UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2018
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________to _______________.
Commission File Number: 001-38608
Summit Wireless Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 27-3107828 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
6840 Via Del Oro Ste. 280
San Jose, CA 95119
(Address of principal executive offices) (Zip Code)
(408) 627-4716
(Registrant’s telephone number, including area code)
Summit Semiconductor, Inc.
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ | Accelerated filer ¨ |
Non-accelerated filer x | Smaller reporting company x |
Emerging growth company x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares of the Registrant’s common stock outstanding as of September 21, 2018 is 15,270,338.
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed with the U.S. Securities and Exchange Commission on September 14, 2018 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).
No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q reflects events as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date (except for subsequent events described therein), and does not modify or update in any way disclosures made in the original Form 10-Q.
PART II: OTHER INFORMATION
Item 6. | Exhibits |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Summit Wireless Technologies, Inc. | |||
Date: September 21, 2018 | By: | /s/ Brett Moyer | |
Name: | Brett Moyer | ||
Title: | Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer) | ||
Date: September 21, 2018 | By: | /s/ Gary Williams | |
Name: | Gary Williams | ||
Title: | Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
EXHIBIT INDEX
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Sep. 14, 2018 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Summit Wireless Technologies, Inc. | |
Entity Central Index Key | 0001682149 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | WISA | |
Entity Common Stock, Shares Outstanding | 15,261,178 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 2,762,594 | 2,762,594 |
Preferred Stock, Shares Outstanding | 2,762,594 | 2,762,594 |
Preferred Stock, Liquidation Preference, Value | $ 12,432,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 325,148 | 324,821 |
Common Stock, Shares, Outstanding | 325,148 | 324,821 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenue, net | $ 379,819 | $ 244,364 | $ 661,614 | $ 704,967 |
Cost of revenue | 433,185 | 368,134 | 831,632 | 784,340 |
Gross profit | (53,366) | (123,770) | (170,018) | (79,373) |
Operating Expenses: | ||||
Research and development | 992,999 | 910,304 | 2,597,806 | 1,874,930 |
Sales and marketing | 469,287 | 388,824 | 1,381,367 | 884,086 |
General and administrative | 418,069 | 291,780 | 1,648,700 | 587,145 |
Total operating expenses | 1,880,355 | 1,590,908 | 5,627,873 | 3,346,161 |
Loss from operations | (1,933,721) | (1,714,678) | (5,797,891) | (3,425,534) |
Interest expense | (10,592,693) | (2,373,678) | (19,330,593) | (3,862,433) |
Change in fair value of warrant liability | (4,358,000) | 47,368 | (4,249,000) | (16,684) |
Change in fair value of derivative liability | (2,572,000) | 0 | (3,386,000) | 0 |
Other income (expense), net | (579) | (2,357) | 105 | (6,065) |
Loss before provision for income taxes | (19,456,993) | (4,043,345) | (32,763,379) | (7,310,716) |
Provision for income taxes | 0 | 0 | 2,000 | 2,950 |
Net loss | $ (19,456,993) | $ (4,043,345) | $ (32,765,379) | $ (7,313,666) |
Net loss per common share - basic and diluted | $ (59.84) | $ (11.84) | $ (100.80) | $ (21.42) |
Weighted average number of common shares used in computing net loss per common share | 325,148 | 341,488 | 325,041 | 341,488 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net loss | $ (19,456,993) | $ (4,043,345) | $ (32,765,379) | $ (7,313,666) |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustment | (454) | (2,124) | (1,060) | (3,032) |
Comprehensive loss | $ (19,457,447) | $ (4,045,469) | $ (32,766,439) | $ (7,316,698) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
||||
Cash flows from operating activities: | |||||
Net loss | $ (32,765,379) | $ (7,313,666) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization | 19,226 | 42,330 | |||
Stock compensation expense | 2,156,394 | 0 | |||
Amortization of intangible asset | 16,666 | 0 | |||
Amortization of debt discounts | 14,191,254 | 2,591,022 | |||
Change in fair value of warrant liability | 4,249,000 | 16,684 | |||
Change in fair value of derivative liability | 3,386,000 | 0 | |||
Compensation expense for issuance of consultant warrants | 65,000 | 0 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 47,851 | (90,806) | |||
Inventories | (123,142) | (41) | |||
Prepaid expenses and other assets | (406,713) | (151,551) | |||
Accounts payable | 743,437 | (11,419) | |||
Accrued liabilities | 60,086 | (1,047,488) | |||
Accrued interest | 5,137,140 | 1,262,780 | |||
Net cash used in operating activities | (3,223,180) | (4,702,154) | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (36,357) | (2,095) | |||
Net cash used in investing activities | (36,357) | (2,095) | |||
Cash flows from financing activities: | |||||
Proceeds from issuance of promissory notes | 2,002,000 | 2,451,558 | |||
Proceeds from issuance of convertible notes payable | 1,434,698 | 2,308,475 | |||
Repayment of convertible notes payable | 0 | (67,500) | |||
Net cash provided by financing activities | 3,436,698 | 4,692,533 | |||
Effect of exchange rate changes on cash and cash equivalents | (1,060) | (3,032) | |||
Net increase (decrease) in cash and cash equivalents | 176,101 | (14,748) | |||
Cash and cash equivalents as of beginning of year | 249,143 | [1] | 92,262 | ||
Cash and cash equivalents as of end of year | 425,244 | 77,514 | |||
Supplemental disclosure of cash flow information: | |||||
Cash paid for income taxes | 2,000 | 2,950 | |||
Noncash Investing and Financing Activities: | |||||
Issuance of warrants in connection with convertible notes payable | 795,000 | 2,356,938 | |||
Beneficial conversion feature of convertible notes payable | 665,000 | 2,209,393 | |||
Reclassification of warrant from liability to equity | 192,000 | 0 | |||
Issuance of convertible notes payable upon amendment of promissory notes | 0 | 150,000 | |||
Issuance of convertible notes in lieu of employee expense payments | 50,000 | 0 | |||
Reduction of convertible notes payable by shipment of inventories | 0 | 277,725 | |||
Conversion of accrued interest to accounts payable | 1,622 | 0 | |||
Conversion of interest to convertible notes payable as principal | 9,045 | 12,518 | |||
Issuance of convertible notes payable in lieu of vendor expense payment | 0 | 12,000 | |||
Fair value of derivative liability in connection with issuance of notes payable | $ 1,558,000 | $ 0 | |||
|
Business and Viability of Operations |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Nature of Operations [Text Block] |
Summit Wireless Technologies, Inc. (f/k/a Summit Semiconductor, Inc.) (also referred to herein as “we”, “us”, “our”, or the “Company”) was originally formed as a limited liability company in Delaware on July 23, 2010. The Company develops wireless audio integrated circuits for home entertainment and professional audio markets. On December 31, 2017, the Company converted from a Delaware limited liability company to a Delaware corporation (the “Conversion”). Prior to the Conversion, the Company had been taxed as a partnership for federal and state income tax purposes, such that the Company’s taxable income was reported by its members in their respective tax returns. Following the Conversion, the Company will now be taxed as a corporation. In connection with the Conversion, the Company’s Board of Directors approved a 15-for-1 reverse split of the Company’s units into stock. All unit and stock data in this report have been retroactively adjusted to reflect the split. In connection with the Conversion, the Company authorized 20,000,000 shares of preferred stock and 200,000,000 shares of common stock and issued 324,821 shares of common stock to such investors previously holding 4,872,221 common membership interests and 2,762,594 shares of convertible preferred stock to such investors previously holding 41,438,818 preferred membership interests. Such shares of common stock and preferred stock were fully paid, nonassessable shares of stock of the Company. Liquidity and management plans The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, since inception, the Company has sustained significant operating losses and such losses are expected to continue for the foreseeable future. As of June 30, 2018, the Company had an accumulated deficit of approximately $141.0 million and cash and cash equivalents of approximately $0.4 million and has not generated positive cash flows from operations. As a result of these conditions, management has concluded that substantial doubt about the Company’s ability to continue as a going concern exists as conditions and events, considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date of issuance of the interim condensed consolidated financial statements. Management expects operating losses to continue in the foreseeable future because of additional costs and expenses related to research and development activities, plans to expand its product portfolio, and increase its market share. The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure. Based on current operating levels and required debt repayments, the Company will need to raise additional funds by selling additional equity or incurring additional debt. To date, the Company has not generated significant revenues and has been able to fund its operations through private equity financings from various investors and debt financings. Additionally, future capital requirements will depend on many factors, including the rate of revenue growth, the selling price of the Company’s products, the expansion of sales and marketing activities, the timing and extent of spending on research and development efforts and the continuing market acceptance of the Company’s products. Management intends to raise additional funds through the issuance of equity securities and debt. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. (See Note 11- Subsequent Events.) The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. |
Summary of Significant Accounting Policies |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 | |||||
Accounting Policies [Abstract] | |||||
Significant Accounting Policies [Text Block] |
Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act of 1933, as amended (“Securities Act”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of operations and cash flows. Interim period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The condensed consolidated balance sheet as of December 31, 2017 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed consolidated financial statements and the notes accompanying them should be read in conjunction with our audited consolidated financial statements included elsewhere in this registration statement. Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and filing fees relating to the initial public offering, are capitalized. The deferred offering costs will be offset against initial public offering proceeds upon the effectiveness of the offering. In the event the offering is terminated, deferred offering costs will be expensed. As of June 30, 2018, the Company had capitalized $341,000 of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet. As of December 31, 2017, the amount of deferred offering costs was not material. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts at one financial institution. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company’s accounts receivable are derived from revenue earned from customers located throughout the world. The Company performs credit evaluations of its customers’ financial condition and sometimes requires partial payment in advance of shipping. As of June 30, 2018, the Company had three customers accounting for 38%, 28% and 22% of accounts receivable. As of December 31, 2017, the Company had two customers accounting for 74% and 12% of accounts receivable. The Company had three customers accounting for 60%, 25% and 11% of its net revenues for the three months ended June 30, 2018. The Company had two customers accounting for 60% and 37% of its net revenues for the three months ended June 30, 2017. The Company had two customers accounting for 63%, and 25% of its net revenues for the six months ended June 30, 2018. The Company had two customers accounting for 60% and 37% of its net revenues for the six months ended June 30, 2017. The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. The Company relies on sole-source suppliers to manufacture some of the components used in its product. The Company’s manufacturers and suppliers may encounter problems during manufacturing due to a variety of reasons, any of which could delay or impede their ability to meet demand. The Company is heavily dependent on a single contractor in China for assembly and testing of its products. Convertible Financial Instruments The Company bifurcates conversion options and warrants from their host instruments and accounts for them as freestanding derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options and warrants should be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument. Debt discounts under these arrangements are amortized to interest expense using the interest method over the earlier of the term of the related debt or their earliest date of redemption. The Company has pledged all its assets, including its personal property, fixtures, intellectual property and products as collateral for certain of its promissory and convertible notes payable. Warrants for Common Shares and Derivative Financial Instruments Warrants for common shares and other derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) that contain reset provisions that do not qualify for the scope exception are classified as equity or liabilities. The Company assesses classification of its warrants for common shares and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The issuance of the convertible notes payable generated a beneficial conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock at the commitment date. The Company recognized the BCF by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of common stock per share on the commitment date, to common shares, resulting in a discount on the convertible debt. Comprehensive Loss Comprehensive loss includes all changes within stockholders’ deficit that are not the result of transactions with stockholders. Accumulated other comprehensive loss includes the foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiary. Foreign Currency The financial position and results of operations of the Company’s foreign operations are measured using currencies other than the U.S. dollar as their functional currencies. Accordingly, for these operations all assets and liabilities are translated into U.S. dollars at the current exchange rates as of the respective balance sheet date. Expense items are translated using the weighted average exchange rates prevailing during the period. Cumulative gains and losses from the translation of these operations’ financial statements are reported as a separate component of stockholders’ deficit, while foreign currency transaction gains or losses, resulting from remeasuring local currency to the U.S. dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and six months ended June 30, 2018 and 2017. Advertising Costs Advertising costs are charged to selling and marketing expenses as incurred. Advertising costs for the three and six months ended June 30, 2018 and 2017 were not material. Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares and potentially dilutive common share equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per common share calculation, preferred stock, warrants for common stock, restricted stock units and shares issuable upon the conversion of convertible notes payable are considered to be potentially dilutive securities. For the three and six months ended June 30, 2018, warrants to purchase 7,366,944 shares of common stock, 2,762,594 shares of preferred stock and 1,437,596 shares of restricted stock have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive. For the three and six months ended June 30, 2017, warrants to purchase 2,176,469 shares of common stock and 2,762,594 shares of preferred stock have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive. In addition, shares issuable upon the conversion of convertible notes payable have been excluded from the calculation of net loss per common share for all periods presented because the inclusion would be antidilutive. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) on revenue from contracts with customers, ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). This standard update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance is effective for annual reporting periods including interim reporting reports beginning after December 15, 2017. Collectively, we refer to Topic 606, its related amendments and Subtopic 340-40 as the “new standard”. On January 1, 2018, we adopted the new standard using the modified retrospective method applied to all contracts that are not completed contracts at the date of initial application (i.e., January 1, 2018). Results for reporting periods after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting. There was no impact on the opening accumulated deficit as of January 1, 2018 due to the adoption of the new standard. |
Balance Sheet Components |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Disclosures [Text Block] |
Inventories:
Property and equipment, net:
Depreciation and amortization expense for the three months ended June 30, 2017 and 2018 was $17,498 and $9,268, respectively. Depreciation and amortization expense for the six months ended June 30, 2017 and 2018 was $42,330 and $19,225, respectively. Accrued liabilities:
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Promissory Notes |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 | |||||
Debt Disclosure [Abstract] | |||||
Short-term Debt [Text Block] |
In connection with the acquisition of the Focus Enhancements, Inc. assets in July 2010, the Company assumed an asset purchase agreement with Hallo Development Co, LLC (“Hallo”). In October 2010, the Hallo agreement was amended to require the Company to pay royalties to Hallo at specified rates based on annual net sales derived from the Company’s purchased technology over a period of three years with a minimum royalty of $900,000. Initial shipments commenced in 2011 and after three years, cumulative royalties due Hallo were $900,000. In April 2014, the Hallo agreement was amended, converting the outstanding balance of $357,500, to an unsecured promissory note (“Hallo Note”), bearing interest at 18.0% per year with an initial maturity date of December 31, 2015, that was later extended. In December 2016, following a principal reduction payment of $37,500, the Hallo Note was amended as follows: (i) the maturity date was changed to “five days following an IPO”, (ii) following a debt or equity financing in excess of $4,000,000, the Company would make a principal reduction payment of $12,500, (iii) on the maturity date, the Company would make a principal reduction payment of $95,000, and (iv) the remaining unpaid principal and accrued interest, after the payments described in (ii) and (iii) above, shall automatically convert to shares in connection with the initial public offering (“IPO”), at a conversion price equal to the average of the highest and the lowest price of the related stock that the Company sold on the maturity date. As a result of such amendment, the Hallo Note was reclassified to convertible notes payable as of December 31, 2016. As of February 28, 2018, the Hallo note holders agreed to amend the conversion price language in their respective convertible notes to be the lower of (i) $4.50 or (ii) the initial price of the Company’s common stock sold pursuant to an IPO and to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $9,817 and $10,110 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $20,136 and $20,289 for the six months ended June 30, 2018 and 2017, respectively. The Company made principal reduction payments under the Hallo Note of $0 and $13,750 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $218,750 of principal was due under the Hallo Note and such amount is classified under convertible notes payable. On January 5, 2015, we entered into a Loan and Securities Agreement and a separate Secured Promissory Note with the principal face value of $500,000 (the “January 2015 Note”). The personal property, fixtures and intellectual property and products of the Company serve as the collateral for the borrowing. The initial interest rate was 15.0% per year with an initial maturity date of July 5, 2015, that was later extended. In February 2016, following a principal reduction payment of $225,000, the maturity date was extended to June 1, 2017, and the interest rate was adjusted to 10.0% per year. In December 2016, following a principal reduction payment of $23,414, the January 2015 Note was amended as follows: (i) the maturity date was changed to “five days following an IPO”, (ii) following a debt or equity financing in excess of $4,000,000 prior to an IPO, the Company would make a principal reduction payment of $12,500, (iii) on the maturity date, the Company would make a principal reduction payment of $95,000, and (iv) the remaining unpaid principal and accrued interest, after the payments described in (ii) and (iii) above, shall automatically convert to shares in connection with the IPO, at a conversion price equal to the average of the highest and the lowest price of the related stock that the Company sold on the maturity date. As a result of such amendment, the January 2015 Note was reclassified to convertible notes payable as of December 31, 2016. As of February 28, 2018, the January 2015 Note holders agreed to amend the conversion price language in their respective convertible notes to be the lower of (i) $4.50 or (ii) the initial price of the Company’s common stock sold pursuant to an IPO and to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $4,553 and $6,280 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $9,046 and $12,518 for the six months ended June 30, 2018 and 2017, respectively. The Company made principal reduction payments under the January 2015 Note of $0 and $13,750 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $274,340 and $265,331, respectively was due under the January 2015 Note and such amount is classified under convertible notes payable. On April 4, 2015, we entered into a Loan and Securities Agreement and a separate Secured Promissory Note with the principal face value of $450,000 (the “April 2015 Note”). The proceeds from April 2015 Note were used to repay the $450,000 loan outstanding with a bank. The personal property, fixtures and intellectual property and products of the Company serve as the collateral for the borrowing. Interest accrues at a rate 5.0% per year during the first twelve months and increases to 10.0% per year through maturity. All principal and related accrued interest outstanding are due and payable at the maturity date, which was originally January 31, 2017. In November 2016, the April 2015 Note was amended to (i) change the maturity date to June 1, 2017 and (ii) provide that if the Company completes an underwritten public offering of its common shares or consummates a change of control, then the aggregate outstanding principal and related accrued interest will automatically convert into the number of common shares equal to the quotient obtained by dividing the aggregate principal and accrued interest by the conversion price. The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. As a result of such amendment, the April 2015 Note was reclassified to convertible notes payable. As of February 28, 2018, the April 2015 Note holder agreed to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $11,219 for both of the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $22,315 for both of the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $450,000 was due under the April 2015 Note and such amount is classified under convertible notes payable. On September 18, 2015, we entered into a Loan and Securities Agreement and a separate Secured Promissory Note with the principal face value of $200,000 (the “September 2015 Note”). The personal property, fixtures and intellectual property and products of the Company serve as the collateral for the borrowing. Interest accrues at a rate 10.0% per year through maturity. All principal and related accrued interest outstanding are due and payable at the maturity date, which was originally January 31, 2017. In November 2016, the September 2015 Note was amended to (i) change the maturity date to June 1, 2017 and (ii) provide that if the Company completes an underwritten public offering of its common shares or consummates a change of control, then the aggregate outstanding principal and related accrued interest will automatically convert in to the number of common shares equal to the quotient obtained by dividing the aggregate principal and accrued interest by the conversion price. The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. As a result of such amendment, the September 2015 Note was reclassified to convertible notes payable. As of February 28, 2018, the September 2015 Note holder agreed to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $4,986 for both of the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $9,918 and $8,685 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $200,000 was due under the September 2015 Note and such amount is classified under convertible notes payable. In connection with the sale of product on December 22, 2015, we entered into a Loan and Securities Agreement and a separate Secured Promissory Note with the principal face value of $353,475 (the “December 2015 Note”). The principal amount represented as advance on the product sale. The personal property, fixtures and intellectual property and products of the Company served as the collateral for the borrowing (see Note 5 – Series E Convertible Note Payable for subsequent release of collateral). Interest accrues at a rate 12.0% per year through maturity. All principal and related accrued interest outstanding are due and payable at the maturity date, which was originally September 22, 2016, that was later extended. In December 2016, the December 2015 Note was amended to (i) change the maturity date to June 1, 2017 and (ii) provide that if the Company completes an underwritten public offering of its common shares or consummates a change of control, then the aggregate outstanding principal and related accrued interest will automatically convert in to the number of common shares equal to the quotient obtained by dividing the aggregate principal and accrued interest by the conversion price. The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. As a result of such amendment, the December 2015 Note was reclassified to convertible notes payable. The Company has recognized interest expense of $5,511 for both the three and six months ended June 30, 2017. In 2016 and 2017, the Company shipped finished inventory valued at $75,750 and $277,725, respectively, to the lender which agreed that such shipment shall be considered a principal reduction payment. As of December 31, 2017, the December 2015 Note had a zero principal balance as the Company had fulfilled its obligation to ship product to the lender. During February 2016, we entered into five different Loan and Securities Agreements and separate Secured Promissory Notes with a total principal face value of $250,000 (the “Five February 2016 Notes”). The personal property, fixtures and intellectual property and products of the Company serve as the collateral for the borrowings. Interest accrues at a rate 10.0% per year through maturity. All principal and related accrued interest outstanding are due and payable at the maturity date, which was originally February 1, 2017, that was later extended. In December 2016, two of the Five February 2016 Notes were terminated and extinguished and the lenders agreed that the $100,000 aggregate principal balance of the loans and the $8,863 aggregate accrued interest would be used to fund their participation in the Series D convertible notes. In May 2017, the three remaining holders of the Five February 2016 Notes agreed to amend their notes to include a provision that if the Company completes an underwritten public offering of its common shares or consummates a change of control, then the aggregate outstanding principal and related accrued interest will automatically convert in to the number of common shares equal to the quotient obtained by dividing the aggregate principal and accrued interest by the conversion price. The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. As a result of such amendment, the three remaining Five February 2016 Notes were reclassified to convertible notes payable. Effective February 28, 2018, the February 2016 Note holders agreed to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $3,740 and $6,208 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $7,439 and $9,906 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $150,000 was due to the remaining holders of the Five February 2016 Notes and such amount is classified under convertible notes payable. In connection with the Five February 2016 Notes, the Company issued warrants to purchase common shares of 111,112 (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants was recorded as a debt discount to be amortized over the respective terms of the various notes. The debt discounts are amortized to interest expense using the effective interest method. During the three months ended June 30, 2018 and 2017, the Company recognized $0 from the amortization of the debt discount for both periods. During the six months ended June 30, 2018 and 2017, the Company recognized $0 and $29,417, respectively, from the amortization of the debt discount. Series G Notes Payable Between April 20, 2018 and June 29, 2018, the Company issued $2,812,500 of 15% OID Senior Secured Promissory Notes due June 15, 2018 (“Series G Notes”) raising an aggregate principal amount of $2,200,000 and cancelling $50,000 of expense reimbursement payable by the Company to Mr. Brett Moyer, the Company’s President, Chief Executive Officer and a board member. Medalist Partners Harvest Master Fund, Ltd. and Medalist Partners Opportunity Master Fund A, LP, each of which Mr. Brian Herr, a member of the Company’s board of directors, is co-portfolio manager, have each participated in the Series G Notes financing. The Series G Notes have a senior priority security interest in all the personal property, fixtures and intellectual property and products of the Company. Additionally, in connection with the Series G Note financing, all of the Company’s Series F Convertible Note holders were required by the terms of the Series G Notes to subordinate their notes to the Series G Notes. As of June 15, 2018, the Company was in default on $1,725,000 of the Series G Notes. On June 28, 2018, the Company and the holders of the Series G Notes agreed to extend the maturity date of such notes from June 30, 2018 to July 15, 2018 in consideration for increasing the original issue discount of such notes from 15% to 20% and the issuance of warrants to purchase 208,350 shares of common stock. The Company has accrued and recognized interest expense of $450,000 for the three and six months ended June 30, 2018. As of June 30, 2018, $2,250,000 was due and such amount is classified under promissory notes. In connection with the issuance of the Series G Notes, the Company issued warrants to the lender and investment bankers to purchase common shares of 208,350 and 58,334, respectively (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants, and issuance costs for the Series G Notes described above were recorded as debt discounts to be amortized to interest expense over the respective term using the effective interest method. During both the three months and the six months ended June 30, 2018, the Company recognized interest expense $197,250, respectively, from the amortization of the debt discounts. |
Convertible Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Debt [Text Block] |
On February 12, 2016, we entered into a Loan and Securities Agreement and a separate Secured Promissory Note with the principal face value of $300,000 (the “February 2016 Note”). The personal property, fixtures and intellectual property and products of the Company serve as the collateral for the borrowing (see Note 5 – Series E Convertible Note Payable for subsequent release of collateral). Interest accrues at a rate 10.0% per year through maturity. All principal and related accrued interest outstanding are due and payable at the maturity date, which was originally January 31, 2017. In November 2016, the February 2016 Note was amended to (i) change the maturity date to June 1, 2017 and (ii) provide that if the Company completes an underwritten public offering of its common shares or consummates a change of control, then the aggregate outstanding principal and related accrued interest will automatically convert in to the number of common shares equal to the quotient obtained by dividing the aggregate principal and accrued interest by the conversion price. The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. As a result of such amendment, the February 2016 Note was reclassified to convertible notes payable. As of February 28, 2018, the February 2016 Note holders agreed to extend the maturity date to June 30, 2018. The Company has recognized interest expense of $7,479 for both of the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $14,877 and $14,877 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $300,000 of principal was due under the February 2016 Note and such amount is classified under convertible notes payable. In connection with the February 2016 Note, the Company issued warrants to purchase 33,334 common shares (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants for the February 2016 Note was recorded as a debt discount and is being amortized to interest expense over the term of the note using the effective interest method. During both of the three months ended June 30, 2018 and 2017, the Company recognized interest expense of $0 from the amortization of the debt discount. During the six months ended June 30, 2018 and 2017, the Company recognized interest expense of $0 and $13,250, respectively, from the amortization of the debt discount. On May 11, 2016, a significant shareholder provided a $300,000 unsecured advance to the Company (the “May 2016 Advance”) in contemplation of participating in the Preferred Unit Purchase Agreement dated April 12, 2016, which required the significant shareholder to invest a minimum of $500,000. In July 2016, the significant shareholder invested an additional $200,800 and requested the May 2016 Advance be cancelled and its principal be aggregated with the $200,800 to purchase a total of 111,307 preferred shares at $4.50 per share. Series C Convertible Notes Payable During February 2016 through October 2016, the Company received total proceeds of $2,880,000 from the issuance of original issue discount convertible notes (“Series C Convertible Notes”) to investors. The principal balance, plus all accrued and unpaid interest, was due February 28, 2018, as amended, or upon a change of control or an IPO by the Company. On February 28, 2018, in connection with the extension of the maturity date to August 28, 2018, the Company issued 327 shares of common stock to the holder of the convertible notes. The conversion price in effect upon an IPO is the lesser of $9.00 or the price per common share in the pre-money valuation immediately prior to the IPO multiplied by 80%. The conversion price at any other conversion event is $9.00. Issuance costs to obtain the convertible notes were recorded as a debt discount in the amount of $208,800. The Company has recognized interest expense of $0 and $580 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $0 and $1,258 for the six months ended June 30, 2018 and 2017, respectively. In connection with the Series C Convertible Notes, the Company issued warrants to investors and investment bankers to purchase common shares of 188,236 and 26,354, respectively (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants, the BCF and issuance costs for the Series C Convertible Notes were recorded as debt discounts to be amortized to interest expense over the respective term using the effective interest method. During the three months ended June 30, 2018 and 2017, the Company recognized no interest expense from the amortization of the debt discounts. Between November and December 2016, all of the Series C Convertible Notes, except for $25,000, were extinguished and converted to Series D Convertible Notes. Series D Convertible Notes Payable On various dates in 2016 and 2017, the Company received total proceeds of $4,716,992 from the issuance of original issue discount convertible notes (“Series D Convertible Notes”) to investors. In addition, the Company: (i) extinguished Series C Convertible Notes in the amount of $2,855,000 along with accrued interest of $172,059 and converted those to Series D Convertible Notes; (ii) extinguished other promissory notes in the amount of $235,704 along with accrued interest of $18,536 and converted those to Series D Convertible Notes; (iii) allowed Mr. Moyer to convert $69,290 of reimbursable expense reports into Series D Convertible Notes; and (iv) allowed Mr. Jonathan Gadzak, a member of the Company’s Board of Directors, to convert $12,000 of certain expenses into Series D Convertible Notes. At the date of issuance, the Series D Convertible Notes had a senior priority security interest in all the personal property, fixtures and intellectual property and products of the Company except for the January 2015 Note and the Hallo Note which had a pari passu security interest with the Series D Convertible Notes (see Note 5 – Series E Convertible Note Payable for subsequent release of security interest). The principal balance, plus all accrued and unpaid interest is due on June 30, 2018, as amended. The Series D Convertible Notes are eligible for conversion at any point prior to the maturity date or upon a change of control or an IPO by the Company. The conversion price in effect upon on IPO is the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 75%. The conversion price at any other conversion event is $4.50. Issuance costs to obtain the convertible notes were recorded as a debt discount in the amount of $386,415. In connection with the February 28, 2018 extension of the maturity date, the Company confirmed to the holders of the Series D Convertible Notes that Series D Convertible Notes would accrue an additional 10% interest on the first day of every month, beginning March 1, 2018, so long as such Series D Convertible Notes remained outstanding. The Company has recognized interest expense of $2,837,499 and $469,898 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $3,844,944 and $1,099,712 for the six months ended June 30, 2018 and 2017, respectively. In connection with the Series D Convertible Notes, the Company issued warrants to investors and investment bankers to purchase common shares of 1,017,692 and 380,449, respectively (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants, the BCF, the embedded conversion feature and issuance costs for the Series D Convertible Notes described above were recorded as debt discounts to be amortized to interest expense over the respective term using the effective interest method. In connection with the extension of the maturity date to June 30, 2018, the Company confirmed to the holders of the Series D Convertible Notes that the warrants issued in connection with the Series D Convertible Notes would double effective February 28, 2018. The number of warrants outstanding as of June 30, 2018 was therefore 2,035,434. During the three months ended June 30, 2018 and 2017, the Company recognized interest expense of $1,402,000 and $1,093,379, respectively from the amortization of the debt discounts. During the six months ended June 30, 2018 and 2017, the Company recognized interest expense of $2,875,233 and $1,858,324, respectively, from the amortization of the debt discounts. Series E Convertible Notes Payable On various dates from May to September 2017, the Company received total proceeds of $5,000,000 from the issuance of original issue discount convertible promissory notes (“Series E Convertible Note”). The Series E Convertible Notes have a senior priority security interest in all the personal property, fixtures and intellectual property and products of the Company. The principal balance of the Series E Convertible Notes, was due on October 31, 2017. The Series E Convertible Notes were eligible for conversion at any point prior to the maturity date or upon a change of control or an IPO by the Company. The conversion price in effect upon on IPO is the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 75%. The conversion price at any other conversion event is the lessor of $4.50 or the price per share issued by the Company in connection with any sale involving substantially all the assets of the Company. Additionally, in connection with the Series E Convertible Note financing, all of the Company’s outstanding promissory and convertible note holders agreed to: (i) subordinate their notes to the Series E Convertible Notes, (ii) release all security interests in the Company’s assets in favor of the Series E Convertible Notes (iii) extend their maturity dates to February 28, 2018 and (iv) amend the Company’s Operating Agreement to allow the Series E Convertible Note lender one seat on the Company’s Board of Directors so long as the investor owns any debt or securities of the Company. Issuance costs to obtain the convertible notes were recorded as a debt discount in the amount of $275,000. The Company has recognized interest expense of $70,840 for the three and six months ended June 30, 2017, respectively. On October 31, 2017, the Company filed a confidential S-1 registration statement with the Securities and Exchange Commission (“SEC”) (“S-1”) with the belief that the S-1 filing would extend the maturity date of the Series E Convertible Notes to November 30, 2017. The Series E Convertible Note holders claimed that the S-1 filing did not meet the definition outlined in the Series E Convertible Note and issued a notice of default to the Company on November 2, 2017 (“Default Notice”). On November 30, 2017, as a result of the Default Notice and an inability of the two parties to renegotiate the Series E Convertible Notes under acceptable terms, the Company requested and received a Series E Convertible Note payoff letter (“Series E Payoff Letter”) from the Series E Convertible Note holders. The Series E Payoff Letter stated that in addition to the repayment of the Series E Convertible Notes of $5,882,353, that the Series E Convertible Note holders were due, $1,097,695 of default interest and penalties, reimbursement of $178,645 of legal fees, and consulting, travel and lodging fees of $102,063. Despite the Company’s vigorous disagreement that it was in default and subject to default penalties, interest and legal fees, the Company paid the full monetary demand of $7,260,756 as requested by the Series E Convertible Note holders on November 30, 2017. As a result, the Company recognized interest expense including default interest and penalties of $1,980,049 and additional general and administrative expenses of $280,708 which was comprised of Series E Note holder’s legal fees and consulting expenses of $178,645 and $102,063, respectively, for the year ended December 31, 2017. In addition, the note holder claims that the Company is obligated to issue an additional 487,865 warrants in connection with the Default Notice. The Company does not believe that they are required to issue these warrants and has not issued any additional warrants to the note holder. (See Note 11 – Subsequent Events.) In connection with the Series E Convertible Notes, the Company issued warrants to investors and investment bankers to purchase common shares of 1,307,190 and 114,380, respectively (see Note 6 – Fair Value Measurements for fair value computation). On November 30, 2017, in connection with a provision in the Series E Convertible Note warrants issued to investors (Series E Investor Warrants), the outstanding Series E Investor Warrants doubled, as the Company had not completed an IPO by November 30, 2017. Therefore, total warrants outstanding to investors under the Series E Convertible Notes are 2,614,380. The sum of the fair value of the warrants, the BCF, the embedded conversion feature and issuance costs for the Series E Convertible Notes described above were recorded as debt discounts to be amortized to interest expense over the respective term using the effective interest method. During the three and six months ended June 30, 2017 the Company recognized interest expense of $690,031 from the amortization of the debt discounts. During the three and six months ended June 30, 2018, the Company recognized interest expense of $69,736 from the amortization of the debt discounts. Series F Convertible Notes Payable On various dates between November 2017 and March 2018, the Company received total proceeds of $10,345,000 from the issuance of senior secured convertible promissory notes (“Series F Convertible Notes”) to investors. The Series F Convertible Notes accrue interest at 15% per year and have a senior priority security interest in all the personal property, fixtures and intellectual property and products of the Company. The principal balance of the Series F Convertible Notes, plus all accrued interest is due on June 30, 2018. The Series F Convertible Notes are eligible for conversion at any point prior to the maturity date at the option of the holder. The conversion price in effect upon on IPO shall be the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 60%. The conversion price at any other conversion event shall be $4.50. Between April 1, 2018 and May 25, 2018, the Company issued $225,000 of additional Series F Convertible Notes. In connection with the additional Series F Convertible Notes the Company issued 25,000 and 5,000 warrants to purchase common stock, to its lenders and investment bankers, respectively. The warrants have a five-year life and are exercisable into common stock at $5.40 per share. Issuance costs to obtain the convertible notes were recorded as a debt discount in the amount of $135,300. The Company has recognized interest expense of $392,773 and $0 for the three months ended June 30, 2018 and 2017, respectively. The Company has recognized interest expense of $756,845 and $0 for the six months ended June 30, 2018 and 2017, respectively. In connection with the issuance of the Series F Convertible Notes, the Company issued warrants to the lender and investment bankers to purchase common shares of 1,174,447 and 233,111, respectively (see Note 6 – Fair Value Measurements for fair value computation). The sum of the fair value of the warrants, the BCF, the embedded conversion feature and issuance costs for the Series F Convertible Notes described above were recorded as debt discounts to be amortized to interest expense over the respective term using the effective interest method. During the three months ended June 30, 2018 and 2017, the Company recognized interest expense of $5,124,063 and $0, respectively, from the amortization of the debt discounts. During the six months ended June 30, 2018 and 2017, the Company recognized interest expense of $10,668,514 and $0, respectively, from the amortization of the debt discounts. Derivative Liability The February 2016 Note, the Series C Convertible Notes, the Series D Convertible Notes, the Series E Convertible Notes and the Series F Convertible Notes contain an embedded conversion feature that the Company has determined is a derivative requiring bifurcation. The fair value of the derivative liability as of June 30, 2018 and December 31, 2017 was $25,776,000 and $20,832,000, respectively, which was recorded as a derivative liability with the offset recorded as a discount to the convertible notes payable (See Note 6 – Fair Value Measurements for fair value computation). |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] |
The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Each level of input has different levels of subjectivity and difficulty involved in determining fair value.
The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level within the fair value hierarchy, are as follows:
There were no transfers between Level 1, 2 or 3 during the three and six months ended June 30, 2018. Warrant Liability The following table includes a summary of changes in fair value of the Company’s warrant liability measured at fair value using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018 and 2017:
The changes in fair value of the warrant liability are recorded in change in fair value of warrant liability in the condensed consolidated statements of operations. A summary of the weighted average significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liability that is categorized within Level 3 of the fair value hierarchy as of June 30, 2018 is as follows:
Derivative Liability The following table includes a summary of changes in fair value of the Company’s derivative liability measured at fair value using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018:
There was no derivative liability during the three and six months ended June 30, 2017. As of June 30, 2018, the Company measured the fair value of the derivative by estimating the fair value of the convertible notes payable at certain conversion points. To calculate the fair value of the convertible notes payable with the conversion feature, the Company calculated the present value of the convertible notes payable upon conversion at a qualifying initial public offering in the third quarter of 2018, and the present value of the convertible notes payable at non-qualifying initial public offering in the last quarter of 2018. The Company estimated a probability of 90% for the occurrence of a qualifying initial public offering in the third quarter of 2018 and a probability of 10% in the last quarter of 2018. The Company’s derivative liabilities are measured at fair value using the Probability Weighted Expected Return valuation methodology. A summary of the weighted average significant unobservable inputs (Level 3 inputs) used in measuring the Company’s embedded conversion options that is categorized within Level 3 of the fair value hierarchy as of June 30, 2018 is as follows:
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Stockholders' Deficit |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] |
Common Stock On January 30, 2018 the Company’s Board of Directors approved the establishment of the Company’s 2018 Long-Term Stock Incentive Plan (the “LTIP”) and termination of its Carve-Out Plan (the “Plan”). Under the LTIP, the aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the LTIP pursuant to awards of restricted shares or options will be limited to 15% of the outstanding shares of common stock, which calculation shall be made on the first (1st) business day of each new fiscal year; provided that for fiscal year 2018, upon approval of the LTIP by the Company’s shareholders, up to 300,000 shares of common stock will initially be available for participants under the LTIP. Thereafter, the 15% evergreen provision shall govern the LTIP. In connection with the termination of the Plan, on January 31, 2018, the Company issued to its employees and directors 1,284,470 and 153,126, shares of restricted common stock (“January 2018 Restricted Stock Grant”), respectively. Such shares of restricted common stock were granted outside the LTIP’s first year share availability pool, are fully vested, and will be released to the employees and directors in three tranches at the rate of 33.4%, 33.3% and 33.3% on September 1, 2018, March 1, 2019 and September 1, 2019, respectively. In the event an employee voluntarily resigns, the release dates of the shares will be extended such that only 16.5% of the shares are released every six months, until 100% are released. In the event that a director voluntarily resigns, each of the release dates will be extended six months. The LTIP and January 2018 Restricted Stock Grant were approved by a majority of the Company’s stockholders on January 31, 2018. In connection with the January 2018 Restricted Stock Grant, the Company recorded stock compensation expense of $2,156,394 for the three and six months ended June 30, 2018. On February 28, 2018 in connection with the extension of the maturity date of the Series C Convertible Note to August 28, 2018, the Company issued 327 shares of its common stock to the note holder. The Company recorded interest expense of $490 for the three and six months ended June 30, 2018. Warrants for Common Shares The Company has issued warrants to purchase common shares to employees as compensation for services rendered, as well as, in conjunction with the purchase of common shares in equity and debt transactions. A summary of the warrant activity and related information that occurred for the three months ended June 30, 2018 and as of June 30, 2018 is provided in the following paragraphs. In connection with the Series F Convertible Notes issued during the three months ended June 30, 2018, the Company issued warrants to purchase 25,000 common shares at an exercise price of $5.40 per share with a five-year term. The grant date fair value of the warrants was $44,000 which was recorded as debt discount with the offset recorded to additional paid-in capital on the consolidated balance sheet. The fair value of the warrants was determined using the Black-Scholes Model based on the following weighted average assumptions: common share price on date of grant $4.03, expected dividend yield 0%, expected volatility 57%, risk-free interest rate 2.82% and expected life of 5 years. In connection with the Series F Convertible Notes issued during the three months ended June 30, 2018, the Company issued warrants to investment bankers to purchase 3,222 common shares at an exercise price of $5.40 per share with a five-year term. The grant date fair value of the warrants was $5,700 which was recorded as debt discount with the offset recorded to additional paid-in capital on the consolidated balance sheet. The fair value of the warrants was determined using the Black-Scholes Model based on the following weighted average assumptions: common share price on date of grant $4.03, expected dividend yield 0%, expected volatility 57%, risk-free interest rate 2.82% and expected life of 5 years. In connection with the Series G Notes issued during the three months ended June 30, 2018, the Company issued warrants to purchase 208,350 common shares at an exercise price of $5.40 per share with a five-year term. The grant date fair value of the warrants was $366,000 which was recorded as debt discount with the offset recorded to additional paid-in capital on the consolidated balance sheet. The fair value of the warrants was determined using the Black-Scholes Model based on the following weighted average assumptions: common share price on date of grant $4.03, expected dividend yield 0%, expected volatility 57%, risk-free interest rate 2.81% and expected life of 5 years. In connection with the Series G Notes issued during the three months ended June 30, 2018, the Company issued warrants to investment bankers to purchase 58,334 common shares at an exercise price of $5.40 per share with a five-year term. The grant date fair value of the warrants was $102,000 which was recorded as debt discount with the offset recorded to additional paid-in capital on the consolidated balance sheet. The fair value of the warrants was determined using the Black-Scholes Model based on the following weighted average assumptions: common share price on date of grant $4.03, expected dividend yield 0%, expected volatility 57%, risk-free interest rate 2.82% and expected life of 5 years. During the three months ended June 30, 2018, the Company granted warrants to purchase up to 275,000 shares of common stock to Mr. Michael Howse, a member of the Company’s Board of Directors in connection with a consulting agreement. The warrants have an exercise price of $5.40 per share and warrants to purchase up to 110,000 shares of common stock vest over nine months. The remaining warrants vest upon certain performance milestones. As of June 30, 2018, warrants to purchase 36,667 shares of common stock were vested. All of the warrants immediately vest upon a change of control, and the exercise price is subject to certain price protection provisions. The fair value of the vested warrants was $65,000 which was recorded as consulting expense with the offset recorded to warrant liability. The fair value of the warrants was estimated using the Black-Scholes Model based on the following weighted average assumptions: common share price on date of grant $4.03, expected dividend yield 0%, expected volatility 57%, risk-free interest rate 2.92% and expected life of 5 years. Information regarding warrants for common stock outstanding and exercisable as of June 30, 2018 is as follows:
Warrants exercisable as of June 30, 2018, excludes (i) warrants to purchase 104,150 common shares that have been granted to employees that are outstanding but only become exercisable upon a change of control of the Company or the filing of a registration statement with the SEC in accordance with the Securities Act of 1933, as amended and (ii) warrants to purchase 250,556 common shares issued to Mr. Howse which have not yet vested. |
Income Taxes |
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Jun. 30, 2018 | |||||
Income Tax Disclosure [Abstract] | |||||
Income Tax Disclosure [Text Block] |
The Company recorded an income tax expense of $2,000 for the six months ended June 30, 2018, compared to income tax expense of $2,950 for the six months ended June 30, 2017. The income tax expense recorded for the six months ended June 30, 2018 and 2017 was primarily due to state income tax expense. The Company’s effective tax rate was (0.01)% for the six months ended June 30, 2018, compared to an effective tax rate of (0.04)% for the six months ended June 30, 2017. The difference between the effective tax rate and the federal statutory tax rate for the six months ended June 30, 2018 and 2017 primarily relates to the valuation allowance on the Company’s deferred tax assets. For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items reported separately and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur. As of June 30, 2018, the Company retains a full valuation allowance on its deferred tax assets. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. The tax provision for the six months ended June 30, 2018 and 2017, was calculated on a jurisdiction basis. On December 22, 2017, the United States enacted a law commonly known as the Tax Cuts and Jobs Act (“TCJA”) which makes widespread changes to the Internal Revenue Code, including a reduction in the federal corporate tax rate to 21%, and repatriation of accumulated foreign earnings and profits, effective January 1, 2018. Additionally, on December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017. The accounting for all items is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018. Any differences between what was previously recorded and the final tax return amounts or estimates done for subsequent quarters are not expected to be material. |
Commitments and Contingencies |
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Jun. 30, 2018 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies Disclosure [Text Block] |
Operating Leases The Company rents its office under an operating lease, which expires in October 2018. Under the terms of the lease, the Company is responsible for taxes, insurance and maintenance expense. The Company recognizes rent expense on a straight-line basis over the lease period. Rent expense for the three months ended June 30, 2018 and 2017 was $91,175 and $85,872, respectively. Rent expense for the six months ended June 30, 2018 and 2017 was $178,688 and $171,191, respectively. Other Commitments From 2011 to January 30, 2018, employees, consultants, and directors of the Company were entitled to participate in the Plan at the discretion of the Company’s Board of Directors. Each Plan participant was awarded points which entitled the participant to a portion of the proceeds payable to the Company and/or its members upon a sale of the Company. The proceeds payable to a Plan participant were to equal an amount determined in accordance with the following formula: number of points held by participant, divided by total points outstanding, multiplied by 18% of Net Sale Price. For this purpose, “Net Sale Price” equaled the aggregate amount payable to the Company and/or its members in connection with a sale of the Company, less all amounts payable to creditors of the Company. Awards payable to Plan participants were senior to any amounts payable to members of the Company. As of December 31, 2017, the Company had not recorded a liability relating to the Plan, as any amounts payable under the Plan would be recognized as compensation expense in the consolidated statement of operations during the period that the Company would have become obligated to make such payments. On January 30, 2018, the Company’s Board of Directors terminated the Plan and adopted the LTIP. (See Note 7 – Stockholders’ Deficit). Contingencies In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of a possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a materially adverse effect on the Company’s condensed consolidated financial statements. |
Related Parties |
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Jun. 30, 2018 | |||||
Related Party Transactions [Abstract] | |||||
Related Party Transactions Disclosure [Text Block] |
Brett Moyer Mr. Moyer has served as the Company’s President, Chief Executive Officer and a board member since the Company’s founding in August 2010. Effective February 28, 2018, Mr. Moyer agreed to extend the maturity date of his Series D Convertible Note to June 30, 2018. In connection with the maturity date extension, Mr. Moyer received a warrant to purchase 9,058 shares of common stock at an exercise price of $5.40 and which will accrue an additional 10% interest on the first day of every month, beginning March 1, 2018, so long as such Series D Convertible Note remains outstanding. In April 2018, the Company issued Mr. Moyer a $62,500 Series G Note, initially due June 15, 2018, in consideration for $50,000 of expenses incurred by Mr. Moyer. In June 2018, in consideration for extending the maturity date of the Series G Note, Mr. Moyer was granted a warrant to purchase 4,630 shares of common stock. As of June 30, 2018, Mr. Moyer was owed $57,500 of principal under promissory notes and $443,208 of principal under convertible promissory notes and owned 2.5% of the outstanding shares of the Company. Jonathan Gazdak Mr. Gazdak, works as Managing Director – Head of Investment Banking for Alexander Capital an investment banking firm based in New York. Mr. Gazdak has been a member of the Company’s board of directors since June 2015. Alexander Capital has acted as the lead investment bank in a number of the Company’s private financings. Effective February 28, 2018, Mr. Gazdak agreed to extend the maturity date of his Series D Convertible Note to June 30, 2018. In connection with the maturity date extension, Mr. Gazdak received a warrant to purchase 1,569 shares of common stock at an exercise price of $5.40 and which will accrue an additional 10% interest on the first day of every month, beginning March 1, 2018, so long as such Series D Convertible Note remains outstanding. As of June 30, 2018, Mr. Gazdak was owed $19,765 of principal under convertible promissory notes and owned 0.6% of the outstanding shares of the Company. The Company has signed an engagement letter with Alexander Capital under which Alexander Capital earns a fee on total investments by their clients. Alexander Capital earned fees of $200,250 and $321,300 for the three and six months ended June 30, 2018. As of June 30, 2018, Alexander Capital had been issued a total of 588,392 common share warrants that are exercisable at $5.40 per share and have a five-year life from date of issuance. Brian Herr Mr. Herr has been a member of the Company’s board of directors since February 2018. Mr. Herr is Chief Investment Officer and Co-Head of Structured Credit and Asset Finance for the Medalist Partners platform (f/k/a Candlewood Structured Strategy Funds) and serves as a co-portfolio manager for the Medalist Partners Harvest Master Fund, Ltd. and Medalist Partners Opportunity Master Fund A, LP (collectively, the “Medalist Funds”). Mr. Herr was granted a seat on the Company’s board of directors pursuant to a securities purchase agreement, dated as of November 30, 2017, between the Company and the Medalist Funds, pursuant to which the Company also issued to the Medalist Funds an aggregate of $2,000,000 Series F Convertible Notes, due June 30, 2018, as amended, and warrants to purchase an aggregate of 222,222 shares of our common stock. In addition, between April 20, 2018 and June 29, 2018, the Company issued an aggregate of $2,437,500 of Series G Notes to the Medalist Funds and warrants to purchase an aggregate of 180,570 shares of our common stock. As of June 30, 2018, the Medalist Funds were owed $1,950,000 of principal under promissory notes and $2,000,000 of principal under convertible promissory notes and owned 0% of the outstanding shares of the Company. Michael Howse We are party to a consulting agreement with Michael Howse, dated April 6, 2018 (the “Howse Agreement”), pursuant to which Mr. Howse has agreed to serve an interim role as the Company’s chief strategic officer on an “at-will” basis in consideration for a monthly cash salary of $20,000 per month, as well as (i) a warrant to purchase 110,000 shares of our common stock, exercisable at a per share price of $5.40 and all of which shall vest on the earlier of: (x) nine months from the issuance date of such warrants, (y) if Mr. Howse is terminated as the Company’s chief strategic officer and (z) immediately prior to an Acquisition of the Company (as defined in the Howse Agreement), and (ii) a warrant to purchase 165,000 shares of our common stock, exercisable at a per share price of $5.40, which shall vest upon the achievement of significant milestones. Helge Kristensen Mr. Kristensen has served as a member of the Company’s board of directors since 2010. Mr. Kristensen serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China, president of Platin Gate Technology (Nanjing) Co. Ltd, a company with focus on service-branding in lifestyle products as well as pro line products based in China and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands. Effective February 28, 2018, Inizio Capital and Hansong Technology agreed to extend the maturity dates of the Five February 2016 Note and the December 2015 Note, respectively to June 30, 2018. In connection with the maturity date extensions, Inizio Capital and Hansong Technology received warrants to purchase 1,341 and 942 shares of common stock, respectively, at an exercise price of $5.40. As of June 30, 2018, affiliates of Mr. Kristensen were owed $50,000 of principal under convertible promissory notes and owned 3.8% of the outstanding shares of the Company. Significant Shareholders Effective February 28, 2018, Carl E. Berg agreed to extend the maturity date of his Series D Convertible Note to June 30, 2018. In connection with the maturity date extension, Mr. Berg received a warrant to purchase 39,216 shares of common stock at an exercise price of $5.40 and will accrue an additional 10% interest on the first day of every month, beginning March 1, 2018, so long as such Series D Convertible Note remains outstanding. In addition, Mr. Berg agreed to extend the maturity date of his various other convertibles notes to June 30, 2018. In connection with the maturity date extensions, Mr. Berg received warrants to purchase a total of 25,965 shares of common stock at an exercise price of $5.40. As of June 30, 2018, Mr. Berg was owed a total of $1,444,118 of principal under convertible promissory notes and owned 37% of the outstanding shares of the Company. Effective February 28, 2018, Lisa Walsh agreed to extend the maturity date of her Series D Convertible Note to June 30, 2018. In connection with the maturity date extension, Ms. Walsh received a warrant to purchase 112,419 shares of common stock at an exercise price of $5.40 and which will accrue an additional 10% interest on the first day of every month, beginning March 1, 2018, so long as such Series D Convertible Note remains outstanding. As of June 30, 2018, Ms. Walsh was owed $8,203,971 of principal under convertible promissory notes and owned 25.2% of the outstanding shares of the Company. |
Subsequent Events |
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Jun. 30, 2018 | |||||
Subsequent Events [Abstract] | |||||
Subsequent Events [Text Block] |
The Company’s Series D and Series F convertible promissory notes as well as its other convertible promissory notes, excluding its Series C Convertible Notes and its Series G Notes, had maturity dates of June 30, 2018 (the “June 30 th Notes”). On June 30, 2018, the June 30th Notes with a principal balance of $26.4 million went into default. The Company obtained consents from the holders of such notes to initially extend the maturity date of the June 30th Notes to June 15, 2018 and then requested and received consents to extend the maturity date to July 25, 2018.As of July 15, 2018, the Company was in default on $2,812,500 of the Series G Notes. On July 20, 2018, the Company and the holders of the Series G Notes agreed to (i) extend the maturity date of such notes from July 15, 2018 to July 25, 2018 and (ii) agreed to make the Series G Notes mandatorily convertible in connection with an IPO at a conversion price of the lesser of $4.50 or 40% of the highest price of the common stock sold in an IPO. In consideration for the extension of the maturity date and the agreement to make the Series G Notes mandatorily convertible, the Company agreed to issue warrants to purchase an additional 625,000 shares of common stock to the Series G Note holders. Pursuant to a settlement agreement that we entered into with MARCorp Signal, LLC, on July 25, 2018, with respect to certain disputes, we issued to MARCorp Signal, LLC a warrant to purchase an aggregate of 487,864 shares of common stock. On July 26, 2018, the Company closed its IPO. The Company’s registration statement on Form S-1 (File No. 333-224267) relating to the IPO was declared effective by the SEC on July 25, 2018. The shares began trading on The NASDAQ Capital Market under the ticker symbol (WISA) on July 27, 2018. Under the offering the Company issued 2,400,000 shares of common stock at an offering price of $5.00 per share, raising gross proceeds of $12,000,000. In aggregate, the shares issued in the offering generated approximately $10,355,000 in net proceeds, which amount is net of $900,000 in underwriters’ discounts and commissions, $220,000 in underwriters’ accountable and non-accountable expenses and legal, accounting and other estimated offering costs of $525,000. Upon the closing of the IPO, (i) all shares of preferred stock then outstanding were automatically converted into 2,762,594 shares of common stock and (ii) all convertible notes payable were automatically converted in to 9,516,155 shares of common stock, except for $200,000 of such notes which were repaid in cash immediately following the offering.Effective as of September 11, 2018, the Company changed its name to Summit Wireless Technologies, Inc. |
Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2018 | ||
Accounting Policies [Abstract] | ||
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act of 1933, as amended (“Securities Act”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of operations and cash flows. Interim period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The condensed consolidated balance sheet as of December 31, 2017 has been derived from audited consolidated financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed consolidated financial statements and the notes accompanying them should be read in conjunction with our audited consolidated financial statements included elsewhere in this registration statement. |
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Deferred Charges, Policy [Policy Text Block] | Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and filing fees relating to the initial public offering, are capitalized. The deferred offering costs will be offset against initial public offering proceeds upon the effectiveness of the offering. In the event the offering is terminated, deferred offering costs will be expensed. As of June 30, 2018, the Company had capitalized $341,000 of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet. As of December 31, 2017, the amount of deferred offering costs was not material. |
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Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts at one financial institution. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. The Company’s accounts receivable are derived from revenue earned from customers located throughout the world. The Company performs credit evaluations of its customers’ financial condition and sometimes requires partial payment in advance of shipping. As of June 30, 2018, the Company had three customers accounting for 38%, 28% and 22% of accounts receivable. As of December 31, 2017, the Company had two customers accounting for 74% and 12% of accounts receivable. The Company had three customers accounting for 60%, 25% and 11% of its net revenues for the three months ended June 30, 2018. The Company had two customers accounting for 60% and 37% of its net revenues for the three months ended June 30, 2017. The Company had two customers accounting for 63%, and 25% of its net revenues for the six months ended June 30, 2018. The Company had two customers accounting for 60% and 37% of its net revenues for the six months ended June 30, 2017. The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. The Company relies on sole-source suppliers to manufacture some of the components used in its product. The Company’s manufacturers and suppliers may encounter problems during manufacturing due to a variety of reasons, any of which could delay or impede their ability to meet demand. The Company is heavily dependent on a single contractor in China for assembly and testing of its products. |
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Derivatives, Embedded Derivatives [Policy Text Block] | Convertible Financial Instruments The Company bifurcates conversion options and warrants from their host instruments and accounts for them as freestanding derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options and warrants should be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument. Debt discounts under these arrangements are amortized to interest expense using the interest method over the earlier of the term of the related debt or their earliest date of redemption. The Company has pledged all its assets, including its personal property, fixtures, intellectual property and products as collateral for certain of its promissory and convertible notes payable. |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Warrants for Common Shares and Derivative Financial Instruments Warrants for common shares and other derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) that contain reset provisions that do not qualify for the scope exception are classified as equity or liabilities. The Company assesses classification of its warrants for common shares and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The issuance of the convertible notes payable generated a beneficial conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock at the commitment date. The Company recognized the BCF by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of common stock per share on the commitment date, to common shares, resulting in a discount on the convertible debt. |
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Comprehensive Income, Policy [Policy Text Block] | Comprehensive Loss Comprehensive loss includes all changes within stockholders’ deficit that are not the result of transactions with stockholders. Accumulated other comprehensive loss includes the foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiary. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency The financial position and results of operations of the Company’s foreign operations are measured using currencies other than the U.S. dollar as their functional currencies. Accordingly, for these operations all assets and liabilities are translated into U.S. dollars at the current exchange rates as of the respective balance sheet date. Expense items are translated using the weighted average exchange rates prevailing during the period. Cumulative gains and losses from the translation of these operations’ financial statements are reported as a separate component of stockholders’ deficit, while foreign currency transaction gains or losses, resulting from remeasuring local currency to the U.S. dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and six months ended June 30, 2018 and 2017. |
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Advertising Costs, Policy [Policy Text Block] | Advertising Costs Advertising costs are charged to selling and marketing expenses as incurred. Advertising costs for the three and six months ended June 30, 2018 and 2017 were not material. |
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Earnings Per Share, Policy [Policy Text Block] | Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares and potentially dilutive common share equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per common share calculation, preferred stock, warrants for common stock, restricted stock units and shares issuable upon the conversion of convertible notes payable are considered to be potentially dilutive securities. For the three and six months ended June 30, 2018, warrants to purchase 7,366,944 shares of common stock, 2,762,594 shares of preferred stock and 1,437,596 shares of restricted stock have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive. For the three and six months ended June 30, 2017, warrants to purchase 2,176,469 shares of common stock and 2,762,594 shares of preferred stock have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive. In addition, shares issuable upon the conversion of convertible notes payable have been excluded from the calculation of net loss per common share for all periods presented because the inclusion would be antidilutive. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) on revenue from contracts with customers, ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). This standard update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance is effective for annual reporting periods including interim reporting reports beginning after December 15, 2017. Collectively, we refer to Topic 606, its related amendments and Subtopic 340-40 as the “new standard”. On January 1, 2018, we adopted the new standard using the modified retrospective method applied to all contracts that are not completed contracts at the date of initial application (i.e., January 1, 2018). Results for reporting periods after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting. There was no impact on the opening accumulated deficit as of January 1, 2018 due to the adoption of the new standard. |
Balance Sheet Components (Tables) |
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Schedule of Inventory, Current [Table Text Block] | Inventories:
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Property, Plant and Equipment [Table Text Block] | Property and equipment, net:
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Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities:
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Convertible Notes Payable (Tables) |
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Convertible Debt [Table Text Block] |
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Fair Value Measurements (Tables) |
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level within the fair value hierarchy, are as follows:
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Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table includes a summary of changes in fair value of the Company’s derivative liability measured at fair value using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018:
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Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | The Company’s derivative liabilities are measured at fair value using the Probability Weighted Expected Return valuation methodology. A summary of the weighted average significant unobservable inputs (Level 3 inputs) used in measuring the Company’s embedded conversion options that is categorized within Level 3 of the fair value hierarchy as of June 30, 2018 is as follows:
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Warrant [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table includes a summary of changes in fair value of the Company’s warrant liability measured at fair value using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018 and 2017:
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Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | A summary of the weighted average significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liability that is categorized within Level 3 of the fair value hierarchy as of June 30, 2018 is as follows:
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Stockholders' Deficit (Tables) |
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Information regarding warrants for common stock outstanding and exercisable as of June 30, 2018 is as follows:
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Business and Viability of Operations (Details Textual) - USD ($) |
12 Months Ended | |||||||
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Dec. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2016 |
Jul. 23, 2010 |
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Stockholders' Equity, Reverse Stock Split | 15-for-1 | |||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | ||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | ||||||
Common Stock, Shares, Issued | 324,821 | 325,148 | 4,872,221 | |||||
Preferred Stock, Shares Issued | 2,762,594 | 2,762,594 | 41,438,818 | |||||
Retained Earnings (Accumulated Deficit) | $ (108,283,423) | [1] | $ (141,048,802) | |||||
Cash and Cash Equivalents, at Carrying Value | $ 249,143 | [1] | $ 425,244 | $ 77,514 | $ 92,262 | |||
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Summary of Significant Accounting Policies (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
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Deferred Offering Costs | $ 341,000 | $ 341,000 | |||
Warrant [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,366,944 | 2,176,469 | 7,366,944 | 2,176,469 | |
Antidilutive Securities Preferred Stock [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,762,594 | 2,762,594 | 2,762,594 | 2,762,594 | |
Restricted Stock Units (RSUs) [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,437,596 | 1,437,596 | |||
Accounts Receivable [Member] | Customer Concentration Risk One [Member] | |||||
Concentration Risk, Percentage | 38.00% | 74.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk Two [Member] | |||||
Concentration Risk, Percentage | 28.00% | 12.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk Three [Member] | |||||
Concentration Risk, Percentage | 22.00% | ||||
Sales Revenue, Net [Member] | Customer Concentration Risk One [Member] | |||||
Concentration Risk, Percentage | 60.00% | 60.00% | 63.00% | 60.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk Two [Member] | |||||
Concentration Risk, Percentage | 25.00% | 37.00% | 25.00% | 37.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk Three [Member] | |||||
Concentration Risk, Percentage | 11.00% |
Balance Sheet Components (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Raw materials | $ 3,730 | $ 3,729 | |||
Work in progress | 121,684 | 141,302 | |||
Finished goods | 690,612 | 547,853 | |||
Total inventories | $ 816,026 | $ 692,884 | [1] | ||
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Balance Sheet Components (Details 1) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Property, Plant and Equipment, Gross | $ 945,294 | $ 908,937 | |||
Less: Accumulated depreciation and amortization | (863,501) | (844,275) | |||
Property and equipment, net | 81,793 | 64,662 | [1] | ||
Machinery and equipment [Member] | |||||
Property, Plant and Equipment, Gross | 800,225 | 768,168 | |||
Tooling [Member] | |||||
Property, Plant and Equipment, Gross | 27,200 | 22,900 | |||
Computer software [Memebr] | |||||
Property, Plant and Equipment, Gross | 91,631 | 91,631 | |||
Furniture and fixtures [Member] | |||||
Property, Plant and Equipment, Gross | 15,000 | 15,000 | |||
Leasehold improvements [Member] | |||||
Property, Plant and Equipment, Gross | $ 11,238 | $ 11,238 | |||
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Balance Sheet Components (Details 2) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Accrued vacation | $ 236,469 | $ 197,976 | |||
Accrued compensation | 0 | 27,058 | |||
Accrued bonus | 129,979 | 227,194 | |||
Accrued other | 408,858 | 262,992 | |||
Total accrued liabilities | $ 775,306 | $ 715,220 | [1] | ||
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Balance Sheet Components (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Depreciation, Depletion and Amortization | $ 9,268 | $ 17,498 | $ 19,226 | $ 42,330 |
Promissory Notes (Details Textual) - USD ($) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
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Jul. 15, 2018 |
Apr. 04, 2015 |
Jan. 05, 2015 |
Feb. 28, 2018 |
Nov. 30, 2016 |
Feb. 29, 2016 |
Dec. 22, 2015 |
Sep. 18, 2015 |
Apr. 30, 2014 |
Oct. 31, 2010 |
Jun. 29, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jun. 28, 2018 |
Jun. 15, 2018 |
Dec. 31, 2011 |
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Short-term Debt [Line Items] | |||||||||||||||||||||||
Royalty Guarantees, Commitments, Amount | $ 900,000 | ||||||||||||||||||||||
Asset Purchase Agreement Term | 3 years | ||||||||||||||||||||||
Accrued Royalties | $ 900,000 | ||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 2,250,000 | ||||||||||||||||||||||
Interest Expense, Debt | $ 450,000 | ||||||||||||||||||||||
Convertible Notes Payable, Current | 17,659,868 | 17,659,868 | $ 5,241,361 | [1] | |||||||||||||||||||
Debt Instrument, Face Amount | $ 2,812,500 | 26,771,282 | 26,771,282 | 20,071,824 | |||||||||||||||||||
Repayments of Bank Debt | $ 450,000 | ||||||||||||||||||||||
Reimbursement Expenses | $ 50,000 | ||||||||||||||||||||||
Interest Payable | $ 8,863 | ||||||||||||||||||||||
Debt InstrumentOriginaL Issued Discount | 15.00% | 20.00% | |||||||||||||||||||||
Proceeds from Notes Payable | $ 2,200,000 | 2,002,000 | $ 2,451,558 | ||||||||||||||||||||
Debt Default, Short-term Debt, Amount | $ 26,400,000 | $ 26,400,000 | $ 1,725,000 | ||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,174,447 | 233,111 | 1,174,447 | 233,111 | |||||||||||||||||||
Hallo Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 357,500 | ||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18.00% | ||||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | Dec. 31, 2015 | |||||||||||||||||||||
Debt Instrument, Payment Terms | In December 2016, following a principal reduction payment of $37,500, the Hallo Note was amended as follows: (i) the maturity date was changed to “five days following an IPO”, (ii) following a debt or equity financing in excess of $4,000,000, the Company would make a principal reduction payment of $12,500, (iii) on the maturity date, the Company would make a principal reduction payment of $95,000, and (iv) the remaining unpaid principal and accrued interest, after the payments described in (ii) and (iii) above, shall automatically convert to shares in connection with the initial public offering (“IPO”), at a conversion price equal to the average of the highest and the lowest price of the related stock that the Company sold on the maturity date. | ||||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | the Hallo note holders agreed to amend the conversion price language in their respective convertible notes to be the lower of (i) $4.50 or (ii) the initial price of the Company’s common stock sold pursuant to an IPO | ||||||||||||||||||||||
Interest Expense, Debt | $ 10,110 | $ 20,136 | $ 20,289 | ||||||||||||||||||||
Repayments of Notes Payable | 0 | 13,750 | |||||||||||||||||||||
Convertible Notes Payable, Current | $ 218,750 | 218,750 | 218,750 | ||||||||||||||||||||
January 2015 Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | 10.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jul. 05, 2015 | Jun. 30, 2018 | Jun. 01, 2017 | ||||||||||||||||||||
Debt Instrument, Payment Terms | In December 2016, following a principal reduction payment of $23,414, the January 2015 Note was amended as follows: (i) the maturity date was changed to “five days following an IPO”, (ii) following a debt or equity financing in excess of $4,000,000 prior to an IPO, the Company would make a principal reduction payment of $12,500, (iii) on the maturity date, the Company would make a principal reduction payment of $95,000, and (iv) the remaining unpaid principal and accrued interest, after the payments described in (ii) and (iii) above, shall automatically convert to shares in connection with the IPO, at a conversion price equal to the average of the highest and the lowest price of the related stock that the Company sold on the maturity date. | ||||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | the January 2015 Note holders agreed to amend the conversion price language in their respective convertible notes to be the lower of (i) $4.50 or (ii) the initial price of the Company’s common stock sold pursuant to an IPO | ||||||||||||||||||||||
Interest Expense, Debt | 4,553 | 6,280 | 9,046 | 12,518 | |||||||||||||||||||
Repayments of Notes Payable | 0 | 13,750 | |||||||||||||||||||||
Convertible Notes Payable, Current | 274,340 | 274,340 | 265,331 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 500,000 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | $ 225,000 | ||||||||||||||||||||||
April 2015 Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Instrument, Maturity Date | Jan. 31, 2017 | Jun. 30, 2018 | Jun. 01, 2017 | ||||||||||||||||||||
Debt Instrument, Payment Terms | Interest accrues at a rate 5.0% per year during the first twelve months and increases to 10.0% per year through maturity. | ||||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. | ||||||||||||||||||||||
Interest Expense, Debt | 11,219 | 11,219 | 22,315 | 22,315 | |||||||||||||||||||
Convertible Notes Payable, Current | 450,000 | 450,000 | 450,000 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 450,000 | ||||||||||||||||||||||
September 2015 Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | Jun. 01, 2017 | Jan. 31, 2017 | ||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75% | ||||||||||||||||||||||
Interest Expense, Debt | 4,986 | 4,986 | 9,918 | 8,685 | |||||||||||||||||||
Convertible Notes Payable, Current | 200,000 | 200,000 | 200,000 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 200,000 | ||||||||||||||||||||||
December 2015 Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 22, 2016 | Jun. 01, 2017 | |||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. | ||||||||||||||||||||||
Interest Expense, Debt | 5,511 | 5,511 | |||||||||||||||||||||
Convertible Notes Payable, Current | 0 | ||||||||||||||||||||||
Debt Instrument, Face Amount | $ 353,475 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 277,725 | $ 75,750 | |||||||||||||||||||||
February 2016 Notes [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||||||||||||
Debt Instrument, Maturity Date | Feb. 01, 2017 | ||||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. | ||||||||||||||||||||||
Interest Expense, Debt | 3,740 | 6,208 | 9,906 | ||||||||||||||||||||
Convertible Notes Payable, Current | 150,000 | 150,000 | $ 150,000 | ||||||||||||||||||||
Debt Instrument, Face Amount | $ 250,000 | $ 100,000 | |||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 0 | $ 0 | $ 0 | $ 29,417 | |||||||||||||||||||
February 2016 Notes [Member] | Warrant [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 111,112 | 111,112 | |||||||||||||||||||||
Series G Notes [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Interest Expense, Debt | $ 450,000 | ||||||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 197,250 | $ 197,250 | |||||||||||||||||||||
Series G Notes [Member] | Lender [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 208,350 | ||||||||||||||||||||||
Series G Notes [Member] | Investment Bankers [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 58,334 | 58,334 | |||||||||||||||||||||
Series G Notes [Member] | Warrant [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 208,350 | ||||||||||||||||||||||
|
Convertible Notes Payable (Details) - USD ($) |
2 Months Ended | 5 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
May 25, 2018 |
Mar. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Oct. 31, 2016 |
Dec. 31, 2017 |
Jun. 29, 2018 |
Feb. 28, 2018 |
||||
Company Proceeds | $ 1,434,698 | $ 2,308,475 | $ 18,181,074 | ||||||||
Carrying Value | 20,227,706 | 18,648,662 | |||||||||
Less: Debt discount | (618,534) | (1,971,997) | |||||||||
Less: Embedded conversion features | (1,451,000) | (10,831,000) | |||||||||
Less: Beneficial conversion features | (498,304) | (604,304) | |||||||||
Balance | 17,659,868 | 5,241,361 | [1] | ||||||||
Accrued interest | 6,993,576 | 1,867,103 | [1] | ||||||||
Principal Value as of Maturity | 26,771,282 | 20,071,824 | $ 2,812,500 | ||||||||
Series C Convertible notes payable [Member] | |||||||||||
Company Proceeds | 2,880,000 | $ 2,880,000 | 2,880,000 | ||||||||
Carrying Value | 25,000 | 25,000 | |||||||||
Less: Debt discount | $ (208,800) | ||||||||||
Accrued interest | 4,412 | 4,412 | |||||||||
Principal Value as of Maturity | 29,412 | 29,412 | |||||||||
Series D Convertible notes payable [Member] | |||||||||||
Company Proceeds | 4,716,992 | 4,716,992 | |||||||||
Carrying Value | 8,039,580 | 8,039,580 | |||||||||
Less: Debt discount | (386,415) | ||||||||||
Accrued interest | 5,202,081 | 1,357,412 | |||||||||
Principal Value as of Maturity | 13,241,661 | 9,458,330 | |||||||||
Series F Convertible notes payable [Member] | |||||||||||
Company Proceeds | $ 225,000 | $ 10,345,000 | 10,570,000 | 9,000,000 | |||||||
Carrying Value | 10,570,000 | 9,000,000 | |||||||||
Less: Debt discount | (135,300) | ||||||||||
Accrued interest | 869,036 | 112,192 | |||||||||
Principal Value as of Maturity | 11,439,036 | 9,000,000 | |||||||||
Various individual convertible notes payable [Member] | |||||||||||
Company Proceeds | 1,593,126 | 1,584,082 | |||||||||
Carrying Value | 1,593,126 | 1,584,082 | |||||||||
Accrued interest | 468,047 | 393,087 | |||||||||
Principal Value as of Maturity | $ 2,061,173 | $ 1,584,082 | |||||||||
|
Convertible Notes Payable (Details Textual) - USD ($) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 11, 2016 |
Feb. 12, 2016 |
Feb. 28, 2018 |
Nov. 30, 2017 |
Nov. 30, 2016 |
Jul. 31, 2016 |
May 25, 2018 |
Dec. 31, 2016 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 31, 2018 |
Sep. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Oct. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2017 |
Jun. 29, 2018 |
|||||
Debt Instrument, Face Amount | $ 26,771,282 | $ 26,771,282 | $ 20,071,824 | $ 20,071,824 | $ 2,812,500 | |||||||||||||||||
Interest Expense, Debt | 450,000 | |||||||||||||||||||||
Convertible Notes Payable, Current | 17,659,868 | 17,659,868 | 5,241,361 | [1] | 5,241,361 | [1] | ||||||||||||||||
Debt Conversion, Original Debt, Amount | 2,250,000 | |||||||||||||||||||||
Proceeds from Convertible Debt | 1,434,698 | $ 2,308,475 | 18,181,074 | |||||||||||||||||||
Debt Instrument, Unamortized Discount, Current | 618,534 | 618,534 | 1,971,997 | 1,971,997 | ||||||||||||||||||
Interest Payable | $ 8,863 | |||||||||||||||||||||
Repayments of Convertible Debt | 0 | 67,500 | ||||||||||||||||||||
Interest Expense | 10,592,693 | $ 2,373,678 | 19,330,593 | 3,862,433 | ||||||||||||||||||
General and Administrative Expense | 418,069 | 291,780 | 1,648,700 | 587,145 | ||||||||||||||||||
Derivative Liability | 25,776,000 | $ 25,776,000 | 20,832,000 | 20,832,000 | ||||||||||||||||||
Investment Bankers [Member] | ||||||||||||||||||||||
Number of Warrants Issued | 5,000 | |||||||||||||||||||||
Lender [Member] | ||||||||||||||||||||||
Number of Warrants Issued | 25,000 | |||||||||||||||||||||
Mr Moyer [Member] | ||||||||||||||||||||||
Reimbursable Expenses | 69,290 | |||||||||||||||||||||
Mr Jonathan Gadzak [Member] | ||||||||||||||||||||||
Certain Expenses to be converted | 12,000 | |||||||||||||||||||||
Series C Convertible Notes [Member] | ||||||||||||||||||||||
Debt Instrument, Face Amount | 29,412 | $ 29,412 | 29,412 | 29,412 | ||||||||||||||||||
Debt Instrument, Maturity Date | Aug. 28, 2018 | |||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price in effect upon an IPO is the lesser of $9.00 or the price per common share in the pre-money valuation immediately prior to the IPO multiplied by 80%. The conversion price at any other conversion event is $9.00. | |||||||||||||||||||||
Interest Expense, Debt | 0 | 580 | 0 | 1,258 | ||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 327 | |||||||||||||||||||||
Proceeds from Convertible Debt | 2,880,000 | $ 2,880,000 | 2,880,000 | |||||||||||||||||||
Debt Instrument, Unamortized Discount, Current | $ 208,800 | |||||||||||||||||||||
Extinguishment of Debt, Amount | $ 25,000 | 2,855,000 | ||||||||||||||||||||
Interest Payable | 172,059 | 172,059 | ||||||||||||||||||||
Promissory Notes [Member] | ||||||||||||||||||||||
Extinguishment of Debt, Amount | 235,704 | |||||||||||||||||||||
Interest Payable | 18,536 | 18,536 | ||||||||||||||||||||
Series D Convertible Notes [Member] | ||||||||||||||||||||||
Debt Instrument, Face Amount | 13,241,661 | $ 13,241,661 | 9,458,330 | 9,458,330 | ||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price in effect upon on IPO is the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 75%. | |||||||||||||||||||||
Interest Expense, Debt | 2,837,499 | 469,898 | $ 3,844,944 | 1,099,712 | ||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 1,402,000 | 1,093,379 | $ 2,875,233 | 1,858,324 | ||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4.50 | $ 4.50 | ||||||||||||||||||||
Proceeds from Convertible Debt | $ 4,716,992 | 4,716,992 | ||||||||||||||||||||
Debt Instrument, Unamortized Discount, Current | $ 386,415 | 386,415 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | |||||||||||||||||||||
Series D Convertible Notes [Member] | Investor [Member] | ||||||||||||||||||||||
Proceeds from Convertible Debt | 4,716,992 | |||||||||||||||||||||
Series E Convertible Notes [Member] | ||||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price in effect upon on IPO is the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 75%. The conversion price at any other conversion event is the lessor of $4.50 or the price per share issued by the Company in connection with any sale involving substantially all the assets of the Company. | |||||||||||||||||||||
Interest Expense, Debt | 70,840 | 70,840 | ||||||||||||||||||||
Amortization of Debt Discount (Premium) | 69,736 | 690,031 | 69,736 | 690,031 | ||||||||||||||||||
Proceeds from Convertible Debt | $ 5,000,000 | |||||||||||||||||||||
Debt Instrument, Unamortized Discount, Current | 275,000 | 275,000 | ||||||||||||||||||||
Repayments of Convertible Debt | $ 5,882,353 | |||||||||||||||||||||
Default Interest And Penalities | 1,097,695 | |||||||||||||||||||||
Reimbursement Of Legal Fees | 178,645 | |||||||||||||||||||||
Reimbursement Of Consulting Travel And Lodging Fees | 102,063 | |||||||||||||||||||||
Repayments of Debt | $ 7,260,756 | |||||||||||||||||||||
Interest Expense | 1,980,049 | |||||||||||||||||||||
General and Administrative Expense | 280,708 | |||||||||||||||||||||
Legal Fees | 178,645 | |||||||||||||||||||||
Consulting Expenses | 102,063 | |||||||||||||||||||||
Warrants Issuable In Connection With Default Notice | 487,865 | |||||||||||||||||||||
Series F Convertible Notes [Member] | ||||||||||||||||||||||
Debt Instrument, Face Amount | 11,439,036 | $ 11,439,036 | 9,000,000 | 9,000,000 | ||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | |||||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price in effect upon on IPO shall be the lesser of $4.50 or the highest price per common share sold in the IPO multiplied by 60%. | |||||||||||||||||||||
Interest Expense, Debt | 392,773 | 0 | $ 756,845 | 0 | ||||||||||||||||||
Amortization of Debt Discount (Premium) | 5,124,063 | $ 0 | 10,668,514 | $ 0 | ||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4.50 | |||||||||||||||||||||
Proceeds from Convertible Debt | $ 225,000 | $ 10,345,000 | 10,570,000 | 9,000,000 | ||||||||||||||||||
Debt Instrument, Unamortized Discount, Current | $ 135,300 | $ 135,300 | ||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,174,447 | 233,111 | 1,174,447 | 233,111 | ||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | ||||||||||||||||||||
Warrant [Member] | Series C Convertible Notes [Member] | Investment Bankers [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 26,354 | 26,354 | ||||||||||||||||||||
Warrant [Member] | Series C Convertible Notes [Member] | Investor [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 188,236 | 188,236 | ||||||||||||||||||||
Warrant [Member] | Series D Convertible Notes [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Outstanding | 2,035,434 | 2,035,434 | ||||||||||||||||||||
Warrant [Member] | Series D Convertible Notes [Member] | Investment Bankers [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 380,449 | 380,449 | ||||||||||||||||||||
Warrant [Member] | Series D Convertible Notes [Member] | Investor [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,017,692 | 1,017,692 | ||||||||||||||||||||
Warrant [Member] | Series E Convertible Notes [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Outstanding | 2,614,380 | 2,614,380 | ||||||||||||||||||||
Warrant [Member] | Series E Convertible Notes [Member] | Investment Bankers [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 114,380 | 114,380 | ||||||||||||||||||||
Warrant [Member] | Series E Convertible Notes [Member] | Investor [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,307,190 | 1,307,190 | ||||||||||||||||||||
February 2016 Note [Member] | ||||||||||||||||||||||
Debt Instrument, Face Amount | $ 300,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jan. 31, 2017 | Jun. 30, 2018 | Jun. 01, 2017 | |||||||||||||||||||
Debt Instrument Convertible Conversion Price Description | The conversion price is the lesser of $4.50 or the highest price per common share sold in the IPO or paid by a buyer upon a change in control multiplied by 75%. | |||||||||||||||||||||
Interest Expense, Debt | $ 7,479 | $ 7,479 | $ 14,877 | $ 14,877 | ||||||||||||||||||
Convertible Notes Payable, Current | 300,000 | 300,000 | $ 300,000 | $ 300,000 | ||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 0 | $ 0 | $ 0 | $ 13,250 | ||||||||||||||||||
February 2016 Note [Member] | Warrant [Member] | ||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 33,334 | |||||||||||||||||||||
May 2016 Note [Member] | ||||||||||||||||||||||
Proceeds from Collection of Advance from Significant Shareholder | $ 300,000 | |||||||||||||||||||||
Minimum Investments to be Received | $ 500,000 | |||||||||||||||||||||
Proceeds from Collection of Additional Investments from Significant Shareholder | 200,800 | |||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 200,800 | |||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4.50 | |||||||||||||||||||||
May 2016 Note [Member] | Preferred Stock [Member] | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 111,307 | |||||||||||||||||||||
|
Fair Value Measurements (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Liabilities: | ||
Derivative liability | $ 25,776,000 | $ 20,832,000 |
Quoted prices in active markets (Level 1) [Member] | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Quoted prices in active markets (Level 1) [Member] | Warrant [Member] | ||
Liabilities: | ||
Warrant liability | 0 | 0 |
Significant other observable inputs (Level 2) [Member] | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Significant other observable inputs (Level 2) [Member] | Warrant [Member] | ||
Liabilities: | ||
Warrant liability | 0 | 0 |
Significant unobservable inputs (Level 3) [Member] | ||
Liabilities: | ||
Derivative liability | 25,776,000 | 20,832,000 |
Significant unobservable inputs (Level 3) [Member] | Warrant [Member] | ||
Liabilities: | ||
Warrant liability | $ 5,349,786 | $ 1,227,786 |
Fair Value Measurements (Details 1) - Warrant Liability [Member] - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Beginning balance | $ 926,786 | $ 2,509,305 | $ 1,227,786 | $ 1,619,287 |
Additions | 65,000 | 1,530,972 | 65,000 | 2,356,938 |
Change in fair value | 4,358,000 | (47,368) | 4,249,000 | 16,684 |
Reclass to additional paid-in capital | 0 | 0 | (192,000) | 0 |
Ending balance | $ 5,349,786 | $ 3,992,909 | $ 5,349,786 | $ 3,992,909 |
Fair Value Measurements (Details 2) - Fair Value, Inputs, Level 3 [Member] - Warrant Liability [Member] |
Jun. 30, 2018
$ / shares
|
---|---|
Common Stock Price | $ 4.03 |
Term (Years) [Member] | |
Warrants and Rights Outstanding, Measurement Input | 4.57 |
Volatility [Member] | |
Warrants and Rights Outstanding, Measurement Input | 57 |
Risk-free rate of interest [Member] | |
Warrants and Rights Outstanding, Measurement Input | 2.76 |
Dividend Yield [Member] | |
Warrants and Rights Outstanding, Measurement Input | 0.0 |
Fair Value Measurements (Details 3) - Derivative Liability [Member] - USD ($) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Beginning balance | $ 22,959,000 | $ 20,832,000 |
Additions | 245,000 | 1,558,000 |
Change in fair value | 2,572,000 | 3,386,000 |
Ending balance | $ 25,776,000 | $ 25,776,000 |
Fair Value Measurements (Details 4) - Fair Value, Inputs, Level 3 [Member] - Derivative Liability [Member] |
Jun. 30, 2018
$ / shares
|
---|---|
Common Stock Price | $ 4.03 |
Term (Years) [Member] | |
Derivative Liability, Measurement Input | 1.00 |
Volatility [Member] | |
Derivative Liability, Measurement Input | 60 |
Risk-free rate of interest [Member] | |
Derivative Liability, Measurement Input | 2.33 |
Dividend Yield [Member] | |
Derivative Liability, Measurement Input | 0.0 |
Fair Value Measurements (Details Textual) |
3 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
|
Measurement Input, Default Rate [Member] | Scenario, Forecast [Member] | ||
Fair Value Input Probability Of Default | 10.00% | 90.00% |
Stockholders' Deficit (Details) - Warrant [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Class of Stock [Line Items] | |
Exercise Price | $ / shares | $ 5.06 |
Warrants Outstanding | 7,366,944 |
Remaining Life (years) | 4 years 2 months 26 days |
Warrants Exercisable | 7,012,238 |
Exercise Price Range One [Member] | |
Class of Stock [Line Items] | |
Exercise Price | $ / shares | $ 4.50 |
Warrants Outstanding | 2,829,645 |
Remaining Life (years) | 4 years 2 months 8 days |
Warrants Exercisable | 2,725,495 |
Exercise Price Range Two [Member] | |
Class of Stock [Line Items] | |
Exercise Price | $ / shares | $ 5.40 |
Warrants Outstanding | 4,535,665 |
Remaining Life (years) | 4 years 3 months 7 days |
Warrants Exercisable | 4,285,109 |
Exercise Price Range Three [Member] | |
Class of Stock [Line Items] | |
Exercise Price | $ / shares | $ 10.35 |
Warrants Outstanding | 1,634 |
Remaining Life (years) | 2 years 9 months 14 days |
Warrants Exercisable | 1,634 |
Stockholders' Deficit (Details Textual) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|
Feb. 28, 2018 |
Jan. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Apr. 06, 2018 |
|
Class of Stock [Line Items] | |||||||
Share-based Compensation | $ 2,156,394 | $ 2,156,394 | $ 0 | ||||
Interest Expense | 10,592,693 | $ 2,373,678 | 19,330,593 | 3,862,433 | |||
Fair Value Adjustment of Warrants | 4,358,000 | $ (47,368) | 4,249,000 | $ 16,684 | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 153,126 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | In the event an employee voluntarily resigns, the release dates of the shares will be extended such that only 16.5% of the shares are released every six months, until 100% are released. In the event that a director voluntarily resigns, each of the release dates will be extended six months. | ||||||
Series C Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Interest Expense | $ 490 | $ 490 | |||||
Debt Instrument, Maturity Date | Aug. 28, 2018 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 327 | ||||||
Warrant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,174,447 | 233,111 | 1,174,447 | 233,111 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 7,012,238 | 7,012,238 | |||||
Warrant [Member] | Series F Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 25,000 | 25,000 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Warrant Term | 5 years | ||||||
Share Price | $ 4.03 | $ 4.03 | |||||
Warrant [Member] | Series F Convertible Note [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,222 | 3,222 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Warrant Term | 5 years | ||||||
Fair Value Adjustment of Warrants | $ 5,700 | ||||||
Share Price | $ 4.03 | $ 4.03 | |||||
Warrant [Member] | Series G Notes [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 208,350 | 208,350 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Warrant Term | 5 years | ||||||
Fair Value Adjustment of Warrants | $ 366,000 | ||||||
Share Price | $ 4.03 | $ 4.03 | |||||
Warrant [Member] | Series G Notes [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 58,334 | 58,334 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Warrant Term | 5 years | ||||||
Fair Value Adjustment of Warrants | $ 102,000 | ||||||
Share Price | $ 4.03 | $ 4.03 | |||||
Warrants and Rights Outstanding, Measurement Input | 4.03 | 4.03 | |||||
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Series F Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 | |||||
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Series F Convertible Note [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 | |||||
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Series G Notes [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 | |||||
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Series G Notes [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 | |||||
Warrant [Member] | Measurement Input, Price Volatility [Member] | Series F Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 57 | 57 | |||||
Warrant [Member] | Measurement Input, Price Volatility [Member] | Series F Convertible Note [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 57 | 57 | |||||
Warrant [Member] | Measurement Input, Price Volatility [Member] | Series G Notes [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 57 | 57 | |||||
Warrant [Member] | Measurement Input, Price Volatility [Member] | Series G Notes [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 57 | 57 | |||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Series F Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 2.82 | 2.82 | |||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Series F Convertible Note [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 2.82 | 2.82 | |||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Series G Notes [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 2.81 | 2.81 | |||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Series G Notes [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 2.82 | 2.82 | |||||
Warrant [Member] | Measurement Input, Expected Term [Member] | Series F Convertible Note [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||
Warrant [Member] | Measurement Input, Expected Term [Member] | Series F Convertible Note [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||
Warrant [Member] | Measurement Input, Expected Term [Member] | Series G Notes [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||
Warrant [Member] | Measurement Input, Expected Term [Member] | Series G Notes [Member] | Investment Bankers [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||
Share-based Compensation Award, Tranche One [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.40% | ||||||
Share-based Compensation Award, Tranche Two [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.30% | ||||||
Share-based Compensation Award, Tranche Three [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.30% | ||||||
Employees [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 1,284,470 | ||||||
Employees [Member] | Warrant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 104,150 | 104,150 | |||||
Mr Michael Howse [Member] | Warrant [Member] | |||||||
Class of Stock [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 275,000 | 275,000 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | $ 5.40 | |||||
Fair Value Adjustment of Warrants | $ 65,000 | ||||||
Share Price | $ 4.03 | $ 4.03 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 110,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 36,667 | 36,667 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 250,556 | 250,556 | |||||
Mr Michael Howse [Member] | Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 | |||||
Mr Michael Howse [Member] | Warrant [Member] | Measurement Input, Price Volatility [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 57 | 57 | |||||
Mr Michael Howse [Member] | Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 2.92 | 2.92 | |||||
Mr Michael Howse [Member] | Warrant [Member] | Measurement Input, Expected Term [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||
LongTerm Stock Incentive Plan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award Maximum Percentage of Shares Authorized | 15.00% | 15.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 | 300,000 |
Income Taxes (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Expense (Benefit) | $ 0 | $ 0 | $ 2,000 | $ 2,950 |
Effective Income Tax Rate Reconciliation, Percent | 0.01% | 0.04% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Commitments and Contingencies (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Operating Leases, Rent Expense | $ 91,175 | $ 85,872 | $ 178,688 | $ 171,191 |
Other Commitments, Description | The proceeds payable to a Plan participant were to equal an amount determined in accordance with the following formula: number of points held by participant, divided by total points outstanding, multiplied by 18% of Net Sale Price. | |||
Lease Expiration Date | Oct. 31, 2018 |
Related Parties (Details Textual) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 06, 2018 |
Apr. 30, 2018 |
Feb. 28, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Jun. 29, 2018 |
Jun. 15, 2018 |
Dec. 31, 2017 |
Nov. 30, 2017 |
Jun. 30, 2017 |
||||
Debt Instrument, Face Amount | $ 26,771,282 | $ 2,812,500 | $ 20,071,824 | ||||||||||
Convertible Notes Payable, Current | $ 17,659,868 | 5,241,361 | [1] | ||||||||||
Share-based Compensation Award, Tranche One [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Alexander Capital [Member] | |||||||||||||
Number of Warrants Issued | 588,392 | ||||||||||||
Financial Service [Member] | Alexander Capital [Member] | |||||||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 200,250 | $ 321,300 | |||||||||||
Series G Notes [Member] | Medalist Funds [Member] | |||||||||||||
Debt Instrument, Face Amount | $ 2,000,000 | ||||||||||||
Notes Payable, Related Parties, Current | 1,950,000 | ||||||||||||
Series F Convertible Notes [Member] | |||||||||||||
Debt Instrument, Face Amount | 11,439,036 | $ 9,000,000 | |||||||||||
Series F Convertible Notes [Member] | Medalist Funds [Member] | |||||||||||||
Convertible Notes Payable, Current | $ 2,000,000 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 0.00% | ||||||||||||
Warrant [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,174,447 | 233,111 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Warrant [Member] | Alexander Capital [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Warrants and Rights Outstanding, Term | 5 years | ||||||||||||
Warrant [Member] | Medalist Funds [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 180,570 | 222,222 | |||||||||||
Warrant [Member] | Series G Notes [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 208,350 | ||||||||||||
Brett Moyer [Member] | |||||||||||||
Other Expenses | $ 50,000 | ||||||||||||
Brett Moyer [Member] | Series G Notes [Member] | |||||||||||||
Debt Instrument, Face Amount | $ 62,500 | ||||||||||||
Notes Payable, Related Parties, Current | $ 57,500 | ||||||||||||
Brett Moyer [Member] | Series D Convertible Note [Member] | |||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | ||||||||||||
Convertible Notes Payable, Current | $ 443,208 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 2.50% | ||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | ||||||||||||
Brett Moyer [Member] | Warrant [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 9,058 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 4,630 | ||||||||||||
Jonathan Gazdak [Member] | Series D Convertible Note [Member] | |||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | ||||||||||||
Convertible Notes Payable, Current | $ 19,765 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 0.60% | ||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | ||||||||||||
Jonathan Gazdak [Member] | Warrant [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,569 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Brian Herr [Member] | Series G Notes [Member] | |||||||||||||
Debt Instrument, Face Amount | $ 2,437,500 | ||||||||||||
Michael Howse [Member] | |||||||||||||
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | $ 20,000 | ||||||||||||
Michael Howse [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 165,000 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Helge Kristensen [Member] | |||||||||||||
Convertible Notes Payable, Current | $ 50,000 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 3.80% | ||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | ||||||||||||
Helge Kristensen [Member] | Warrant [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Helge Kristensen [Member] | Warrant [Member] | Inizio Capital [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,341 | ||||||||||||
Helge Kristensen [Member] | Warrant [Member] | Hansong Technology [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 942 | ||||||||||||
Carl E Berg [Member] | |||||||||||||
Convertible Notes Payable, Current | $ 1,444,118 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 37.00% | ||||||||||||
Carl E Berg [Member] | Other Convertible Notes [Member] | |||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | ||||||||||||
Carl E Berg [Member] | Series D Convertible Note [Member] | |||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | ||||||||||||
Carl E Berg [Member] | Warrant [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 110,000 | ||||||||||||
Carl E Berg [Member] | Warrant [Member] | Other Convertible Notes [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 25,965 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Carl E Berg [Member] | Warrant [Member] | Series D Convertible Note [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 39,216 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
Lisa Walsh [Member] | |||||||||||||
Convertible Notes Payable, Current | $ 8,203,971 | ||||||||||||
Debt Conversion Converted Instrument Percentage of Shares Held | 25.20% | ||||||||||||
Lisa Walsh [Member] | Series D Convertible Note [Member] | |||||||||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 10.00% | ||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | ||||||||||||
Lisa Walsh [Member] | Warrant [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 112,419 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||
|
Subsequent Events (Details Textual) - USD ($) |
1 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2018 |
Jul. 20, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jul. 27, 2018 |
Jul. 25, 2018 |
Jul. 15, 2018 |
Jun. 15, 2018 |
||
Debt Default, Short-term Debt, Amount | $ 26,400,000 | $ 1,725,000 | |||||||
Debt Instrument, Maturity Date, Description | The Company obtained consents from the holders of such notes to initially extend the maturity date of the June 30 th Notes to June 15, 2018 and then requested and received consents to extend the maturity date to July 25, 2018. |
||||||||
Repayments of Convertible Debt | $ 0 | $ 67,500 | |||||||
Subsequent Event [Member] | |||||||||
Debt Instrument, Maturity Date, Description | On July 20, 2018, the Company and the holders of the Series G Notes agreed to extend the maturity date of the notes from July 15, 2018 to July 25, 2018 | ||||||||
Proceeds from Issuance Initial Public Offering | $ 10,355,000 | ||||||||
Payments for Underwriters Discounts and Commissions | 900,000 | ||||||||
Payments for Underwriters Accountable and Nonaccountable Expenses | 220,000 | ||||||||
Payments for Legal Accounting and Other Estimated Offering Costs | $ 525,000 | ||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2,762,594 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 9,516,155 | ||||||||
Repayments of Convertible Debt | $ 200,000 | ||||||||
Subsequent Event [Member] | Warrant [Member] | |||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 625,000 | ||||||||
Subsequent Event [Member] | IPO [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 2,400,000 | ||||||||
Shares Issued, Price Per Share | $ 5.00 | ||||||||
Stock Issued During Period, Value, Issued for Services | $ 12,000,000 | ||||||||
Subsequent Event [Member] | MARCorp Signal LLC [Member] | Warrant [Member] | |||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 487,864 | ||||||||
Series G Notes [Member] | Subsequent Event [Member] | |||||||||
Debt Default, Short-term Debt, Amount | $ 2,812,500 | ||||||||
Debt Instrument Convertible Conversion Price Description | The Company and the holders of the Series G Notes agreed to make the Series G Notes mandatorily convertible in connection with an IPO at a conversion price of the lesser of $4.50 or 40% of the highest price of the common stock sold in an IPO. |
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