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Organization and Basis of Presentation | 6 Months Ended
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Jun. 30, 2018
Accounting Policies [Abstract] |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Organization and Reverse Merger On October 11, 2016, Integrated Surgical Systems, Inc. (“Integrated”), a Delaware corporation incorporated on October 1, 1990, and Amplify Media Network, Inc. (“Amplify”), a Nevada corporation incorporated on July 22, 2016, executed a Share Exchange Agreement, as amended (the “Exchange Agreement”), that provided for each outstanding common share of Amplify to be converted into 4.13607 common shares of Integrated (the “Exchange Ratio”), and for each outstanding warrant and stock option to purchase shares of Amplify common stock be cancelled in exchange for a warrant or stock option to purchase shares of Integrated common stock based on the exchange ratio (the “Recapitalization”). On November 4, 2016 (the “Recapitalization Date”), the consummation of the Recapitalization became effective and Amplify became a wholly-owned subsidiary of Integrated. Pursuant to the Recapitalization, Integrated: (1) issued to the shareholders of Amplify an aggregate of 12,517,152 shares of Integrated common stock (see “Note 9. Restricted Stock Awards”); and (2) issued to MDB Capital Group, LLC (“MDB”) as an advisory fee, warrants to purchase 1,169,607 shares of Integrated common stock. Existing Integrated stock options to purchase 175,000 shares of Integrated common stock were assumed pursuant to the Recapitalization. Amplify had no common stock options or warrants outstanding as of the Recapitalization Date. Amplify was originally incorporated in Nevada on July 22, 2016 under the name Amplify Media, Inc., and its Certificate of Incorporation was subsequently amended to change its name to Amplify Media Network, Inc. on July 27, 2016, to TheMaven Network, Inc. on October 14, 2016, and to Maven Coalition, Inc. on March 5, 2018. Amplify is subsequently referred to herein as “Coalition”. Integrated was originally incorporated in Delaware on October 1, 1990 under the name Integrated Surgical Systems, Inc, and its Certificate of Incorporation was subsequently amended to change its name to TheMaven, Inc. on December 2, 2016. Integrated is subsequently referred to herein as “TheMaven”. Unless the context indicates otherwise, TheMaven and Coalition are together hereinafter referred to as the “Company”. Business Operations The Company operates and continues to develop an exclusive network of professionally managed online media channels, with an underlying technology platform. Each channel will be operated by an invitation-only channel partner (“Channel Partner”) drawn from subject matter experts, reporters, group evangelists and social leaders. Channel Partners will publish content and oversee an online community for their respective channels, leveraging a proprietary, socially-driven, mobile-enabled, video-focused technology platform to engage niche audiences within a single network. The Company’s growth strategy includes the acquisition of related online media, publishing and technology businesses that management believes will expand the scale of unique users interacting on the Company’s technology platform. The Company believes that with an increased scale in unique users, it will be able to obtain improved advertising terms and grow advertising revenue. In 2018, the Company completed two acquisitions as described in “Note 13. Subsequent Events”. The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital, as described herein. The Company has not yet developed sustainable revenue-generating operations, does not have positive cash flows from operations, and is dependent on periodic infusions of debt and equity capital to fund its operating requirements. The Company’s common stock is traded on the Over-the-Counter Market under the symbol “MVEN”. Basis of Presentation The condensed consolidated financial statements of the Company at June 30, 2018, and for the three months and six months ended June 30, 2018 and 2017, are unaudited. In the opinion of management of the Company, all adjustments, including normal recurring accruals, have been made that are necessary to present fairly the financial position of the Company as of June 30, 2018, and the results of its operations for the three months and six months ended June 30, 2018 and 2017, and its cash flows for the six months ended June 30, 2018 and 2017. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for a full fiscal year. The consolidated balance sheet at December 31, 2017, has been derived from the Company’s audited financial statements at such date. The statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and other information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC on May 15, 2018. Going Concern The Company’s condensed consolidated financial statements have been presented on the basis that the Company is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company has had nominal revenues to date, and has experienced recurring net losses from operations and negative operating cash flows. During the six months ended June 30, 2018, the Company incurred a net loss of $8,788,587 and utilized cash in operating activities of $4,104,967 and had an accumulated deficit of $17,260,658 as of June 30, 2018. The Company has financed its working capital requirements since inception through the issuance of its debt and equity securities. At June 30, 2018, the Company had cash of $116,187. From July 2018 through July 2019, the Company has raised aggregate net proceeds of approximately $112,815,000 through various debt and preferred stock private placements (see “Note 13. Subsequent Events”). Notwithstanding these recent financings, the Company does not have sufficient resources to fully fund its business operations through June 30, 2020. The Company estimates that it will require a significant amount of capital over a sustained period of time to advance the development of the Company’s business to the point at which it becomes commercially viable and self-sustaining. Accordingly, the Company is currently seeking to raise additional funds, primarily through the issuance of debt and/or equity securities. However, there can be no assurances that the Company will be successful in this regard. As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the accompanying condensed consolidated financial statements are being issued. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s consolidated financial statements for the year ended December 31, 2017, has also expressed substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan, and to ultimately achieve sustainable operating revenues and profitability. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As market conditions present uncertainty as to the Company’s ability to secure additional funds, there can be no assurances that the Company will be able to secure additional financing on acceptable terms, or at all, as and when necessary to continue to conduct operations. A debt financing may contain undue restrictions on the Company’s operations and/or liens on the Company’s tangible and intangible assets, and an equity financing may cause substantial dilution to the Company’s common stockholders. If cash resources are insufficient to satisfy the Company’s ongoing cash requirements, the Company may be required to scale back or discontinue its operations, obtain funds, if available, although there can be no certainty, through strategic alliances that may require the Company to relinquish rights to its technology, or to discontinue its operations entirely. The development and expansion of the Company’s business during the remainder of 2018 and in 2019 and thereafter will be dependent on the capital resources available to the Company. No assurances can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company or adequate to fund the development and expansion of the Company’s business to a level that is commercially viable and self-sustaining. Reclassifications Certain comparative amounts as of December 31, 2017 and for the three months and six months ended June 30, 2017 have been reclassified to conform to the current period’s presentation. These reclassifications were immaterial, both individually and in the aggregate. These changes did not impact previously reported loss from operations or net loss. Correction of Accounting Errors - Restatement for the Three Months and Six Months Ended June 30, 2018 On September 28, 2018, the Company originally filed its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018, with the SEC (and subsequently filed Amendment No. 1 to such report on October 12, 2018, to submit XBRL files as Exhibit 101) that included its condensed consolidated unaudited financial statements for the three months and six months ended June 30, 2018 and 2017. These condensed consolidated unaudited financial statements for the three months and six months ended June 30, 2018 had not been reviewed by an independent certified public accounting firm in accordance with Public Company Accounting Oversight Board Section AS 4105: Reviews of Interim Financial Information prior to such filing with the SEC. The condensed consolidated unaudited financial statements for the three months and six months ended June 30, 2017 included in such report were not revised from their original filing in 2017. The condensed consolidated unaudited financial statements for the three months and six months ended June 30, 2018 included herein have been reviewed by the Company’s independent certified public accounting firm in accordance with Public Company Accounting Oversight Board Section AS 4105: Reviews of Interim Financial Information. In conjunction with the review, the Company made various adjustments and revisions to the previously filed financial statements for the three months and six months ended June 30, 2018, as well as to the related footnotes and management’s discussion and analysis included therein, to correct certain accounting errors. A summary of the impact of the adjustments to the Company’s condensed consolidated unaudited financial statements as of and for the three months and six months ended June 30, 2018 to correct the accounting errors is presented below. These adjustments primarily reflect certain reclassifications and corrections to the accounting treatment for the issuance of certain fully-vested warrants and the issuance of certain derivatives and debt discounts associated with debt financing transactions entered into during the three months and six months ended June 30, 2018.
|  | June 30, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Restated |
CONDENSED CONSOLIDATED BALANCE SHEET: |  |  |  |  |  |  |  |  |  |  |  |
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Total current assets |  | $ | 628,778 |  |  | $ | - |  |  | $ | 628,778 |
Total assets |  | $ | 10,845,572 |  |  | $ | 14,384 |  |  | $ | 10,859,956 |
LIABILITIES AND STOCKHOLDERS’ EQUITY: |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | 1,856,394 |  |  | $ | 620,946 |  |  | $ | 2,477,340 |
Notes payable |  |  | 2,895,103 |  |  |  | 2,505,965 |  |  |  | 5,401,068 |
Liquidated damages payable under registration rights agreements |  |  |  |  |  |  | 15,001 |  |  |  | 15,001 |
Other current liabilities |  |  | 1,460,227 |  |  |  | (444,871 | ) |  |  | 1,015,356 |
Total liabilities |  |  | 6,211,724 |  |  |  | 2,697,041 |  |  |  | 8,908,765 |
Redeemable Series G convertible preferred stock |  |  | 168,496 |  |  |  | - |  |  |  | 168,496 |
Total stockholders’ equity |  |  | 4,465,352 |  |  |  | (2,682,657 | ) |  |  | 1,782,695 |
Total liabilities and stockholders’ equity |  | $ | 10,845,572 |  |  | $ | 14,384 |  |  | $ | 10,859,956 |
|  | Three Months Ended June 30, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Restated |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS: |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 216,356 |  |  | $ | - |  |  | $ | 216,356 |
Gross loss |  |  | (867,966 | ) |  |  | (18,491 | ) |  |  | (886,457 | )
Total operating expenses |  |  | 2,729,691 |  |  |  | 260,246 |  |  |  | 2,989,937 |
Loss from operations |  |  | (3,597,657 | ) |  |  | (278,737 | ) |  |  | (3,876,394 | )
Change in derivatives valuation |  |  | 315,194 |  |  |  | (186,650 | ) |  |  | 128,544 |
Interest expense |  |  | (179,155 | ) |  |  | 55,612 |  |  |  | (123,543 | )
Interest income |  |  | - |  |  |  | 14,384 |  |  |  | 14,384 |
True-up termination fee |  |  | - |  |  |  | (1,344,648 | ) |  |  | (1,344,648 | )
Liquidated damages under registration rights agreements |  |  | - |  |  |  | (15,001 | ) |  |  | (15,001 | )
Net loss |  |  | (3,461,618 | ) |  |  | (1,755,040 | ) |  |  | (5,216,658 | )
Basic and diluted net loss per common share |  | $ | (0.14 | ) |  | $ | (0.07 | ) |  | $ | (0.21 | )
|  | Six Months Ended June 30, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Restated |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS: |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 303,041 |  |  | $ | - |  |  | $ | 303,041 |
Gross loss |  |  | (1,816,989 | ) |  |  | (18,491 | ) |  |  | (1,835,480 | )
Total operating expenses |  |  | 5,352,597 |  |  |  | 260,246 |  |  |  | 5,612,843 |
Loss from operations |  |  | (7,169,586 | ) |  |  | (278,737 | ) |  |  | (7,448,323 | )
Change in derivatives valuation |  |  | 315,194 |  |  |  | (186,650 | ) |  |  | 128,544 |
Interest expense |  |  | (179,155 | ) |  |  | 55,612 |  |  |  | (123,543 | )
Interest income |  |  | - |  |  |  | 14,384 |  |  |  | 14,384 |
True-up termination fee |  |  | - |  |  |  | (1,344,648 | ) |  |  | (1,344,648 | )
Liquidated damages under registration rights agreements |  |  | - |  |  |  | (15,001 | ) |  |  | (15,001 | )
Net loss |  |  | (7,033,547 | ) |  |  | (1,755,040 | ) |  |  | (8,788,587 | )
Basic and diluted net loss per common share |  | $ | (0.29 | ) |  | $ | (0.08 | ) |  | $ | (0.36 | )
|  | Six Months Ended June 30, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Restated |
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY: |  |  |  |  |  |  |  |  |  |  |  |
Common stock, shares outstanding |  |  | 30,975,206 |  |  |  | 143,810 |  |  |  | 31,119,016 |
Common stock, par value |  | $ | 309,751 |  |  | $ | 1,438 |  |  | $ | 311,189 |
Additional paid-in capital |  |  | 19,661,219 |  |  |  | (929,055 | ) |  |  | 18,732,164 |
Accumulated deficit |  |  | (15,505,618 | ) |  |  | (1,755,040 | ) |  |  | (17,260,658 | )
Total stockholders’ equity |  | $ | 4,465,352 |  |  | $ | (2,682,657 | ) |  | $ | 1,782,695 |
|  | Six Months Ended June 30, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Restated |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS: |  |  |  |  |  |  |  |  |  |  |  |
Net cash used in operating activities |  | $ | (4,104,967 | ) |  | $ | - |  |  | $ | (4,104,967 | )
Net cash used in investing activities |  |  | (7,157,631 | ) |  |  | - |  |  |  | (7,157,631 | )
Net cash provided by financing activities |  |  | 7,759,536 |  |  |  | - |  |  |  | 7.759,536 |
Net decrease in cash and restricted cash |  |  | (3,503,062 | ) |  |  | - |  |  |  | (3,503,062 | )
Balance at beginning of period |  |  | 3,619,249 |  |  |  | - |  |  |  | 3,619,249 |
Balance at end of period |  | $ | 116,187 |  |  | $ | - |  |  | $ | 116,187 |

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