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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2018
Equity [Abstract] |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 9. Stockholders’ Equity The Company has authorized 100,000,000 shares of common stock, $0.01 par value, of which 30,216,009 shares were issued and outstanding as of March 31, 2018 and December 31, 2017. Restricted Stock Awards On August 11, 2016, management and employees of Subsidiary in conjunction with the incorporation on July 22, 2016 received 12,209,677 shares of common stock as adjusted for the Recapitalization exchange ratio of 4.13607. These shares were subject to a Company option to buy back the shares at the original cash consideration paid, which totaled $2,952 or approximately $0.0002 per share. The employees vest their ownership in these shares over a three-year period beginning August 1, 2016 with one-third vesting on August 1, 2017 and the balance monthly over the remaining two years. The fair value of these shares of Subsidiary stock was estimated on the date of the award using the exchange value used by Integrated and the Subsidiary to establish the relative voting control ratio in the Recapitalization (See Note 7). Because these shares require continued service to the Company the estimated fair value is recognized as compensation expense over the vesting period of the award. As of December 31, 2017, the Unique User Performance Condition was determined based on 4,977,144 unique users accessing Maven channels in November 2017. Based on this level of unique users 56% of the shares subject to the performance condition were released and 1,927,641 of the escrow shares were subject to the Company’s buy-back right. The Company’s Board of Directors made a determination on March 12, 2018 to waive the buy-back right. This waiver of the buy-back right related to 1,927,641 shares is a modification of the terms of the restricted stock awards and will result in incremental compensation cost of approximately $2.8 million that will be recognized over a period of approximately 1.3 years, with a total of $2.2 million to be recognized in 2018, of which $1.5 million was recognized in the three months ended March 31, 2018. At March 31, 2018, total compensation cost, including the effect of the waiver of the buy-back right, related to restricted stock awards but not yet recognized was $3.0 million. This cost will be recognized over a period of approximately 1.3 years with a total of $1.7 million remaining to be recognized in 2018. Stock Options On March 28, 2018, the Board of Directors approved an increase in the total number of shares reserved from 3,000,000 to 5,000,000. The Plan is administered by the Board of Directors, and there were no grants prior to the formation of the Plan. Shares of common stock that are issued under the Plan or subject to outstanding incentive awards will be applied to reduce the maximum number of shares of common stock remaining available for issuance under the Plan, provided, however, that that shares subject to an incentive award that expire will automatically become available for issuance. Options issued under the Plan may have a term of up to ten years and may have variable vesting provisions. In conjunction with the Recapitalization, the Company assumed 175,000 fully-vested options, 25,000 were exercised in 2017 and 150,000 are still outstanding, in connection with the Recapitalization with an exercise price of $0.17 per share, which expire on May 15, 2019. The estimated fair value of stock-based awards is recognized as compensation expense over the vesting period of the award. The fair value of restricted stock awards is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant. The fair value of stock option awards are estimated at the grant date as calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. The fair values of our stock option grants were estimated with the following average assumptions: The fair value of stock options granted during the three months ended March 31, 2018 were estimated with the following assumptions:
Expected life |  | 6.0 years |
Risk-free interest rate |  |  | 2.60 | %
Expected annual volatility |  |  | 113.87 | %
Dividend yield |  |  | 0.00 | %
For the three months ended March 31, 2018 option activity was as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Aggregate Intrinsic Value |
Outstanding at January 1, 2018 |  |  | 2,176,637 |  |  | $ | 1.25 |  |  |  | 9.25 |  |  |  |  |
Granted |  |  | 1,671,250 |  |  |  | 1.83 |  |  |  | 9.99 |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Forfeited |  |  | (45,000 | ) |  |  | 1.90 |  |  |  | 9.75 |  |  |  |  |
Outstanding at March 31, 2018 |  |  | 3,802,887 |  |  | $ | 1.52 |  |  |  | 9.59 |  |  | $ | 785,000 |
Vested and expected to vest at March 31, 2018 |  |  | 3,802,887 |  |  | $ | 1.52 |  |  |  | 9.59 |  |  | $ | 785,000 |
Exercisable at March 31, 2018 |  |  | 502,917 |  |  | $ | 0.96 |  |  |  | 7.10 |  |  | $ | 298,000 |
The Company has granted 3,652,887 options under the Plan. In the three months ended March 31, 2018, the Company recorded stock-based compensation of $266,308 related to the grants. Of the total stock-based compensation, $201,730 was expensed in General and Administrative and Research and Development expenses and $64,578 was capitalized as Website Development Costs. At March 31, 2018, total compensation cost related to stock options granted under the Plan but not yet recognized was $3,563,000. This cost will be amortized on a straight-line method over a period of approximately 2.72 years. The aggregate intrinsic value represents the difference between the exercise price of the underlying options and the quoted price of our common stock for the number of options that were in-the-money at March 31, 2018. The following table summarizes certain information about stock options for the three months ended March 31, 2018:
Weighted average grant-date fair value for options granted during the period |  | $ | 1.83 |
Vested options in-the-money at March 31, 2018 |  |  | 502,917 |
Aggregate intrinsic value of options exercised during the period |  | $ | - |
The following table summarizes the common shares reserved for future issuance under the Plan as of March 31, 2018:
Stock options outstanding |  |  | 3,652,887 |
Stock options available for future grant |  |  | 1,347,113 |
|  |  | 5,000,000 |
Common Stock Warrants – Channel Partner Program On December 19, 2016, the Company’s Board of Directors approved a program to be administered by management that authorized the Company to issue up to 5,000,000 common stock warrants to provide equity incentive to its Channel Partners to motivate and reward them for their services to the Company and to align the interests of the Channel Partners with those of stockholders of the Company. The following table summarizes the activity in Channel Partner Warrants during the three months ended March 31, 2018:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Aggregate Intrinsic Value |
Outstanding at January 1, 2018 |  |  | 1,303,832 |  |  | $ | 1.48 |  |  |  | 4.50 |  |  |  |  |
Granted |  |  | 225,000 |  |  |  | 1.84 |  |  |  | 4.90 |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Forfeited |  |  | (83,986 | ) |  |  | 1.91 |  |  |  | 4.50 |  |  |  |  |
Outstanding at March 31, 2018 |  |  | 1,444,846 |  |  | $ | 1.51 |  |  |  | 4.79 |  |  | $ | - |
Exercisable at March 31, 2018 |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
In the three months ended March 31, 2018, the Company issued 225,000 common stock warrants to 13 of the Channel Partners. The warrants have a performance condition and vest over three years and expire in five years from issuance. The exercise prices range from $1.15 to $1.99 with a weighted average of $1.84. The performance conditions are generally based on the average number of unique visitors on the Channel operated by the Channel Partner generated during the six-month period from the launch of the Channel Partners operations on theMaven Network or the revenue generated during the period from issuance date through December 31, 2021 Equity grants with performance conditions that do not have sufficiently large disincentive for non-performance may be measured at fair value that is not fixed until performance is complete. The Company recognizes expense for equity-based payments to non-employees as the services are received. The Company has specific objective criteria, such as the date of launch of a Channel on the Company’s platform, for determination of the period over which services are received and expense is recognized. In the three months ended March 31, 2018, the Company recorded stock-based compensation of $136,587 related to these warrants. Other Warrants In accordance with the Investment Banking Advisory Agreement more fully described in Note 11, Integrated issued warrants to MDB Capital Group, LLC to purchase 1,169,607 shares of Parent common stock in conjunction with the Recapitalization on November 4, 2016. The warrants have an exercise price of $0.20 per share and expire on November 4, 2021. The aggregate intrinsic value of the warrants at March 31, 2018 is $1,567,000. Common Stock to be Issued – Private Placement of Common Stock As fully described in Note 13, in January 2018 and March 2018, the Company raised pursuant to a pending private placement $3,000,000 and $1,250,000, respectively. The $3 million was received prior to December 31, 2017 and was classified as Restricted Cash in the December 31, 2017 balance sheet and then subsequently reclassified to Cash in January 2018 upon completion of the private placement subscription documents. In addition, the investment was classified as Investor Demand Payable in the December 31, 2017 balance sheet and then subsequently reclassified to equity in January 2018. Stock-based Compensation The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2018 was as follows:
|  | Restricted |  |  |  |  |  | Channel |  |  | Common |  |  |  |
|  | Stock at |  |  | Stock |  |  | Partner |  |  | Stock to |  |  |  |
|  | Inception |  |  | Options |  |  | Warrants |  |  | be Issued |  |  | Total |
Research and development |  | $ | - |  |  | $ | 106 |  |  | $ | - |  |  | $ | - |  |  | $ | 106 |
General and administrative |  |  | 1,012,575 |  |  |  | 201,624 |  |  |  | 136,587 |  |  |  | - |  |  |  | 1,350,786 |
|  | $ | 1,012,575 |  |  | $ | 201,730 |  |  |  | 136,587 |  |  | $ | - |  |  | $ | 1,350,892 |
In addition, during the three months ended March 31, 2018 stock-based compensation totaling $1,907,978 during the application and development stage was capitalized for website development. The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2017 was as follows:
|  | Restricted |  |  |  |  |  | Channel |  |  | Common |  |  |  |
|  | Stock at |  |  | Stock |  |  | Partner |  |  | Stock to |  |  |  |
|  | Inception |  |  | Options |  |  | Warrants |  |  | be Issued |  |  | Total |
Research and development |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
General and administrative |  |  | 270,653 |  |  |  | 15,496 |  |  |  | - |  |  |  | - |  |  |  | 286,149 |
|  | $ | 270,653 |  |  | $ | 15,496 |  |  | $ | - |  |  | $ | - |  |  | $ | 286,149 |
In addition, during the three months ended March 31, 2017 stock-based compensation totaling $212,156 during the application and development stage was capitalized for website development.

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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