform to operate. Furthermore, certain advertisers may also purchase advertising across multiple product lines, making individual product financial statements more difficult to segregate. Due to its in-house organic development, SRAXmd also has no separately capitalized assets that may be presented as held for sale on our balance sheet. Based on managements best estimates, for the three and twelve month periods ended December 31, 2018 and 2017, the unaudited results for revenue and cost of sales attributable to the SRAXmd product group are estimated below: Three Months ended Full Year December 31, December 31, 2018 2017 2018 2017 Revenue $ $ 4,603,366 $ 6,306,613 $ 11,077,503 Cost of Sales $ $ 1,082,389 $ 1,101,080 $ 1,998,395 Gross Profit $ 0 $ 3,520,977 $ 5,205,533 $ 9,079,108 Gross Margin 0.00 % 76.49 % 82.54 % 81.96 % General, Sales & Administrative expense $ $ 1,438,957 $ 2,896,193 $ 2,028,407 Operating Income $ $ 2,082,020 $ 2,309,340 $ 7,050,702 There is no specific depreciation and amortization, or interest expense specifically attributable to the SRAXmd product line. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 3 NOTES PAYABLE Financing Agreement with Victory Park Management, LLC as agent for the lenders On October 30, 2014, the Company entered a financing agreement with Victory Park Management, LLC, as administrative agent and collateral agent for the lenders and holders of notes and warrants issued thereunder. The initial and subsequent notes issued bore interest at a rate per annum equal to the sum of (1) cash interest at a rate of 10% per annum and (2) payment-in-kind (PIK) interest at a rate of 4% per annum for the period commencing on the closing date and extending through the last day of the calendar month during which the Company's financial statements for December 31, 2014 are delivered, and which PIK interest rate thereafter from time to time may be adjusted based on the ratio of the Company's consolidated indebtedness to its earnings before interest, taxes, depreciation and amortization. If the Company achieved a reduction in the leverage ratio as described in the transaction documents, the PIK interest rate declined on a sliding scale from 4% to 2%. The notes issued under the transaction documents were scheduled to mature on October 30, 2017. During the twelve months ended December 31, 2017, we completely repaid the notes and made principal and PIK interest repayments in the amount of $3,996,928. We incurred a total of $3,178,011 of costs related to the transaction. These costs were amortized to interest expense over the life of the debt. During the twelve months ended December 31, 2017 $2,101,377 of debt issuance costs were amortized as interest expense. As of December 31, 2017, all deferred debt issuance costs have been completely amortized. During the twelve months ended December 31, 2017 $67,612 were recorded as PIK interest expense. Pursuant to the transaction documents, the Company issued to the lender a five-year warrant to purchase 580,000 shares of its Class A common stock at an exercise price of $5.00 per share. Pursuant to the warrant, the warrant holder had the right, at any time after the earlier of April 30, 2016 and the maturity date, but prior to October 30, 2019, to exercise its put right under the terms of the warrant, pursuant to which the warrant holder may sell to the Company, and the Company will purchase from the warrant holder, all or any portion of the warrant that had not been previously exercised. In connection with any exercise of this put right, the purchase price was equal to an amount based upon the percentage of the warrant for which the put right is being exercised, multiplied by the lesser of (a) 50% of the total consolidated revenue for the Company for the trailing 12-month period ending with the Company's then-most recently completed fiscal quarter, and (b) $1,500,000. In May 2017, the Company was notified by the warrant holder that it was exercising its put right. On October 27, 2017, the Company paid the warrant holder $1,567,612, which was comprised of the $1,500,000 warrant value and an additional $67,612 of accrued interest. Financing and Security Agreement with FastPay In September 2016, we executed a Financing and Security Agreement, as amended (collectively, the "FastPay Agreement"). with FastPay Partners, LLC to create an accounts receivable-based credit facility. The FastPay Agreement was further amended in April 2018. Under the April 2018 amended terms of the FastPay Agreement, FastPay may, at its sole discretion, purchase our eligible accounts receivable. Upon any acquisition of accounts receivable, FastPay will advance us up to 80% of the gross value of the purchased accounts, up to a maximum of $4,000,000 in advances. Each account receivable purchased by FastPay will be subject to a factoring fee rate specified in the FastPay Agreement calculated as a percentage of the gross value of the account outstanding and additional fees for accounts outstanding over 30 days. We are subject to a concentration limitation on the percentage of debt from any single customer of 25% to the total amount outstanding on its purchased accounts, subject to an increase to 30% for one specific large customer. We are obligated to repurchase accounts remaining uncollected after a specified deadline, and FastPay will generally have full recourse against us in the event of nonpayment of any purchased accounts. Our obligations under the FastPay Agreement are secured by a first position security interest in its accounts receivable, deposit accounts and all proceeds therefrom. The FastPay Agreement contains covenants that are customary for agreements of this type and are primarily related to accounts receivable and audit rights. We are also required to provide FastPay with 30-day notice of any transaction that result, or would result in, a change of control as defined in the FastPay Agreement. The failure to satisfy covenants under the FastPay Agreement or the occurrence of other specified events that constitute an event of default, as defined, could result in the termination of the FastPay Agreement and/or the acceleration of our obligations. The FastPay Agreement contains provisions relating to events of default that are customary for agreements of this type. The current FastPay Agreement has a term of 18 months and automatically renews thereafter for successive one-year terms, subject to earlier termination by written notice by the Company, provided all obligations are paid, including the payment of an early termination fee. At December 31, 2018 $106,920 of accounts receivable purchased by FastPay remain outstanding and are subject to repurchase under the terms of the FastPay Agreement. The Series A warrants are initially exercisable at $3.00 per share and, if at any time after the six-month anniversary of the issuance the underlying shares of our Class A common stock are not covered by an effective resale registration statement, the Series A warrants are exercisable on a cashless basis. The conversion price of the Debentures and the exercise price of the Debenture Warrants are subject to adjustments upon certain events, including stock splits, stock dividends, subsequent equity transactions (other than specified exempt issuances), subsequent rights offerings, and fundamental transactions, subject to a floor of $1.40 per share. If we fail to timely deliver the shares of our Class A common stock upon any conversion of the Debentures or exercise of the Series A warrants we will be subject to certain buy-in provisions. The debentures and Series A warrants, also contain certain beneficial ownership limitations. Chardan Capital Markets, LLC, Noble Capital Markets, Inc. and Aspenwood Capital (an independent branch of Colorado Financial Services Corporation), all broker-dealers and members of FINRA, acted as either our placement agent or a finder in connection with the sale of the securities. In addition, an affiliate of Noble purchased Debentures amounting to $720,000 and was issued a Series A warrant to purchase 120,000 shares of our Class A common stock in this offering. We paid aggregate cash commissions of $276,700 in connection with the sale of the securities. Additionally, we issued Chardan placement agent warrants to purchase 100,000 shares of our Class A common stock at an exercise price of $3.75 per share which are exercisable for 5.5 years commencing nine months from the issuance date. We issued Noble placement agent warrants to purchase up to 66,800 shares of our Class A common stock at an exercise price of $3.00 per share which will become exercisable nine months from the date of issuance. We also issued Colorado Financial Service Corporation and its designees warrants to purchase 7,700 shares of our Class A common stock at an exercise price of $3.75 per share which are exercisable for 5.5 years commencing nine months from the issuance date. We included the shares underlying the placement agent warrants in a resale registration statement that was declared effective by the SEC in September 2017. The net proceeds to us from the offering, after deducting placement agent fees and estimated offering expenses, were approximately $4,566,405. We utilized $2,500,000 of the net proceeds to satisfy a put obligation under the Series B Warrants from our January 2017 offering. The balance of the net proceeds was used to pay down accounts payable and satisfy other working capital requirements. On October 26, 2017, we sold an aggregate of: (i) $5,180,157 in principal amount of 12.5% secured convertible debentures; and (ii) five year Series A common stock purchase warrants representing the right to acquire up to 863,365 shares of our Class A common stock. During the three months ended December 31, 2018, we completed redeemed the convertible debentures through repayment of $6,545,157 in principal, $764,089.53 in interest and prepayment penalties, and 1,090,862 Series B warrants. The Warrants have an initial exercise price of $3.00 per share (subject to adjustment pursuant to the terms therein). Of the Warrants: (i) 277,500 expire on April 21, 2022, and (ii) 813,362 expire on October 27, 2022. Chardan Capital Markets, LLC acted as lead placement agent and Aspenwood Capital acted as co-placement agent, in connection with the sale of the securities. Pursuant to their respective engagement agreements On November 29, 2018, the Company invoked the early redemption clause in certain of its convertible notes payable pursuant to which the Company redeemed early these convertible notes payable by cash and issuing warrant to purchase shares of common stock (the "Redemption Penalty Warrants"). In connection with the early retirement of these notes payable, the warrants issued to these investors included a registration rights agreement clauses, pursuant to which the Company agreed to provide certain registration rights with respect to the warrants issued. The registration rights agreements require the Company to file a registration statement within 90 calendar days from the final closing under the retirement transaction and to be effective 60 calendar days thereafter. The final closing under the retirement transaction of the debentures occurred on November 29, 2018. On February 11, 2019, the Company filed the required registration statement, as of this filing, it has yet to be declared effective. If the registration statement is not declared effective, the Company is subject to a 2% penalty of investors subscription amount. The Company has estimated the liability under the registration rights agreement at $0 as of December 31, 2018. |
SECURED CONVERTIBLE DEBENTURES,
SECURED CONVERTIBLE DEBENTURES, NET | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debt [Abstract] | |
SECURED CONVERTIBLE DEBENTURES, NET | NOTE 4 SECURED CONVERTIBLE DEBENTURES, NET In April 2017, the Company entered into definitive securities purchase agreements (the Series A1 Securities Purchase Agreements) with certain accredited investors (the A1 Purchasers) for the purchase and sale of an aggregate of : (i) $5,000,000 principal amount of 12.5% secured convertible debentures (the Series A1 Debentures); and (ii) five-year warrants (the Series A1 Warrants) representing the right to acquire up to 833,337 shares of our class A common stock in a transaction exempt from registration under the Securities Act, in reliance on an exemption provided by Rule 506(b) of Regulation D and Section 4(a)(2) of the Securities Act. The Series A1 Debentures, which mature three years from the date of issuance, pay interest in cash at the rate of 12.5% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on July 1, 2017. Our obligations under the Series A1 Debentures are secured by a second position security interest in our accounts receivable and a first position security interest in the balance of our assets, and we are subject to continued compliance with certain financial covenants. The A1 Debentures are convertible at the option of the holder into shares of our class A common stock at an initial conversion price of $3.00 per share, subject to adjustment as hereinafter set forth. Subject to our compliance with certain equity conditions set forth in the Series A1 Debentures, upon 20 trading days' notice to the holders we have the right to redeem the Debentures in cash at a 120% premium during the first year and a 110% premium during the remaining term of the Debentures. Upon any optional redemption, we are obligated to issue the holder five-year warrant series B warrants, the terms of which will be identical to the Series A1 Warrants, to purchase a number of shares of our class A common stock as shall equal 50% of conversion shares issuable on an as-converted basis as if the principal amount of the Series A1 Debenture had been converted immediately prior to the optional redemption. In the event of future financings by us, subject to certain exempt issuances, the holders have the right to cause us to allocate 20% of the proceeds we may receive as a mandatory redemption of a portion of the principal amount then outstanding. We are also required to redeem the Debentures upon our failure to maintain certain financial covenants which include a minimum monthly current ratio, a maximum quarterly corporate expense ratio, and maintain minimum quarterly revenue and EBITDA related to SRAXmd The Series A1 Debenture also contains certain customary events of default (including, but not limited to, default in payment of principal or interest thereunder, breaches of covenants, agreements, representations or warranties thereunder, the occurrence of an event of default under certain material contracts of the Company, changes in control of the Company and the entering or filing of certain monetary judgments against the Company). Upon the occurrence of any such event of default, the outstanding principal amount of the Series A1 Debenture, plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the holders election, immediately due and payable in cash. The Company is also subject to certain customary non-financial covenants under the Debenture. The Debenture holders were granted board observation rights so long as the lead investor continues to hold the Debentures. The Series A1 Warrants are initially exercisable at $3.00 per share and, if at any time after the six-month anniversary of the issuance the underlying shares of our class A common stock are not covered by an effective resale registration statement, the Series A1 Warrants are exercisable on a cashless basis. The conversion price of the Debentures and the exercise price of the Series A1 Warrants are subject to adjustments upon certain events, including stock splits, stock dividends, subsequent equity transactions (other than specified exempt issuances), subsequent rights offerings, and fundamental transactions, subject to a floor of $1.40 per share. If we fail to timely deliver the shares of our class A common stock upon any conversion of the Series A1 Debentures or exercise of the Series A1 Warrants we will be subject to certain buy-in provisions. Pursuant to the terms of the Series A1 Debentures and Series A1 Warrants, a holder will not have the right to convert any portion of the Series A1 Debentures or exercise any portion of the Series A1 Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of class A common stock outstanding immediately after giving effect to such conversion or exercise, as such percentage ownership is determined in accordance with the terms of the Series A1 Debentures and the Series A1 Warrants; provided that after the Shareholder Approval Date, as defined below, at the election of a holder and notice to us such percentage ownership limitation may be increased or decreased to any other percentage, not to exceed 9.99%; provided that any increase will not be effective until the 61 st In accordance with the Nasdaq Marketplace Rules, until such time as our stockholders have approved the Securities Purchase Agreements and the transactions thereunder (the "Shareholder Approval Date"), we were not obligated to issue any shares of our class A common stock upon any conversion of the Series A1 Debentures and/or exercise of the Series A1 Warrants, and the holders had no right to receive upon conversion and/or exercise thereof any shares of our Class A common stock, to the extent the issuance of such shares of Class A common stock would exceed 20% of our outstanding Class A common stock prior to the transaction. We held a special meeting of the shareholders on June 23, 2017 whereby we obtained approval of the Securities Purchase Agreements and the transactions thereunder. We agreed to file a registration statement registering the resale of the shares of our Class A common stock underlying the Series A1 Debentures and the Series A1 Warrants. Under the terms of the Securities Purchaser Agreements, we also granted the Purchasers of the Series A1Debentures the right to purchase an additional $3,000,000 of Series A1 Debentures upon the same terms and conditions for a period beginning on the Shareholder Approval Date and expiring on earliest of the date that (a) the initial registration statement has been declared effective by the SEC, (b) all of the underlying shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for our company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary of the closing date provided that a holder of the underlying shares is not an affiliate of the Company or (d) all of the underlying shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act. The shares underlying the Series A1 Debentures and Series Warrants were included in a resale registration statement on Form S-3 that was declared effective by the SEC in June 2017. Chardan Capital Markets, LLC (Chardan Capital), Noble Capital Markets, Inc. ("Noble") and Aspenwood Capital (an independent branch of Colorado Financial Services Corporation) (Aspenwood), all broker-dealers and members of FINRA, acted as either our placement agent or a finder in connection with the sale of the securities pursuant to the Securities Purchase Agreements. In addition, an affiliate of Noble purchased Series A1 Debentures amounting to $720,000 and was issued Series A1 Warrants (Placement Agent Warrants) to purchase 120,000 shares of our Class A common stock in this offering. We paid aggregate cash commissions amounting to $276,700 to these broker-dealers in connection with the sale of the Series A1 Debentures. Additionally, we issued Chardan Capital Placement Agent Warrants to purchase 100,000 shares of our Class A common stock at an exercise price of $3.75 per share which are exercisable for 5.0 years commencing six months from the issuance date. We issued Noble Placement Agent Warrants to purchase up to 66,800 shares of our Class A common stock at an exercise price of $3.00 per share which will become exercisable six months from the date of issuance. We also issued Colorado Financial Service Corporation and its designees Placement Agent Warrants to purchase 7,700 shares of our Class A common stock at an exercise price of $3.75 per share which are exercisable for 5.0 years commencing six months from the issuance date. We included the shares underlying the Placement Agent Warrants in the aforedescribed resale registration statement that was declared effective by the SEC in June 2017. The net proceeds to us from the offering, after deducting placement agent fees and estimated offering expenses, were approximately $4,636,629. We utilized $2,500,000 of the net proceeds to satisfy a put obligation under the Series B Warrants issued to investors in a registered direct offering that we conducted in January 2017 as described in Note 11. The balance of the net proceeds was used to pay down accounts payable and satisfy other working capital requirements. The Series A1 Warrants have been accounted for utilizing ASC 815 Derivatives and Hedging. The Company accounted for the Series A1 Debentures in accordance with ASC 470-20 Debt with Conversion and other options. The net proceeds of $4,639,629 from the issuance of the Series A1 Debentures was allocated between the Series A1 Debentures and the fair value of the Series A1 Warrants. The values allocated to the Series A1 Debentures and Series A1Warrant was $3,408,629 and $1,288,000 respectively. After the allocation between the Series A1 Debentures and Series A1 Warrants, the effective conversion feature was greater than the fair market value of the Companys common stock on the date of issuance, so the adjusted proceeds were not allocated to the conversion feature. In October 2017, we entered into securities purchase agreements to sell an aggregate of $5,180,157.78 of our 12.5% secured convertible debentures (Series A2 Debentures) and issued 863,365 Series A2 Warrants. The Series A2 Debentures mature on 4/21/2020, bear interest at an annual rate of 12.5%, payable quarterly on January 1, April 1, July 1, and October 1, beginning on January 1, 2018. Pursuant to the greenshoe provision contained in our Series A1 Debentures, $2,000,000 of Series A2 Debentures were purchased pursuant to the greenshoe provision and the remaining $3,180,157.78 were purchased separately. Of the 863,365 Series A2 Warrants issued, a total of 333,335 were purchased pursuant to the greenshoe provision and 630,030 were purchased separately. The Series A2 Debentures are convertible into shares of our Class A common stock at $3.00 per share, subject to adjustment, and contain anti-dilution protection for subsequent financings and have a conversion price floor of $1.40 per share (pursuant to shareholder vote approving the offering that occurred on December 29, 2017). The Series A2 Warrants have an exercise price of $3.00 per share, subject to adjustment and contain anti-dilution protection for subsequent financings and have an exercise price floor of $1.40 per share. In connection with the offering we issued Chardan Capital Markets 160,000 Placement Agent Warrants, of which: (i) 129,176 have an exercise price of $3.75 and (ii) 54,161 have an exercise price of $4.49. We also issued Aspenwood Capital 23,337 Placement Agent Warrants with an exercise price of $3.75. All Placement Agent Warrants have a term of five and a half years (exercisable beginning 6 months after issuance). The Company identified embedded derivatives related to the Series A2 Warrants issued. These embedded derivatives included the right for the holders to request for the Company to purchase the Series A2 Warrant from the Holder by paying to the Holder an amount of cash equal to the black scholes value of the remaining unexercised portion of the Series A2 Warrant on the date of the consummation of a fundamental transaction. The Series A2 Warrants have been accounted for utilizing ASC 815 Derivatives and Hedging. The Company accounted for the Series A2 Debentures in accordance with ASC 470-20 Debt with Conversion and other options. The net proceeds of $4,261,684 from the issuance of the Series A2 Debentures was allocated between the Series A2 Debentures and the fair value of the Series A2 Warrants. The values allocated to the Series A2 Debentures and Series A2Warrant was $1,405,540 and $2,856,108 respectively. After the allocation between the Series A2 Debentures and the Series A2 Warrants, the adjusted value assigned to Series A2 Debenture created the effected conversion feature to be a rate lower than the current market price for the Companys common stock on the date of the issuance. The value assigned to the conversion feature was $1,405,540. On November 29, 2018, the Company redeemed the outstanding principal balance of the Series A1 and A2 Debentures (collectively the Debentures) with the repayment of the Debentures face value or $6,545,157, a 10% prepayment penalty of $654,517 and the issuance of Series B warrants for a total of 50% of the of the conversion shares issuable on an as-converted basis as if the principal amount of the Debenture had been converted immediately prior to the optional redemption.. Also, the Company issued warrants to purchase 1,090,862 shares of its Class A common stock (Series B1 Warrants). The Series B1 Warrants were issued pursuant to the redemption terms of the Companys Debentures. The Company received no additional consideration for the issuance. The Series B Warrants were issued in a transaction exempt from registration under the Securities Act of 1933, as amended (the Securities Act), in reliance on the exemption provided by Rule 506(b) of Regulation D and Section 4(a)(2) of the Securities Act. The Series B1 warrants have a term of five (5) years from the date in which each of the redeemed Debenture were issued. Accordingly, of the Series B Warrants: (i) 277,500 have an expiration date of April 21, 2022, and (ii) 813,362 have an expiration date of October 27, 2022. The Series B1 Warrants are initially exercisable at $3.00 per share and, are subject to cashless exercise after six (6) months from the issuance date if the shares underlying the warrants are not subject to an effective registration statement. The Series B Warrants also contain anti- dilution protection for subsequent equity sales for a price lower than the then applicable exercise price, with a floor of $1.40. The exercise price of the Series B1 Warrants is subject to adjustment upon certain events, including stock splits, stock dividends, subsequent equity transactions (other than specified exempt issuances), subsequent rights offerings, and fundamental transactions, subject to the $1.40 floor described above. If we fail to timely deliver the shares of our Class A common stock (Common Stock) upon any exercise of the Series B Warrants, we will be subject to certain buy-in provisions. Additionally, the Series B Warrants contained certain beneficial ownership limitations. The Company identified embedded derivatives related to the Series B Warrants issued. These embedded derivatives included the right for the holders to request for the Company to purchase the Series B Warrant from the Holder by paying to the Holder an amount of cash equal to the black scholes value of the remaining unexercised portion of the Series A2 Warrant on the date of the consummation of a fundamental transaction. The Series B1 Warrants have been accounted for utilizing ASC 815 Derivatives and Hedging. The secured convertible debentures are comprised of the following at December 31: 2018 2017 Principal Balance $ $ 6,845,157 Debt discount (4,107,792 ) Debt issuance costs (1,026,219 ) Convertible notes, net $ $ 1,711,146 |
WARRANT LIABILITIES
WARRANT LIABILITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
WARRANT LIABILITIES | NOTE 2 WARRANT LIABILITIES The discussion below relates to the following (collectively, the Derivative Warrant Instruments): 1. In January 2017, the Company issued Series A and Series B Warrants in our registered direct and concurrent private placement. In April 2017, the Company repurchased the Series B Warrants for $2,500,000 and recognized a loss on the repurchase amounting to $2,053,975. Accordingly, only the Series A Warrants are currently outstanding. 2. In April and October 2017, the Company issued the Series A1 Warrants and Series A2 Warrants in connection with the private placement of secured convertible debentures; and 3. In November 2018, the Company issued the Series B1 Warrants upon redemption of the outstanding convertible debentures issued in April and October 2017, pursuant to the terms of such debentures. The Derivative Warrant Instruments have been accounted for utilizing ASC 815 Derivatives and Hedging. The Company identified embedded features in the Derivative Warrant Instruments which caused the warrants to be classified as a liability. These embedded features included the right for the holders to request for the Company to cash settle the Warrant Instruments from the Holder by paying to the Holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the Derivative Warrant Instruments on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet dates. The Warrant liabilities are comprised of the following at June 30: Debenture Warrant Liability Leapfrog Warrant Liability Derivative Liability Balance as of beginning of period (December 31, 2018) 4,323,357 622,296 496,241 Adjustments to Warrants Outstanding Adjustment to fair value 1,577,865 208,072 175,914 Balance as of end of period (March 31, 2019) 5,901,222 830,368 672,155 Adjustments to Warrants Outstanding Adjustment to fair value 2,313,813 330,982 230,760 Balance as of end of period (June 30, 2019) 8,215,035 1,161,350 902,915 Debenture Warrant Liability Leapfrog Warrant Liability Derivative Liability Balance as of beginning of period (December 31, 2017) 7,256,864 1,873,107 2,026,031 Adjustments to Warrants Outstanding Adjustment to fair value (2,409,444 ) (629,171 ) (685,080 ) Balance as of end of period (March 31, 2018) 4,847,420 1,243,936 1,340,951 Adjustments to Warrants Outstanding (328,627 ) Adjustment to fair value 862,115 269,127 210,950 Balance as of end of period (June 30, 2018) 5,709,535 1,513,063 1,223,274 | NOTE 5 WARRANT LIABILITIES As more fully described in Notes 4 and 6, the Company issued Series A and B Warrants, Series A1 and A2 Debenture Warrants and Series B1 Warrants (collectively the Derivative Warrant Instruments). The Derivative Warrant Instruments have been accounted for utilizing ASC 815 Derivatives and Hedging. The Company identified embedded features in the warrants which caused the warrants to be classified as a liability. These embedded features included the right for the holders to request for the Company to cash settle the Warrant Instruments from the Holder by paying to the Holder an amount of cash equal to the black scholes value of the remaining unexercised portion of the Derivative Warrant Instruments on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivatives as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet dates. On the date of inception, the fair value of the Series A and B Warrants of $3,038,344 was determined using the Black-Scholes Model based on a risk-free interest rate of 2% for both the Series A Warrants and the Series B Warrants, an expected term of 5.5 years for the Series A Warrants and 5 years for the Series B Warrants, an expected volatility of 110% for the Series A Warrants and the Series B Warrants and a 0% dividend yield for the Series A Warrants and the Series B Warrants, respectively. In April 2017, the Company repurchased the Series B Warrants for $2,500,000 and recognized a loss on the repurchase amounting to $2,053,975. The Series A Warrants fair value as of December 31, 2018 and 2017 was estimated to be $496,000 and $2,026,000, respectively, based on a risk-free interest rates of 2.46 and 2.20, respectively, an expected term of 3 and 4 years, respectively, an expected volatility of 167% and 164%, respectively and a 0% dividend yield. On January 4, 2017, the date of inception, the fair value of the Series A and B Warrants of $3,038,344 was determined using the Black-Scholes Model based on a risk-free interest rate of 2% for both the Series A Warrants and the Series B Warrants, an expected term of 5.5 years for the Series A Warrants and 5 years for the Series B Warrants, an expected volatility of 110% for the Series A Warrants and the Series B Warrants and a 0% dividend yield for the Series A Warrants and the Series B Warrants, respectively. At the inception of the Series A1 Warrants, the Company determined a fair value of $1,228,000 of the Series A1 Warrants. On April 21 and April 28, 2017, the dates of inception, the fair value of the Series A1 Warrants was determined using the Black-Scholes Model based on a risk-free interest rate of 1.875%, an expected term of 5.5 years, an expected volatility of 109% and a 0% dividend yield for each respective date. Fair value at December 31, 2018 and 2017 of the Series A1 Warrants was estimated to be $868,000 and $2,641,000, respectively based on a risk-free interest rate ranging from 2.73 to 2.73, an expected term ranging from 3.375 to 4.375 years, an expected volatility ranging from 164% to 167% and a 0% dividend yield. During the years ended December 31, 2018 and 2017, we recorded a decrease and increase, respectively, in the fair value of the warrant derivative liability of $(1,774,000) and $1,419,000, respectively. This was recorded as a loss on change in fair value of derivative liability. At the inception of the Series A2 Warrants, the Company determined a fair value of $2,856,000 of the Series A2 Warrants. On the date of inception, the fair value of the Series A2 Warrants was determined using the Black-Scholes Model based on a risk-free interest rate of 2.03%, an expected term of 5.5 years, an expected volatility of 122% and a 0% dividend yield. Fair value at December 31, 2018 and 2017 of the Series A2 Warrants was estimated to be $1,446,000 and $4,615,000, respectively based on a risk-free interest rate ranging from 2.20 to 2.46, an expected term ranging from 3.875 to 4.875 years, an expected volatility ranging from 158% to 161% and a 0% dividend yield. During the years ended December 31, 2018 and 2017, we recorded the decrease and increase, respectively, in the fair value of the warrant derivative liability of $(3,170,000) and $1,759,000, respectively. This was recorded as a loss on change in fair value of derivative liability. At the inception of the Series B1 Warrant, the Company determined a fair value of $3,240,000 of the Series B1 Warrants. On the date of inception, the fair value of the Series B1 was determined using the Black-Scholes Model based on a risk-free interest rate of 2.9%, an expected term of 5.0 years, an expected volatility of 162% and a 0% dividend yield. Fair value at December 31, 2018 of the Series B Warrants was estimated to be $1,201,000 based on a risk-free interest rate of 2.5, an expected term of 3.92, an expected volatility of 155% and a 0% dividend yield. During the years ended December 31, 2018, we recorded a decrease, in the fair value of the warrant derivative liability of $1,529,771. This was recorded as a loss on change in fair value of derivative liability. The Warrant liabilities are comprised of the following at December 31: 2018 2017 Outstanding, beginning of the period $ 11,156,003 $ Initial derivative liability on issuance of warrants 3,240,127 7,453,615 Change in fair value (8,953,933 ) 4,134,166 Less accretion and conversion of debenture warrants (431,780 ) Warrant liabilities $ 5,442,195 $ 11,156,001 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
STOCKHOLDERS' EQUITY | NOTE 3 STOCKHOLDERS' EQUITY Stock Awards During the year ended December 31, 2018 and as of June 30, 2019, respectively, we issued a 75,000 share stock grant to a contractor during the three months ended June 30, 2019. Stock Options During the three month period ended June 30, 2019 the Company issued 11,252 options to purchase the Companys common stock at a price of $5.49 to our non-executive directors. Each of our four non-executive directors received 2,813 options that vest 1/4 th On March 27, 2019, 685,000 common stock options having an exercise price of $3.42 per share with an option value as of the grant date of $1,513,137 calculated using the Black-Scholes option pricing model were granted to several employees and members of our management team. This expense associated with this option award will be recognized in operating expenses ratably over the vesting period. The expected option life assumption is estimated based on the simplified method. Accordingly, the Company has utilized the average of the contractual term of the options and the weighted average vesting period for all options to calculate the expected option term. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options. In April 2019, the Company amended its expected volatility assumption from using exclusively a historical volatility. The Company calculates its expected volatility assumption based on a its historical and implied volatilities over the expected life of the stock-based award. We do not anticipate paying dividends on the common stock in the foreseeable future. We recognize stock-based compensation expense over the vesting period using the straight-line single option method. Stock-based compensation expense is recognized only for those awards that vest. We account for the forfeitures of unvested awards as they occur. Total stock-based compensation expense for the three month period ended June 30, 2019 and 2018 was $326,000 and $996,000, respectively. Total stock-based compensation expense for the six month period ended June 30, 2019 and 2018 was $466,000 and $1,162,000, respectively. The expense is included in its entirety within General, selling and administrative expenses. Transactions involving our stock options for the year to date period ending June 30, 2019 are summarized as follows: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term ( Years) Aggregate Intrinsic Value Outstanding December 31, 2018 547,662 $ 5.27 2.7 $ Granted (weighted-average fair value of $2.21 per share) 696,252 3.45 3.0 842,465 Exercised Forfeited (2,400 ) 13.50 Outstanding June 30, 2019 1,241,514 4.24 2.3 521,436 Vested (exercisable) June 30, 2019 348,933 6.15 2.3 Expected to vest after June 30, 2019 (unexercisable) 892,581 $ 3.49 2.3 $ 1,044,320 (1) Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of our common stock on June 28, 2019, which was $4.66 per share Warrants On May 13, 2019 the Company entered into a consulting agreement with a contractor for services related to BIGtoken. The agreement provides for 300,000 warrants with vesting conditions based on BIGtoken user growth in Asia. The warrants were valued using the Black Scholes option pricing model at a total of $1,138,332 based on the five-year term, implied volatility of 101%, a risk free equivalent yield of 1.8% and stock price of $4.99. We typically issue warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services rendered by placement agents and consultants. Our outstanding warrants expire on varying dates through November 2021. A summary of warrant activity is as follows: Transactions involving our stock warrants for the year to date period ended June 30, 2019 include the following: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding December 31, 2018 4,325,423 $ 3.77 2.9 $ 3,849,626 Granted 399,610 4.81 5.0 Exercised (328,667 ) 3.49 0.3 384,540 Forfeited Outstanding June 30, 2019 4,396,366 3.90 2.7 3,341,238 Vested (exercisable) June 30, 2019 4,096,366 3.83 2.6 3,399,984 Expected to vest after June 30, 2019 (unexercisable) 300,000 $ 5.00 4.8 $ The fair value of each warrant grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions: Expected life (years) 1 - 7 Risk-free interest rate 1.31% - 2.3% Volatility 100% - 167% Dividend yield 0% (1) Aggregate intrinsic value represents the difference between the exercise price of the warrant and the closing market price of our common stock on June 28, 2019, which was $4.66 per share. Total intrinsic value of warrants exercised during the three and six months ended June 30, 2019 was $345,776. Loss per share As the Company incurred a net loss during the six months ended June 30, 2019, and during the three months ended June 30, 2019, the loss and diluted loss per common share are based on the weighted-average common shares outstanding during the period, accordingly the company had no dilutive securities during the three and six months ended June 30, 2019 and 2018. The following outstanding instruments could have a dilutive effect in the future: June 30, June 30 (unaudited) (unaudited) Warrants 4,396,366 2,196,700 Stock options 1,241,514 370,600 Total 5,637,880 2,567,300 The following transactions during the three and six months ended June 30, 2019 impacted the shares outstanding: · 1,687,825 shares of common stock in a registered direct offering in April 2019. · 328,667 shares from the exercise of warrants · 200,000 shares in a private placement of shares The following transactions during the three and six months ended June 30, 2018 impacted the shares outstanding: · 61,482 share from the exercise of warrants · 150,000 shares issued to a contractor for services · 29,223 shares as compensation to employees and directors | NOTE 6 STOCKHOLDERS' EQUITY Preferred Stock We are authorized to issue 50,000,000 of preferred stock, par value $0.001, of which 200,000 shares were designated as Series 1 Preferred Stock. Our board of directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our board of directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our board of directors can fix limitations and restrictions, if any, upon the payment of dividends on both classes of our common stock to be effective while any shares of preferred stock are outstanding. Common Stock We are authorized to issue an aggregate of 259,000,000 shares of common stock. Our certificate of incorporation provides that we will have two classes of common stock: Class A common stock (authorized 250,000,000 shares, par value $0.001), which has one vote per share, and Class B common stock (authorized 9,000,000 shares, par value $0.001), which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock are identical. There were no shares of Class B common stock outstanding at December 31, 2018 or 2017, respectively. On January 4, 2017, we sold an aggregate of: (i) 761,905 shares of Class A common stock; and (ii) five-year Series B Warrants representing the right to acquire up an additional 380,953 shares of our Class A common stock at an exercise price of $7.00 per share. The shares of our Class A common stock and the Series B Warrants were sold in a registered direct offering and we received gross proceeds of $3,980,001. Simultaneously we conducted a private placement with the same investors for no additional consideration of Series A Warrants representing the right to acquire up to an additional 380,953 shares of our Class A common stock at an exercise price of $6.70 per share. The Series A Warrants are exercisable for five years commencing 6 months from the date of closing. The exercise price of the Series A Warrants is subject to full ratchet adjustment in certain circumstances, subject to a floor price of $1.20 per share. The adjustment provisions under the terms of the Series A Warrants will be extinguished at such time as our Class A common stock trades at or above $10.00 per share for 20 consecutive trading days, subject to the satisfaction of certain equity conditions. In addition, if there is no effective registration statement covering the shares issuable upon the exercise of the Series A Warrants, the warrants are exercisable on a cashless basis. If we fail to timely deliver the shares underlying the warrants, we will be subject to certain buy-in provisions. As a result of the sale of the debentures in April 2017, the exercise price of the Series A Warrants issued to investors in our January 2017 private offering were reset to $2.245 per share. Beginning 100 days after the issuance date of the Series B Warrants, at any time the market price of our Class A common stock is less than $5.25 per share, the holders had the right to exercise the Series B Warrants on a cashless basis for shares of our Class A common stock calculated pursuant to a formula set forth in the Series B Warrants. We had the right, in lieu of delivery of such shares of our Class A common stock, to pay the holder of the Series B Warrants being exercised on a cashless basis, a specified amount in cash, with a maximum cash payment of $2,500,000. The holders of the Series B Warrants exercised their right in April 2017 and we repurchased the Series B Warrants for $2,500,000. Pursuant to an engagement letter dated December 29, 2016 by and between the Company and Chardan Capital Markets, Chardan Capital agreed to act as the Companys placement agent in connection with both the registered direct offering and a concurrent private placement. Pursuant to the agreement, the Company paid Chardan Capital a cash fee equal to $160,000 (4% of the gross proceeds), as well as reimbursement of its expenses related to the offering in the amount of $15,000. In addition, the Company granted Chardan Capital a warrant to purchase 76,190 shares of Class A common. The warrants have an exercise price of $6.50 per share and are exercisable for 5.5 years commencing nine months from the issuance date. The shares underlying the warrants were included in a resale registration statement that was declared effective by the SEC in September 2017. The net proceeds to the Company from the offering, after deducting placement agent fees and estimated offering expenses, were $3,830,000. The proceeds of the offering were used to satisfy the outstanding notes issued under the terms of the financing agreement. In connection with the January 2017 capital raise, Victory Park Management, LLC agreed not to exercise the put right prior to May 20, 2017. Victory Park Management, LLC exercised the put right on May 22, 2017. On October 27, 2017, the Company satisfied this obligation in full utilizing a portion of net proceeds from a second debenture financing. The Class A shares of common stock and Series B warrants were sold and issued pursuant to the Prospectus Supplement, dated January 4, 2017, to the Prospectus included in the Companys Registration Statement on Form S-3 (Registration No. 333-214644) filed with the SEC on November 16, 2016 and declared effective on November 28, 2016. In January 2017, in connection with an advisory agreement with kathy ireland Worldwide LLC ("kiWW"), the Company issued affiliates and designees of kiWW 100,000 shares of its Class A common stock valued at $678,000. In January 2017, we issued 3,858 shares of our Class A common stock valued at $12,500 to Mr. Derek J. Ferguson upon his appointment to our board of directors and the audit committee of the board. He is an accredited investor and the issuance was exempt from registration under the Securities Act pursuant to an exemption provided by Section 4(a)(2) of that act. In February 2017, the Company issued Mr. Steven Antebi 150,000 shares of our Class A common stock valued at $540,000 as compensation for services under the terms of a consulting agreement. He is a principal stockholder of the Company. In March 2017, we issued 51,667 shares of Class A common stock for vested stock awards. In March 2017, we issued 6,510 shares of our Class A common stock valued at $12,500 to Mr. Robert Jordan upon his appointment to our board of directors and the audit committee of the board. He is an accredited investor and the issuance was exempt from registration under the Securities Act pursuant to an exemption provided by Section 4(a)(2) of that act. In August 2017, we issued 200,000 shares in conjunction with our acquisition of certain intellectual property assets from Leapfrog Media Trading, Inc. On September 15, 2017, the Company entered an Investor Relations and Consulting Agreement. The Company engaged the consultant to provide certain consulting services on behalf of the Company. Under the terms of this agreement, which expired on December 15, 2017, the Company engaged consultant to provide a variety of advisory and consulting services to the Company, including introducing the Company to potential sources of media, marketing agreement(s) and/or other strategic alliances which may benefit the Company in the performance of implementing its business plan(s), including but not limited to radio and television media spots; various media publications; and internet podcasts. As compensation for such services, the Company issued consultant 75,000 shares of its Class A common stock, valued at $97,500, on September 15, 2017. Between September 2017 and January 2018, we issued an aggregate of 225,000 shares of Class A common stock valued at $1,137,650 as consideration for media and marketing services. In October 2017, we issued 70,409 shares of our Class A common stock to Joseph P. Hannan, our former chief financial officer, pursuant to his October 2017 employment agreement. The shares were issued pursuant to our 2016 equity compensation plan. In October 2017, we entered into securities purchase agreements to sell an aggregate of $5,180,158 of our 12.5% secured convertible debentures and issued 863,365 Series A common stock purchase warrants. The debentures are convertible into shares of our Class A common stock at $3.00 per share, subject to adjustment, and contain anti-dilution protection for subsequent financings and have a conversion price floor of $1.40 per share (pursuant to shareholder vote approving the offering that occurred on December 29, 2017). The warrants have an exercise price of $3.00 per share, subject to adjustment and contain anti-dilution protection for subsequent financings and have an exercise price floor of $1.40 per share. In connection with the offering we issued Chardan Capital Markets 160,000 placement agent warrants, of which: (i) 129,176 have an exercise price of $3.75 and (ii) 54,161 have an exercise price of $4.49 (. We also issued Aspenwood Capital 23,337 placement agent warrants with an exercise price of $3.75. All placement agent warrants have a term of five and a half years (exercisable beginning 6 months after issuance). In October 2017, certain debenture holders converted an aggregate of $655,000 of debentures into 218,334 shares of Class A common stock. In October 2017, 83,334 Series A common stock purchase warrants were exercised at a price of $3.00 per share, resulting in gross proceeds to the Company of $250,002. In January 2018, we issued Colleen DiClaudio, a board member, 7,813 Class A common shares valued at $10,000 as payment for 2017 services on our board of directors. The shares were issued from our 2016 equity compensation plan. In January 2018, we issued Hardy Thomas, a former board member, 7,195 Class A common shares valued at $10,000 as payment for 2017 services on our board of directors. The shares were issued from our 2016 equity compensation plan. In January 2018, we issued Marc Savas and Malcolm CasSelle each 3,774 Class A common shares valued at $10,000 as payment for their respective 2017 service on our board of directors. The shares were issued from our 2016 equity compensation plan. In January 2018, we issued a consultant an additional 150,000 shares for media consulting services. In August 2018, we issued the consultant an additional 150,000 shares pursuant to this same agreement. In March 2018, we issued 6,667 shares of Class A common stock to one employee for vested stock awards. In March 2018, 122,950 shares of Class A common stock were awarded to one employee for sales performance achievement pursuant to our 2016 equity compensation plan. In July 2018, 16,667 Series A common stock purchase warrants were exercised at a price of $3.00 per share, resulting in gross proceeds to the Company of $50,000. In August 2018, we issued William Packer 3,774 shares of Class A common shares valued at $10,000 as payment for 2017 services on our board of directors. The shares were issued from our 2016 equity compensation plan. In June 2018, we issued 44,815 Series A common stock purchase warrants at an exercise price of $2.245 per share, on a cashless basis. In September 2018, one investor in the Companys October 2017 debenture financing exercised 16,667 Series A common stock purchase warrants were exercised at a price of $3.00 per share, resulting in gross proceeds to the Company of $50,000. In September 2018, we issued 100,000 shares of our Class A common stock for legal services rendered. In September 2018, we issued 50,000 shares of our Class A common stock to Joseph P. Hannan, our former chief financial officer, pursuant to his October 2017 employment agreement. The shares were issued pursuant to our 2016 equity compensation plan, and subject to vesting at issue. In September 2018, we issued 3,334 shares of Class A common stock to one employee for vested stock awards. During September 30, 2018, certain debenture holders converted an aggregate of $300,000 in principal into 100,000 shares of the Companys Class A common stock. On August 6, 2018, we repurchased 514,000 shares of our Class A common stock from Erin DeRuggiero as contracted under the terms of her separation agreement with the Company. In October 2018, 50,000 shares of our Class A common stock were retired in lieu of cash tax withholding from a vesting on shares previously issued to Joseph P. Hannan, our former chief financial officer. In October 2018, 23,800 shares of our Class A common stock were retired in lieu of cash tax withholding from a vesting on shares previously issued to Joseph P. Hannan, our former chief financial officer. Stock Awards During the years ended December 31, 2018 and December 31, 2017, respectively, there were no new grants of restricted stock awards made nor were any previously issued grants forfeited. Stock Options and Warrants During the years ended December 31, 2018 and December 31, 2017, respectively, there were no new grants of restricted stock awards made nor were any previously issued grants forfeited. Stock Options and Warrants In October 2016, we granted an aggregate of 146,000 stock options to three employees. The options will vest over three years. The options have an exercise price of $7.50 per share and a term of five years. These options had a grant date fair value of $4.98 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 1.125%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 112%; and (4) an expected life of the options of 5 years. During the years ended December 31, 2018 and 2017, we recorded compensation expense of $667,749 and $992,732, respectively, related to stock based compensation. During the years ended December 31, 2018 and 2017, 72,498 and 161,500 options were forfeited, respectively. On September 19, 2016, the Company extended the expiration date of common stock purchase warrants issued and sold in 2013 to purchase an aggregate of 642,000 shares of its Class A common stock at an exercise price of $5.00 per share from between October 8, 2016 and November 6, 2016 to March 31, 2017, for which, the Company applied ASC 718-20-35-3 modification of equity-classified contracts and therefore the incremental fair value from the modification (the change in the fair value of the instrument before and after the modification) of $274,634 is recognized as an expense in the consolidated statements of operations to the extent the modified instrument has a higher fair value. On November 16, 2016, the Company entered an Investor Relations and Consulting Agreement (Consulting Agreement) with Market Street Investor Relations, LLC (Consultant). The Company engaged the Consultant to provide certain investor relations and public relations services on behalf of the Company as are more fully described in the Consulting Agreement. The term of the Consulting Agreement is for a period of six-months from the effective date and may be extended for an additional six-month term. In lieu of cash payments for the services rendered by the Consultant, the Company issued the Consultant a three year Class A common stock purchase warrant to purchase 400,000 shares of the Companys Class A common stock at an exercise price of $7.50 per share. The warrants vest based on specific milestones described within the Consulting Agreement. The value of the warrants at the date of grant was $1,390,264. At the direction of the Consultant, a warrant to purchase 200,000 shares was issued to the Consultant and a warrant to purchase 200,000 shares was issued to Steve Antebi (a principal stockholder in the Company). The Company also advanced the Consultant $100,000 on the effective date to cover anticipated expenses regarding the services to be performed by the Consultant. The Company is recognizing the value of the services rendered over the term of the Consulting Agreement. During the years ended December 31, 2018 and December 31, 2017, respectively, an aggregate of 226,402 and 1,223,874 common stock purchase warrants, having exercise prices of between $5.00 and $10.00, per share, expired. On January 24, 2018, 176,400 common stock purchase warrants, having exercise prices of $7.50, per share, expired. On September 11, 2018, 250,000 common stock purchase warrants, having an exercise price of $4.20 per share with an option value as of the grant date of $488,106 calculated using the black-scholes option pricing model were granted to Joseph P. Hannan, our former chief financial officer. The options vested one third annually and expire three years after the vesting date. Upon Mr. Hannans termination in December of 2018, 229,166 option terminated. On December 16, 2018, 100,000 common stock purchase warrants, having an exercise price of $2.56 per share with an option value as of the grant date of $220,832 calculated using the black-scholes option pricing model were granted to Michael Malone, our chief financial officer. This expense associated with this option award will be recognized in operating expenses ratably over the vesting period. |
Big Token, Inc. [Member] | ||
STOCKHOLDERS' EQUITY | NOTE 6 STOCKHOLDERS' EQUITY The Company was formed as a wholly owned subsidiary of SRAX, Inc, on December 14, 2017. The company is authorized to issue 398,000,000 shares of Preferred Stock, par value $0.001 per share, of which no shares were issued or outstanding at December 31, 2018 and 2017. The company is authorized to issue 1,000,000 shares of Class A Common Stock, par value $0.001 per share, of which no shares were issued or outstanding at December 31 2018 and 2017. The company is authorized to issue 1,000,000 shares of Class B Common Stock, par value $0.001 per share, of which 1,000,000 shares were issued and outstanding at December 31, 2018 and 2017. At formation, the Company issued 1,000,000 Class B common shares to its parent. BIGToken Preferred Tracking Stock The Company has authorized the issuance of up to 20,000,000 shares of Non-Voting Preferred Tracking Stock. The Board of Directors shall have the power to increase such number of shares of Non-Voting Preferred Tracking Stock in its sole discretion. The Non-Voting Preferred Tracking Stock has a par value of $0.001 per share and a stated value equal to $0.20, subject to increase as more fully described in the Companys Certificate of Designation of BIGToken Preferred Tracking Stock (COD). The Board of Directors may declare dividends exclusively to the Common Stock holders or Non-Voting Preferred Tracking Stock Holders, or any other class of capital stock or in such equal or unequal amounts as may be determined by the Board of Directors. Redemption/Exchange of Preferred Tracking Stock by the Company Redemption for Cash at the Election of SRAX -- Redemption for Securities of BIGToken Subsidiary -- For a further description of the Non-Voting Preferred Tracking Stock, please see the COD. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 PROPERTY AND EQUIPMENT Property and equipment consists of the following at December 31: 2018 2017 Office equipment $ 332,932 251,415 Accumulated depreciation (140,867 ) (96,869 ) Property and equipment, net $ 192,065 154,546 Depreciation expense for the years ended December 31, 2018 and 2017 was $43,998 and $22,908, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
INTANGIBLE ASSETS | NOTE 8 INTANGIBLE ASSETS Intangible assets consist of the following at December 31: 2018 2017 Non-compete agreement $ 1,250,000 $ 1,250,000 Intellectual property 756,000 756,000 Acquired Software 617,069 617,069 Internally developed software 1,563,401 754,140 Total cost 4,186,470 3,377,209 Accumulated amortization (2,423,865 ) (1,734,449 ) Intangible assets, net $ 1,762,605 $ 1,642,760 Amortization expense was $51,422 for intellectual property, $121,527 for the non-compete agreement and $365,266 for internally developed software and 151,200 acquired software for the year ended December 31, 2018. Amortization expense was $151,200 for intellectual property, $677,083 for the non-compete agreement, and $146,181 for internally developed software for the year ended December 31, 2017. The estimated future amortization expense for the years ended December 31, are as follows: 2019 $ 858,041 2020 737,648 2021 166,916 $ 1,762,605 |
Big Token, Inc. [Member] | |
INTANGIBLE ASSETS | NOTE 4 INTANGIBLE ASSETS, NET Intangible assets consist of the following: December 31, 2018 December 31, 2017 Internally developed software $ 237,507 $ 12,496 Accumulated amortization (38,345 ) (442 ) Carrying value $ 199,162 $ 12,054 During the years ended December 31, 2018 and 2017, the Company capitalized $225,010 and $12,496 of costs associated with the development of BIGToken respectively, including directly related payroll costs. Amortization expense for the periods ended December 31, 2018 and 2017 amounted to $37,093 and $442 respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Related Party Transactions | NOTE 9 RELATED PARTY TRANSACTIONS Malcolm CasSelle, a member of our board of directors, is the former Chief Technology Officer and President of New Ventures of Tronc, Inc., one of our major advertisers. On March 20, 2018, we entered into certain retention and bonus agreements with SRAXMD employees, including Erin DeRuggiero, our chief innovations officer. Pursuant to the terms of the agreements with Ms. DeRuggiero, her employment agreement was terminated, and she became a consultant to the Company. The term of the consultancy expired upon the sale of the assets comprising SRAXmd. Pursuant to the terms of the agreement, we paid Ms. DeRuggiero a total of $5.2 million at closing which also included repurchase of 514,000 shares of our Class A common stock. On April 2, 2018, we issued a common stock purchase warrant to Kristoffer Nelson, our Chief Operating Officer and a member of our board of directors. The option entitles Mr. Nelson to purchase 100,000 shares of Class A Common Stock at a price per share of $5.78, has a term of three years and vests quarterly over a three (3) year period. On September 11, 2018, we issued a common stock purchase warrant to Joseph P. Hannan, our former Chief Financial Officer. The option entitled Mr. Hannan to purchase 250,000 shares of Class A Common Stock at a price per share of $4.20, had a term of three years and vested quarterly over a three (3) year period. Upon Mr. Hannans termination in December 2018, 234,375 of these options expired. Our Chief Executive Officer joined the board of directors of one of our advertising customers which purchases advertising at market rates during the first quarter of 2018. | |
Big Token, Inc. [Member] | ||
Related Party Transactions | NOTE 3 RELATED PARTY TRANSACTIONS Overview SRAX and its subsidiaries provide certain management and administrative services to BigToken. The costs of such services are reflected in appropriate categories in the accompanying stand-alone statements of operations for the period ended June 30, 2019. Additionally, SRAX performs cash management functions on behalf of BigToken. BigToken does not have separate cash accounts as of June 30, 2019. As a result, all of our charges and cost allocations covered by these centralized cash management functions were deemed to have been paid by us to SRAX, in cash, during the period in which the cost was recorded in the stand-alone financial statements. We consider all of our transactions with SRAX to be financing transactions, which are presented as net cash received from SRAX in the accompanying stand-alone statements of cash flows. Net Contributions from SRAX The significant components of the net cash contributions from SRAX for the period ending June 30, 2019, were as follows: Six months ended June 30, 2019 2018 Category: Expense allocations 1,534,637 853,625 Accounts payable and other payments Intangible assets and digital currency transfers 150,155 78,415 Other Total 1,684,792 932,040 Contributions from (distributions to) SRAX are generally recorded based on actual costs incurred, without a markup. The basis of allocation to BigToken, for the items described above, is as follows: Expense allocations Accounts payable and other payments Intangible assets and digital currency transfers The balance due to SRAX (parent entity) as of June 30, 2019 and December 31, 2018 amounted to $4,141,732 and $2,456,940 respectively. | NOTE 5 RELATED PARTY TRANSACTIONS Overview SRAX and its subsidiaries provide certain management and administrative services to BigToken. The costs of such services are reflected in appropriate categories in the accompanying stand-alone statements of operations for the period ended December 31, 2018 and 2017. Additionally, SRAX performs cash management functions on behalf of BigToken. BigToken does not have separate cash accounts as of December 31, 2018. As a result, all of our charges and cost allocations covered by these centralized cash management functions were deemed to have been paid by us to SRAX, in cash, during the period in which the cost was recorded in the stand-alone financial statements. We consider all of our transactions with SRAX to be financing transactions, which are presented as net cash received from SRAX in the accompanying stand-alone statements of cash flows. Net Contributions from SRAX The significant components of the net cash contributions from SRAX for the period ending December 31, 2018 and 2017, were as follows: 2018 2017 Category Expense allocations $ 2,005,728 $ 209,623 Accounts payable and other payments Intangible assets and digital currency transfers 228,658 12,931 Other Total $ 2,234,386 $ 222,554 Contributions from (distributions to) SRAX are generally recorded based on actual costs incurred, without a markup. The basis of allocation to BigToken, for the items described above, is as follows: Expense allocations Accounts payable and other payments Intangible assets and digital currency transfers The balance due to SRAX (parent entity) as of December 31, 2018 and 2017 amounted to $2,456,940 and $222,554 respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 10 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at December 31, are comprised of the following: 2018 2017 Accounts payable, trade $ 2,517,749 $ 2,858,871 Accrued expenses 256,008 1,800,621 Accrued compensation 722,010 256,164 Accrued commissions 79,158 95,159 Accounts payable and accrued expenses $ 3,574,926 $ 5,010,815 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAXES | NOTE 11 INCOME TAXES Income tax (benefit) expense from continuing operations for the year ended December 31, 2018 consisted of the following: Current Deferred Total Federal $ $ (1,301,486 ) $ (1,301,486 ) State (700,900 ) (700,900 ) Subtotal (2,002,386 ) (2,002,386 ) Valuation allowance 2,002,386 2,002,386 Total $ $ $ Income tax (benefit) expense from continuing operations for the year ended December 31, 2017 consisted of the following: Current Deferred Total Federal $ $ 543,682 543,682 State (287,649 ) (287,649 ) Subtotal 256,033 256,033 Valuation allowance (256,033 ) (256,033 ) Total $ $ $ A reconciliation of the federal statutory income tax rate to the Companys effective income tax rate is as follows: 2018 2017 Taxes calculated at federal rate 21.0 % 34.0 % State income tax, net of federal benefit (1.9 )% 1.4 % Stock based compensation 1.4 % % Permanent Differences 1.0 % (5.0 )% Change in Valuation Allowance 13.9 % 2.0 % Fair market adjustment derivatives (21.5 )% (10.8 )% Prior year True-ups (14.9 )% 1.3 % True-up to deferred tax rate % (17.9 )% Other adjustments 1.0 % (5.0 )% Provision for income taxes % % The tax effects, rounded to thousands, of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below: 2018 2017 Deferred Tax Assets Net operating loss carryforwards $ 2,914,731 $ 4,156,406 Fixed assets (37,801 ) Accrued interest Intangibles Stock based compensation 430,907 579,085 Other accruals 24,390 53,185 Total Deferred Tax Assets 3,332,227 4,788,677 Deferred Tax Liabilities Stock based compensation Intangibles (249,530 ) (482,121 ) Prepaid expenses (12,620 ) (14,623 ) Total Deferred Tax Liabilities (262,150 ) (496,744 ) Net Deferred Tax Assets 3,070,707 4,291,933 Valuation Allowance (3,070,707 ) (4,291,933 ) Net deferred tax / (liabilities) $ $ Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carry-forwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. During the year ended December 31, 2018, the valuation allowance decreased by $1,221,226 to $3,070,707. All of this decrease attributable to the decrease in our net operating loss carryforwards. The total valuation allowance results from the Companys estimate of its inability to recover its net deferred tax assets. At December 31, 2018, the Company has federal and state net operating loss carry forwards, which are available to offset future taxable income, of approximately $12,806,705 and $15,752,351, respectively, both of which begin to expire in 2032 and 2032 respectively. These carry forwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an IRC Section 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Companys effective tax rate. The Company files income tax returns in the United States and various state jurisdictions. Due to the Companys net operating loss posture all tax years are open and subject to income tax examination by tax authorities. The Companys policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2018, there are no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties. |
Big Token, Inc. [Member] | |
INCOME TAXES | NOTE 8 - INCOME TAXES The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized. The Company has not recognized an income tax benefit for its operating losses generated from operations, based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of December 31, 2018 and 2017, the Company has a net operating loss (NOL)carry forward in the amount of $538,029. The NOLs will begin expiring in 2037. The provision for Federal and State income tax consists of the following: 2018 2017 Federal income tax benefit attributable to: Current Operations $ 421,540 $ 44,021 Less: valuation allowance $ (421,540 ) $ (44,021 ) Net provision for Federal income taxes $ $ The Tax Act enacted on December 22, 2017 introduced significant changes to U.S. income tax law. Effective 2018, the Tax Act reduced the U.S. statutory tax rate from 35% to 21%. The cumulative tax effect at the expected rate of 24.2% of significant items comprising our net deferred tax amount is as follows: 2018 2017 Deferred tax asset attributable to: Net operating loss carryover $ 538,029 $ 50,785 Less: valuation allowance $ (538,029 ) $ (50,785 ) Net deferred tax asset $ $ Gross NOLs for federal and state income tax purposes for December 31, 2018 and 2017, are $2,035,171 and $209,623, respectively determined on a separate return basis, which would expire in periods through 2038. A valuation allowance has been recorded on the state carryforwards because the realizability of such tax benefits on a separate return basis is not more likely than not. The federal net operating loss carryforwards have not been utilized in the consolidated federal income tax returns of SRAX. |
STOCK OPTIONS, AWARDS AND WARRA
STOCK OPTIONS, AWARDS AND WARRANTS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS, AWARDS AND WARRANTS | NOTE 12 STOCK OPTIONS, AWARDS AND WARRANTS 2012, 2014 and 2016 Equity Compensation Plans In January 2012, our board of directors and stockholders authorized the 2012 Equity Compensation Plan, which we refer to as the 2012 Plan, covering 600,000 shares of our Class A common stock. On November 5, 2014, our board of directors approved the adoption of our 2014 Equity Compensation Plan (the " 2014 Plan ") and reserved 600,000 shares of our Class A common stock for grants under this plan. On February 23, 2016, our board of directors approved the adoption of our 2016 Equity Compensation Plan (the 2016 Plan) and reserved 600,000 shares of our Class A common stock for grants under this plan. The purpose of the 2012, 2014 and 2016 Plans is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to our employees, directors and consultants and to promote the success of our company's business. The 2012, 2014 and 2016 Plans are administered by our board of directors. Plan options may either be: · incentive stock options (ISOs), · non-qualified options (NSOs), · awards of our common stock, · stock appreciation rights (SARs), · restricted stock units (RSUs), · performance units, · performance shares, and · other stock-based awards. Any option granted under the 2012, 2014 and 2016 Plans must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plans further provide that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The exercise price of any NSO granted under the 2012, 2014 or 2016 Plans is determined by the Board at the time of grant, but must be at least equal to fair market value on the date of grant. The term of each plan option and the manner in which it may be exercised is determined by the board of directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant. The terms of grants of any other type of award under the 2012, 2014 or 2016 Plans is determined by the Board at the time of grant. Subject to the limitation on the aggregate number of shares issuable under the plans, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person. Transactions involving our stock options for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 414,300 $ 6.65 575,800 $ 6.97 Granted during the period 480,236 3.57 Exercised during the period Forfeited during the period (366,874 ) 4.84 (161,500 ) 7.26 Outstanding, end of the period 537,662 $ 5.94 414,300 $ 6.97 Exercisable at the end of the period 331,993 6.8 288,630 6.65 At December 31, 2018 options outstanding totaled 532,662 with a weighted average exercise price of $5.94. Of these options, 331,993 are exercisable at December 31, 2018, with an intrinsic value of $74,425 and a remaining weighted average contractual term of 2.9 years. Compensation cost related to the unvested options not yet recognized is approximately $583,412 at December 31, 2017. We have estimated that approximately $356,852 will be recognized during 2018. The weighted average remaining life of the options is 2.8 years. Transactions involving our common stock awards for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Number Number Outstanding, beginning of the period 54,669 116,666 Granted during the period Vested during the period (53,334 ) (55,998 ) Forfeited during the period (1,335 ) (6,000 ) Unvested at the end of the period 54,669 Unrecognized compensation cost related to our common stock awards is approximately $0 and $162,741 at December 31, 2018 and 2017, respectively. We have estimated that we will recognize future compensation expense approximating $0 during the year ended December 31, 2018. Transactions involving our stock warrants for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 2,485,005 $ 5.09 2,976,863 $ 6.45 Granted during the period 2,162,058 3.00 2,121,433 3.73 Exercised during the period (95,238 ) 2.25 (428,469 ) 3 Forfeited during the period (226,402 ) 6.95 (2,184,822 ) 6.04 Outstanding, end of the period 4,325,423 5.05 2,485,005 5.09 Exercisable at the end of the period 4,325,423 5.05 2,485,005 5.09 The weighted average remaining life of the warrants is 3.2 years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | NOTE 4 COMMITMENTS AND CONTINGENCIES BIGtoken Point liability During the three and six months ended June 30, 2019 the Company instituted a policy that allows BIGtoken user to redeem outstanding BIGtoken points for cash if their account and point balances meet certain criteria. As of June 30, 2019, the Company has estimated the future liability for point redemptions to be $187,000. The Company considered the total number of points outstanding, the conversion rate in which points are redeemable for cash. Due to the recency of the BIGtoken platform and the ability for users to redeem points for cash, the Company does not have sufficient history to estimate account attrition and the associate breakage rates for outstanding points. Therefore, the Company utilized a breakage factor of zero percent as of June 30, 2019 in determining the estimated liability. | NOTE 13 COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases offices under operating leases that have now expired and now operate on a month-to-month basis, with certain notice of termination provisions. Future minimum lease payments required under the operating lease for the Mexico facility amounts to $786,168 as of December 31, 2018. Future minimum lease payments under this rental agreement are approximately as follows: For the year ended: 12/31/2019 $ 163,218 12/31/2020 $ 163,218 12/31/2021 $ 163,218 12/31/2022 $ 163,218 12/31/2023 $ 133,295 $ 786,167 Rent expense for office space amounted to $277,801 and $211,680 for the years ended December 31, 2018 and 2017, respectively. Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise due to their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances. It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. Such indemnification agreements may not be subject to maximum loss clauses. Employment agreements We have entered employment agreements with key employees. These agreements may include provisions for base salary, guaranteed and discretionary bonuses and option grants. The agreements may contain severance provisions if the employees are terminated without cause, as defined in the agreements. Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patent or other intellectual property rights. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company's business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. |
Big Token, Inc. [Member] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 7 COMMITMENTS AND CONTINGENCIES Operating Leases The Company utilizes office space provided by its parent company, currently at no direct cost to us. There is no lease between us and our parent company. We consider our current principal office space arrangement adequate and will reassess our needs based upon the future growth of the company. The office space leased by our parent company is on month-to-month basis. Other Commitments None Employment agreements None Litigation None |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash and accounts payable, approximate their respective fair values due to the short-term nature of such instruments. The fair value of the 2017 Senior Secured Convertible Notes was $6,845,147 as of December 31, 2017. All Convertible Notes fall within Level 3 of the fair value hierarchy as their value is based on the credit worthiness of the Company, which is an unobservable input. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company had no financial assets or liabilities as of December 31, 2018 and 2017: Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2018 (Level 1) (Level 2) (Level 3) Debenture warrant liability $ 4,323,499 $ 4,323,499 Leapfrog warrant liability 622,436 622,436 Derivative liability 496,260 496,260 Put liability Total liabilities $ 5,442,195 $ $ $ 5,442,195 Securities: Certificates of deposit Money Market funds U.S. government-sponsored agency securities 2,723,264 2,723,264 Total assets $ 2,723,264 $ 2,723,264 $ $ The Company received an equity position representing approximately 30% in the LLC that purchased the assets in the SRAX Md transaction. As there is no readily available fair market value for the LLC we carry the investment on our books at our basis for the assets sold, which was $0. Additionally, the Company has no significant influence over the entity even though the Company has an approximately 30% ownership interest. Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Debenture warrant liability $ 7,256,863 $ 7,256,863 Leapfrog warrant liability 1,873,107 1,873,107 Derivative liability 2,026,031 2,026,031 Put liability Total liabilities $ 11,156,001 $ $ $ 11,156,001 Securities: Certificates of deposit Money Market funds U.S. government-sponsored agency securities Total assets $ $ $ $ A reconciliation of the beginning and ending balances for the derivative and warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows): Outstanding, beginning of the period $ 11,156,003 $ Initial derivative liability on issuance of warrants 3,240,127 7,453,615 Change in fair value (8,953,933 ) 4,134,166 Less accretion and conversion of debenture warrants (431,780 ) Warrant liabilities $ 5,442,195 $ 11,156,001 The Company accounts for its investments in equity securities in accordance with ASC 321-10 Investments - Equity Securities. The equity securities may be classified into two categories and accounted for as follows: · Equity securities with a readily determinable fair value are reported at fair value, with unrealized gains and losses included in earnings. Any dividends received are recorded in interest income, the fair value of equity investments with fair values is primarily obtained from third-party pricing services. · Equity securities without a readily determinable fair value are reported at their cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer and their impact on fair value. Any dividends received are recorded in interest income. For equity investments without readily determinable fair values, when an orderly transaction for the identical or similar investment of the same issuer is identified, we use the valuation techniques permitted under ASC 820 Fair Value Measurement to evaluate the observed transaction(s) and adjust the fair value of the equity investment. Equity investments include the Companys retention of an approximately 30% membership interest in the purchaser of SRAXmd group of assets (a limited liability company). The investment was valued initially at its cost basis which was nil. The Company has limited access to operating results and information and has no significant influence over the purchaser of SRAXmd. The operating agreement designates a different managing member for that entity. Accordingly, the value at December 31, 2018 is nil and is a level 3 asset. |
Big Token, Inc. [Member] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 9 FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of certain financial instruments, including accounts payable, approximate their respective fair values due to the short-term nature of such instruments. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
SUBSEQUENT EVENTS | NOTE 5 SUBSEQUENT EVENTS On August 12, 2019, the Company entered into an agreement with existing investors to purchase 1,525,000 shares of class A common stock and Series A warrants to purchase an aggregate of 965,500 shares of common stock at $3.60 per share in registered direct offering. The Series A warrants are exercisable for 90 days at an exercise price of $3.60. SRAX has also agreed to issue to the investors in a concurrent private placement Series B warrants to purchase an aggregate of 1,525,000 shares of common stock and Series C warrants to purchase an aggregate of 965,500 shares of common stock that each are exercisable six months following issuance, are exercisable until October 1, 2022, and have an exercise price of $4.00. The Series C warrants vest ratably upon the exercise of the Series A warrants. The closing of the offering is expected to take place on or about August 14, 2019, subject to the satisfaction of customary closing conditions. | NOTE 15 SUBSEQUENT EVENTS On April 10, 2019 we completed a registered direct offering of 1,687,825 shares our Class A common stock. The offering resulted in gross proceeds to the company of approximately $6.75 million. On April 8, 2019, we accepted proposals from certain holders of outstanding Class A common stock purchase warrants. Pursuant to the proposal, the holders agreed to exercise their outstanding warrants to purchase an aggregate of 310,487 shares of our common stock, for cash, by April 10, 2019, in exchange for the Company reducing the exercise price of the Warrants from $7.50 to $3.56. As a result of the transaction, we expect to receive gross proceeds in the amount of $1,105,333. On April 1, 2019, we sold a non-performing receivable in the amount of $567,977, (such amount includes a mutually agreed upon gross-up with our customer of $150,000) for $417,977. In connection with the sale, we agreed to repurchase the receivable if the purchaser was not able to collect on the amounts owed by June 30, 2019. As security for our repurchase obligation, we issued and pledged 220,000 shares of our Class A common stock. |
Big Token, Inc. [Member] | ||
SUBSEQUENT EVENTS | NOTE 4 SUBSEQUENT EVENTS In accordance with ASC 855, the Company has analyzed its operations subsequent to June 30, 2019 through the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements. | NOTE 10 SUBSEQUENT EVENTS On February 1, 2019 the BIGToken Platform became generally available to the public. During the six months ended June 30, 2019, Company instituted a policy that allows BIGtoken users to redeem outstanding BIGtoken points for cash if their account and point balances meet certain criteria. |
Restatement
Restatement | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement | NOTE 16 Restatement Financial Information (As Restated) · As further described in the Explanatory Note, in lieu of filing an amended Form 10-K the Company has presented restated 2017 financials attached here. · In addition to the restatement of the financial statements, certain information within the following notes to the financial statements and financial statement schedule has been restated to reflect the corrections of misstatements discussed previously. Impact of the Restatement Below weve presented the 2017 Financial Statements as previously reported with a reconciliation to the restated financials: Summary of Restatement Consolidated Balance Sheet 2017 Adjustments 2017 As Restated Assets Current assets: Cash and cash equivalents $ 1,017,299 $ $ 1,017,299 Accounts receivable, net 4,348,305 4,348,305 Prepaid expenses 468,336 468,336 Other current assets 300,898 300,898 Total current assets 6,134,838 6,134,838 Property and equipment, net 154,546 154,546 Goodwill 15,644,957 15,644,957 Intangible assets, net 1,642,760 1,642,760 Other assets 28,598 28,598 Total assets $ 23,605,699 $ $ 23,605,699 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses 5,010,815 5,010,815 Debenture warrant liability 7,256,864 7,256,864 Leapfrog warrant liability 1,873,107 1,873,107 Derivative liability 2,026,031 2,026,031 Put liability Total current liabilities 5,010,815 11,156,002 16,166,817 Secured convertible debentures, net 1,711,146 (186,554 ) 1,524,592 Total liabilities 6,721,961 10,969,448 17,691,409 Commitments and contingencies (Note 11) Stockholders' equity: Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively Class A common stock, authorized 250,000,000 shares, $0.001 par value, 10,109,530 and 9,910,565 shares issued and outstanding at December 31, 2018 and 2017, respectively 9,911 9,911 Class B common stock, authorized 9,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively Common stock to be issued 879,500 879,500 Additional paid in capital 37,143,033 (4,596,213 ) 32,546,820 Accumulated deficit (21,148,706 ) (6,373,235 ) (27,521,941 ) Total stockholders' equity 16,883,738 (10,969,448 ) 5,914,290 Total liabilities and stockholders' equity $ 23,605,699 $ $ 23,605,699 The adjustments to the consolidated balance sheet reflect the effect of adjusting certain warrants from equity reporting to liability reporting. Summary of Restatement Consolidated Statement of Operations Adjustments 2017 Adjustments 2017 As Restated Revenue $ 23,348,714 $ $ 23,348,714 Cost of revenue 9,328,893 9,328,893 Gross profit 14,019,821 14,019,821 Operating expense: General, selling and administrative expense 17,016,789 17,016,789 Impairment of goodwill Write off of non-compete agreement 468,750 468,750 Restructuring Costs 377,961 377,961 Operating expense 17,863,500 17,863,500 Loss from operations (3,843,679 ) (3,843,679 ) Other income (expense): Interest expense (713,826 ) (2,068,221 ) (2,782,047 ) Amortization of debt issuance costs (2,101,377 ) 1,018,548 (1,082,829 ) Total Interest Expense (2,815,203 ) (1,049,673 ) (3,864,876 ) Gain on sale of Assets Accretion of beneficial conversion feature (925,748) (925,748) Accretion of debenture discount and warrants (263,648 ) (263,648 ) Change in Fair Value of Warrant Liability (4,134,166 ) (4,134,166 ) Other non-operating income / (expense) (5,323,562 ) (5,323,562 ) Total other income / (expense) (2,815,203 ) (6,373,235 ) (9,188,438 ) Income / (Loss) before provision for income taxes (6,658,882 ) (6,373,235 ) (13,032,117 ) Provision for income taxes Net income / (loss) $ (6,658,882 ) $ (6,373,235 ) $ (13,032,117 ) Net income / (loss) per share, basic and diluted $ (0.81 ) (0.77 ) $ (1.58 ) Weighted average shares outstanding Basic 8,253,851 8,253,851 8,253,851 Diluted 8,253,851 8,253,851 8,253,851 The adjustments to the consolidated statement of operations reflect the changes in fair the value from the date of issuance or 1/1/17, whichever is later, through December 31, 2017 for certain warrants that had previously been reported as equity. Summary of Restatement Consolidated Statement of Cash Flows There was no net impact of the 2017 restatement adjustments on net cash provided by operating activities, net cash provided by investing activities or net cash used in financing activities in the Consolidated Statement of Cash Flows. The adjustments only had an impact on certain captions within cash from operating activities. Subsequent to the filing of the Annual Report on Form 10-K for the year ended December 31, 2017 (the Annual Report), the Company reviewed its accounting methodology relating to its warrant reclassification as equity in December 2017. The description has been revised on the face of the consolidated balance sheets to indicate that the warrant related liabilities. The foregoing restatement is being made in accordance with ASC 250, Accounting Changes and Error Corrections. The disclosure provision of ASC 250 requires a company that corrects an error to disclose that its previously issued financial statements have been restated, to provide a description of the nature of the error, the effect of the correction on each financial statement line item and any per share amount affected for each prior period presented, and the cumulative effect on retained earnings in the statement of financial position as of the beginning of each period presented. The restatement pertains to all the quarters for the year ended December 31, 2017 and first three quarters of 2018, and accordingly will have effect on these previously filed quarterly reports. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Organization and Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and notes thereto are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in the Companys annual financial statements have been condensed or omitted. The December 31, 2018 condensed balance sheet data was derived from financial statements, but does not include all disclosures required by GAAP. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three and six month periods ended June 30, 2019 and 2018. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 or for any future period. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2018, included in the Company's annual report on Form 10-K filed with the SEC on April 16, 2019. | Organization and Basis of Presentation Social Reality, Inc. ("Social Reality", "we", "us", our or the "Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired 100% of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009 which began business in May of 2010, in exchange for 2,465,753 shares of our Class A common stock. The former members of Social Reality, LLC owned 100% of our Class A common stock after the acquisition. At SRAX, we sell digital advertising campaigns to advertising agencies and brands. We have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to many different digital advertising buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: · sales of digital advertising campaigns to advertising agencies and brands; · sales of media inventory owned by our publishing partners through real-time bidding ( “ ” · sale and licensing of our SRAX Social · creation of custom platforms for buying media on SRAX The core elements of this business are: · Social Reality Ad Exchange or "SRAX" – Real Time Bidding sell side and buy side representation SRAX · SRAX Social · SRAXshopper · SRAXauto We are headquartered in Los Angeles, California. |
Description of Business | Description of Business We are a digital marketing and data technology company with tools to reach and reveal valuable audiences with marketing and advertising communication. Our machine-learning technology analyzes marketing data to identify brands and content owners' core consumers and their characteristics across marketing channels. In addition to our business services and technologies, we also operate a direct to consumer platform, BIGToken, which enables consumers to own, manage and sell access to their digital identity and data. This provides us with a direct consumer relationship and gives us valuable proprietary data. We derive our revenues from: · sales of digital advertising campaigns to advertising agencies and brands; · sales of media inventory through real-time bidding, or RTB, exchanges; · sale and licensing of our SRAX Social · creation of custom platforms for buying media on SRAX · sales of proprietary consumer data. The core elements of our business are: · Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation SRAX · SRAXauto · SRAXcore is our generalized services and technologies supporting brands and agencies in data management, audience optimization, and multi-channel and omnichannel media and marketing services · SRAXshopper · SRAXir · BIGToken | |
Uses and Sources of Liquidity | Uses and Sources of Liquidity Going Concern Although we believe that the foregoing actions will assist with our liquidity needs during the 12 months following the issuance of the financial statements, there is no assurance that the outcome of our actions will result in liquidity. If we continue to experience operating losses, we may need to raise additional capital through the sale of our equity and/or debt securities. Although historically we have funded our operations through the sale of our debt and equity securities, there is no assurance that we will be able to raise additional capital or that if such capital is raised, it will be on favorable terms. A failure to generate additional liquidity could negatively impact our business, including our access to critical business services. Additionally, if we require additional capital and are not able to secure it, we may need to greatly curtail our current and planned business initiatives. In connection with preparing consolidated financial statements for the year ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Companys ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: · Operating losses of $11,648,703 and $13,884,055 for the year ended December 31, 2018 and the year to date period ended June 30, 2019, respectively. · Negative cash flow from operating activities for 2019 and 2018. · At June 30, 2019 the Company had an accumulated deficit of $32,662,403. · Revenue decline in the six months period ended June 30, 2019 from the same period in the prior year of $5,312,224. Ordinarily, conditions or events that raise substantial doubt about an entitys ability to continue as a going concern relate to the entitys ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: · The Company has no debt as of June 30, 2019 · The Company has historically raised funds from debt and equity financings. · The Companys sale of the SRAXmd vertical for $43.5 million in consideration. · In 2018, the Company is in compliance with NASDAQ Capital Markets listing requirements. · In 2018, the Company redeemed $6.5 million of convertible debentures. · Revenue declines were largely the result of a strategic shift away from lower margin sales the produced little to no positive cash flow benefit for the Company. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: · Raise additional capital through short-term loans. · Implement restructuring and cost reductions. · Raise additional capital through a private placement. · Secure a commercial bank line of credit. · Dispose of one or more product lines. · Sell or license intellectual property. At June 30, 2019 the Company had $2,465,639 in cash and cash equivalents and negative working capital of $8,534,224. | |
Presentation of Financial Statements - Going Concern | Presentation of Financial Statements Going Concern Going Concern Evaluation In connection with preparing consolidated financial statements for the year ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Companys ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: · Net Income of $8.7 million for the year-ended December 31, 2018 · Negative cash flow from operating activities for 2018 and 2017. · At December 31, 2018, the Company had an accumulated deficit of $18,778,348. · Revenue decline in 2018 of $13,468,106. Ordinarily, conditions or events that raise substantial doubt about an entitys ability to continue as a going concern relate to the entitys ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: · The Company has no debt as of December 31, 2018 · On April 10, 2019 the Company raised $6.2 million through the sale of common stock in a direct shelf offering. · The Companys sale of the SRAXmd vertical for $33.5 million in cash consideration. · In 2018, the Company is in compliance with NASDAQ Capital Markets listing requirements. · In 2018, the Company redeemed $6.5 million of convertible debentures. · Revenue declines were largely the result of a sale of a lower margin sales the produced little to no positive cash flow benefit for the Company. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: · Raise additional capital through short-term loans. · Implement restructuring and cost reductions. · Raise additional capital through a private placement of equity. · Secure a commercial bank line of credit. · Dispose of one or more product lines. · Sell or license intellectual property. At December 31, 2018, the Company had $2,784,865 in cash and cash equivalents. In April 2019 the Company concluded a private placement sale of its common stock for approximately $6.5 million. We believe we have sufficient working capital to pay our expenses for the next twelve months. | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control of the subsidiary. | |
Use of Estimates | Use of Estimates The consolidated financial statements have been prepared in conformity with generally accepted accounting principles accepted in the United States of America (GAAP) and requires management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, purchase price for acquisition, goodwill, other intangible assets, put rights and valuation of other assets and liabilities. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. | |
Revenue Recognition | Revenue Recognition The Company adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ASC Topic 606 is a comprehensive revenue recognition model that requires revenue to be recognized when control of the promised goods or services are transferred to our customers at an amount that reflects the consideration that we expect to receive. Application of ASC Topic 606 requires us to use more judgment and make more estimates than under former guidance. Application of ASC Topic 606 requires a five-step model applicable to all product offereing revenue streams as follows: Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each partys rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customers intent and ability to pay the promised consideration. We apply judgment in determining the customers ability and intention to pay, which is based on a variety of factors including the customers historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Variable consideration is described in detail below. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative Stand-Alone Selling Price (SSP,) basis. We determine SSP based on the price at which the performance obligation would be sold separately. If the SSP is not observable, we estimate the SSP based on available information, including market conditions and any applicable internally approved pricing guidelines. Recognition of revenue when, or as, we satisfy a performance obligation We recognize revenue at the point in time that the related performance obligation is satisfied by transferring the promised goods or services to our customer. Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have risk before the specified good or service have been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. Contract Liabilities Contract liabilities consist of customer advance payments and billings in excess of revenue recognized. We may receive payments from our customers in advance of completing our performance obligations. We record contract liabilities equal to the amount of payments received in excess of revenue recognized, including payments that are refundable if the customer cancels the contract according to the contract terms. Contract liabilities have been historically low historically recorded as current liabilities on our consolidated financial statements when the time to fulfill the performance obligations under terms of our contracts is less than one year. We have no Long-term contract liabilities which would represent the amount of payments received in excess of revenue earned, including those that are refundable, when the time to fulfill the performance obligation is greater than one year. Practical Expedients and Exemptions We have elected certain practical expedients and policy elections as permitted under ASC Topic 606 as follows: · We applied the transitional guidance to contracts that were not complete at the date of our initial application of ASC Topic 606 on January 1, 2018. · We adopted the practical expedient related to not adjusting the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; · We made the accounting policy election to not assess promised goods or services as performance obligations if they are immaterial in the context of the contract with the customer; · We made the accounting policy election to exclude any sales and similar taxes from the transaction price; and · We adopted the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. | |
Cost of Revenue | Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying consolidated statements of operations. | |
Accounts Receivable | Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Allowance for doubtful accounts was $48,741 and $59,703 at December 31, 2018 and 2017, respectively. | |
Concentration of Credit Risk, Significant Customers and Supplier Risk | Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with financial institutions within the United States. The balances maintained at these financial institutions are generally more than the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any loss on these accounts. At December 31, 2018, two customers accounted for more than 10% of the accounts receivable balance, for a total of 75.1%. At December 31, 2017, four customers accounted for more than 10% of the accounts receivable balance, for a total of 59.5%. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as 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, based on the Companys principal or, in absence of a principal, most advantageous market for the specific asset or liability. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: · Level 1Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; · Level 2Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and · Level 3Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At December 31, 2018 and 2017, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. The Company measures certain non-financial assets, liabilities, and equity issuances at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets and goodwill for impairment; allocating value to assets in an acquired asset group; and applying accounting for business combinations. Derivative instruments are carried at fair value, generally estimated using the Black-Scholes Merton model. As of December 31, 2018 the Company included $2,723,264 of United States Treasury bills with maturities less than 90 days within cash and cash equivalents. | |
Property and equipment | Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. | |
Intangible assets | Intangible assets Intangible assets consist of intellectual property, a non-complete agreement, and internally developed software and are stated at cost less accumulated amortization. Amortization is provided for on the straight-line basis over the estimated useful lives of the assets of five to six years. Costs Incurred to Develop Software for Internal Use Costs incurred to develop computer software for internal use are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a specific software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Post-implementation costs related to the internal use computer software, are expensed as incurred. Internal use software development costs are amortized using the straight-line method over its estimated useful life which ranges up to three years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the years ended December 31, 2018, and 2017 there has been no impairment associated with internal use software. For the years ended December 31, 2018, and 2017, the Company capitalized software development costs of $960,157 and $694,914 respectively. During 2016, the Company began capitalizing the costs of developing internal-use computer software, including directly related payroll costs. The Company amortizes costs associated with its internally developed software over periods up to three years, beginning when the software is ready for its intended use. The Company capitalizes costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. | |
Business Combinations | Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value are recognized in earnings until settlement and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. | |
Goodwill | Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test as of December 31, 2018 using market data and discounted cash flow analysis. Based on this analysis, it was determined that the fair value exceeded the carrying value of its reporting units. The Company concluded the fair value of the goodwill exceed the carrying value accordingly there were no indicators of impairment for the years ended December 31, 2018 and 2017. The Company had historically performed its annual goodwill and impairment assessment on December 31 st When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company's products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company's reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the impairment testing methodology primarily using the income approach (discounted cash flow method). We compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, then the amount of impairment to be recognized. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. | |
Long-lived Assets | Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the years ended December 31, 2018 or 2017, respectively. | |
Accounting for discontinued operations | Accounting for discontinued operations We regularly review underperforming assets (product offereings) to determine if a sale or disposal might be a better way to monetize the assets. When a product line or other asset group is considered for sale or disposal, we review the transaction to determine if or when the entity qualifies as a discontinued operation in accordance with the criteria of FASB ASC Topic 205-20 Discontinued Operations. The FASB has issued authoritative guidance that raises the threshold for disposals to qualify as discontinued operations. Under the this guidance, a discontinued operation is (1) a component of an entity or group of components that have been disposed of or are classified as held for sale and represent a strategic shift that has or will have a major effect on an entity's operations and financial results, or (2) an acquired business that is classified as held for sale on the acquisition date. We operate as a single reporting unit that has multiple product offerings. All our product offerings are in the same geographic market, sharing the same building, equipment, and managed by a single general manager. The product level is the lowest level for which discrete financial information related solely to revenue and related accounts recievalbe is available and the level reviewed by management to analyze operating results. Our senior management is compensated based on the results of all the product offerings as a whole, not the results of any individual product line We have determined that the sale of the SRAXmd prodcut line did not qualify for as a discontinued operation pursuant to guidance in ASC 205-20. During 2018, based on revenue results management and board decided to accept the offer for the sale of the SRAXmd product line. The Company decided to monetize the SRAXmd product line via a sale rather than continue to offer the SRAXmd product to its customers. We have retained an approximatley 30% interest in the purchaser of the SRAXmd product line, however, based on the operating agreement covering our ownerhisp we have no ongoing or further involvement in the operations of the purschaser of SRAXmd. The sale of the SRAXmd product line is not considered to be discontinued operations pursuant to the guidance in ASC 205-20. | |
Derivatives | Derivatives The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, Distinguishing Liabilities From Equity Derivatives and Hedging The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entitys own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend, which will reduce the income available to common stockholders. | |
Warrant Liability | Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using a Black-Scholes option pricing model, at each measurement date. | |
Debt Discounts | Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options | |
Earnings Per Share | Earnings Per Share We use ASC 260, " Earnings Per Share There were 4,853,085 common share equivalents at December 31, 2018 and 5,246,692 at December 31, 2017. For the year ended December 31, 2018 these potential shares were excluded from the shares used to calculate diluted. These securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive. | |
Income Taxes | Income Taxes We utilize ASC 740 Income Taxes The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. | |
Stock-Based Compensation | Stock-Based Compensation We account for our stock-based compensation under ASC 718 " Compensation Stock Compensation We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Common stock awards The Company grants common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded in accordance with ASC 505-50 on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash. Warrants In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 4, Stockholders Equity . | |
Registration Rights | Registration Rights The Company accounts for registration rights agreements in accordance with the Accounting Standards Codification subtopic 825-20, Registration Payment Arraignments ("ASC 825-20"). Under ASC 825-20, the Company is required to disclose the nature and terms of the arraignment, the maximum potential amount and to assess each reporting period the probable liability under these arraignments and, if exists, to record or adjust the liability to current period operations. On November 29, 2018, the Company invoked the early redemption clause in certain of its convertible notes payable pursuant to which the Company redeemed early these convertible notes payable by cash and issuing warrant to purchase shares of common stock (the "Redemption Penalty Warrants"). In connection with the early retirement of these notes payable, the warrants issued to these investors included a registration rights agreement clauses, pursuant to which the Company agreed to provide certain registration rights with respect to the warrants issued. The registration rights agreements require the Company to file a registration statement within 90 calendar days from the final closing under the retirement transaction and to be effective 60 calendar days thereafter. The final closing under the retirement transaction of the debentures occurred on November 29, 2018. On February 11, 2019, the Company filed the required registration statement, as of this filing, it has yet to be declared effective. If the registration statement is not declared effective, the Company is subject to a 2% penalty of investors subscription amount. The Company has estimated the liability under the registration rights agreement at $0 as of December 31, 2018. | |
Business Segments | Business Segments The Company uses the "management approach" to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's reportable segments. Using the management approach, the Company determined that it has one operating segment due to business similarities and similar economic characteristics. | |
Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards Leases In February 2016, the FASB issued ASU No. 2016-02 (ASC 842), Leases, to require lessees to recognize all leases, with certain exceptions, on the balance sheet, while recognition on the statement of operations will remain similar to current lease accounting. Subsequently, the FASB issued ASU No.2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Targeted Improvements, ASU No. 2018-20, Narrow-Scope Improvements for Lessors, and ASU 2019-01, Codification Improvements, to clarify and amend the guidance in ASU No. 2016-02. ASC 842 eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. This standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We are using a modified retrospective adoption approach, is required to recognize and measure leases existing at the beginning of the adoption period, with certain practical expedients available. We adopted the standard effective January 1, 2019. The standard allows a number of optional practical expedients to use for transition. The Company choose the certain practical expedients allowed under the transition guidance which permitted us to not to reassess any existing or expired contracts to determine if they contain embedded leases, to not to reassess our lease classification on existing leases, to account for lease and non-lease components as a single lease component for equipment leases, and whether initial direct costs previously capitalized would qualify for capitalization under FASB ASC 842. The new standard also provides practical expedients and recognition exemptions for an entity's ongoing accounting policy elections. The Company has elected the short-term lease recognition for all leases that qualify, which means that we do not recognize a ROU asset and lease liability for any lease with a term of twelve months or less. The most significant impact of adopting the standard was the recognition of ROU assets and lease liabilities for operating leases on the Company's consolidated balance sheet but it did not have an impact on the Company's consolidated statements of operations or consolidated statements of cash flows. We recorded a ROU and the related operating lease liability for our long-term facilities lease. The below table summarizes these lease asset and liability accounts presented on our accompanying Condensed Consolidated Balance Sheets: Operating Leases* Condensed Consolidated Balance Sheet Caption Balance as of June 30, Operating lease right-of-use assets - non-current Right of Use Asset $ 466,253 Operating lease liabilities - current Accrued liabilities $ 139,782 Operating lease liabilities - non-current Lease Obligation Long-Term $ 326,471 Total operating lease liabilities $ 466,253 * As of June 30, 2019, we have no finance leases as defined in Topic 842 Components of Lease Expense We recognize lease expense on a straight-line basis over the term of our operating leases, as reported within selling, general and administrative expense on the accompanying Condensed Consolidated Statement of Operations. The components of our aggregate lease expense is summarized below: Three Months Ended Six Months Ended Operating lease cost 76,277 152,842 Variable lease cost Short-term lease cost Total lease cost 76,277 152,842 Weighted Average Remaining Lease Term and Applied Discount Rate Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of June 30, 2019 4.25 years 18 % Future Contractual Lease Payments as of June 30, 2019 The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments: Operating Leases - future payments 2019 (remaining) $ 81,609 2020 163,218 2021 163,218 2022 163,218 2023 133,296 Total future lease payments, undiscounted 704,559 Less: Implied interest (238,306 ) Present value of operating lease payments 466,253 Effective January 1, 2018, we adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230) In February 2018, the FASB issued ASU 2018-02: Income Statement Reporting Comprehensive Income (Topic 220) In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement, Accounting Guidance Issued but Not Adopted at June 30, 2019 In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information for credit loss estimates. In addition, new disclosures are required. The ASU is effective for fiscal years beginning after December 15, 2019. We are currently evaluating the impact of adopting this guidance. During the six months ended June 30, 2019, the Financial Accounting Standards Board (FASB) has not issued any Accounting Standard Updates which are expected to have a material retrospective or future effect on the consolidated financial statements. | Recently Issued Accounting Standards Changes to accounting principles are established by the FASB in the form of ASUs to the FASBs Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. Described below are ASUs that are not yet effective, but may be applicable to our financial position, results of operations, cash flows, or presentation thereof. ASUs not listed below were assessed and determined to not be applicable to our financial position, results of operations, cash flows, or presentation thereof. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements In November 2018, the FASB issued ASU 2018-18 , Collaborative Arrangements (Tope 818): Clarifying the Interaction Between Topic 808 and Topic 606 In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases In July 2018, the FASB issued ASU 2018-09, Codification Improvements In June 2018, the FASB issued ASU 2018-07, CompensationStock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment In February 2018, the FASB issued ASU 2018-02, Income StatementReporting Comprehensive Income (Topic 220)Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient for Transition to Topic 842. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
Big Token, Inc. [Member] | ||
Uses and Sources of Liquidity | Uses and Sources of Liquidity Going Concern These carve-out financial statements have been prepared on a going concern basis in accordance with US GAAP. The going concern basis of presentation assumes that Big Token will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities, contingent or otherwise, and commitments in the normal course of business. Because of Big Tokens dependency on its parent, SRAX. for financing, and as Big Token has experienced losses and negative cash flows from its inception the parent company will support Big Token for its working capital needs over the next twelve months. Big Tokens ability to generate revenue, profitable operations and positive operating cash flow in the future is dependent on its ability to execute its current business plan. In the event Big Token is unable to achieve its current business plan, it will require additional financing until it is able to sustain profitable operations and positive operating cash flows. Given Big Tokens reliance on its parent, it will require additional financing to meet its short-term obligations as well as ongoing operating costs. In addition, Big Token continues to invest in the business through the development of sales channel for its products which management believes will result in growth in revenue, profitability and cash flows. However, there can be no assurance regarding the timing of or ultimate achievement of profitability or positive cash flows. BIGTokens primary need for liquidity is currently to fund working capital requirements of our business and the development of the BIGToken platform, user acquisition and sales and marketing efforts. We began to generate revenue in the third quarter of 2019. Our general, selling and administrative expenses for the periods ended December 31, 2018 and 2017 were $1,970,677 and $209,181, respectively. We generated a net losses of $2,044,054 and $209,623 for the periods ended December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, we had an accumulated deficit of $2,253,677 and $209,623, respectively. We had a working capital deficit of $2,455,486 and $220,677 at December 31, 2018 and 2017, respectively. We have completed our initial development states and the Company facing a challenging competitive environment. While we continue to build out our platform to begin targeting revenue generating opportunities, we reported losses and have historically funded all of our operations and investing activities with cash provided by our parent company, SRAX, Inc. We anticipate that our parent company will fund our operational requirements for the next 12 months. We expect our parent company will fund our operations for the next twelve months through cash on hand, cash generated from its core operations and potential sales of other non-core assets. SRAX had cash and equivalents of $2.8 million as of December 31, 2018. | |
Use of Estimates | Use of Estimates The financial statements have been prepared in conformity with GAAP and requires management of the Company to make estimates and assumptions in the preparation of these financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from these estimates and assumptions. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Companys critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern and liquidity (ii) Valuation allowance for deferred tax assets (iii) Estimates and assumptions used in valuation of intangible assets : Management estimates These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on their experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company held no financial instruments as of December 31, 2018 and 2017. Cash and Cash Equivalents As of December 31, 2018 and 2017, the Company had no cash accounts. In the future, the Company will consider all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Concentration of Credit Risk, Significant Customers and Supplier Risk The Company does not have any bank accounts as of December 31, 2018 and 2017. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a.) affiliates of the Company (Affiliate means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) 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; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Internal use software The Business capitalizes eligible costs of internally developed software as capital expenditures if the costs meet the criteria established under ASC 350: Intangibles - Goodwill and Other. Amounts capitalized are amortized on a straight line basis over the estimated useful life of the software, which is three years beginning in 2017. Generally, costs incurred during the application development stage (for example, costs incurred for designing the software configuration and interfaces, coding, installation, and testing) are capitalized. Costs incurred during the preliminary project stage (for example, costs incurred to develop, evaluate, and select alternatives) and costs incurred during the post implementation and operation stage (for example, costs incurred for training and application maintenance) are expensed as incurred. Capitalized software development costs were $225,011 during the year ended December 31, 2018 The Company regularly evaluates capitalized software for potential impairment. Impairment is recognized when events or changes in circumstances occur related to computer software being developed or currently in use, which indicate that the carrying amount may not be recoverable. There were no impairment charges for the year ended December 31, 2018. In accordance with the authoritative guidance, we capitalize application development stage costs associated with the development of new functionality for internal-use software and software developed related to our planned product offerings. The capitalized costs are then amortized over the estimated useful life of the software, which is generally three to five years, and are included in property and equipment in the accompanying balance sheet. The Company's intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives of three years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Amortization expense of intangible assets during the period ended December 31, 2018 was $37,000. For the period ended December 31, 2017 amortization was not material. Digital Currency Assets Digital Currency Assets are included in current assets in the balance sheet. Digital Currency Assets are recorded at cost less impairment. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Realized gain (loss) on sale of Digital Currency Assets are included in other income (expense) in the statements of operations. The Company had no realized gain or loss on sale of digital currency during the periods ending December 31, 2018 and 2017. The Company assesses impairment of Digital Currency Assets quarterly if the fair value of Digital Currency Assets is less than its cost basis. The Company recognizes impairment losses on Digital Currency Assets caused by decreases in fair value using the average U.S. dollar spot price of the related Digital Asset as of each impairment date. Such impairment in the value of Digital Currency Assets are recorded as a component of costs and expenses in our statements of operations. The Company recorded impartment charges of $35,474 and $0 during the periods ended December 31, 2018 and 2017. Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the periods ended December 31, 2018 and 2017. Revenue Recognition The Company has adopted the provisions of ASC Topic 606, Revenue from Contracts with Customers ("Topic 606") as of January 1, 2018. For the periods ended December 31, 2018 and 2017, the Company had no revenue or cost of sales. Advertising Advertising costs are expensed as incurred. Advertising costs incurred amounted to $4,491 and $0 for the periods ended December 31, 2018 and 2017, respectively. Earnings (Loss) Per Share We use Accounting Standards Codification (ASC) 260, " Earnings Per Share There were no common share equivalents at December 31, 2018 and 2017. Income taxes Our income taxes as presented are calculated on a separate tax return basis and may not be reflective of the results that would have occurred on a standalone basis. Our operations have historically been included in SRAXs U.S. federal and state tax returns. We do not maintain taxes payable to/from our parent and we are deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions, if applicable. These settlements are reflected as changes in parent company investment. We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company did not recognize any tax benefits in the stand-alone Financial Statements because tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Fair Value Measurements Non-recurring fair value measurements. Certain assets are measured at fair value on a non-recurring basis such as property and equipment and intangible assets. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Financial instruments not carried at fair value. The carrying values of our short-term financial instruments, including a, accounts payable, and accrued liabilities, approximate fair value due to the relatively short maturity of such instruments. The Company does not hold any financial instruments that are measured at fair value on a recurring basis. Tax years that remain subject to examination by major tax jurisdictions The Company discloses tax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15. Major tax jurisdictions generally have the right to examine and audit the previous three or four years of tax returns filed. Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in selling, general and administrative expenses. A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income, and (3) the impact of tax planning strategies. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding the Businesss forecasts. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. Taxable loss generated by BigToken has been included in the consolidated federal income tax returns of SRAX and its state income tax returns. SRAX has allocated income tax/loss to Big Token in the accompanying stand-alone financial statements as if Big Token were held in a separate corporation which filed separate income tax returns. SRAX believes the assumptions underlying its allocation of income taxes on a separate return basis are reasonable. However, the amounts allocated for income taxes in the accompanying stand-alone financial statements are not necessarily indicative of the actual amount of income taxes that would have been recorded had Big Token been a completely separate stand-alone entity. Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, which classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (the Indirect Method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Lease Asset and Liability Accounts Presented in Condensed Consolidated Balance Sheets | The below table summarizes these lease asset and liability accounts presented on our accompanying Condensed Consolidated Balance Sheets: Operating Leases* Condensed Consolidated Balance Sheet Caption Balance as of June 30, Operating lease right-of-use assets - non-current Right of Use Asset $ 466,253 Operating lease liabilities - current Accrued liabilities $ 139,782 Operating lease liabilities - non-current Lease Obligation Long-Term $ 326,471 Total operating lease liabilities $ 466,253 * As of June 30, 2019, we have no finance leases as defined in Topic 842 |
Schedule of Component of Lease Expense | The components of our aggregate lease expense is summarized below: Three Months Ended Six Months Ended Operating lease cost 76,277 152,842 Variable lease cost Short-term lease cost Total lease cost 76,277 152,842 |
Schedule of Weighted Average Remaining Lease Term and Applied Discount Rate | Weighted Average Remaining Lease Term and Applied Discount Rate Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of June 30, 2019 4.25 years 18 % |
Schedule of Future Contractual Lease Payments | The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments: Operating Leases - future payments 2019 (remaining) $ 81,609 2020 163,218 2021 163,218 2022 163,218 2023 133,296 Total future lease payments, undiscounted 704,559 Less: Implied interest (238,306 ) Present value of operating lease payments 466,253 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Gain on Sale of Assets | GAIN ON SALE OF SRAXmd: Cash Proceeds $ 32,966,303 Fair Value of Interest Retained Carrying amount of Assets Sold Fixed Assets (117,000 ) Working Capital (3,228,803 ) Transactions Fees & Sales Commissions (7,512,472 ) Gain on Sale $ 22,108,028 |
Schedule of Income from Discontinued Operations | Based on managements best estimates, for the three and twelve month periods ended December 31, 2018 and 2017, the unaudited results for revenue and cost of sales attributable to the SRAXmd product group are estimated below: Three Months ended Full Year December 31, December 31, 2018 2017 2018 2017 Revenue $ $ 4,603,366 $ 6,306,613 $ 11,077,503 Cost of Sales $ $ 1,082,389 $ 1,101,080 $ 1,998,395 Gross Profit $ 0 $ 3,520,977 $ 5,205,533 $ 9,079,108 Gross Margin 0.00 % 76.49 % 82.54 % 81.96 % General, Sales & Administrative expense $ $ 1,438,957 $ 2,896,193 $ 2,028,407 Operating Income $ $ 2,082,020 $ 2,309,340 $ 7,050,702 |
SECURED CONVERTIBLE DEBENTURE_2
SECURED CONVERTIBLE DEBENTURES, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debt [Abstract] | |
Schedule of secured convertible debentures | The secured convertible debentures are comprised of the following at December 31: 2018 2017 Principal Balance $ $ 6,845,157 Debt discount (4,107,792 ) Debt issuance costs (1,026,219 ) Convertible notes, net $ $ 1,711,146 |
WARRANT LIABILITIES (Tables)
WARRANT LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Summary of Warrant Liabilities | The Warrant liabilities are comprised of the following at June 30: Debenture Warrant Liability Leapfrog Warrant Liability Derivative Liability Balance as of beginning of period (December 31, 2018) 4,323,357 622,296 496,241 Adjustments to Warrants Outstanding Adjustment to fair value 1,577,865 208,072 175,914 Balance as of end of period (March 31, 2019) 5,901,222 830,368 672,155 Adjustments to Warrants Outstanding Adjustment to fair value 2,313,813 330,982 230,760 Balance as of end of period (June 30, 2019) 8,215,035 1,161,350 902,915 Debenture Warrant Liability Leapfrog Warrant Liability Derivative Liability Balance as of beginning of period (December 31, 2017) 7,256,864 1,873,107 2,026,031 Adjustments to Warrants Outstanding Adjustment to fair value (2,409,444 ) (629,171 ) (685,080 ) Balance as of end of period (March 31, 2018) 4,847,420 1,243,936 1,340,951 Adjustments to Warrants Outstanding (328,627 ) Adjustment to fair value 862,115 269,127 210,950 Balance as of end of period (June 30, 2018) 5,709,535 1,513,063 1,223,274 | The Warrant liabilities are comprised of the following at December 31: 2018 2017 Outstanding, beginning of the period $ 11,156,003 $ Initial derivative liability on issuance of warrants 3,240,127 7,453,615 Change in fair value (8,953,933 ) 4,134,166 Less accretion and conversion of debenture warrants (431,780 ) Warrant liabilities $ 5,442,195 $ 11,156,001 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of Loss Per Share Dilutive Effect | The following outstanding instruments could have a dilutive effect in the future: June 30, June 30 (unaudited) (unaudited) Warrants 4,396,366 2,196,700 Stock options 1,241,514 370,600 Total 5,637,880 2,567,300 | |
Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of stock options and stock warrants | Transactions involving our stock options for the year to date period ending June 30, 2019 are summarized as follows: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term ( Years) Aggregate Intrinsic Value Outstanding December 31, 2018 547,662 $ 5.27 2.7 $ Granted (weighted-average fair value of $2.21 per share) 696,252 3.45 3.0 842,465 Exercised Forfeited (2,400 ) 13.50 Outstanding June 30, 2019 1,241,514 4.24 2.3 521,436 Vested (exercisable) June 30, 2019 348,933 6.15 2.3 Expected to vest after June 30, 2019 (unexercisable) 892,581 $ 3.49 2.3 $ 1,044,320 | Transactions involving our stock options for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 414,300 $ 6.65 575,800 $ 6.97 Granted during the period 480,236 3.57 Exercised during the period Forfeited during the period (366,874 ) 4.84 (161,500 ) 7.26 Outstanding, end of the period 537,662 $ 5.94 414,300 $ 6.97 Exercisable at the end of the period 331,993 6.8 288,630 6.65 |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of stock options and stock warrants | Transactions involving our stock warrants for the year to date period ended June 30, 2019 include the following: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding December 31, 2018 4,325,423 $ 3.77 2.9 $ 3,849,626 Granted 399,610 4.81 5.0 Exercised (328,667 ) 3.49 0.3 384,540 Forfeited Outstanding June 30, 2019 4,396,366 3.90 2.7 3,341,238 Vested (exercisable) June 30, 2019 4,096,366 3.83 2.6 3,399,984 Expected to vest after June 30, 2019 (unexercisable) 300,000 $ 5.00 4.8 $ | Transactions involving our stock warrants for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 2,485,005 $ 5.09 2,976,863 $ 6.45 Granted during the period 2,162,058 3.00 2,121,433 3.73 Exercised during the period (95,238 ) 2.25 (428,469 ) 3 Forfeited during the period (226,402 ) 6.95 (2,184,822 ) 6.04 Outstanding, end of the period 4,325,423 5.05 2,485,005 5.09 Exercisable at the end of the period 4,325,423 5.05 2,485,005 5.09 |
Schedule of Fair Value of Warrant Weighted Average Assumptions | The fair value of each warrant grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions: Expected life (years) 1 - 7 Risk-free interest rate 1.31% - 2.3% Volatility 100% - 167% Dividend yield 0 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following at December 31: 2018 2017 Office equipment $ 332,932 251,415 Accumulated depreciation (140,867 ) (96,869 ) Property and equipment, net $ 192,065 154,546 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Intangible assets | Intangible assets consist of the following at December 31: 2018 2017 Non-compete agreement $ 1,250,000 $ 1,250,000 Intellectual property 756,000 756,000 Acquired Software 617,069 617,069 Internally developed software 1,563,401 754,140 Total cost 4,186,470 3,377,209 Accumulated amortization (2,423,865 ) (1,734,449 ) Intangible assets, net $ 1,762,605 $ 1,642,760 |
Schedule of estimated future amortization expense | The estimated future amortization expense for the years ended December 31, are as follows: 2019 $ 858,041 2020 737,648 2021 166,916 $ 1,762,605 |
Schedule of Income Tax (Benefit) Expense | Income tax (benefit) expense from continuing operations for the year ended December 31, 2018 consisted of the following: Current Deferred Total Federal $ $ (1,301,486 ) $ (1,301,486 ) State (700,900 ) (700,900 ) Subtotal (2,002,386 ) (2,002,386 ) Valuation allowance 2,002,386 2,002,386 Total $ $ $ Income tax (benefit) expense from continuing operations for the year ended December 31, 2017 consisted of the following: Current Deferred Total Federal $ $ 543,682 543,682 State (287,649 ) (287,649 ) Subtotal 256,033 256,033 Valuation allowance (256,033 ) (256,033 ) Total $ $ $ |
Schedule of Deferred Tax Assets and Liabilities | The tax effects, rounded to thousands, of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below: 2018 2017 Deferred Tax Assets Net operating loss carryforwards $ 2,914,731 $ 4,156,406 Fixed assets (37,801 ) Accrued interest Intangibles Stock based compensation 430,907 579,085 Other accruals 24,390 53,185 Total Deferred Tax Assets 3,332,227 4,788,677 Deferred Tax Liabilities Stock based compensation Intangibles (249,530 ) (482,121 ) Prepaid expenses (12,620 ) (14,623 ) Total Deferred Tax Liabilities (262,150 ) (496,744 ) Net Deferred Tax Assets 3,070,707 4,291,933 Valuation Allowance (3,070,707 ) (4,291,933 ) Net deferred tax / (liabilities) $ $ |
Big Token, Inc. [Member] | |
Schedule of Income Tax (Benefit) Expense | The provision for Federal and State income tax consists of the following: 2018 2017 Federal income tax benefit attributable to: Current Operations $ 421,540 $ 44,021 Less: valuation allowance $ (421,540 ) $ (44,021 ) Net provision for Federal income taxes $ $ |
Schedule of Deferred Tax Assets and Liabilities | The cumulative tax effect at the expected rate of 24.2% of significant items comprising our net deferred tax amount is as follows: 2018 2017 Deferred tax asset attributable to: Net operating loss carryover $ 538,029 $ 50,785 Less: valuation allowance $ (538,029 ) $ (50,785 ) Net deferred tax asset $ $ |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Big Token, Inc. [Member] | ||
Schedule of Significant Components of Net Cash Contributions from SRI | The significant components of the net cash contributions from SRI for the period ending June 30, 2019, were as follows: Six months ended June 30, 2019 2018 Category: Expense allocations 1,534,637 853,625 Accounts payable and other payments Intangible assets and digital currency transfers 150,155 78,415 Other Total 1,684,792 932,040 | The significant components of the net cash contributions from SRAX for the period ending December 31, 2018 and 2017, were as follows: 2018 2017 Category Expense allocations $ 2,005,728 $ 209,623 Accounts payable and other payments Intangible assets and digital currency transfers 228,658 12,931 Other Total $ 2,234,386 $ 222,554 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts payable and accrued expenses | Accounts payable and accrued expenses at December 31, are comprised of the following: 2018 2017 Accounts payable, trade $ 2,517,749 $ 2,858,871 Accrued expenses 256,008 1,800,621 Accrued compensation 722,010 256,164 Accrued commissions 79,158 95,159 Accounts payable and accrued expenses $ 3,574,926 $ 5,010,815 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax (Benefit) Expense | Income tax (benefit) expense from continuing operations for the year ended December 31, 2018 consisted of the following: Current Deferred Total Federal $ $ (1,301,486 ) $ (1,301,486 ) State (700,900 ) (700,900 ) Subtotal (2,002,386 ) (2,002,386 ) Valuation allowance 2,002,386 2,002,386 Total $ $ $ Income tax (benefit) expense from continuing operations for the year ended December 31, 2017 consisted of the following: Current Deferred Total Federal $ $ 543,682 543,682 State (287,649 ) (287,649 ) Subtotal 256,033 256,033 Valuation allowance (256,033 ) (256,033 ) Total $ $ $ |
Schedule of Effective tax rate | A reconciliation of the federal statutory income tax rate to the Companys effective income tax rate is as follows: 2018 2017 Taxes calculated at federal rate 21.0 % 34.0 % State income tax, net of federal benefit (1.9 )% 1.4 % Stock based compensation 1.4 % % Permanent Differences 1.0 % (5.0 )% Change in Valuation Allowance 13.9 % 2.0 % Fair market adjustment derivatives (21.5 )% (10.8 )% Prior year True-ups (14.9 )% 1.3 % True-up to deferred tax rate % (17.9 )% Other adjustments 1.0 % (5.0 )% Provision for income taxes % % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects, rounded to thousands, of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below: 2018 2017 Deferred Tax Assets Net operating loss carryforwards $ 2,914,731 $ 4,156,406 Fixed assets (37,801 ) Accrued interest Intangibles Stock based compensation 430,907 579,085 Other accruals 24,390 53,185 Total Deferred Tax Assets 3,332,227 4,788,677 Deferred Tax Liabilities Stock based compensation Intangibles (249,530 ) (482,121 ) Prepaid expenses (12,620 ) (14,623 ) Total Deferred Tax Liabilities (262,150 ) (496,744 ) Net Deferred Tax Assets 3,070,707 4,291,933 Valuation Allowance (3,070,707 ) (4,291,933 ) Net deferred tax / (liabilities) $ $ |
STOCK OPTIONS, AWARDS AND WAR_2
STOCK OPTIONS, AWARDS AND WARRANTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of stock options, common stock awards and stock warrants | Transactions involving our stock options for the year to date period ending June 30, 2019 are summarized as follows: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term ( Years) Aggregate Intrinsic Value Outstanding December 31, 2018 547,662 $ 5.27 2.7 $ Granted (weighted-average fair value of $2.21 per share) 696,252 3.45 3.0 842,465 Exercised Forfeited (2,400 ) 13.50 Outstanding June 30, 2019 1,241,514 4.24 2.3 521,436 Vested (exercisable) June 30, 2019 348,933 6.15 2.3 Expected to vest after June 30, 2019 (unexercisable) 892,581 $ 3.49 2.3 $ 1,044,320 | Transactions involving our stock options for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 414,300 $ 6.65 575,800 $ 6.97 Granted during the period 480,236 3.57 Exercised during the period Forfeited during the period (366,874 ) 4.84 (161,500 ) 7.26 Outstanding, end of the period 537,662 $ 5.94 414,300 $ 6.97 Exercisable at the end of the period 331,993 6.8 288,630 6.65 |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of stock options, common stock awards and stock warrants | Transactions involving our stock warrants for the year to date period ended June 30, 2019 include the following: Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding December 31, 2018 4,325,423 $ 3.77 2.9 $ 3,849,626 Granted 399,610 4.81 5.0 Exercised (328,667 ) 3.49 0.3 384,540 Forfeited Outstanding June 30, 2019 4,396,366 3.90 2.7 3,341,238 Vested (exercisable) June 30, 2019 4,096,366 3.83 2.6 3,399,984 Expected to vest after June 30, 2019 (unexercisable) 300,000 $ 5.00 4.8 $ | Transactions involving our stock warrants for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Weighted Weighted Average Average Exercise Exercise Number Price Number Price Outstanding, beginning of the period 2,485,005 $ 5.09 2,976,863 $ 6.45 Granted during the period 2,162,058 3.00 2,121,433 3.73 Exercised during the period (95,238 ) 2.25 (428,469 ) 3 Forfeited during the period (226,402 ) 6.95 (2,184,822 ) 6.04 Outstanding, end of the period 4,325,423 5.05 2,485,005 5.09 Exercisable at the end of the period 4,325,423 5.05 2,485,005 5.09 |
Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of stock options, common stock awards and stock warrants | Transactions involving our common stock awards for the years ended December 31, 2018 and 2017, respectively, are summarized as follows: 2018 2017 Number Number Outstanding, beginning of the period 54,669 116,666 Granted during the period Vested during the period (53,334 ) (55,998 ) Forfeited during the period (1,335 ) (6,000 ) Unvested at the end of the period 54,669 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under this rental agreement are approximately as follows: For the year ended: 12/31/2019 $ 163,218 12/31/2020 $ 163,218 12/31/2021 $ 163,218 12/31/2022 $ 163,218 12/31/2023 $ 133,295 $ 786,167 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The Company had no financial assets or liabilities as of December 31, 2018 and 2017: Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2018 (Level 1) (Level 2) (Level 3) Debenture warrant liability $ 4,323,499 $ 4,323,499 Leapfrog warrant liability 622,436 622,436 Derivative liability 496,260 496,260 Put liability Total liabilities $ 5,442,195 $ $ $ 5,442,195 Securities: Certificates of deposit Money Market funds U.S. government-sponsored agency securities 2,723,264 2,723,264 Total assets $ 2,723,264 $ 2,723,264 $ $ Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Debenture warrant liability $ 7,256,863 $ 7,256,863 Leapfrog warrant liability 1,873,107 1,873,107 Derivative liability 2,026,031 2,026,031 Put liability Total liabilities $ 11,156,001 $ $ $ 11,156,001 Securities: Certificates of deposit Money Market funds U.S. government-sponsored agency securities Total assets $ $ $ $ |
Schedule of reconciliation of derivative and warrant liability measured at fair value | A reconciliation of the beginning and ending balances for the derivative and warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows): Outstanding, beginning of the period $ 11,156,003 $ Initial derivative liability on issuance of warrants 3,240,127 7,453,615 Change in fair value (8,953,933 ) 4,134,166 Less accretion and conversion of debenture warrants (431,780 ) Warrant liabilities $ 5,442,195 $ 11,156,001 |
Restatement (Tables)
Restatement (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Impact of Restatement | Below weve presented the 2017 Financial Statements as previously reported with a reconciliation to the restated financials: Summary of Restatement Consolidated Balance Sheet 2017 Adjustments 2017 As Restated Assets Current assets: Cash and cash equivalents $ 1,017,299 $ $ 1,017,299 Accounts receivable, net 4,348,305 4,348,305 Prepaid expenses 468,336 468,336 Other current assets 300,898 300,898 Total current assets 6,134,838 6,134,838 Property and equipment, net 154,546 154,546 Goodwill 15,644,957 15,644,957 Intangible assets, net 1,642,760 1,642,760 Other assets 28,598 28,598 Total assets $ 23,605,699 $ $ 23,605,699 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses 5,010,815 5,010,815 Debenture warrant liability 7,256,864 7,256,864 Leapfrog warrant liability 1,873,107 1,873,107 Derivative liability 2,026,031 2,026,031 Put liability Total current liabilities 5,010,815 11,156,002 16,166,817 Secured convertible debentures, net 1,711,146 (186,554 ) 1,524,592 Total liabilities 6,721,961 10,969,448 17,691,409 Commitments and contingencies (Note 11) Stockholders' equity: Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively Class A common stock, authorized 250,000,000 shares, $0.001 par value, 10,109,530 and 9,910,565 shares issued and outstanding at December 31, 2018 and 2017, respectively 9,911 9,911 Class B common stock, authorized 9,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively Common stock to be issued 879,500 879,500 Additional paid in capital 37,143,033 (4,596,213 ) 32,546,820 Accumulated deficit (21,148,706 ) (6,373,235 ) (27,521,941 ) Total stockholders' equity 16,883,738 (10,969,448 ) 5,914,290 Total liabilities and stockholders' equity $ 23,605,699 $ $ 23,605,699 The adjustments to the consolidated balance sheet reflect the effect of adjusting certain warrants from equity reporting to liability reporting. Summary of Restatement Consolidated Statement of Operations Adjustments 2017 Adjustments 2017 As Restated Revenue $ 23,348,714 $ $ 23,348,714 Cost of revenue 9,328,893 9,328,893 Gross profit 14,019,821 14,019,821 Operating expense: General, selling and administrative expense 17,016,789 17,016,789 Impairment of goodwill Write off of non-compete agreement 468,750 468,750 Restructuring Costs 377,961 377,961 Operating expense 17,863,500 17,863,500 Loss from operations (3,843,679 ) (3,843,679 ) Other income (expense): Interest expense (713,826 ) (2,068,221 ) (2,782,047 ) Amortization of debt issuance costs (2,101,377 ) 1,018,548 (1,082,829 ) Total Interest Expense (2,815,203 ) (1,049,673 ) (3,864,876 ) Gain on sale of Assets Accretion of beneficial conversion feature (925,748) (925,748) Accretion of debenture discount and warrants (263,648 ) (263,648 ) Change in Fair Value of Warrant Liability (4,134,166 ) (4,134,166 ) Other non-operating income / (expense) (5,323,562 ) (5,323,562 ) Total other income / (expense) (2,815,203 ) (6,373,235 ) (9,188,438 ) Income / (Loss) before provision for income taxes (6,658,882 ) (6,373,235 ) (13,032,117 ) Provision for income taxes Net income / (loss) $ (6,658,882 ) $ (6,373,235 ) $ (13,032,117 ) Net income / (loss) per share, basic and diluted $ (0.81 ) (0.77 ) $ (1.58 ) Weighted average shares outstanding Basic 8,253,851 8,253,851 8,253,851 Diluted 8,253,851 8,253,851 8,253,851 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
General, selling and administrative expense | $ 5,114,115 | $ 5,392,625 | $ 9,605,377 | $ 9,522,883 | $ 18,442,839 | $ 17,016,789 | |||
Net income (loss) | (8,098,651) | $ (5,785,404) | (4,021,410) | $ 11,068 | (13,884,055) | (4,010,344) | 8,743,593 | (13,032,117) | |
Accumulated deficit | $ (27,521,941) | (32,662,403) | (27,510,876) | (32,662,403) | (27,510,876) | (18,778,348) | (27,521,941) | ||
Big Token, Inc. [Member] | |||||||||
General, selling and administrative expense | 209,181 | 1,012,528 | 614,760 | 1,707,211 | 913,229 | 1,970,677 | 209,181 | ||
Net income (loss) | (209,623) | (1,043,182) | $ (721,466) | $ (621,821) | $ (306,395) | (1,764,648) | $ (928,216) | (2,044,054) | (209,623) |
Accumulated deficit | $ (209,623) | (4,018,325) | (4,018,325) | $ (2,253,677) | $ (209,623) | ||||
Working capital (deficit) | $ 4,316,757 | $ 4,316,757 |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Apr. 10, 2019USD ($) | Apr. 30, 2019USD ($) | Apr. 30, 2017USD ($) | Jan. 31, 2017USD ($) | Jan. 31, 2012shares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)Itemshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) |
Net income (loss) | $ (8,098,651) | $ (5,785,404) | $ (4,021,410) | $ 11,068 | $ (13,884,055) | $ (4,010,344) | $ 8,743,593 | $ (13,032,117) | ||||||
Accumulated deficit | 32,662,403 | 27,510,876 | 32,662,403 | 27,510,876 | 18,778,348 | 27,521,941 | ||||||||
Allowance for doubtful accounts | $ 48,741 | $ 59,703 | ||||||||||||
Number of operating segments | Item | 1 | |||||||||||||
Antidilutive common share equivalents | shares | 4,853,085 | 5,246,692 | ||||||||||||
Cash and cash equivalents | $ 2,465,639 | $ 41,036 | 2,465,639 | 41,036 | $ 2,784,865 | $ 1,017,299 | $ 1,048,762 | |||||||
Decline in revenue from preceding period | 5,312,224 | 13,468,106 | ||||||||||||
Equity debt financing | ||||||||||||||
Convertible debentures redeemed | 6,500,000 | |||||||||||||
Capitalized software development costs | 960,157 | 694,914 | ||||||||||||
Proceeds from the sale of stock | $ 4,566,405 | $ 3,830,000 | 7,228,709 | $ 4,020,401 | ||||||||||
Subsequent Event [Member] | ||||||||||||||
Proceeds from the sale of stock | $ 6,200,000 | $ 6,500,000 | ||||||||||||
United States Treasury bills [Member] | ||||||||||||||
Cash and cash equivalents | $ 2,723,264 | |||||||||||||
Internally Developed Software [Member] | ||||||||||||||
Intangible assets estimated useful life | 3 years | |||||||||||||
Minimum [Member] | ||||||||||||||
Property and equipment estimated useful life | 3 years | |||||||||||||
Intangible assets estimated useful life | 5 years | |||||||||||||
Maximum [Member] | ||||||||||||||
Property and equipment estimated useful life | 7 years | |||||||||||||
Intangible assets estimated useful life | 6 years | |||||||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||||||||
Concentration risk percentage | 75.10% | 59.50% | ||||||||||||
Social Reality Llc [Member] | ||||||||||||||
Effective date of business acquisition | Jan. 1, 2012 | |||||||||||||
Social Reality Llc [Member] | Class A and Class B Common Stock [Member] | ||||||||||||||
Percentage ownership | 100.00% | |||||||||||||
Shares issued in business acquisition | shares | 2,465,753 | |||||||||||||
SRAXmd [Member] | ||||||||||||||
Consideration | $ 43,500,000 | $ 33,500,000 |
BIGTOKEN POINT LIABILITY (Narra
BIGTOKEN POINT LIABILITY (Narrative) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Big Token, Inc. [Member] | ||
BIGtoken Point Liability | $ 186,800 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 13, 2017 | Dec. 31, 2016 | |
General, selling and administrative expense | $ 5,114,115 | $ 5,392,625 | $ 9,605,377 | $ 9,522,883 | $ 18,442,839 | $ 17,016,789 | |||||
Net income (loss) | 8,098,651 | $ 5,785,404 | 4,021,410 | $ (11,068) | 13,884,055 | 4,010,344 | (8,743,593) | 13,032,117 | |||
Accumulated deficit | $ 27,521,941 | 32,662,403 | 27,510,876 | 32,662,403 | 27,510,876 | 18,778,348 | 27,521,941 | ||||
Cash and cash equivalents | 1,017,299 | 2,465,639 | 41,036 | 2,465,639 | 41,036 | 2,784,865 | 1,017,299 | $ 1,048,762 | |||
Working capital deficit | 8,534,224 | 8,534,224 | 3,549,408 | ||||||||
Software development costs | 543,617 | 451,168 | 960,988 | 634,914 | |||||||
Big Token, Inc. [Member] | |||||||||||
General, selling and administrative expense | 209,181 | 1,012,528 | 614,760 | 1,707,211 | 913,229 | 1,970,677 | 209,181 | ||||
Net income (loss) | 209,623 | 1,043,182 | $ 721,466 | 621,821 | $ 306,395 | 1,764,648 | 928,216 | 2,044,054 | 209,623 | ||
Accumulated deficit | 209,623 | 4,018,325 | 4,018,325 | 2,253,677 | 209,623 | ||||||
Cash and cash equivalents | |||||||||||
Working capital deficit | 220,677 | 2,455,486 | 220,677 | ||||||||
Software development costs | $ 12,496 | 152,288 | 78,415 | 225,011 | 12,496 | ||||||
Amortization expense | 37,000 | ||||||||||
Advertising costs | 4,491 | 0 | |||||||||
Cryptocurrency impairment | $ 596 | $ 1,772 | $ 5,260 | $ 35,474 | $ 0 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
General, selling and administrative expense | $ 5,114,115 | $ 5,392,625 | $ 9,605,377 | $ 9,522,883 | $ 18,442,839 | $ 17,016,789 | |||
Net income (loss) | (8,098,651) | $ (5,785,404) | (4,021,410) | $ 11,068 | (13,884,055) | (4,010,344) | 8,743,593 | (13,032,117) | |
Accumulated deficit | 32,662,403 | 27,510,876 | 32,662,403 | 27,510,876 | 18,778,348 | 27,521,941 | |||
Cash and cash equivalents | 2,465,639 | $ 41,036 | 2,465,639 | $ 41,036 | 2,784,865 | $ 1,017,299 | $ 1,048,762 | ||
Working capital deficit | 8,534,224 | 8,534,224 | 3,549,408 | ||||||
Operating losses | 13,884,055 | 11,648,703 | |||||||
Decline in revenue from preceding period | 5,312,224 | 13,468,106 | |||||||
Negative working capital | $ 8,533,924 | 8,533,924 | |||||||
Convertible debentures redeemed | 6,500,000 | ||||||||
SRAXmd [Member] | |||||||||
Consideration | $ 43,500,000 | $ 33,500,000 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Schedule of Lease Asset and Liability Accounts) (Details) | Jun. 30, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets - non-current | $ 466,253 |
Operating lease liabilities - current | 139,782 |
Operating lease liabilities - non-current | 326,471 |
Total operating lease liabilities | $ 466,253 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Schedule of Component of Lease Expense) (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating lease cost | $ 76,277 | $ 152,842 |
Variable lease cost | ||
Short-term lease cost | ||
Total lease costs | $ 76,277 | $ 152,842 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Schedule of Weighted Average Remaining Lease Term) (Details) | Jun. 30, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Weighted average remaining lease term | 4 years 2 months 30 days |
Weighted average discount rate | 18.00% |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNT POLICIES (Schedule of Future Contractual Lease Payments) (Details) | Jun. 30, 2019USD ($) |
Operating Leases - future payments | |
2019 (remaining) | $ 81,609 |
2020 | 163,218 |
2021 | 163,218 |
2022 | 163,218 |
2023 | 133,296 |
Total future lease payments, undiscounted | 704,559 |
Less: Implied interest | (238,306) |
Total operating lease liabilities | $ 466,253 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES (Narrative) (Details) - USD ($) | Aug. 06, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||
Gain on sale of assets | $ (77,373) | $ (22,165) | $ 395,106 | $ (22,165) | $ 22,108,028 | ||
SRAXmd [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Asset sale | $ 52,500,000 | ||||||
Cash consideration | 33,000,000 | ||||||
Equity isssuance | 10,000,000 | ||||||
Earn-out provision upon the SRAXmd product line achieving certain gross profit thresholds | 9,000,000 | ||||||
Purchase price of future release | 762,500 | ||||||
Accounts receivable | 3,536,503 | ||||||
Prepaid expense | 216,479 | ||||||
Accounts payable | 191,164 | ||||||
Additional accrued expense | 333,014 | ||||||
Over-delivery of working capital | 196,055 | ||||||
Contractual working capital | 3,000,000 | ||||||
Advisory fees | 1,709,500 | ||||||
Legal fees | 351,089 | ||||||
Insurance premiums and escrow related fees | 164,028 | ||||||
Transaction costs | $ 1,870,361 | ||||||
Gain on sale of assets | 22,108,028 | ||||||
Net proceeds on closing of escrow | $ 22,980,824 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES (Schedule of Gain on Sale of Assets) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Carrying amount of Assets Sold | ||||||
Gain on Sale | $ (77,373) | $ (22,165) | $ 395,106 | $ (22,165) | $ 22,108,028 | |
SRAXmd [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash Proceeds | 32,966,303 | |||||
Fair Value of Interest Retained | ||||||
Carrying amount of Assets Sold | ||||||
Fixed Assets | (117,000) | |||||
Working Capital | (3,228,803) | |||||
Transactions Fees & Sales Commissions | (7,512,472) | |||||
Gain on Sale | $ 22,108,028 |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES (Schedule of Income from Discontinued Operations) (Details) - SRAXmd [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | $ 4,603,366 | $ 6,306,613 | $ 11,077,503 | |
Cost of Sales | 1,082,389 | 1,101,080 | 1,998,395 | |
Gross Profit | $ 3,520,977 | $ 5,205,533 | $ 9,079,108 | |
Gross Margin | 0.00% | 76.49% | 82.54% | 81.96% |
General, Sales & Administrative expense | $ 1,438,957 | $ 2,896,193 | $ 2,028,407 | |
Operating Income | $ 2,082,020 | $ 2,309,340 | $ 7,050,702 |
NOTES PAYABLE (Financing Agreem
NOTES PAYABLE (Financing Agreement with Victory Park Management, LLC) (Details) - USD ($) | Oct. 27, 2017 | Aug. 22, 2016 | Feb. 16, 2016 | Jan. 26, 2016 | Oct. 26, 2015 | Jul. 06, 2015 | Oct. 30, 2014 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 24, 2018 | Oct. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 5 | $ 10 | $ 7.50 | |||||||||||||
Amortization of debt issue costs | $ 482,588 | $ 918,254 | $ 1,026,220 | $ 1,082,829 | ||||||||||||
Costs related to agreement | 582,392 | |||||||||||||||
Repayments of note payable | $ 6,545,157 | 3,996,928 | ||||||||||||||
PIK interest expense accrued to principal | ||||||||||||||||
Common Class A [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 1.40 | |||||||||||||||
Financing Agreement [Member] | Victory Park Management, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate (as a percent) | 10.00% | 10.00% | 10.00% | |||||||||||||
Paid-in-kind interest rate (as a percent) | 4.00% | 4.00% | ||||||||||||||
Exercise price of warrants | $ 5 | |||||||||||||||
Percentage of revenue used as base to calculate purchase price | 50.00% | |||||||||||||||
Amount used as base to calculate purchase price | $ 1,567,612 | $ 1,500,000 | ||||||||||||||
Amortization of debt issue costs | 2,101,377 | |||||||||||||||
Costs related to agreement | $ 3,178,011 | |||||||||||||||
Maturity date | Dec. 31, 2016 | Oct. 30, 2017 | Oct. 30, 2017 | Oct. 30, 2017 | Oct. 30, 2017 | |||||||||||
PIK interest expense accrued to principal | $ 67,612 | $ 67,612 | ||||||||||||||
Financing Agreement [Member] | Victory Park Management, LLC [Member] | Common Class A [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Number of shares callable by warrant | 580,000 | |||||||||||||||
Financing Agreement [Member] | Victory Park Management, LLC [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Paid-in-kind interest rate (as a percent) | 4.00% | |||||||||||||||
Financing Agreement [Member] | Victory Park Management, LLC [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Paid-in-kind interest rate (as a percent) | 2.00% |
NOTES PAYABLE (Financing Agre_2
NOTES PAYABLE (Financing Agreement with Fast Pay Partners, LLC) (Details) - Financing Agreement [Member] - Fast Pay Partners, LLC [Member] - USD ($) | 1 Months Ended | |
Apr. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Notes issued | $ 106,920 | |
Percentage of accounts receivable pledged | 80.00% | |
Maximum amount of advances pledged | $ 4,000,000 | |
Concentration limitation on percentage of debt from any single customer | 25.00% | |
Concentration limitation on percentage of debt from larger customer | 30.00% |
NOTES PAYABLE (Secured Converti
NOTES PAYABLE (Secured Convertible Debentures, Net) (Details) - USD ($) | May 13, 2019 | Apr. 10, 2019 | Apr. 08, 2019 | Apr. 02, 2019 | Feb. 11, 2019 | Oct. 31, 2017 | Jan. 04, 2017 | Dec. 29, 2016 | Apr. 30, 2019 | Sep. 30, 2018 | Oct. 26, 2017 | Apr. 30, 2017 | Apr. 28, 2017 | Apr. 21, 2017 | Jan. 31, 2017 | Dec. 31, 2018 | Jan. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 24, 2018 | Nov. 16, 2016 | Sep. 19, 2016 |
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Sale of common stock | $ 4,566,405 | $ 3,830,000 | $ 7,228,709 | $ 4,020,401 | ||||||||||||||||||||
Stock issued for reimbursement of expenses, shares | 100,000 | |||||||||||||||||||||||
Exercise price of warrant | $ 5 | $ 5 | $ 10 | $ 7.50 | ||||||||||||||||||||
Repayments of note payable | $ 6,545,157 | $ 3,996,928 | ||||||||||||||||||||||
Initial derivative liability on issuance of debenture warrants | $ 0 | 0 | ||||||||||||||||||||||
Fair value of debenture warrants | 4,323,499 | $ 8,215,035 | 4,323,499 | 7,256,864 | ||||||||||||||||||||
Conversion of debentures | $ 300,000 | $ 3,335,000 | ||||||||||||||||||||||
Interest expense on convertible debenture | 764,090 | |||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Sale of common stock | $ 6,200,000 | $ 6,500,000 | ||||||||||||||||||||||
Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Fee percentage of proceeds | 4.00% | |||||||||||||||||||||||
Series A1 Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 2.245 | |||||||||||||||||||||||
Risk-free interest rate | 1.875% | 1.875% | ||||||||||||||||||||||
Expected term | 5 years 6 months | 5 years 6 months | ||||||||||||||||||||||
Expected volatility | 109.00% | 109.00% | ||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||
Fair value of debenture warrants | $ 1,228,000 | 868,000 | $ 868,000 | $ 2,641,000 | ||||||||||||||||||||
Series A1 Warrants [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Risk-free interest rate | 2.73% | 2.73% | ||||||||||||||||||||||
Expected term | 3 years 4 months 18 days | 3 years 4 months 18 days | ||||||||||||||||||||||
Expected volatility | 164.00% | 164.00% | ||||||||||||||||||||||
Series A1 Warrants [Member] | Maximum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Risk-free interest rate | 2.73% | 2.73% | ||||||||||||||||||||||
Expected term | 4 years 4 months 18 days | 4 years 4 months 18 days | ||||||||||||||||||||||
Expected volatility | 167.00% | 167.00% | ||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds used to satisfy put obligation | 2,500,000 | |||||||||||||||||||||||
Risk-free interest rate | 1.80% | |||||||||||||||||||||||
Expected term | 5 years | |||||||||||||||||||||||
Expected volatility | 101.00% | |||||||||||||||||||||||
Dividend yield | 0.00% | |||||||||||||||||||||||
Warrant [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 160,000 | |||||||||||||||||||||||
Warrant [Member] | Aspenwood Capital [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 3.75 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 23,337 | |||||||||||||||||||||||
Warrant [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Expected term | 1 year | |||||||||||||||||||||||
Warrant [Member] | Maximum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Expected term | 7 years | |||||||||||||||||||||||
Series B Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds used to satisfy put obligation | 2,500,000 | |||||||||||||||||||||||
Risk-free interest rate | 2.00% | 2.50% | ||||||||||||||||||||||
Expected term | 5 years | 3 years 11 months 1 day | ||||||||||||||||||||||
Expected volatility | 110.00% | 155.00% | ||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||||||||||||||
Fair value of debenture warrants | $ 3,038,344 | $ 1,201,000 | $ 1,201,000 | |||||||||||||||||||||
Conversion of debentures, shares | 1,090,862 | |||||||||||||||||||||||
Series B Warrants [Member] | April 21, 2022 [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Warrant expired | 277,500 | |||||||||||||||||||||||
Series B Warrants [Member] | October 27, 2022 [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Warrant expired | 813,362 | |||||||||||||||||||||||
Redemption Penalty Warrants [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Percentage of prepayment penalty | 2.00% | |||||||||||||||||||||||
Common Class A [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock issued, shares | 761,905 | 100,000 | 100,000 | |||||||||||||||||||||
Stock issued for reimbursement of expenses, shares | 225,000 | |||||||||||||||||||||||
Exercise price of warrant | $ 1.40 | |||||||||||||||||||||||
Common Class A [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock issued, shares | 220,000 | |||||||||||||||||||||||
Common Class A [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 6.50 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 76,190 | |||||||||||||||||||||||
Common Class A [Member] | Series A1 Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 6.70 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 380,953 | |||||||||||||||||||||||
Common Class A [Member] | Warrant [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Interest rate | 12.50% | |||||||||||||||||||||||
Stock issued, shares | 863,365 | |||||||||||||||||||||||
Exercise price of warrant | $ 3 | $ 7.50 | $ 5 | |||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 400,000 | 642,000 | ||||||||||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 7 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 380,953 | |||||||||||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 1.20 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debenture principal amount | $ 5,000,000 | |||||||||||||||||||||||
Interest rate | 12.50% | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Affiliate of Noble [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debenture principal amount | $ 720,000 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 120,000 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Three Broker-Dealers [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Placement agent commissions | $ 276,700 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Placement agent commissions - cash | $ 149,021 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Chardan Capital Markets, LLC [Member] | PA Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock issued, shares | 160,000 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Aspenwood Capital [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Placement agent commissions - cash | $ 70,000 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Aspenwood Capital [Member] | PA Warrants [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock issued, shares | 23,337 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Warrant [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debenture principal amount | $ 5,180,157 | |||||||||||||||||||||||
Interest rate | 12.50% | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Threshhold of ownership | 20.00% | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Sale of common stock | $ 6,750,000 | $ 1,105,333 | ||||||||||||||||||||||
Stock issued, shares | 1,687,825 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 310,487 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Colorado Financial Service Corporation [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 3.75 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 7,700 | |||||||||||||||||||||||
Exercise period of warrants | 5 years | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Noble Capital Markets [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 3 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 66,800 | |||||||||||||||||||||||
Exercise period of warrants | 6 months | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 3.75 | |||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 100,000 | |||||||||||||||||||||||
Exercise period of warrants | 5 years | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Minimum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 3.56 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 7.50 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Series A1 Warrants [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Exercise price of warrant | $ 1.40 | |||||||||||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Warrant [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 863,365 | |||||||||||||||||||||||
Exercise period of warrants | 5 years | |||||||||||||||||||||||
Convertible Debt [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debenture principal amount | $ 6,545,157 | $ 6,545,157 | ||||||||||||||||||||||
Exercise price of warrant | $ 3 | $ 3 |
SECURED CONVERTIBLE DEBENTURE_3
SECURED CONVERTIBLE DEBENTURES, NET (Narrative) (Details) - USD ($) | Jan. 04, 2017 | Dec. 29, 2016 | Nov. 29, 2018 | Sep. 30, 2018 | Oct. 26, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 24, 2018 | Oct. 31, 2017 |
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds from the sale of stock | $ 4,566,405 | $ 3,830,000 | $ 7,228,709 | $ 4,020,401 | ||||||||||||
Stock issued for reimbursement of expenses, shares | 100,000 | |||||||||||||||
Exercise price of warrants | $ 5 | $ 10 | $ 7.50 | |||||||||||||
Common Stock, shares authorized | 259,000,000 | 259,000,000 | ||||||||||||||
Amortization of debt discount and deferred financing costs | $ 482,588 | $ 918,254 | $ 1,026,220 | $ 1,082,829 | ||||||||||||
Value assigned to conversion feature | 1,405,540 | |||||||||||||||
Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Fee percentage of proceeds | 4.00% | |||||||||||||||
Series A1 Debentures [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | 3,408,629 | |||||||||||||||
Proceeds from the sale of stock | 4,639,629 | |||||||||||||||
Series A1 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | 1,288,000 | |||||||||||||||
Series A2 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | 2,856,108 | |||||||||||||||
Series A2 Debentures [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | 1,405,540 | |||||||||||||||
Proceeds from the sale of stock | 4,261,684 | |||||||||||||||
Series B Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds used to satisfy put obligation | 2,500,000 | |||||||||||||||
Series A1 and A2 Debentures [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 6,545,157 | |||||||||||||||
Percentage of conversion shares issuable | 50.00% | |||||||||||||||
Percentage of prepayment penalty | 10.00% | |||||||||||||||
Series B1 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3 | |||||||||||||||
Exercise period of warrants | 5 years | 5 years | ||||||||||||||
Series B1 Warrants [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 1.40 | |||||||||||||||
Warrant One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 277,500 | |||||||||||||||
Maturity date | Apr. 21, 2022 | |||||||||||||||
Warrant One [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3.75 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 129,176 | |||||||||||||||
Warrant Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 813,362 | |||||||||||||||
Maturity date | Oct. 27, 2022 | |||||||||||||||
Warrant Two [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 4.49 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 54,161 | |||||||||||||||
Common Class A [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Stock issued, shares | 761,905 | 100,000 | 100,000 | |||||||||||||
Stock issued for reimbursement of expenses, shares | 225,000 | |||||||||||||||
Exercise price of warrants | $ 1.40 | |||||||||||||||
Conversion price | $ 1.40 | |||||||||||||||
Common Stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||||
Common Class A [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 6.50 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 76,190 | |||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 7 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 380,953 | |||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 1.20 | |||||||||||||||
Common Class A [Member] | Series B1 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 1,090,862 | |||||||||||||||
Securities Purchase Agreements [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 5,000,000 | |||||||||||||||
Interest rate | 12.50% | |||||||||||||||
Securities Purchase Agreements [Member] | Affiliate of Noble [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 720,000 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 120,000 | |||||||||||||||
Securities Purchase Agreements [Member] | Three Broker-Dealers [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Placement agent commissions | $ 276,700 | |||||||||||||||
Securities Purchase Agreements [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Placement agent commissions - cash | $ 149,021 | |||||||||||||||
Securities Purchase Agreements [Member] | Aspenwood [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Placement agent commissions - cash | 70,000 | |||||||||||||||
Securities Purchase Agreements [Member] | Series A1 Debentures [Member] | Greenshoe [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 2,000,000 | |||||||||||||||
Securities Purchase Agreements [Member] | Series A2 Warrants [Member] | Greenshoe [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Stock issued, shares | 630,030 | |||||||||||||||
Exercise price of warrants | $ 3 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 333,335 | |||||||||||||||
Securities Purchase Agreements [Member] | Series A2 Warrants [Member] | Minimum [Member] | Greenshoe [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 1.40 | |||||||||||||||
Securities Purchase Agreements [Member] | Series A2 Debentures [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 5,180,157 | |||||||||||||||
Interest rate | 12.50% | |||||||||||||||
Maturity date | Apr. 21, 2020 | |||||||||||||||
Securities Purchase Agreements [Member] | Series A2 Debentures [Member] | Greenshoe [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debenture principal amount | $ 3,180,157 | |||||||||||||||
Securities Purchase Agreements [Member] | PA Warrants [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Stock issued, shares | 160,000 | |||||||||||||||
Exercise price of warrants | $ 3.75 | |||||||||||||||
Exercise period of warrants | 5 years 6 months | |||||||||||||||
Securities Purchase Agreements [Member] | PA Warrants [Member] | Aspenwood [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Stock issued, shares | 23,337 | |||||||||||||||
Exercise price of warrants | $ 4.49 | |||||||||||||||
Exercise period of warrants | 5 years 6 months | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Threshhold of ownership | 20.00% | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Colorado Financial Service Corporation [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3.75 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 7,700 | |||||||||||||||
Exercise period of warrants | 5 years | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Noble Capital Markets [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 66,800 | |||||||||||||||
Exercise period of warrants | 6 months | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3.75 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 100,000 | |||||||||||||||
Exercise period of warrants | 5 years | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Series A1 Debentures [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3 | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 833,337 | |||||||||||||||
Right to purchase an additional stock | $ 3,000,000 | |||||||||||||||
Exercise period of warrants | 3 years | |||||||||||||||
Premium exercise percentage during first year | 120.00% | |||||||||||||||
Premium exercise percentage during the remainder of the term | 110.00% | |||||||||||||||
Percentage of conversion shares issuable | 50.00% | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Series A1 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 3 | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Series A1 Warrants [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Exercise price of warrants | $ 1.40 | |||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Series A2 Warrants [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 863,365 |
SECURED CONVERTIBLE DEBENTURE_4
SECURED CONVERTIBLE DEBENTURES, NET (Schedule of Secured Convertible Debentures) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible Debt [Abstract] | ||
Principal Balance | $ 6,845,157 | |
Debt discount | (4,107,792) | |
Debt issuance costs | (1,026,219) | |
Convertible notes, net | $ 1,711,146 |
WARRANT LIABILITIES (Narrative)
WARRANT LIABILITIES (Narrative) (Details) - USD ($) | Jan. 04, 2017 | Nov. 29, 2018 | Apr. 30, 2017 | Apr. 28, 2017 | Apr. 21, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 |
Derivative [Line Items] | ||||||||
Fair value of warrants | $ 4,323,499 | $ 7,256,864 | $ 8,215,035 | |||||
Repurchase of warrant | $ 1,500,000 | |||||||
Series A Warrants [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.00% | 2.46% | 2.20% | |||||
Expected term | 5 years 6 months | 3 years | 4 years | |||||
Expected volatility | 110.00% | 167.00% | 164.00% | |||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||
Fair value of warrants | $ 3,038,344 | $ 496,000 | $ 2,026,000 | |||||
Series B Warrants [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.00% | 2.50% | ||||||
Expected term | 5 years | 3 years 11 months 1 day | ||||||
Expected volatility | 110.00% | 155.00% | ||||||
Dividend yield | 0.00% | 0.00% | ||||||
Fair value of warrants | $ 3,038,344 | $ 1,201,000 | ||||||
Repurchase of warrant | $ 2,500,000 | |||||||
Loss on repurchase of stock | $ 2,053,975 | |||||||
Change in fair value of derivative liability | $ 1,529,771 | |||||||
Series A1 Warrants [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 1.875% | 1.875% | ||||||
Expected term | 5 years 6 months | 5 years 6 months | ||||||
Expected volatility | 109.00% | 109.00% | ||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Fair value of warrants | $ 1,228,000 | $ 868,000 | $ 2,641,000 | |||||
Change in fair value of derivative liability | $ (1,774,000) | $ 1,419,000 | ||||||
Series A1 Warrants [Member] | Minimum [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.73% | 2.73% | ||||||
Expected term | 3 years 4 months 18 days | 3 years 4 months 18 days | ||||||
Expected volatility | 164.00% | 164.00% | ||||||
Series A1 Warrants [Member] | Maximum [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.73% | 2.73% | ||||||
Expected term | 4 years 4 months 18 days | 4 years 4 months 18 days | ||||||
Expected volatility | 167.00% | 167.00% | ||||||
Series A2 Warrants [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.03% | |||||||
Expected term | 5 years 6 months | |||||||
Expected volatility | 122.00% | |||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||
Fair value of warrants | $ 2,856,000 | $ 1,446,000 | $ 4,615,000 | |||||
Change in fair value of derivative liability | $ (3,170,000) | $ 1,759,000 | ||||||
Series A2 Warrants [Member] | Minimum [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.20% | 2.20% | ||||||
Expected term | 3 years 10 months 17 days | 3 years 10 months 17 days | ||||||
Expected volatility | 158.00% | 158.00% | ||||||
Series A2 Warrants [Member] | Maximum [Member] | ||||||||
Derivative [Line Items] | ||||||||
Risk-free interest rate | 2.46% | 2.46% | ||||||
Expected term | 4 years 10 months 17 days | 4 years 10 months 17 days | ||||||
Expected volatility | 161.00% | 161.00% | ||||||
Series B1 Warrants [Member] | ||||||||
Derivative [Line Items] | ||||||||
Exercise period of warrants | 5 years | 5 years | ||||||
Risk-free interest rate | 2.90% | |||||||
Expected term | 5 years | |||||||
Expected volatility | 162.00% | |||||||
Dividend yield | 0.00% | |||||||
Fair value of warrants | $ 3,240,000 |
WARRANT LIABILITIES (Summary of
WARRANT LIABILITIES (Summary of Warrant Liabilities 10Q) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right [Line Items] | ||||||
Outstanding, beginning of the period | $ 5,442,195 | $ 11,156,001 | $ 11,156,001 | |||
Initial derivative liability on issuance of warrants | 3,240,127 | 7,453,615 | ||||
Change in fair value | (8,953,933) | 4,134,166 | ||||
Less accretion and conversion of debenture warrants | (431,780) | |||||
Warrant liabilities | 5,442,195 | 11,156,001 | ||||
Debenture Warrant Liability [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Outstanding, beginning of the period | $ 5,901,222 | 4,323,357 | $ 4,847,420 | 7,256,864 | 7,256,864 | |
Change in fair value | 2,313,813 | 1,577,865 | 862,115 | (2,409,444) | ||
Adjustments to Warrants Outstanding | ||||||
Warrant liabilities | 8,215,035 | 5,901,222 | 5,709,535 | 4,847,420 | 4,323,357 | 7,256,864 |
Leapfrog Warrant Liability [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Outstanding, beginning of the period | 830,368 | 622,296 | 1,243,936 | 1,873,107 | 1,873,107 | |
Change in fair value | 330,982 | 208,072 | 269,127 | (629,171) | ||
Adjustments to Warrants Outstanding | ||||||
Warrant liabilities | 1,161,350 | 830,368 | 1,513,063 | 1,243,936 | 622,296 | 1,873,107 |
Derivative Liability [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Outstanding, beginning of the period | 672,155 | 496,241 | 1,340,951 | 2,026,031 | 2,026,031 | |
Change in fair value | 230,760 | 175,914 | 210,950 | (685,080) | ||
Adjustments to Warrants Outstanding | (328,627) | |||||
Warrant liabilities | $ 902,915 | $ 672,155 | $ 1,223,274 | $ 1,340,951 | $ 496,241 | $ 2,026,031 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | May 13, 2019USD ($)$ / sharesshares | Dec. 16, 2018USD ($)$ / sharesshares | Sep. 11, 2018USD ($)$ / sharesshares | Jan. 24, 2018$ / sharesshares | Oct. 31, 2017USD ($)$ / sharesshares | Jan. 04, 2017USD ($)$ / sharesshares | Jan. 02, 2017USD ($)shares | Dec. 29, 2016USD ($)$ / sharesshares | Sep. 19, 2016USD ($)$ / sharesshares | Mar. 27, 2019USD ($)$ / sharesshares | Oct. 31, 2018shares | Sep. 30, 2018USD ($)$ / sharesshares | Aug. 31, 2018USD ($)shares | Jul. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2018$ / sharesshares | Mar. 31, 2018shares | Jan. 31, 2018USD ($)shares | Sep. 15, 2017USD ($)shares | Aug. 31, 2017shares | Apr. 30, 2017USD ($) | Apr. 28, 2017 | Apr. 21, 2017 | Mar. 31, 2017USD ($)shares | Feb. 28, 2017USD ($)shares | Jan. 31, 2017USD ($) | Oct. 31, 2016$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)shares | Jan. 31, 2018USD ($)shares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Aug. 06, 2018shares | Nov. 16, 2016USD ($)$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||||||||||||||||||||
Preferred Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 259,000,000 | 259,000,000 | ||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock | $ | ||||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 7.50 | $ 5 | $ 10 | |||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 859,500 | $ 1,009,500 | $ 879,500 | |||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 100,000 | |||||||||||||||||||||||||||||||||||
Common stock to be issued | $ | 879,500 | |||||||||||||||||||||||||||||||||||
Repayments of note payable | $ | 6,545,157 | 3,996,928 | ||||||||||||||||||||||||||||||||||
Repurchase of warrant | $ | 1,500,000 | |||||||||||||||||||||||||||||||||||
Proceeds from the issuance of common stock units | $ | $ 4,566,405 | $ 3,830,000 | 7,228,709 | $ 4,020,401 | ||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 150,000 | $ 150,000 | ||||||||||||||||||||||||||||||||||
Debenture financing exercised | 100,000 | 226,402 | 1,223,874 | |||||||||||||||||||||||||||||||||
Proceeds from warrants exercised | $ | $ 1,146,148 | $ 50,001 | $ 100,000 | $ 1,085,004 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 150 | $ 423 | ||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 150,000 | 422,950 | ||||||||||||||||||||||||||||||||||
Stock based compensation, shares | 6,667 | 79,534 | ||||||||||||||||||||||||||||||||||
Sale of common stock and warrants for cash, shares | 1,687,825 | 1,687,825 | 761,905 | |||||||||||||||||||||||||||||||||
Exercise of warrants, shares | 328,667 | 61,482 | 328,667 | 61,482 | 78,149 | 428,469 | ||||||||||||||||||||||||||||||
Share of common stock in private placement, shares | 200,000 | 200,000 | ||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 150,000 | 300,000 | ||||||||||||||||||||||||||||||||||
Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Cash fee amount | $ | $ 160,000 | |||||||||||||||||||||||||||||||||||
Fee percentage of proceeds | 4.00% | |||||||||||||||||||||||||||||||||||
Reimbursement amount | $ | $ 15,000 | |||||||||||||||||||||||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 685,000 | 696,252 | ||||||||||||||||||||||||||||||||||
Granted during the period, exercise price | $ / shares | $ 3.42 | $ 3.45 | ||||||||||||||||||||||||||||||||||
Stock options granted, grant date fair value per option | $ / shares | $ 2.21 | |||||||||||||||||||||||||||||||||||
Awards forfeited | 2,400 | 72,498 | 161,500 | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | $ | $ 326,000 | $ 996,000 | $ 466,000 | $ 1,162,000 | $ 667,749 | $ 992,732 | ||||||||||||||||||||||||||||||
Option value | $ | $ 1,513,137 | |||||||||||||||||||||||||||||||||||
Aggregate instrinsic value of exercise price | $ / shares | $ 4.66 | |||||||||||||||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 300,000 | |||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 1.80% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 101.00% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 5 years | |||||||||||||||||||||||||||||||||||
Option Expired | Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||
Option value | $ | $ 1,138,332 | |||||||||||||||||||||||||||||||||||
Stock price | $ / shares | $ 4.99 | |||||||||||||||||||||||||||||||||||
Aggregate instrinsic value of exercise price | $ / shares | $ 4.66 | |||||||||||||||||||||||||||||||||||
Intrinsic value of warrants exercised | $ | $ 345,776 | $ 345,776 | ||||||||||||||||||||||||||||||||||
Warrant [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Award term | 5 years 6 months | |||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 160,000 | |||||||||||||||||||||||||||||||||||
Warrant [Member] | Aspenwood Capital [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 23,337 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 3.75 | |||||||||||||||||||||||||||||||||||
Warrant [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 1 year | |||||||||||||||||||||||||||||||||||
Warrant [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 7 years | |||||||||||||||||||||||||||||||||||
Series B Warrants [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 2.00% | 2.50% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 110.00% | 155.00% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 5 years | 3 years 11 months 1 day | ||||||||||||||||||||||||||||||||||
Repurchase of warrant | $ | $ 2,500,000 | |||||||||||||||||||||||||||||||||||
Series A1 Warrants [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 1.875% | 1.875% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 109.00% | 109.00% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 5 years 6 months | 5 years 6 months | ||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 2.245 | |||||||||||||||||||||||||||||||||||
Series A1 Warrants [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 2.73% | 2.73% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 164.00% | 164.00% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 3 years 4 months 18 days | 3 years 4 months 18 days | ||||||||||||||||||||||||||||||||||
Series A1 Warrants [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 2.73% | 2.73% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 167.00% | 167.00% | ||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 4 years 4 months 18 days | 4 years 4 months 18 days | ||||||||||||||||||||||||||||||||||
Warrant One [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 277,500 | |||||||||||||||||||||||||||||||||||
Warrant One [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 129,176 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 3.75 | |||||||||||||||||||||||||||||||||||
Warrant Two [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 813,362 | |||||||||||||||||||||||||||||||||||
Warrant Two [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 54,161 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 4.49 | |||||||||||||||||||||||||||||||||||
Three Employees [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 146,000 | |||||||||||||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||||||||||||
Granted during the period, exercise price | $ / shares | $ 7.50 | |||||||||||||||||||||||||||||||||||
Award term | 5 years | |||||||||||||||||||||||||||||||||||
Stock options granted, grant date fair value per option | $ / shares | $ 4.98 | |||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 1.125% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 112.00% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 5 years | |||||||||||||||||||||||||||||||||||
Chief Financial Officer [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Value of warrants at date of grant | $ | $ 220,832 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 2.56 | |||||||||||||||||||||||||||||||||||
Debenture financing exercised | 176,400 | |||||||||||||||||||||||||||||||||||
Joseph P. Hannan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Award term | 3 years | |||||||||||||||||||||||||||||||||||
Value of warrants at date of grant | $ | $ 488,106 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 4.20 | |||||||||||||||||||||||||||||||||||
Debenture financing exercised | 250,000 | |||||||||||||||||||||||||||||||||||
Share cancelled | 229,166 | |||||||||||||||||||||||||||||||||||
Contractor [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 75,000 | |||||||||||||||||||||||||||||||||||
Non-Executive Directors [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 11,252 | |||||||||||||||||||||||||||||||||||
Granted during the period, exercise price | $ / shares | $ 5.49 | |||||||||||||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 2.46% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 102.00% | |||||||||||||||||||||||||||||||||||
Share-based compensation, expected life in years | 7 years | |||||||||||||||||||||||||||||||||||
Option Expired | Apr. 15, 2026 | |||||||||||||||||||||||||||||||||||
Option value | $ | $ 60,000 | |||||||||||||||||||||||||||||||||||
Stock price | $ / shares | $ 5.49 | $ 5.49 | ||||||||||||||||||||||||||||||||||
Non-Executive Directors One [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 2,813 | |||||||||||||||||||||||||||||||||||
Non-Executive Directors Two [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 2,813 | |||||||||||||||||||||||||||||||||||
Non-Executive Directors Three [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 2,813 | |||||||||||||||||||||||||||||||||||
Non-Executive Directors Four [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Granted during the period | 2,813 | |||||||||||||||||||||||||||||||||||
Big Token, Inc. [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Preferred Stock, shares authorized | 398,000,000 | 398,000,000 | 398,000,000 | 398,000,000 | ||||||||||||||||||||||||||||||||
Preferred Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common stock to be issued | $ | ||||||||||||||||||||||||||||||||||||
Common Class B [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 9,000,000 | 9,000,000 | 9,000,000 | 9,000,000 | ||||||||||||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common Stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Common Stock, shares outstanding | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Voting rights per share | Item | 10 | |||||||||||||||||||||||||||||||||||
Common Class B [Member] | Big Token, Inc. [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common Stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||
Common Stock, shares outstanding | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||
Common Class A [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common Stock, shares issued | 12,546,022 | 12,546,022 | 10,109,530 | 9,910,565 | ||||||||||||||||||||||||||||||||
Common Stock, shares outstanding | 12,546,022 | 12,546,022 | 10,109,530 | 9,910,565 | ||||||||||||||||||||||||||||||||
Voting rights per share | Item | 1 | |||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock | $ | $ 3,980,001 | |||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock, shares | 761,905 | 100,000 | 100,000 | |||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | 1.40 | |||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 1,137,650 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 225,000 | |||||||||||||||||||||||||||||||||||
Share price | $ / shares | 3 | |||||||||||||||||||||||||||||||||||
Shares issued for stock awards that have vested | 51,667 | |||||||||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 1.40 | |||||||||||||||||||||||||||||||||||
Debt conversion shares issued | 655,000 | |||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 218,334 | |||||||||||||||||||||||||||||||||||
Debenture financing exercised | 100,000 | |||||||||||||||||||||||||||||||||||
Proceeds from warrants exercised | $ | $ 300,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Erin DeRuggiero [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Repurchas of shares | 514,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Leapfrog Media Trading [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Number of shares exchanged in asset purchase | 200,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Chardan Capital Markets, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Award term | 5 years 6 months | |||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 76,190 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 6.50 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Kathy Ireland Worldwide LLC [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 678,000 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 100,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Mr. Derek J. Ferguson [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 12,500 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 3,858 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Mr. Steven Antebi [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 540,000 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 150,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Mr. Robert Jordan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 12,500 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 6,510 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Al & J Media, Inc [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 97,500 | |||||||||||||||||||||||||||||||||||
Common stock issued for services, shares | 75,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share price | $ / shares | $ 10 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Warrant [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock | $ | $ 5,180,158 | |||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock, shares | 863,365 | |||||||||||||||||||||||||||||||||||
Value of warrants at date of grant | $ | $ 1,390,264 | |||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 642,000 | 400,000 | ||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 3 | $ 5 | $ 7.50 | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | $ | $ 274,634 | |||||||||||||||||||||||||||||||||||
Interest rate | 12.50% | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Award term | 5 years | |||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 380,953 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 7 | |||||||||||||||||||||||||||||||||||
Repurchase of warrant | $ | $ 2,500,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 1.20 | |||||||||||||||||||||||||||||||||||
Share price | $ / shares | $ 5.25 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Cashless payment amount | $ | $ 2,500,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Series A1 Warrants [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Award term | 5 years | |||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 380,953 | |||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 6.70 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Steve Antebi [Member] | Warrant [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 200,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Consultant [Member] | Warrant [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Warrants to purchase shares of common stock, number of shares total | 200,000 | |||||||||||||||||||||||||||||||||||
Advances to consultants | $ | $ 100,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Chief Financial Officer [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Stock based compensation, shares | 70,409 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Colleen DiClaudio [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Debt conversion shares issued | 7,813 | |||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 10,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Hardy Thomas [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Debt conversion shares issued | 7,195 | |||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 10,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | William Packer [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Debt conversion shares issued | 3,774 | |||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 10,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Marc Savas and Malcolm CasSelle [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Debt conversion shares issued | 3,774 | |||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ | $ 10,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Employee [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock, shares | 3,334 | 6,667 | ||||||||||||||||||||||||||||||||||
Common Class A [Member] | Employee [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock, shares | 122,950 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Joseph P. Hannan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share cancelled | 50,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Joseph P. Hannan [Member] | Equity Compensation 2016 Plan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from the sale of stock, shares | 50,000 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Joseph P. Hannan [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Share cancelled | 23,800 | |||||||||||||||||||||||||||||||||||
Common Class A [Member] | Big Token, Inc. [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Common Stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Common Stock, shares outstanding | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Non-Voting Preferred Tracking Stock [Member] | Big Token, Inc. [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Preferred Stock, shares authorized | 20,000,000 | |||||||||||||||||||||||||||||||||||
Common Stock, shares authorized | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||||
Series 1 Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Preferred Stock, shares authorized | 200,000 | |||||||||||||||||||||||||||||||||||
Series A common stock purchase warrants [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 3 | |||||||||||||||||||||||||||||||||||
Debenture financing exercised | 83,334 | |||||||||||||||||||||||||||||||||||
Proceeds from warrants exercised | $ | $ 250,002 | |||||||||||||||||||||||||||||||||||
Series A common stock purchase warrants [Member] | Investor One [Member] | ||||||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 3 | $ 3 | $ 2.245 | $ 2.245 | $ 2.245 | |||||||||||||||||||||||||||||||
Debenture financing exercised | 16,667 | 16,667 | 44,815 | |||||||||||||||||||||||||||||||||
Proceeds from warrants exercised | $ | $ 50,000 | $ 50,000 |
STOCKHOLDERS' EQUITY (Summary o
STOCKHOLDERS' EQUITY (Summary of Stock Options Activity) (Details) - Stock Option [Member] - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 27, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||||
Outstanding at beginning of the period | 547,662 | |||
Granted (weighted-average fair value of $2.21 per share) | 685,000 | 696,252 | ||
Exercised | ||||
Forfeited | (2,400) | (72,498) | (161,500) | |
Outstanding at end of the period | 1,241,514 | 547,662 | ||
Exercisable at end of the period | 348,933 | |||
Expected to vest after June 30, 2019 (unexercisable) | 892,581 | |||
Weighted Average Exercise Price | ||||
Outstanding at beginning of the period | $ 5.27 | |||
Granted (weighted-average fair value of $2.21 per share) | $ 3.42 | 3.45 | ||
Exercised | ||||
Forfeited | 13.50 | |||
Outstanding at end of the period | 4.24 | $ 5.27 | ||
Exercisable at end of the period | 6.15 | |||
Expected to vest after June 30, 2019 (unexercisable) | $ 3.49 | |||
Weighted Average Remaining Contractual Term ( Years) | ||||
Outstanding - December 31, 2018 | 2 years 3 months 19 days | 2 years 8 months 12 days | ||
Granted (weighted-average fair value of $2.21 per share) | 3 years | |||
Vested (exercisable) - June 30, 2019 | 2 years 3 months 19 days | |||
Expected to vest after June 30, 2019 (unexercisable) | 2 years 3 months 19 days | |||
Aggregate Intrinsic Value | ||||
Outstanding - December 31, 2018 | ||||
Granted (weighted-average fair value of $2.21 per share) | $ 842,465 | |||
Exercised | ||||
Outstanding - June 30, 2019 | 521,436 | |||
Expected to vest after June 30, 2019 (unexercisable) | $ 1,044,320 |
STOCKHOLDERS' EQUITY (Summary_2
STOCKHOLDERS' EQUITY (Summary of Stock Warrants Activity) (Details) - Warrant [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrant activity, number of shares: | |||
Outstanding at beginning of the period | 4,325,423 | 2,485,005 | 2,976,863 |
Granted | 399,610 | 2,162,058 | 2,121,433 |
Exercised | (328,667) | (95,238) | (428,469) |
Forfeited | (226,402) | (2,184,822) | |
Outstanding at the end of period | 4,396,366 | 4,325,423 | 2,485,005 |
Exercisable at end of the period | 4,096,366 | 4,325,423 | 2,485,005 |
Expected to vest after June 30, 2019 (unexercisable) | 300,000 | ||
Warrant activity, weighted average exercise price: | |||
Outstanding at beginning of the period | $ 3.77 | $ 5.09 | $ 6.45 |
Granted | 4.81 | 3 | 3.73 |
Exercised | 3.49 | 2.25 | 3 |
Forfeited | 6.95 | 6.04 | |
Outstanding at end of the period | 3.90 | 3.77 | 5.09 |
Exercisable at end of the period | 3.83 | $ 5.05 | $ 5.09 |
Expected to vest after June 30, 2019 (unexercisable) | $ 5 | ||
Weighted Average Remaining Contractual Term ( Years) | |||
Outstanding - December 31, 2018 | 2 years 26 days | 2 years 10 months 25 days | |
Granted | 5 years | ||
Exercised | 3 months 19 days | ||
Vested (exercisable) - June 30, 2019 | 2 years 22 days | ||
Expected to vest after June 30, 2019 (unexercisable) | 4 years 29 days | ||
Aggregate Intrinsic Value | |||
Outstanding - December 31, 2018 | $ 3,849,626 | ||
Granted | |||
Exercised | $ 384,540 | ||
Outstanding - June 30, 2019 | 3,341,238 | $ 3,849,626 | |
Vested (exercisable) - June 30, 2019 | 3,399,984 | ||
Expected to vest after June 30, 2019 (unexercisable) |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Fair Value of Warrant Weighted Average Assumptions) (Details) - Warrant [Member] | May 13, 2019 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 5 years | |
Risk-free interest rate, Minimum | 1.31% | |
Risk-free interest rate, Maximum | 2.30% | |
Volatility Minimum | 100.00% | |
Volatility Maximum | 167.00% | |
Dividend yield | 0.00% | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 1 year | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 7 years |
STOCKHOLDERS' EQUITY (Schedul_2
STOCKHOLDERS' EQUITY (Schedule of Loss Per Share Dilutive Effect) (Details) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dilutive effect | 5,637,880 | 2,567,300 |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dilutive effect | 4,396,366 | 2,196,700 |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dilutive effect | 1,241,514 | 370,600 |
PROPERTY AND EQUIPMENT (Schedul
PROPERTY AND EQUIPMENT (Schedule of Property and equipment) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Office equipment | $ 332,932 | $ 251,415 | ||
Accumulated depreciation | (140,867) | (96,869) | ||
Property and equipment, net | $ 211,240 | 192,065 | 154,546 | |
Depreciation expense | $ 33,749 | $ 20,036 | $ 43,999 | $ 22,908 |
INTANGIBLE ASSETS (Narrative) (
INTANGIBLE ASSETS (Narrative) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Capitalization of costs associated with the development of internal use software | $ 543,617 | $ 451,168 | $ 960,988 | $ 634,914 | |
Amortization expense | 495,178 | 350,165 | 723,823 | 505,712 | |
2019 | 858,041 | ||||
2020 | 737,648 | ||||
2021 | 166,916 | ||||
Total | 1,762,605 | ||||
Big Token, Inc. [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Capitalization of costs associated with the development of internal use software | $ 12,496 | $ 152,288 | $ 78,415 | 225,011 | 12,496 |
Amortization expense | 37,903 | 442 | |||
Intellectual Property [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 51,422 | 151,200 | |||
Non-compete agreement [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 121,527 | 677,083 | |||
Internally Developed Software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 365,266 | $ 146,181 | |||
Acquired Software [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 151,200 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Intangible assets) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 4,186,470 | $ 3,377,209 | |
Accumulated amortization | (2,423,865) | (1,734,449) | |
Carrying value | $ 1,811,044 | 1,762,605 | 1,642,760 |
Big Token, Inc. [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | 38,345 | 442 | |
Carrying value | $ 296,556 | 199,162 | 12,054 |
Non-compete agreement [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 1,250,000 | 1,250,000 | |
Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 756,000 | 756,000 | |
Acquired Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 617,069 | 617,069 | |
Internally Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 1,563,401 | 754,140 | |
Internally Developed Software [Member] | Big Token, Inc. [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 237,507 | $ 12,496 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | Sep. 11, 2018 | Apr. 02, 2018 | Mar. 20, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2017 |
Big Token, Inc. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to Parent Entity | $ 2,456,940 | $ 4,141,732 | $ 222,554 | |||
Erin DeRuggiero [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Amount paid to related party | $ 5,200,000 | |||||
Erin DeRuggiero [Member] | Common Class A [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Shares repurchased | 514,000 | |||||
Kristoffer Nelson, Chief Operating Officer [Member] | Common Stock Purchase Warrant [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Options granted | 100,000 | |||||
Price per share | $ 5.78 | |||||
Vesting term | 3 years | |||||
Expected term | 3 years | |||||
Joseph P. Hannan, Chief Financial Officer [Member] | Common Stock Purchase Warrant [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Options granted | 250,000 | |||||
Price per share | $ 4.20 | |||||
Vesting term | 3 years | |||||
Expected term | 3 years | |||||
Mr. Hannan's, Chief Financial Officer [Member] | Common Stock Purchase Warrant [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Option Expired | 234,375 |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Significant Components of Net Cash Contributions from SRI) (Details) - Big Token, Inc. [Member] - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||
Expense allocations | $ 1,534,637 | $ 853,625 | $ 2,005,728 | $ 209,623 |
Accounts payable and other payments | ||||
Intangible assets and digital currency transfers | 150,155 | 78,415 | 228,658 | 12,931 |
Other | ||||
Total | $ 1,684,792 | $ 932,040 | $ 2,234,386 | $ 222,554 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable, trade | $ 2,517,749 | $ 2,858,871 |
Accrued expenses | 256,008 | 1,800,621 |
Accrued compensation | 722,010 | 256,164 |
Accrued commissions | 79,158 | 95,159 |
Accounts payable and accrued expenses | $ 3,574,926 | $ 5,010,815 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (decrease) in valuation allowance | $ 1,221,226 | |
Federal net operating losses carryforwards | 12,806,705 | |
State net operating losses carryforwards | $ 15,752,351 | |
Operating loss carry-forward expiration dates, Federal | Dec. 31, 2032 | |
Operating loss carry-forward expiration dates, State and Local | Dec. 31, 2032 | |
Unrecognized tax benefits | $ 0 | |
Accruals for interest and penalties related to unrecognized tax benefits | $ 0 | |
Effective tax rate | 21.00% | 34.00% |
Big Token, Inc. [Member] | ||
Federal net operating losses carryforwards | $ 2,035,171 | $ 2,035,171 |
State net operating losses carryforwards | 209,623 | 209,623 |
Net operating loss carry forward | $ 538,029 | $ 538,029 |
Operating loss carry-forward expiration dates, Federal | Dec. 31, 2037 | |
Operating loss carry-forward expiration dates, State and Local | Dec. 31, 2038 | |
Effective tax rate | 24.20% | |
Big Token, Inc. [Member] | Minimum [Member] | ||
Effective tax rate | 21.00% | |
Big Token, Inc. [Member] | Maximum [Member] | ||
Effective tax rate | 35.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expense (Benefit)) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current | |||||||
Federal | |||||||
Valuation allowance | |||||||
Total | |||||||
Deferred | |||||||
Federal | (1,301,486) | 543,682 | |||||
State | (700,900) | (287,649) | |||||
Subtotal | (2,002,386) | 256,033 | |||||
Valuation allowance | 2,002,386 | (256,033) | |||||
Total | |||||||
Total | |||||||
Federal | (1,301,486) | 543,682 | |||||
State | (700,900) | (287,649) | |||||
Subtotal | (2,002,386) | 256,033 | |||||
Valuation allowance | 2,002,386 | (256,033) | |||||
Total | |||||||
Big Token, Inc. [Member] | |||||||
Current | |||||||
Federal | 421,540 | 44,021 | |||||
Valuation allowance | (421,540) | (44,021) | |||||
Total | |||||||
Total | |||||||
Total |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective tax rate) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Taxes calculated at federal rate | 21.00% | 34.00% |
State income tax, net of federal benefit | (1.90%) | 1.40% |
Stock based compensation | 1.40% | |
Permanent Differences | 1.00% | (5.00%) |
Change in Valuation Allowance | 13.90% | 2.00% |
Fair market adjustment derivatives | (21.50%) | (10.80%) |
Prior year True-ups | (14.90%) | 1.30% |
True-up to deferred tax rate | (17.90%) | |
Other adjustments | 1.00% | (5.00%) |
Provision for income taxes |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets | ||
Net operating loss carryforwards | $ 2,914,731 | $ 4,156,406 |
Fixed assets | (37,801) | |
Accrued interest | ||
Intangibles | ||
Stock based compensation | 430,907 | 579,085 |
Other accruals | 24,390 | 53,185 |
Total Deferred Tax Assets | 3,332,227 | 4,788,677 |
Deferred Tax Liabilities | ||
Stock based compensation | ||
Intangibles | (249,530) | (482,121) |
Prepaid expenses | (12,620) | (14,623) |
Total Deferred Tax Liabilities | (262,150) | (496,744) |
Net Deferred Tax Assets | ||
Net Deferred Tax Assets | 3,070,707 | 4,291,933 |
Valuation Allowance | (3,070,707) | (4,291,933) |
Net deferred tax / (liabilities) | ||
Big Token, Inc. [Member] | ||
Deferred Tax Assets | ||
Net operating loss carryforwards | 538,029 | 50,785 |
Total Deferred Tax Assets | 538,029 | 50,785 |
Net Deferred Tax Assets | ||
Net Deferred Tax Assets | 538,029 | 50,785 |
Valuation Allowance | (538,029) | (50,785) |
Net deferred tax / (liabilities) |
STOCK OPTIONS, AWARDS AND WAR_3
STOCK OPTIONS, AWARDS AND WARRANTS (Narrative) (Details) - USD ($) | Feb. 23, 2016 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 05, 2014 | Jan. 31, 2012 |
Warrant [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Intrinsic value, outstanding | $ 3,341,238 | $ 3,849,626 | ||||
Intrinsic value, exercisable | $ 3,399,984 | |||||
Average remaining contractual life outstanding | 2 years 26 days | 2 years 10 months 25 days | ||||
Average remaining contractual life exercisable | 2 years 22 days | |||||
Weighted average remaining life, outstanding | 3 years 2 months 12 days | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Intrinsic value, exercisable | $ 74,425 | |||||
Average remaining contractual life outstanding | 2 years 9 months 18 days | |||||
Average remaining contractual life exercisable | 2 years 10 months 25 days | |||||
Compensation cost related to unvested employee options not yet recognized | $ 356,852 | $ 583,412 | ||||
Unrecognized compensation cost | 0 | $ 162,741 | ||||
Options expected to recognize | $ 0 | |||||
Equity Compensation 2012 Plan [Member] | Common Class A [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 600,000 | |||||
Equity Compensation 2014 Plan [Member] | Common Class A [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 600,000 | |||||
Equity Compensation 2016 Plan [Member] | Common Class A [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 600,000 | |||||
Minimum percentage of fair market value | 100.00% | |||||
Threshhold of employee ownership for increase in fair market value and decrease in maximum life | 10.00% | |||||
Minimum percentage of fair market value for eligible employee | 110.00% | |||||
Maximum fair market value underlying options exercisable by any option holder during any calendar year | $ 100,000 | |||||
Maximum option life | 10 years | |||||
Maximum option life for 10% holder | 5 years |
STOCK OPTIONS, AWARDS AND WAR_4
STOCK OPTIONS, AWARDS AND WARRANTS (Summary of Stock Options Activity) (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||
Outstanding at beginning of the period | 414,300 | 575,800 |
Granted during the period | 480,236 | |
Exercised during the period | ||
Forfeited during the period | (366,874) | (161,500) |
Outstanding at end of the period | 537,662 | 414,300 |
Exercisable at end of the period | 331,993 | 288,630 |
Weighted Average Exercise Price | ||
Outstanding at beginning of the period | $ 6.97 | $ 6.97 |
Granted during the period | 3.57 | |
Exercised during the period | ||
Forfeited during the period | 4.84 | 7.26 |
Outstanding at end of the period | 5.94 | 6.97 |
Exercisable at end of the period | $ 6.8 | $ 6.65 |
STOCK OPTIONS, AWARDS AND WAR_5
STOCK OPTIONS, AWARDS AND WARRANTS (Summary of Common Stock Award Activity) (Details) - Common Stock Awards [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Activity, number of shares: | ||
Outstanding, beginning of the period | 54,669 | 116,666 |
Granted during the period | ||
Vested during the period | (53,334) | (55,998) |
Forfeited during the period | (1,335) | (6,000) |
Unvested at the end of the period | 54,669 | |
Unrecognized compensation cost | $ 0 | $ 162,741 |
STOCK OPTIONS, AWARDS AND WAR_6
STOCK OPTIONS, AWARDS AND WARRANTS (Summary of Stock Warrants Activity) (Details) - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrant activity, number of shares: | |||
Outstanding at beginning of the period | 4,325,423 | 2,485,005 | 2,976,863 |
Granted during the period | 399,610 | 2,162,058 | 2,121,433 |
Exercised during the period | (328,667) | (95,238) | (428,469) |
Forfeited during the period | (226,402) | (2,184,822) | |
Outstanding at the end of period | 4,396,366 | 4,325,423 | 2,485,005 |
Exercisable at end of the period | 4,096,366 | 4,325,423 | 2,485,005 |
Warrant activity, weighted average exercise price: | |||
Outstanding at beginning of the period | $ 3.77 | $ 5.09 | $ 6.45 |
Granted during the period | 4.81 | 3 | 3.73 |
Exercised during the period | 3.49 | 2.25 | 3 |
Forfeited during the period | 6.95 | 6.04 | |
Outstanding at end of the period | 3.90 | 3.77 | 5.09 |
Exercisable at end of the period | $ 3.83 | $ 5.05 | $ 5.09 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Future liability for point redemptions | $ 187,000 | ||
Rent expense | $ 277,801 | $ 211,680 | |
For the year ended: | |||
12/31/2019 | 163,218 | ||
12/31/2020 | 163,218 | ||
12/31/2021 | 163,218 | ||
12/31/2022 | 163,218 | ||
12/31/2023 | 133,295 | ||
Total | $ 786,167 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Social Reality Llc [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity method investment | 30.00% | |
Fair value of entity | $ 0 | |
Senior Secured Convertible Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value | $ 6,845,147 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debenture warrant liability | $ 8,215,035 | $ 4,323,499 | $ 7,256,864 |
Leapfrog warrant liability | 1,161,350 | 622,436 | 1,873,107 |
Derivative liability | $ 902,915 | 496,260 | 2,026,031 |
Put liability | |||
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debenture warrant liability | 4,323,499 | 7,256,863 | |
Leapfrog warrant liability | 622,436 | 1,873,107 | |
Derivative liability | 496,260 | 2,026,031 | |
Put liability | |||
Total liabilities | 5,442,195 | 11,156,001 | |
Total assets | 2,723,264 | ||
Fair Value, Measurements, Recurring [Member] | Certificates of Deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | US Government Agencies Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | 2,723,264 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debenture warrant liability | |||
Leapfrog warrant liability | |||
Derivative liability | |||
Put liability | |||
Total liabilities | |||
Total assets | 2,723,264 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Certificates of Deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | 2,723,264 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debenture warrant liability | |||
Leapfrog warrant liability | |||
Derivative liability | |||
Put liability | |||
Total liabilities | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Certificates of Deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debenture warrant liability | 4,323,499 | 7,256,863 | |
Leapfrog warrant liability | 622,436 | 1,873,107 | |
Derivative liability | 496,260 | 2,026,031 | |
Put liability | |||
Total liabilities | 5,442,195 | 11,156,001 | |
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Certificates of Deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Derivative and Warrant Liability Measured on Recurring Basis) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Outstanding, beginning of the period | $ 11,156,001 | |
Initial derivative liability on issuance of warrants | 3,240,127 | 7,453,615 |
Change in fair value | (8,953,933) | 4,134,166 |
Less accretion and conversion of debenture warrants | (431,780) | |
Warrant liabilities | $ 5,442,195 | $ 11,156,001 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Aug. 12, 2019 | Apr. 10, 2019 | Apr. 08, 2019 | Apr. 02, 2019 | Jan. 04, 2017 | Apr. 30, 2019 | Sep. 30, 2018 | Apr. 30, 2017 | Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 24, 2018 | Oct. 31, 2017 |
Subsequent Event [Line Items] | |||||||||||||||
Proceeds from the sale of stock | $ 4,566,405 | $ 3,830,000 | $ 7,228,709 | $ 4,020,401 | |||||||||||
Exercise price of warrants | $ 5 | $ 10 | $ 7.50 | ||||||||||||
Series A Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Exercise price of warrants | $ 2.245 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Proceeds from the sale of stock | $ 6,200,000 | $ 6,500,000 | |||||||||||||
Sale of non-performing receivable | $ 567,977 | ||||||||||||||
Subsequent Event [Member] | Series A Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Option granted | 965,500 | ||||||||||||||
Granted during the period, exercise price | $ 3.60 | ||||||||||||||
Subsequent Event [Member] | Series B Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Option granted | 1,525,000 | ||||||||||||||
Granted during the period, exercise price | $ 4 | ||||||||||||||
Exercisable date | Oct. 1, 2022 | ||||||||||||||
Subsequent Event [Member] | Series C Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Option granted | 965,500 | ||||||||||||||
Granted during the period, exercise price | $ 4 | ||||||||||||||
Exercisable date | Oct. 1, 2022 | ||||||||||||||
Subsequent Event [Member] | Customer [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of non-performing receivable | 150,000 | ||||||||||||||
Subsequent Event [Member] | Gross [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Sale of non-performing receivable | $ 417,977 | ||||||||||||||
Common Class A [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Stock issued | 761,905 | 100,000 | 100,000 | ||||||||||||
Exercise price of warrants | $ 1.40 | ||||||||||||||
Common Class A [Member] | Series A Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 380,953 | ||||||||||||||
Exercise price of warrants | $ 6.70 | ||||||||||||||
Common Class A [Member] | Series B Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 380,953 | ||||||||||||||
Exercise price of warrants | $ 7 | ||||||||||||||
Common Class A [Member] | Minimum [Member] | Series B Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Exercise price of warrants | $ 1.20 | ||||||||||||||
Common Class A [Member] | Subsequent Event [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Stock issued | 220,000 | ||||||||||||||
Option granted | 1,525,000 | ||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Minimum [Member] | Series A Warrants [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Exercise price of warrants | $ 1.40 | ||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Subsequent Event [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Stock issued | 1,687,825 | ||||||||||||||
Proceeds from the sale of stock | $ 6,750,000 | $ 1,105,333 | |||||||||||||
Warrants to purchase shares of common stock, number of shares of common stock | 310,487 | ||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Exercise price of warrants | $ 7.50 | ||||||||||||||
Securities Purchase Agreements [Member] | Common Class A [Member] | Subsequent Event [Member] | Minimum [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Exercise price of warrants | $ 3.56 |
Restatement (Summary of Restate
Restatement (Summary of Restatement Consolidated Balance Sheet) (Details) - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 13, 2017 | Dec. 31, 2016 |
Current assets: | ||||||||
Cash and cash equivalents | $ 2,465,639 | $ 2,784,865 | $ 41,036 | $ 1,017,299 | $ 1,048,762 | |||
Accounts receivable, net | 780,187 | 1,828,940 | 4,348,305 | |||||
Prepaid expenses | 550,003 | 466,823 | 468,336 | |||||
Other current assets | 300,898 | 387,085 | 300,898 | |||||
Total current assets | 4,096,727 | 5,467,713 | 6,134,838 | |||||
Property and equipment, net | 211,240 | 192,065 | 154,546 | |||||
Goodwill | 15,644,957 | 15,644,957 | 15,644,957 | |||||
Intangible assets, net | 1,811,044 | 1,762,605 | 1,642,760 | |||||
Other assets | 107,454 | 51,153 | 28,598 | |||||
Total assets | 22,337,675 | 23,118,493 | 23,605,699 | |||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | 1,456,965 | 3,574,926 | 5,010,815 | |||||
Debenture warrant liability | 8,215,035 | 4,323,499 | 7,256,864 | |||||
Leapfrog warrant liability | 1,161,350 | 622,436 | 1,873,107 | |||||
Derivative liability | 902,915 | 496,260 | 2,026,031 | |||||
Put liability | ||||||||
Total current liabilities | 12,630,951 | 9,017,121 | 16,166,817 | |||||
Secured convertible debentures, net | 1,524,592 | |||||||
Total liabilities | 12,957,422 | 9,017,121 | 17,691,409 | |||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively | ||||||||
Common stock to be issued | 879,500 | |||||||
Additional paid in capital | 42,030,110 | 32,869,611 | 32,546,820 | |||||
Accumulated deficit | (32,662,403) | (18,778,348) | (27,510,876) | (27,521,941) | ||||
Total stockholders' equity | 9,380,253 | $ 8,436,853 | 14,101,372 | $ 3,265,706 | $ 6,241,488 | 5,914,290 | $ 8,824,250 | |
Total liabilities and stockholders' equity | 22,337,675 | 23,118,493 | 23,605,699 | |||||
Common Class A [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock | 12,546 | 10,109 | 9,911 | |||||
Common Class B [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock | ||||||||
Previously Reported [Member] | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 1,017,299 | |||||||
Accounts receivable, net | 4,348,305 | |||||||
Prepaid expenses | 468,336 | |||||||
Other current assets | 300,898 | |||||||
Total current assets | 6,134,838 | |||||||
Property and equipment, net | 154,546 | |||||||
Goodwill | 15,644,957 | |||||||
Intangible assets, net | 1,642,760 | |||||||
Other assets | 28,598 | |||||||
Total assets | 23,605,699 | |||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | 5,010,815 | |||||||
Debenture warrant liability | ||||||||
Leapfrog warrant liability | ||||||||
Derivative liability | ||||||||
Put liability | ||||||||
Total current liabilities | 5,010,815 | |||||||
Secured convertible debentures, net | 1,711,146 | |||||||
Total liabilities | 6,721,961 | |||||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively | ||||||||
Common stock to be issued | 879,500 | |||||||
Additional paid in capital | 37,143,033 | |||||||
Accumulated deficit | (21,148,706) | |||||||
Total stockholders' equity | 16,883,738 | |||||||
Total liabilities and stockholders' equity | 23,605,699 | |||||||
Previously Reported [Member] | Common Class A [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock | 9,911 | |||||||
Previously Reported [Member] | Common Class B [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock | ||||||||
Adjustment [Member] | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | ||||||||
Accounts receivable, net | ||||||||
Prepaid expenses | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property and equipment, net | ||||||||
Goodwill | ||||||||
Intangible assets, net | ||||||||
Other assets | ||||||||
Total assets | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | ||||||||
Debenture warrant liability | 7,256,864 | |||||||
Leapfrog warrant liability | 1,873,107 | |||||||
Derivative liability | 2,026,031 | |||||||
Put liability | ||||||||
Total current liabilities | 11,156,002 | |||||||
Secured convertible debentures, net | (186,554) | |||||||
Total liabilities | 10,969,448 | |||||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at December 31, 2018 and 2017, respectively | ||||||||
Common stock to be issued | ||||||||
Additional paid in capital | (4,596,213) | |||||||
Accumulated deficit | (6,373,235) | |||||||
Total stockholders' equity | (10,969,448) | |||||||
Total liabilities and stockholders' equity | ||||||||
Adjustment [Member] | Common Class A [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock | ||||||||
Adjustment [Member] | Common Class B [Member] | ||||||||
Stockholders' equity: | ||||||||
Common stock |
Restatement (Summary of Resta_2
Restatement (Summary of Restatement Consolidated Statement of Operations Adjustments) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 904,222 | $ 4,697,351 | $ 1,495,977 | $ 6,808,201 | $ 9,880,608 | $ 23,348,714 | ||
Cost of revenue | 410,892 | 1,320,464 | 753,239 | 2,138,569 | 3,156,920 | 9,328,893 | ||
Gross profit | 493,330 | 3,376,887 | 742,738 | 4,669,632 | 6,723,688 | 14,019,821 | ||
Operating expense: | ||||||||
General, selling and administrative expense | 5,114,115 | 5,392,625 | 9,605,377 | 9,522,883 | 18,442,839 | 17,016,789 | ||
Impairment of goodwill | ||||||||
Write off of non-compete agreement | 468,750 | |||||||
Restructuring costs | 377,961 | |||||||
Total operating expense, net | 18,442,839 | 17,863,500 | ||||||
Loss from operations | (4,620,785) | (2,015,738) | (8,862,639) | (4,853,251) | (11,719,151) | (3,843,679) | ||
Other income (expense) | ||||||||
Interest income (expense) | (183,257) | (486,758) | (250,944) | (921,543) | (2,030,321) | (2,782,047) | ||
Amortization of debt issuance costs | (482,588) | (918,254) | (1,026,220) | (1,082,829) | ||||
Total interest expense | (183,257) | (969,346) | (250,944) | (1,839,797) | (3,056,541) | (3,864,876) | ||
Gain on sale of assets | 77,373 | 22,165 | (395,106) | 22,165 | (22,108,028) | |||
Accretion of beneficial conversion feature | (3,085,822) | (925,748) | ||||||
Accretion of debenture discount and warrants | 1,208,524 | 263,648 | ||||||
Change in Fair Value of Warrant Liability | (2,875,554) | (1,013,565) | (4,837,405) | 2,710,129 | 8,953,933 | (4,134,166) | ||
Other non operating income / (expense) | 3,294,609 | 1,036,326 | 4,770,472 | (2,682,704) | 5,323,562 | |||
Total other income (expense) | (3,477,866) | (2,005,672) | (5,021,416) | 842,907 | 20,462,744 | (9,188,438) | ||
Income (loss) before provision for income taxes | (8,098,651) | (4,021,410) | (13,884,055) | (4,010,344) | 8,743,593 | (13,032,117) | ||
Provision for income taxes | ||||||||
Net income (loss) | $ (8,098,651) | $ (5,785,404) | $ (4,021,410) | $ 11,068 | $ (13,884,055) | $ (4,010,344) | $ 8,743,593 | $ (13,032,117) |
Net income / (loss) per share, basic and diluted | $ (0.67) | $ (0.39) | $ (1.24) | $ (0.4) | $ (1.58) | |||
Weighted average shares outstanding, basic | 12,129,787 | 10,213,618 | 11,210,810 | 10,126,247 | 10,121,408 | 8,253,851 | ||
Weighted average shares outstanding, diluted | 12,129,787 | 10,213,618 | 11,210,810 | 10,126,247 | 10,121,408 | 8,253,851 | ||
Previously Reported [Member] | ||||||||
Revenues | $ 23,348,714 | |||||||
Cost of revenue | 9,328,893 | |||||||
Gross profit | 14,019,821 | |||||||
Operating expense: | ||||||||
General, selling and administrative expense | 17,016,789 | |||||||
Impairment of goodwill | ||||||||
Write off of non-compete agreement | 468,750 | |||||||
Restructuring costs | 377,961 | |||||||
Total operating expense, net | 17,863,500 | |||||||
Loss from operations | (3,843,679) | |||||||
Other income (expense) | ||||||||
Interest income (expense) | (713,826) | |||||||
Amortization of debt issuance costs | (2,101,377) | |||||||
Total interest expense | (2,815,203) | |||||||
Gain on sale of assets | ||||||||
Accretion of beneficial conversion feature | ||||||||
Accretion of debenture discount and warrants | ||||||||
Change in Fair Value of Warrant Liability | ||||||||
Other non operating income / (expense) | ||||||||
Total other income (expense) | (2,815,203) | |||||||
Income (loss) before provision for income taxes | (6,658,882) | |||||||
Provision for income taxes | ||||||||
Net income (loss) | $ (6,658,882) | |||||||
Net income / (loss) per share, basic and diluted | $ (0.81) | |||||||
Weighted average shares outstanding, basic | 8,253,851 | |||||||
Weighted average shares outstanding, diluted | 8,253,851 | |||||||
Adjustment [Member] | ||||||||
Revenues | ||||||||
Cost of revenue | ||||||||
Gross profit | ||||||||
Operating expense: | ||||||||
General, selling and administrative expense | ||||||||
Impairment of goodwill | ||||||||
Write off of non-compete agreement | ||||||||
Restructuring costs | ||||||||
Total operating expense, net | ||||||||
Loss from operations | ||||||||
Other income (expense) | ||||||||
Interest income (expense) | (2,068,221) | |||||||
Amortization of debt issuance costs | 1,018,548 | |||||||
Total interest expense | (1,049,673) | |||||||
Gain on sale of assets | ||||||||
Accretion of beneficial conversion feature | (925,748) | |||||||
Accretion of debenture discount and warrants | (263,648) | |||||||
Change in Fair Value of Warrant Liability | (4,134,166) | |||||||
Other non operating income / (expense) | (5,323,562) | |||||||
Total other income (expense) | (6,373,235) | |||||||
Income (loss) before provision for income taxes | (6,373,235) | |||||||
Provision for income taxes | ||||||||
Net income (loss) | $ (6,373,235) | |||||||
Net income / (loss) per share, basic and diluted | $ (0.77) | |||||||
Weighted average shares outstanding, basic | 8,253,851 | |||||||
Weighted average shares outstanding, diluted | 8,253,851 |