Share Capital

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Share Capital

Note 5. Share Capital

Preferred Stock

The Company’s authorized capital includes 50,000,000 shares of preferred stock of $0.0001 par value. The designation of rights including voting powers, preferences, and restrictions shall be determined by the Board of Directors before the issuance of any shares.

The number of shares of Series A Preferred Stock was reduced as a result of the reverse stock split completed in April 2017. Pursuant to an agreement between the Company and the holders of the Series A Preferred Stock reached on July 10, 2017, in return for an extension in the maturity date of the Series A Preferred Stock to February 1, 2018, the stock was re-designated as the Series A-1 Preferred Stock,  the conversion price was reduced to $1.80 per share, the number of outstanding shares of Series A-1 Preferred Stock was increased to 555,555 which are to be paid dividends of 10% per annum in cash or shares of common stock. The Series A-1 Preferred Stock is redeemable into cash or common stock at the option of the holder through the maturity date.

170,940 shares of Series A preferred stock are issued and outstanding as of June 30, 2017. On July 10, 2017 the original number of shares of preferred stock was increased as a result of a renewal agreement to 555,555 notes.

Common Stock

On April 19, 2017, at a special meeting the shareholders of One Horizon Group, Inc. authorized the Board of Directors to effect a six-to-one reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock, par value $0.0001 per share. The Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment (the “Amendment”) to the Certificate of Incorporation of the Company to effect the Reverse Stock Split, which became effective on April 28, 2017.

The Company is authorized to issue 33.3 million shares of common stock, par value of $0.0001 per share, after giving effect to the reverse stock split.

During the six months ended June 30, 2017 the Company:

● Issued 91,667 shares of common stock for services provided with a fair value of $176,000.

● Issued 127,366 shares of common stock upon the exercise of warrants at $0.80 per share

Stock Purchase Warrants

At June 30, 2017, the Company had reserved 760,553 shares of its common stock for the following outstanding warrants with a weighted average exercise price of $14.26. Such warrants expire of various times upto December 2019 and had no intrinsic value as of June 30, 2017.

During the six months ended June 30, 2017 no warrants were forfeited, 238,095 warrants which qualified for equity accounting were issued for services performed and valued under the Black-Scholes valuation method, and 127,366 warrants were exercised.

The assumptions used in calculating the fair value under the Black-Scholes option valuation model for warrants issued by the Comapany during the six months ended June 30, 2017.

Common stock fair value	$	1.92
Risk-free interest rate		2.5	%
Expected dividend yield		0	%
Expected warrant life (years)		0.5
Expected stock valtility		107	%