QUEST RESOURCE HOLDING CORP, 10-Q filed on 5/16/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
May 1, 2016
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
QRHC 
 
Entity Registrant Name
Quest Resource Holding Corporation 
 
Entity Central Index Key
0001442236 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Smaller Reporting Company 
 
Entity Common Stock, Shares Outstanding
 
118,678,225 
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 3,910,056 
$ 2,989,731 
Accounts receivable, less allowance for doubtful accounts of $705,486 and $586,941 as of March 31, 2016 and December 31, 2015, respectively
35,123,632 
33,298,797 
Prepaid expenses and other current assets
967,930 
946,908 
Total current assets
40,001,618 
37,235,436 
Goodwill
58,337,290 
58,337,290 
Intangible assets, net
11,070,012 
11,828,008 
Property and equipment, net, and other assets
1,649,675 
1,608,632 
Total assets
111,058,595 
109,009,366 
Current liabilities:
 
 
Accounts payable and accrued liabilities
36,124,552 
34,847,359 
Deferred revenue and other current liabilities
433,618 
328,829 
Total current liabilities
36,558,170 
35,176,188 
Line of credit
3,500,000 
4,000,000 
Other long-term liabilities
324,297 
341,142 
Total liabilities
40,382,467 
39,517,330 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2016 and December 31, 2015, respectively
   
   
Common stock, $0.001 par value, 200,000,000 shares authorized, 118,678,225 and 111,788,225 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively
118,678 
111,788 
Additional paid-in capital
155,670,715 
152,249,558 
Accumulated deficit
(85,113,265)
(82,869,310)
Total stockholders’ equity
70,676,128 
69,492,036 
Total liabilities and stockholders’ equity
$ 111,058,595 
$ 109,009,366 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Statement Of Financial Position [Abstract]
 
 
Allowance for doubtful accounts receivable
$ 705,486 
$ 586,941 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
118,678,225 
111,788,225 
Common stock, shares outstanding
118,678,225 
111,788,225 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Statement [Abstract]
 
 
Revenue
$ 45,770,896 
$ 40,008,609 
Cost of revenue
42,284,536 
36,722,933 
Gross profit
3,486,360 
3,285,676 
Operating expenses:
 
 
Selling, general, and administrative
4,655,163 
3,776,982 
Depreciation and amortization
1,018,564 
979,137 
Total operating expenses
5,673,727 
4,756,119 
Operating loss
(2,187,367)
(1,470,443)
Other expense:
 
 
Interest expense
(56,588)
(48,597)
Total other expense
(56,588)
(48,597)
Loss before taxes
(2,243,955)
(1,519,040)
Net loss
(2,243,955)
(1,519,040)
Net loss applicable to common stockholders
$ (2,243,955)
$ (1,519,040)
Net loss per share
 
 
Basic and diluted
$ (0.02)
$ (0.01)
Weighted average number of common shares outstanding
 
 
Basic and diluted
111,863,939 
111,617,626 
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (USD $)
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Beginning Balance at Dec. 31, 2015
$ 69,492,036 
$ 111,788 
$ 152,249,558 
$ (82,869,310)
Beginning Balance, Shares at Dec. 31, 2015
 
111,788,225 
 
 
Stock-based compensation
538,697 
 
538,697 
 
Sale of common stock and warrants, net of issuance costs, Value
2,889,350 
6,890 
2,882,460 
 
Sale of common stock and warrants, net of issuance costs, Shares
6,890,000 
6,890,000 
 
 
Net loss
(2,243,955)
 
 
(2,243,955)
Ending Balance at Mar. 31, 2016
$ 70,676,128 
$ 118,678 
$ 155,670,715 
$ (85,113,265)
Ending Balance, Shares at Mar. 31, 2016
 
118,678,225 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:
 
 
Net loss
$ (2,243,955)
$ (1,519,040)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
Depreciation
108,916 
76,046 
Amortization of intangibles
919,065 
903,091 
Provision for doubtful accounts
141,553 
 
Stock-based compensation
538,697 
285,156 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(1,966,388)
1,009,981 
Prepaid expenses and other current assets
(21,022)
(67,983)
Security deposits and other assets
34,183 
(12,677)
Accounts payable and accrued liabilities
1,277,193 
(236,849)
Deferred revenue and other current liabilities
101,845 
41,332 
Other long-term liabilities
(6,282)
4,557 
Net cash provided by (used in) operating activities
(1,116,195)
483,614 
Cash flows from investing activities:
 
 
Purchase of property and equipment
(162,304)
(170,144)
Purchase of capitalized software development
(161,069)
(150,837)
Net cash used in investing activities
(323,373)
(320,981)
Cash flows from financing activities:
 
 
Proceeds from line of credit
5,250,000 
 
Repayments to line of credit
(5,750,000)
 
Proceeds from the sale of common stock and warrants, net of issuance costs
2,889,350 
 
Repayments of capital lease obligations
(29,457)
(5,636)
Net cash provided by (used in) financing activities
2,359,893 
(5,636)
Net increase in cash and cash equivalents
920,325 
156,997 
Cash and cash equivalents at beginning of period
2,989,731 
3,154,540 
Cash and cash equivalents at end of period
3,910,056 
3,311,537 
Supplemental cash flow information:
 
 
Cash paid for interest
55,105 
48,521 
Supplemental non-cash flow activities:
 
 
Acquisition of equipment under capital leases
21,838 
 
Restricted Stock Units [Member]
 
 
Supplemental non-cash flow activities:
 
 
Common stock issued
 
$ 57 
The Company, Description of Business, and Liquidity
The Company, Description of Business, and Liquidity

1. The Company, Description of Business, and Liquidity

The accompanying condensed consolidated financial statements include the accounts of Quest Resource Holding Corporation (“QRHC”) and its subsidiaries, Earth911, Inc. (“Earth911”), Quest Resource Management Group, LLC (“Quest”), Landfill Diversion Innovations, LLC, and Youchange, Inc. (“YouChange”) (collectively, “we,” “us,” or “our company”).

Operations – We provide businesses with one-stop management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their businesses.  Our comprehensive reuse, recycling, and proper disposal management programs are designed to enable regional and national customers to have a single point of contact for managing a variety of waste streams and recyclables.  This business generates substantially all of our revenue.  We also operate environmentally based social media and online data platforms that contain information and instructions necessary to empower consumers and consumer product companies to recycle or properly dispose of household products and materials.  Our directory of local recycling and proper disposal options empowers consumers directly and enables consumer product companies to empower their customers by giving them the guidance necessary for the proper recycling or disposal of a wide range of household products and materials, including the “why, where, and how” of recycling.  Two customers accounted for 55.3% and 61.5% of revenue for the three months ended March 31, 2016 and 2015, respectively.  Our principal offices are located in The Colony, Texas.

Liquidity – As of March 31, 2016 and December 31, 2015, our working capital balance was $3,443,448 and $2,059,248, respectively.

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principals of Presentation and Consolidation

The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2016 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2015 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. As Quest, Earth911, and YouChange each operate as ecology based green service companies, we did not deem segment reporting necessary.

All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year.

Revenue Recognition

We recognize revenue only when all of the following criteria have been met:

 

·

persuasive evidence of an arrangement exists;

 

·

delivery has occurred or services have been rendered;

 

·

the fee for the arrangement is fixed or determinable; and

 

·

collectability is reasonably assured.

Persuasive Evidence of an Arrangement Exists – We document all terms of an arrangement in a service agreement or quote signed or confirmed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Rendered – We perform all services or deliver all products prior to recognizing revenue. Services are deemed to be performed when the services are complete.

The Fee for the Arrangement is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the quote, service agreement, or accepted customer purchase order.

Collectability Is Reasonably Assured – We assess collectability on a customer by customer basis based on criteria developed by us.

We provide businesses with management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their business. We utilize third-party subcontractors to execute the collection, transport, and recycling or disposal of used motor oil, oil filters, scrap tires, cooking oil, and expired food products. We evaluate the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of service revenue and related costs or the net amount earned as management fees. Generally, when we are primarily obligated in a transaction, have latitude in establishing prices and selecting suppliers, have credit risk, or have several but not all of these indicators, we record revenue gross.  We record amounts collected from customers for sales tax on a net basis. In situations in which we are not primarily obligated, we do not have credit risk, or we determine amounts earned using fixed percentage or fixed payment schedules, we record the net amounts as management fees earned. Currently, we have one contract accounted for as management fees with revenue of $87,689 and nil for the three months ended March 31, 2016 and 2015, respectively.  Our gross billings on this management fee contract were $1,121,643 and nil for the three months ended March 31, 2016 and 2015, respectively.

We recognize licensing fees ratably over the term of the license. We derive some revenue from advertising contracts, which we recognize ratably over the term that the advertisement appears on our website.

Net Loss Per Share

We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2016 and 2015 would be anti-dilutive. These potentially dilutive securities include stock options, restricted stock units, and warrants and related to 22,823,106 and 16,832,380 shares at March 31, 2016 and 2015, respectively.

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Anti-dilutive securities excluded from diluted loss per share:

 

 

 

 

 

 

 

 

Stock options

 

 

6,863,656

 

 

 

4,965,280

 

Restricted stock units

 

 

 

 

 

76,100

 

Warrants

 

 

15,959,450

 

 

 

11,791,000

 

Total anti-dilutive securities excluded from diluted loss per share

 

 

22,823,106

 

 

 

16,832,380

 

 

Inventories

We record inventories within “Prepaid expenses and other current assets” in our condensed consolidated balance sheets.  As of March 31, 2016 and December 31, 2015, all inventories were waste disposal equipment with balances of $12,593 and $54,473, respectively, with no reserve for inventory obsolescence at either date.

 

Property and Equipment, Net, and Other Assets
Property and Equipment, Net, and Other Assets

3. Property and Equipment, Net, and Other Assets

At March 31, 2016 and December 31, 2015, property and equipment, net, and other assets consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $2,082,454

     and $1,973,538 as of March 31, 2016 and December 31, 2015,

     respectively

 

$

1,383,462

 

 

$

1,308,236

 

Security deposits and other assets

 

 

266,213

 

 

 

300,396

 

    Property and equipment, net, and other assets

 

$

1,649,675

 

 

$

1,608,632

 

 

We compute depreciation using the straight-line method over the estimated useful lives of the property and equipment. The depreciation expense for the three months ended March 31, 2016 was $108,916, inclusive of $9,417 of depreciation expense reflected within “Cost of revenue” in our consolidated statement of operations as it related to assets used in directly servicing customer contracts.  The depreciation expense for the three months ended March 31, 2015 was $76,046, with no depreciation expense recorded to “Cost of revenue.” At March 31, 2016, our capital lease assets were $413,502, net of $75,325 of accumulated depreciation. At December 31, 2015, our capital lease assets were $426,757, net of $34,041 of accumulated depreciation.  

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

4. Goodwill and Other Intangible Assets

The components of goodwill and other intangible assets were as follows:

  

March 31, 2016 (Unaudited)

 

Estimated

Useful Life

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

Finite lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

5 years

 

$

12,720,000

 

 

$

6,890,000

 

 

$

5,830,000

 

Trademarks

 

7 years

 

 

6,273,885

 

 

 

2,410,797

 

 

 

3,863,088

 

Patents

 

7 years

 

 

230,683

 

 

 

230,683

 

 

 

 

Software

 

7 years

 

 

1,417,602

 

 

 

149,609

 

 

 

1,267,993

 

Customer lists

 

5 years

 

 

307,153

 

 

 

198,222

 

 

 

108,931

 

Total finite lived intangible assets

 

 

 

$

20,949,323

 

 

$

9,879,311

 

 

$

11,070,012

 

 

December 31, 2015

 

Estimated

Useful Life

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

Finite lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

5 years

 

$

12,720,000

 

 

$

6,254,000

 

 

$

6,466,000

 

Trademarks

 

7 years

 

 

6,239,950

 

 

 

2,188,129

 

 

 

4,051,821

 

Patents

 

7 years

 

 

230,683

 

 

 

230,683

 

 

 

 

Software

 

7 years

 

 

1,290,468

 

 

 

104,570

 

 

 

1,185,898

 

Customer lists

 

5 years

 

 

307,153

 

 

 

182,864

 

 

 

124,289

 

Total finite lived intangible assets

 

 

 

$

20,788,254

 

 

$

8,960,246

 

 

$

11,828,008

 

 

March 31, 2016 (Unaudited) and December 31, 2015

 

Estimated

Useful Life

 

Carrying

Amount

 

Indefinite lived intangible asset:

 

 

 

 

 

 

Goodwill

 

Indefinite

 

$

58,337,290

 

 

We compute amortization using the straight-line method over the estimated useful lives of the finite lived intangible assets. The amortization expense related to finite lived intangible assets was $919,065 and $903,091 for the three months ended March 31, 2016 and 2015, respectively.  We have no indefinite-lived intangible assets other than goodwill. The goodwill is not deductible for tax purposes.

Line of Credit
Line of Credit

5. Line of Credit

On December 15, 2010, Quest entered into a Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”), a national banking association. This agreement, as amended, provides Quest with a loan facility of up to $15,000,000 for working capital with advances generally limited to 80% of eligible accounts receivable from Quest’s largest customer and 85% of all other eligible accounts receivable. The facility matures May 13, 2018.  The interest on the outstanding principal amount accrues daily and is payable monthly based on a fluctuating interest rate per annum, which is the base rate plus 1.50% (2.69% as of March 31, 2016). The base rate for any day is the greater of (a) the federal funds rate plus one-half of 1%, (b) Region’s published effective prime rate, or (c) the Eurodollar rate for such day based on an interest period of one month. To secure the amounts due under the agreement, Quest granted Regions a security interest in all of its assets with guarantees from QRHC and Earth911. Quest had $3,500,000 outstanding and $9,124,343 available to be borrowed as of March 31, 2016. The amount of interest expense related to the Regions line of credit for the three months ended March 31, 2016 and 2015 was $49,782 and $35,050, respectively.  As of March 31, 2016, we were in compliance with the financial covenants.  

Capital Lease Obligations
Capital Lease Obligations

6. Capital Lease Obligations

At March 31, 2016 and December 31, 2015, total capital lease obligations outstanding consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

 

Capital lease obligations, imputed interest at 2.65% to 9.39%, with monthly payments of $11,022, through August 2018, secured by computer and telephone equipment

 

$

394,551

 

 

$

402,170

 

Total

 

 

394,551

 

 

 

402,170

 

Less: current maturities

 

 

(115,069

)

 

 

(112,125

)

Long-term portion

 

$

279,482

 

 

$

290,045

 

 

Our capital lease obligations are included within “Deferred revenue and other current liabilities” and “Other long-term liabilities” in our condensed consolidated balance sheets.  The amount of interest expense related to our capital leases for the three months ended March 31, 2016 and 2015 was $3,965 and $487, respectively.

Income Taxes
Income Taxes

7. Income Taxes

We compute income taxes using the asset and liability method in accordance with FASB ASC Topic 740, Income Taxes. Under the asset and liability method, we determine deferred income tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities and measure them using currently enacted tax rates and laws. We provide a valuation allowance for the amount of deferred tax assets that, based on available evidence, are more likely than not to be realized. Realization of our net operating loss carryforward was not reasonably assured as of March 31, 2016 and December 31, 2015, and we have recorded a valuation allowance of $13,199,000 and $12,313,000, respectively, against deferred tax assets in excess of deferred tax liabilities in the accompanying condensed consolidated financial statements. As of March 31, 2016 and December 31, 2015, we had federal income tax net operating loss carryforwards of approximately $15,000,000 and $14,500,000, respectively, which expire at various dates beginning in 2031.

 

Fair Value of Financial Instruments
Fair Value of Financial Instruments

8. Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, line of credit, capital lease obligations, and warrant liability. We do not believe that we are exposed to significant interest, currency, or credit risks arising from these financial instruments. With the exception of the warrant liability, the fair values of these financial instruments approximate their carrying values using Level 3 inputs, based on their short maturities or, for long-term portions of capital lease obligations and line of credit, based on borrowing rates currently available to us for loans with similar terms and maturities.

On May 7, 2014, we issued warrants to purchase an aggregate of 200,000 shares of our common stock to a consultant in exchange for services rendered during 2014.  Of these warrants, 100,000 shares underlying the warrants vested immediately and resulted in no expense recorded for the three months ended March 31, 2016 and 2015.  The remaining 100,000 shares underlying the warrants, which we had classified as a liability, vested on May 7, 2015, subject to performance conditions.  We measured the warrants at fair value by applying the Black-Scholes-Merton valuation model, which utilizes Level 3 inputs. As of March 31, 2015, the assumptions used in the Black-Scholes-Merton valuation for the warrants to purchase 100,000 shares were as follows: volatility of 81.1%; risk free interest rate of 0.59%; expected term of 2.1 years; and expected dividend yield of 0%. The grant date fair value of the warrant valuation described above was $0.32 per warrant. We based the risk free interest rate on U.S. Treasury rates with maturity dates approximating the expected term of the warrants. We determined the historical volatility using the historical changes in the market price of our common stock and applicable comparable companies.  Our warrant liability was nil at March 31, 2016 and December 31, 2015, respectively. Due to the decline in the fair value of these warrants, we recorded a decrease of stock-based compensation expense of nil and $5,936 for the three months ended March 31, 2016 and 2015, respectively, related to these warrants.

 

Stockholders' Equity
Stockholders' Equity

9. Stockholders’ Equity

Preferred StockOur authorized preferred stock includes 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or are outstanding.

Common Stock – Our authorized common stock includes 200,000,000 shares of common stock with a par value of $0.001, of which 118,678,225 and 111,788,225 shares were issued and outstanding as of March 31, 2016 and December 31, 2015, respectively.

During the three months ended March 31, 2016, we issued shares of common stock as follows:

 

 

 

Common Stock

 

 

 

Shares

 

 

Amount

 

Sale of common stock and warrants, net of issuance costs of $452,300

 

 

6,890,000

 

 

$

2,889,350

 

 

 

 

6,890,000

 

 

$

2,889,350

 

 

·

Sale of Common Stock and Warrants  

 

o

On March 30, 2016, we issued 6,890,000 shares of our common stock, together with warrants to purchase 3,445,000 shares of our common stock, at a price per share and warrant of $0.485. We also issued the underwriters warrants to purchase 723,450 shares of our common stock.  The warrants may be exercised for a period of five years at an initial exercise price of $0.485 per share, subject to adjustment for certain dilutive events. We also granted the underwriters a 30-day option to acquire up to 1,033,500 additional shares of common stock and/or additional warrants to purchase up to 516,750 shares of common stock solely to cover over-allotments, with the underwriters receiving additional warrants to purchase 108,518 shares of our common stock if they exercised the over-allotment option.  The underwriters did not exercise the over-allotment option.  

Warrants – During the three months ended March 31, 2016, we issued warrants to purchase 4,168,450 shares and no holders exercised warrants.  During the three months ended March 31, 2015, we did not issue any warrants and a third party forfeited 1,200,000 contingent warrants.  Due to the uncertainty of attaining any of the performance conditions, we had not recognized any additional expense for the non-vested warrants.  As these warrants related to internally developed software, we did not capitalize any costs or recognize any expense for the three months ended March 31, 2015. At March 31, 2016, we had outstanding exercisable warrants to purchase 15,959,450 shares of common stock.  

The following table summarizes the warrants issued and outstanding as of March 31, 2016:

 

Warrants Issued and Outstanding as of March 31, 2016

 

 

 

Date of

 

Exercise

 

 

Shares of

 

Description

 

Issuance

 

Expiration

 

Price

 

 

Common Stock

 

Exercisable warrants

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

04/18/2014

 

04/01/2017

 

$

2.00

 

 

 

1,441,000

 

Warrant

 

05/07/2014

 

05/07/2017

 

$

2.65

 

 

 

200,000

 

Warrant

 

05/28/2014

 

10/31/2016

 

$

4.31

 

 

 

450,000

 

Warrants

 

09/24/2014

 

09/24/2019

 

$

2.50

 

 

 

9,000,000

 

Warrants

 

10/20/2014

 

10/20/2019

 

$

2.50

 

 

 

700,000

 

Warrants

 

3/30/2016

 

03/30/2021

 

$

0.485

 

 

 

4,168,450

 

Total warrants issued and outstanding

 

 

 

 

 

 

15,959,450

 

Employee Stock Purchase Plan – On September 17, 2014, our stockholders approved the Quest Resource Holding Corporation 2014 Employee Stock Purchase Plan (the “ESPP”). We recorded expense of $9,206 and $9,726 related to the ESPP during the three months ended March 31, 2016 and 2015, respectively.  

Stock Options – The following table summarizes the stock option activity for the three month period ended March 31, 2016:

 

 

 

Stock Options

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

Exercise

 

Average

 

 

 

Number

 

 

Price Per

 

Exercise Price

 

 

 

of Shares

 

 

Share

 

Per Share

 

Outstanding at December 31, 2015

 

 

5,943,908

 

 

$    0.78 — 3.75

 

$

2.04

 

Granted

 

 

2,166,000

 

 

$    0.55 — 0.68

 

$

0.68

 

Canceled/Forfeited

 

 

(1,246,252

)

 

$    0.79 — 3.75

 

$

1.64

 

Outstanding at March 31, 2016

 

 

6,863,656

 

 

$    0.55 — 3.75

 

$

1.60

 

 

For the three months ended March 31, 2016 and 2015, we recorded $21,809 and nil, respectively, of stock-based compensation within “Selling, general, and administrative expenses” in our condensed consolidated statements of operations for services provided by a consultant.  

Summary of Significant Accounting Policies (Policies)

Principals of Presentation and Consolidation

The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2016 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2015 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. As Quest, Earth911, and YouChange each operate as ecology based green service companies, we did not deem segment reporting necessary.

All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year.

Revenue Recognition

We recognize revenue only when all of the following criteria have been met:

 

·

persuasive evidence of an arrangement exists;

 

·

delivery has occurred or services have been rendered;

 

·

the fee for the arrangement is fixed or determinable; and

 

·

collectability is reasonably assured.

Persuasive Evidence of an Arrangement Exists – We document all terms of an arrangement in a service agreement or quote signed or confirmed by the customer prior to recognizing revenue.

Delivery Has Occurred or Services Have Been Rendered – We perform all services or deliver all products prior to recognizing revenue. Services are deemed to be performed when the services are complete.

The Fee for the Arrangement is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the quote, service agreement, or accepted customer purchase order.

Collectability Is Reasonably Assured – We assess collectability on a customer by customer basis based on criteria developed by us.

We provide businesses with management programs to reuse, recycle, and dispose of a wide variety of waste streams and recyclables generated by their business. We utilize third-party subcontractors to execute the collection, transport, and recycling or disposal of used motor oil, oil filters, scrap tires, cooking oil, and expired food products. We evaluate the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of service revenue and related costs or the net amount earned as management fees. Generally, when we are primarily obligated in a transaction, have latitude in establishing prices and selecting suppliers, have credit risk, or have several but not all of these indicators, we record revenue gross.  We record amounts collected from customers for sales tax on a net basis. In situations in which we are not primarily obligated, we do not have credit risk, or we determine amounts earned using fixed percentage or fixed payment schedules, we record the net amounts as management fees earned. Currently, we have one contract accounted for as management fees with revenue of $87,689 and nil for the three months ended March 31, 2016 and 2015, respectively.  Our gross billings on this management fee contract were $1,121,643 and nil for the three months ended March 31, 2016 and 2015, respectively.

We recognize licensing fees ratably over the term of the license. We derive some revenue from advertising contracts, which we recognize ratably over the term that the advertisement appears on our website.

Net Loss Per Share

We compute basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. We have other potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect in both 2016 and 2015 would be anti-dilutive. These potentially dilutive securities include stock options, restricted stock units, and warrants and related to 22,823,106 and 16,832,380 shares at March 31, 2016 and 2015, respectively.

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Anti-dilutive securities excluded from diluted loss per share:

 

 

 

 

 

 

 

 

Stock options

 

 

6,863,656

 

 

 

4,965,280

 

Restricted stock units

 

 

 

 

 

76,100

 

Warrants

 

 

15,959,450

 

 

 

11,791,000

 

Total anti-dilutive securities excluded from diluted loss per share

 

 

22,823,106

 

 

 

16,832,380

 

 

Inventories

We record inventories within “Prepaid expenses and other current assets” in our condensed consolidated balance sheets.  As of March 31, 2016 and December 31, 2015, all inventories were waste disposal equipment with balances of $12,593 and $54,473, respectively, with no reserve for inventory obsolescence at either date.

Summary of Significant Accounting Policies (Tables)
Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share

The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Anti-dilutive securities excluded from diluted loss per share:

 

 

 

 

 

 

 

 

Stock options

 

 

6,863,656

 

 

 

4,965,280

 

Restricted stock units

 

 

 

 

 

76,100

 

Warrants

 

 

15,959,450

 

 

 

11,791,000

 

Total anti-dilutive securities excluded from diluted loss per share

 

 

22,823,106

 

 

 

16,832,380

 

 

Property and Equipment, Net, and Other Assets (Tables)
Components Property and Equipment, Net, and Other Assets

At March 31, 2016 and December 31, 2015, property and equipment, net, and other assets consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $2,082,454

     and $1,973,538 as of March 31, 2016 and December 31, 2015,

     respectively

 

$

1,383,462

 

 

$

1,308,236

 

Security deposits and other assets

 

 

266,213

 

 

 

300,396

 

    Property and equipment, net, and other assets

 

$

1,649,675

 

 

$

1,608,632

 

 

Goodwill and Other Intangible Assets (Tables)

The components of goodwill and other intangible assets were as follows:

  

March 31, 2016 (Unaudited)

 

Estimated

Useful Life

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

Finite lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

5 years

 

$

12,720,000

 

 

$

6,890,000

 

 

$

5,830,000

 

Trademarks

 

7 years

 

 

6,273,885

 

 

 

2,410,797

 

 

 

3,863,088

 

Patents

 

7 years

 

 

230,683

 

 

 

230,683

 

 

 

 

Software

 

7 years

 

 

1,417,602

 

 

 

149,609

 

 

 

1,267,993

 

Customer lists

 

5 years

 

 

307,153

 

 

 

198,222

 

 

 

108,931

 

Total finite lived intangible assets

 

 

 

$

20,949,323

 

 

$

9,879,311

 

 

$

11,070,012

 

 

December 31, 2015

 

Estimated

Useful Life

 

Gross Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

 

Finite lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

5 years

 

$

12,720,000

 

 

$

6,254,000

 

 

$

6,466,000

 

Trademarks

 

7 years

 

 

6,239,950

 

 

 

2,188,129

 

 

 

4,051,821

 

Patents

 

7 years

 

 

230,683

 

 

 

230,683

 

 

 

 

Software

 

7 years

 

 

1,290,468

 

 

 

104,570

 

 

 

1,185,898

 

Customer lists

 

5 years

 

 

307,153

 

 

 

182,864

 

 

 

124,289

 

Total finite lived intangible assets

 

 

 

$

20,788,254

 

 

$

8,960,246

 

 

$

11,828,008

 

 

 

March 31, 2016 (Unaudited) and December 31, 2015

 

Estimated

Useful Life

 

Carrying

Amount

 

Indefinite lived intangible asset:

 

 

 

 

 

 

Goodwill

 

Indefinite

 

$

58,337,290

 

 

Capital Lease Obligations (Tables)
Summary of Capital Lease Obligations

At March 31, 2016 and December 31, 2015, total capital lease obligations outstanding consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

 

Capital lease obligations, imputed interest at 2.65% to 9.39%, with monthly payments of $11,022, through August 2018, secured by computer and telephone equipment

 

$

394,551

 

 

$

402,170

 

Total

 

 

394,551

 

 

 

402,170

 

Less: current maturities

 

 

(115,069

)

 

 

(112,125

)

Long-term portion

 

$

279,482

 

 

$

290,045

 

 

Stockholders' Equity (Tables)

During the three months ended March 31, 2016, we issued shares of common stock as follows:

 

 

 

Common Stock

 

 

 

Shares

 

 

Amount

 

Sale of common stock and warrants, net of issuance costs of $452,300

 

 

6,890,000

 

 

$

2,889,350

 

 

 

 

6,890,000

 

 

$

2,889,350

 

 

The following table summarizes the warrants issued and outstanding as of March 31, 2016:

 

Warrants Issued and Outstanding as of March 31, 2016

 

 

 

Date of

 

Exercise

 

 

Shares of

 

Description

 

Issuance

 

Expiration

 

Price

 

 

Common Stock

 

Exercisable warrants

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

04/18/2014

 

04/01/2017

 

$

2.00

 

 

 

1,441,000

 

Warrant

 

05/07/2014

 

05/07/2017

 

$

2.65

 

 

 

200,000

 

Warrant

 

05/28/2014

 

10/31/2016

 

$

4.31

 

 

 

450,000

 

Warrants

 

09/24/2014

 

09/24/2019

 

$

2.50

 

 

 

9,000,000

 

Warrants

 

10/20/2014

 

10/20/2019

 

$

2.50

 

 

 

700,000

 

Warrants

 

3/30/2016

 

03/30/2021

 

$

0.485

 

 

 

4,168,450

 

Total warrants issued and outstanding

 

 

 

 

 

 

15,959,450

 

 

Stock Options – The following table summarizes the stock option activity for the three month period ended March 31, 2016:

 

 

 

Stock Options

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

Exercise

 

Average

 

 

 

Number

 

 

Price Per

 

Exercise Price

 

 

 

of Shares

 

 

Share

 

Per Share

 

Outstanding at December 31, 2015

 

 

5,943,908

 

 

$    0.78 — 3.75

 

$

2.04

 

Granted

 

 

2,166,000

 

 

$    0.55 — 0.68

 

$

0.68

 

Canceled/Forfeited

 

 

(1,246,252

)

 

$    0.79 — 3.75

 

$

1.64

 

Outstanding at March 31, 2016

 

 

6,863,656

 

 

$    0.55 — 3.75

 

$

1.60

 

 

The Company, Description of Business, and Liquidity - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2016
Revenue [Member]
Customer
Mar. 31, 2016
Customer Accounted [Member]
Revenue [Member]
Mar. 31, 2015
Customer Accounted [Member]
Revenue [Member]
Concentration Risk [Line Items]
 
 
 
 
 
Number of customer
 
 
 
 
Percentage of revenue
 
 
 
55.30% 
61.50% 
Working Capital
$ 3,443,448 
$ 2,059,248 
 
 
 
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Contract
Mar. 31, 2015
Dec. 31, 2015
Accounting Policies [Abstract]
 
 
 
Number of contracts accounted for management fees
 
 
Management fees earned, net
$ 87,689 
$ 0 
 
Management fees earned, gross
1,121,643 
 
Potentially dilutive securities include options, restricted stock units, and warrants
22,823,106 
16,832,380 
 
Inventories waste disposal equipment
12,593 
 
54,473 
Reserve for inventory obsolescence
$ 0 
 
 
Summary of Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Diluted Loss Per Share (Detail)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
Anti-dilutive securities excluded from diluted loss per share
22,823,106 
16,832,380 
Stock options [Member]
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
Anti-dilutive securities excluded from diluted loss per share
6,863,656 
4,965,280 
Restricted Stock Units [Member]
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
Anti-dilutive securities excluded from diluted loss per share
 
76,100 
Warrant [Member]
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
Anti-dilutive securities excluded from diluted loss per share
15,959,450 
11,791,000 
Property and Equipment, Net, and Other Assets - Components of Property and Equipment, Net, and Other Assets (Detail) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Property Plant And Equipment [Abstract]
 
 
Property and equipment, net of depreciation
$ 1,383,462 
$ 1,308,236 
Security deposits and other assets
266,213 
300,396 
Property and Equipment net and other assets
$ 1,649,675 
$ 1,608,632 
Property and Equipment, Net, and Other Assets - Components of Property and Equipment, Net, and Other Assets ( Parenthetical) (Detail) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Property Plant And Equipment [Abstract]
 
 
Accumulated depreciation, Property and equipment
$ 2,082,454 
$ 1,973,538 
Property and Equipment, Net, and Other Assets - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Property Plant And Equipment [Abstract]
 
 
 
Depreciation
$ 108,916 
$ 76,046 
 
Depreciation reflected in cost of revenue
9,417 
 
Capital lease assets, net
413,502 
 
426,757 
Capital lease assets, accumulated depreciation
$ 75,325 
 
$ 34,041 
Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 20,949,323 
$ 20,788,254 
Accumulated Amortization
9,879,311 
8,960,246 
Net
11,070,012 
11,828,008 
Customer relationships [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Estimated Useful Life
5 years 
5 years 
Gross Carrying Amount
12,720,000 
12,720,000 
Accumulated Amortization
6,890,000 
6,254,000 
Net
5,830,000 
6,466,000 
Trademarks [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Estimated Useful Life
7 years 
7 years 
Gross Carrying Amount
6,273,885 
6,239,950 
Accumulated Amortization
2,410,797 
2,188,129 
Net
3,863,088 
4,051,821 
Patents [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Estimated Useful Life
7 years 
7 years 
Gross Carrying Amount
230,683 
230,683 
Accumulated Amortization
230,683 
230,683 
Software [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Estimated Useful Life
7 years 
7 years 
Gross Carrying Amount
1,417,602 
1,290,468 
Accumulated Amortization
149,609 
104,570 
Net
1,267,993 
1,185,898 
Customer lists [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Estimated Useful Life
5 years 
5 years 
Gross Carrying Amount
307,153 
307,153 
Accumulated Amortization
198,222 
182,864 
Net
$ 108,931 
$ 124,289 
Goodwill and Other Intangible Assets - Schedule of Indefinite-Lived Intangible Assets (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
 
 
Goodwill Useful Life Description
Indefinite 
 
Goodwill
$ 58,337,290 
$ 58,337,290 
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
 
 
Amortization of intangibles
$ 919,065 
$ 903,091 
Indefinite-lived intangible assets other than goodwill
$ 0 
 
Line of Credit - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Line of Credit Facility [Line Items]
 
 
 
Outstanding principal amount on line of credit facility
$ 3,500,000 
 
$ 4,000,000 
Interest expense related to line of credit facility
56,588 
48,597 
 
Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”) [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Line of credit facility agreement date
Dec. 15, 2010 
 
 
Working capital from loan agreement with Regions Bank
15,000,000 
 
 
Interest on outstanding principal amount
2.69% 
 
 
Outstanding principal amount on line of credit facility
3,500,000 
 
 
Amount available to be borrow under line of credit facility
9,124,343 
 
 
Interest rate line of credit facility description
The base rate for any day is the greater of (a) the federal funds rate plus one-half of 1%, (b) Region’s published effective prime rate, or (c) the Eurodollar rate for such day based on an interest period of one month. 
 
 
Interest expense related to line of credit facility
$ 49,782 
$ 35,050 
 
Maturity date of loan agreement with Regions Bank
May 13, 2018 
 
 
Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”) [Member] |
Base Rate [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Fluctuating interest rate based on base rate
1.50% 
 
 
Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”) [Member] |
Eligible Accounts Receivable [Member] |
Largest Customer [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Percentage of accounts receivable form Quest's customers
80.00% 
 
 
Revolving Credit Note and Loan Agreement with Regions Bank (“Regions”) [Member] |
Eligible Accounts Receivable [Member] |
Other Customer [Member]
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Percentage of accounts receivable form Quest's customers
85.00% 
 
 
Capital Lease Obligations - Summary of Capital Lease Obligations (Detail) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Leases [Abstract]
 
 
Total capital lease obligations, imputed interest at 2.65% to 9.39%, with monthly payments of $11,022, through August 2018, secured by computer and telephone equipment
$ 394,551 
$ 402,170 
Less: current maturities
(115,069)
(112,125)
Long-term portion
$ 279,482 
$ 290,045 
Capital Lease Obligations - Summary of Capital Lease Obligations (Parenthetical) (Detail) (Capital lease obligations, imputed interest at 2.65% to 9.39% [Member], USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Capital lease obligations, imputed interest at 2.65% to 9.39% [Member]
 
 
Debt Instrument [Line Items]
 
 
Imputed interest rate for capital lease obligation, minimum
2.65% 
2.65% 
Imputed interest rate for capital lease obligation, maximum
9.39% 
9.39% 
Monthly installment capital lease obligation
$ 11,022 
$ 11,022 
Capital Lease Obligations - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Debt Disclosure [Abstract]
 
 
Interest expense related to capital leases
$ 3,965 
$ 487 
Income Taxes - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Valuation allowance
$ 13,199,000 
$ 12,313,000 
Federal income tax net operating loss carry forward
$ 15,000,000 
$ 14,500,000 
Net operating loss carry forwards expiration beginning year
2031 
 
Fair Value of Financial Instruments - Additional Information (Detail) (USD $)
3 Months Ended 0 Months Ended
Mar. 31, 2016
Mar. 30, 2016
Dec. 31, 2015
May 7, 2015
Mar. 31, 2015
May 7, 2014
Mar. 31, 2016
Warrant [Member]
Mar. 31, 2015
Warrant [Member]
Mar. 30, 2016
Warrant [Member]
Mar. 31, 2015
Black-Scholes-Merton Valuation Model [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
 
 
 
 
 
 
 
 
 
 
Number of warrants issued to purchase of common stock
 
3,445,000 
 
 
 
200,000 
 
 
723,450 
 
Underlying warrants vested
 
 
 
100,000 
 
100,000 
 
 
 
 
Warrants issued
4,168,450 
 
 
 
 
 
 
 
100,000 
Fair value assumption, expected volatility
 
 
 
 
 
 
 
 
 
81.10% 
Fair value assumption, risk free interest rate
 
 
 
 
 
 
 
 
 
0.59% 
Fair value assumption, expected term
 
 
 
 
 
 
 
 
 
2 years 1 month 6 days 
Fair value assumption, expected dividend yield
 
 
 
 
 
 
 
 
 
0.00% 
Grant date fair value of the initial warrant valuation
 
 
 
 
 
 
 
 
 
$ 0.32 
Warrant liability during the period
 
 
$ 0 
 
$ 0 
 
 
 
 
 
Stock-based compensation expense
 
 
 
 
 
 
$ 0 
$ 5,936 
 
 
Stockholders' Equity - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Mar. 30, 2016
Dec. 31, 2015
Schedule Of Stockholders Equity [Line Items]
 
 
 
 
Preferred stock, shares authorized
10,000,000 
 
 
10,000,000 
Preferred stock, par value
$ 0.001 
 
 
$ 0.001 
Preferred stock, shares issued
 
 
Preferred stock, shares outstanding
 
 
Common stock, shares authorized
200,000,000 
 
 
200,000,000 
Common stock, par value
$ 0.001 
 
 
$ 0.001 
Common stock, shares issued
118,678,225 
 
6,890,000 
111,788,225 
Common stock, shares outstanding
118,678,225 
 
 
111,788,225 
Employee stock purchase plan expense
$ 9,206 
$ 9,726 
 
 
Selling, General and Administrative Expenses [Member]
 
 
 
 
Schedule Of Stockholders Equity [Line Items]
 
 
 
 
Stock-based compensation expense
$ 21,809 
$ 0 
 
 
Stockholders' Equity - Schedule of Common Stock Shares Issued (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Equity [Abstract]
 
Sale of common stock and warrants, net of issuance costs, Shares
6,890,000 
Total common stock shares
6,890,000 
Sale of common stock and warrants, net of issuance costs, Value
$ 2,889,350 
Total common stock amount
$ 2,889,350 
Stockholders' Equity - Schedule of Common Stock Shares Issued (Parenthetical) (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Equity [Abstract]
 
Common stock and warrants issued, issuance cost
$ 452,300 
Stockholders' Equity - Additional Information - Sale of Common Stock and Warrants (Detail) (USD $)
0 Months Ended
Mar. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
May 7, 2014
Schedule Of Sale Of Common Stock And Warrants [Line Items]
 
 
 
 
Common stock, shares issued
6,890,000 
118,678,225 
111,788,225 
 
Warrants issued
3,445,000 
 
 
200,000 
Common stock, stock price
$ 0.485 
 
 
 
Common stock at a price per warrant
0.485 
 
 
 
Warrants exercised period
5 years 
 
 
 
Warrants exercise price
$ 0.485 
 
 
 
Acquired period of common stock
30 days 
 
 
 
Additional shares of common stock
1,033,500 
 
 
 
Warrants issued to acquire common stock
516,750 
 
 
 
Warrants issued to acquire additional common stock
108,518 
 
 
 
Warrant [Member]
 
 
 
 
Schedule Of Sale Of Common Stock And Warrants [Line Items]
 
 
 
 
Warrants issued
723,450 
 
 
 
Stockholders' Equity - Additional Information - Warrants (Detail) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Mar. 31, 2015
Contingent Warrants [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Mar. 31, 2015
Internally-Developed Software [Member]
Contingent Warrants [Member]
Class Of Warrant Or Right [Line Items]
 
 
 
 
 
Warrants issued
4,168,450 
 
 
 
Number of exercised warrants
 
 
 
 
Warrants forfeited
 
 
1,200,000 
 
 
Warrants related to intangible assets
 
 
 
 
$ 0 
Warrants outstanding
15,959,450 
 
 
15,959,450 
 
Stockholders' Equity - Summary of Warrants Issued and Outstanding (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 30, 2016
Mar. 31, 2016
Exercisable Warrants [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrants One [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrant Two [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrants Three [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrants Four [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrant Five [Member]
Mar. 31, 2016
Exercisable Warrants [Member]
Warrant Six [Member]
Class Of Warrant Or Right [Line Items]
 
 
 
 
 
 
 
 
 
Date of Issuance
 
 
 
Apr. 18, 2014 
May 07, 2014 
May 28, 2014 
Sep. 24, 2014 
Oct. 20, 2014 
Mar. 30, 2016 
Date of Expiration
 
 
 
Apr. 01, 2017 
May 07, 2017 
Oct. 31, 2016 
Sep. 24, 2019 
Oct. 20, 2019 
Mar. 30, 2021 
Exercise Price
 
$ 0.485 
 
$ 2.00 
$ 2.65 
$ 4.31 
$ 2.50 
$ 2.50 
$ 0.485 
Shares of Common Stock
15,959,450 
 
15,959,450 
1,441,000 
200,000 
450,000 
9,000,000 
700,000 
4,168,450 
Stockholders' Equity - Summary of Stock Option Activity (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Outstanding Beginning Balance, Number of Shares
5,943,908 
Granted, Number of Shares
2,166,000 
Canceled/Forfeited, Number of Shares
(1,246,252)
Outstanding Ending Balance, Number of Shares
6,863,656 
Outstanding Beginning Balance, Weighted-Average Exercise Price Per Share
$ 2.04 
Granted, Weighted-Average Exercise Price Per Share
$ 0.68 
Canceled/Forfeited, Weighted Average Exercise Price Per Share
$ 1.64 
Outstanding Ending Balance, Weighted Average Exercise Price Per Share
$ 1.60 
Outstanding, 0.78-3.75 [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Exercise Price Per Share, Minimum
$ 0.78 
Exercise Price Per Share, Maximum
$ 3.75 
Granted, 0.55-0.68 [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Exercise Price Per Share, Minimum
$ 0.55 
Exercise Price Per Share, Maximum
$ 0.68 
Canceled/Forfeited, 0.79-3.75 [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Exercise Price Per Share, Minimum
$ 0.79 
Exercise Price Per Share, Maximum
$ 3.75 
Outstanding, 0.55-3.75 [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Exercise Price Per Share, Minimum
$ 0.55 
Exercise Price Per Share, Maximum
$ 3.75