Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 02, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PAID INC | |
Entity Central Index Key | 1,017,655 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 | |
Trading Symbol | PAYD | |
Entity Common Stock, Shares Outstanding | 10,989,608 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 121,013 | $ 123,913 |
Accounts receivable, net | 22,850 | 26,696 |
Prepaid expenses and other current assets | 14,192 | 57,394 |
Advanced royalties, net | 0 | 5,000 |
Total current assets | 158,055 | 213,003 |
Property and equipment, net | 6,735 | 8,833 |
Intangible assets, net | 201,797 | 276,878 |
Total assets | 366,587 | 498,714 |
Current liabilities: | ||
Accounts payable | 114,757 | 95,441 |
Note payable | 0 | 24,202 |
Capital leases | 0 | 3,097 |
Accrued expenses | 972,150 | 1,001,359 |
Deferred revenues | 7,027 | 6,768 |
Total liabilities | 1,093,934 | 1,130,867 |
Shareholders’ deficit | ||
Common stock, $0.001 par value, 11,000,000 shares authorized; 10,989,608 shares and 8,932,466 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 10,991 | 8,932 |
Additional paid-in capital | 54,637,915 | 54,418,160 |
Accumulated deficit | (55,376,253) | (55,059,245) |
Total shareholders' deficit | (727,347) | (632,153) |
Total liabilities and shareholders' deficit | $ 366,587 | $ 498,714 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ .001 | $ .001 |
Common stock, shares authorized | 11,000,000 | 11,000,000 |
Common stock, shares issued | 10,989,608 | 8,932,466 |
Common stock, shares outstanding | 10,989,608 | 8,932,466 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 127,246 | $ 46,191 | $ 391,009 | $ 139,593 |
Cost of revenues | 6,023 | 12,676 | 18,231 | 32,470 |
Gross profit | 121,223 | 33,515 | 372,778 | 107,123 |
Operating expenses | 217,845 | 218,377 | 779,174 | 733,062 |
Loss from operations | (96,622) | (184,862) | (406,396) | (625,939) |
Other income (expense): | ||||
Interest expense | (229) | (148) | (679) | (634) |
Other income | 4,345 | 0 | 62,333 | 0 |
Unrealized gain (loss) on stock price guarantee | (12,812) | (376,007) | 28,541 | (345,542) |
Write down of other receivables | 0 | (108,961) | 0 | (108,961) |
Total other income (expense), net | (8,696) | (485,116) | 90,195 | (455,137) |
Loss before provision for income taxes | (105,318) | (669,978) | (316,201) | (1,081,076) |
Provision for income taxes | 0 | 18 | 807 | 974 |
Net loss | $ (105,318) | $ (669,996) | $ (317,008) | $ (1,082,050) |
Net loss per share - basic and diluted | $ (0.01) | $ (.10) | $ (0.03) | $ (0.16) |
Weighted average number of common shares outstanding - basic and diluted | 10,989,608 | 6,875,481 | 10,552,696 | 6,859,444 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (317,008) | $ (1,082,050) |
Adjustments to reconcile net loss to cash and cash equivalents used in operating activities: | ||
Depreciation and amortization | 77,179 | 9,662 |
Gain on sale of property and equipment | (2,179) | 0 |
Write down of other receivables | 0 | 108,961 |
Share-based compensation | 41,814 | 150,999 |
Unrealized loss on stock price guarantee | (28,541) | 345,542 |
Changes in assets and liabilities: | ||
Accounts receivable | 3,846 | (73) |
Prepaid expenses and other current assets | 43,202 | 25,961 |
Advanced royalties | 5,000 | 0 |
Deposits and other assets | 0 | 11,055 |
Accounts payable | 19,316 | (86,751) |
Accrued expenses | (668) | (3,771) |
Deferred revenues | 259 | (889) |
Net cash and cash equivalents used in operating activities | (157,780) | (521,354) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 2,179 | 0 |
Net cash and cash equivalents provided by investing activities | 2,179 | 0 |
Cash flows from financing activities: | ||
Payments on capital leases | (3,097) | (11,291) |
Payments on note payable | (24,202) | 0 |
Proceeds from the exercise of common stock warrants | 180,000 | 195,000 |
Net cash and cash equivalents provided by financing activities | 152,701 | 183,709 |
Net change in cash and cash equivalents | (2,900) | (337,645) |
Cash and cash equivalents, beginning of period | 123,913 | 651,318 |
Cash and cash equivalents, end of period | 121,013 | 313,673 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Income taxes paid | 807 | 974 |
Interest paid | 679 | 634 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES | ||
Issuance of previously subscribed common stock | $ 0 | $ 25,000 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | PAID, Inc. (“PAID”, the “Company”, “we”, “us”, “our”) has developed AuctionInc, which is a suite of online shipping and tax management tools assisting businesses with e-commerce storefronts, shipping solutions, tax calculation, inventory management, and auction processing. The product has tools to assist with other aspects of the fulfillment process, but the main purpose of the product is to provide accurate shipping and tax calculations and packaging algorithms that provide customers with the best possible shipping and tax solutions. BeerRun Software is a brewery management and Alcohol and Tobacco Tax and Trade Bureau tax reporting software. Small craft brewers utilize the product to manage brewery schedules, inventory, packaging, sales and purchasing. Tax reporting can be processed with a single click and is fully customizable by state or providence. The software is designed to integrate with QuickBooks accounting platforms by using our powerful sync engine. We currently offer two versions of the software BeerRun and BeerRun Light which excludes some of the enhanced features of BeerRun without disrupting the core functionality of the software. Additional features include Brewpad and Kegmaster and can be added on to the base product. Craft brewing is on the rise in the United States and we feel that there is a large potential to grow this portion of our business. SpiritRun is a product of BeerRun and is designed specifically for distilleries. This product was recently released and we feel that there with additional marketing and visibility in the distillery industry SpiritRun has the right core resources to be a valuable tool in distilleries around the United States. General Presentation and Basis of Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2015 that was filed on March 30, 2016. In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited consolidated financial statements, and these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2016. On October 7, 2015, the board of directors agreed to effectuate a reverse split of the Company’s common stock. The process was completed with FINRA on November 13, 2015. As a result of the split every fifty shares of common stock outstanding prior to the reverse split were consolidated into one share, reducing the number of common shares outstanding on the effective date from 446,623,300 to 8,932,466. All share and per share information on this Form 10-Q has been retroactively adjusted to reflect the reverse stock split. Going Concern and Management's Plan The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has continued to incur losses, although it has taken significant steps to reduce them. For the nine months ended September 30, 2016, the Company reported a net loss of $317,008. The Company has an accumulated deficit of $55,376,253 at September 30, 2016 and used $157,780 of cash and cash equivalents in operations for the nine months ended September 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management feels that AuctionInc, BeerRun and SpiritRun will be a beneficial portion of our business and provide more opportunity for growth. The costs of doing business have been and will be significantly reduced in hopes of eliminating the net loss and providing positive cash flow from operations. On September 1, 2016 the Company entered into an amalgamation agreement with emergeIT. The amalgamation is contingent on the approval of certain proposals by the shareholders of the Company. See Note 6. Although there can be no assurances, the Company believes that the above management plan will be sufficient to meet the Company's working capital requirements through the end of 2016. Principles of Consolidation The consolidated financial statements include the accounts of PAID, Inc. and its wholly owned subsidiary PAID Run, LLC. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to the collectability of accounts receivable, the recoverability of long-lived assets, the valuation of deferred tax assets and liabilities, and the estimated fair value of the royalty and advance guarantee, and share-based transactions. Actual results could materially differ from those estimates. Fair Value Measurements The Company measures the fair value of certain of its financial assets on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2016 and December 31, 2015, the Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, capital leases, note payable and accrued expenses. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, capital leases, note payable and accrued expenses approximate fair value due to the short-term maturities of these instruments. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an initial maturity of three months or less to be cash equivalents. Concentration of Credit Risk The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2016, the Company had no amounts in these accounts in excess of the FDIC limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to these deposits. Management believes that it has invested in high credit quality institutions for which the Company has not experienced any loss in its accounts and believes it is not exposed to any significant credit risk related to these accounts. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts. At both September 30, 2016 and December 31, 2015, the Company has recorded an allowance for doubtful accounts of $40,609. For the nine months ended September 30, 2016, and September 30, 2015 no revenues from any one individual client accounted for more than 10% of total revenues. These revenues were generated primarily from the sales of our line of AuctionInc products, brewery management software and merchandising and fulfillment services. Advanced Royalties Advanced royalties represent amounts the Company has advanced to certain clients and are recoupable against future royalties earned by the clients. Advances are issued in either cash or shares of the Company’s common stock and advanced amounts are calculated based on the clients’ projected earning potential over a fixed period of time. Advances made by issuing stock or common stock options are recorded at their fair value on the date of issue. If the shares do not reach the required price per share, the Company has the option of issuing additional shares or making cash payment of the difference between the sales price and the fair value of the stock. The Company records a liability for the difference between the fair value of the stock and the guaranteed sales price amount, which is included in accrued expenses in the accompanying condensed consolidated balance sheets. The change in fair value of the stock price guarantee is recorded in the accompanying condensed consolidated statements of operations. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 3 to 5 years. Any leasehold improvements are depreciated at the lesser of the useful life of the asset or the lease term. Equipment purchased under capital leases is amortized on a straight-line basis over the estimated useful life of the asset or the term of the lease, whichever is shorter. Intangible Assets Intangible assets consist of patents, client lists and brewery and distillery management software which are being amortized on a straight-line basis over their estimated useful life. Currently there are intangible assets that are being amortized over 3 and 17 years. Long-Lived Assets The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. No impairment charges were incurred during the nine months ended September 30, 2016 and 2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future. Revenue Recognition The Company generates revenue principally from sales of shipping calculator subscriptions, brewery management software subscriptions, and entertainment services. The Company recognizes revenues in accordance with the FASB ASC Topic 605. Accordingly, the Company recognizes revenues when there is persuasive evidence that an arrangement exists, product delivery and acceptance have occurred, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. For shipping calculator revenues and brewery management software revenues the Company recognizes subscription revenue on a monthly basis. Shipping calculator customers’ renewal dates are based on their date of installation and registration of the shipping calculator line of products. The payments for shipping calculator services are made via credit card for the month preceding the service and are recorded as deferred revenues until the service has been provided. Brewery management software subscribers are billed on a calendar month at the first of the month with payments processed via credit card for the month following. Entertainment services revenues include web development and design, creative services, marketing services and general business consulting services. For contracts that are of a short duration and fixed price, revenue is recognized when there are no significant obligations and upon acceptance by the customer of the completed project. Revenues on longer-term fixed price contracts are recognized using the percentage-of-completion method. Services that are performed on a time and material basis are recognized as the related services are performed. Cost of Revenues Cost of revenues includes web hosting, data storage, and commissions. Operating Expenses Operating expenses include indirect related expenses, including credit card processing fees, payroll, travel, facility costs, and other general and administrative expenses. Advertising Advertising costs are charged to expense as incurred. For the three months ending September 30, 2016 and 2015 advertising expense totaled $0 and $7,180, and for nine months ended September 30, 2016 and 2015, advertising expense totaled $6,874 and $20,282, respectively. These expenses are included in operating expenses in the accompanying condensed consolidated statements of operations. Share-Based Compensation The Company grants options to purchase the Company’s common stock to employees, directors and consultants under stock option plans. The benefits provided under these plans are share-based payments that the Company accounts for using the fair value method. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model (“Black-Scholes model”) that uses assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, expected stock price volatility, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatilities are based on the historical volatility of the Company’s common stock and other factors. The expected terms of options granted are based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant. Since the Company does not expect to pay dividends on common stock in the foreseeable future, it estimated the dividend yield to be 0%. Share-based compensation expense recognized during a period is based on the value of the portion of share-based payment awards that is ultimately expected to vest and is amortized under the straight-line attribution method. As share-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2016 and 2015 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The estimated fair value method requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on historical experience. Changes to the estimated forfeiture rate are accounted for as a cumulative effect of change in the period the change occurred. Since the Company has a net operating loss carry-forward as of September 30, 2016 and 2015, no excess tax benefits for tax deductions related to share-based awards were recognized from stock options exercised in the nine months ended September 30, 2016 and 2015 that would have resulted in a reclassification from cash flows from operating activities to cash flows from financing activities. Income Taxes The Company accounts for income taxes and the related accounts under the liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company’s income tax provision consists of state minimum taxes. The Company recognizes any uncertain income tax positions on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had $0 accrued for interest and penalties on the Company’s accompanying condensed consolidated balance sheets at September 30, 2016 and December 31, 2015. The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax years for 2012 and forward for federal and 2011 and forward for state purposes are subject to examination by the U.S., Massachusetts and New Jersey tax authorities due to the carry-forward of unutilized net operating losses. The Company does not foresee material changes to its gross uncertain income tax position liability within the next twelve months. Earnings (Loss) Per Common Share Basic earnings (loss) per share represent income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. The potential common shares that may be issued by the Company relate to outstanding stock options and have been excluded from the computation of diluted earnings (loss) per share because they would reduce the reported loss per share and therefore have an anti-dilutive effect. For the three months ended September 30, 2016 and 2015 and the nine months ended September 30, 2016 and 2015, there were approximately 323,000 and 8,000 and 340,000 and 32,000, respectively, dilutive shares that were excluded from the diluted earnings (loss) per share as their effect would have been antidilutive for the period then ended. Segment Reporting The Company reports information about segments of its business in its annual consolidated financial statements and reports selected segment information in its quarterly reports issued to shareholders. The Company also reports on its entity-wide disclosures about the products and services it provides and reports revenues and its major customers. The Company’s three reportable segments are managed separately based on fundamental differences in their operations. At September 30, 2016, the Company operated in the following three reportable segments (see below): a. Entertainment services, b. Shipping calculator services, and c. Brewery management software. The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in this summary of significant accounting policies. The Company’s chief operating decision maker is the President, Chief Executive Officer and Chief Financial Officer. The following table compares total revenue for the periods indicated. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 2,275 $ 6,398 $ 12,937 $ 21,044 Shipping calculator services 46,141 39,793 135,862 118,549 Brewery management software 78,830 — 242,210 — Total revenue $ 127,246 $ 46,191 $ 391,009 $ 139,593 The following table compares total loss from operations for the periods indicated. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 3,404 $ 4,572 $ 11,971 $ 15,078 Shipping calculator services (110,655 ) (189,434 ) (442,629 ) (641,017 ) Brewery management software 10,629 — 24,262 — Total loss from operations $ (96,622 ) $ (184,862 ) $ (406,396 ) $ (625,939 ) Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which addresses certain aspects of accounting for share-based payment award transactions. This guidance will be effective in the first quarter of fiscal year 2017 and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company does not expect ASU 2016-02 to have a material effect on the Company’s results of operations and cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial statements. This guidance will be effective in the first quarter of fiscal year 2019 and early adoption is not permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods ending after December 15, 2016 and early application is permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company is currently evaluating which transition method it will adopt and the expected impact of the updated guidance, but does not believe the adoption of the updated guidance will have a significant impact on its condensed consolidated financial statements. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses are comprised of the following: September 30, December 31, (unaudited) (audited) Payroll and related costs $ 3,018 $ 3,686 Royalties 51,838 51,838 Stock price guarantee 858,041 913,582 Other 32,252 32,253 Total $ 972,150 $ 1,001,359 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets | |
Intangible Assets | The Company has a patent for the real-time calculation of shipping costs for items purchased through online auctions using a zip code as a destination location indicator. It includes shipping charge calculations across multiple carriers and accounts for additional characteristics of the item being shipped, such as weight, special packaging or handling, and insurance costs. On January 29, 2008, the Company was granted a patent for a technique for facilitating advanced, rapid, accurate estimation of shipping costs across multiple shipping carriers and shipping options between buyer and seller in an online auction. Since that time the Company has received four additional patents. These patents help facilitate rapid and accurate estimation of shipping costs across multiple shipping carriers and also include real-time calculation of shipping. Further continuations include the addition of shipping calculation with taxes and enhanced shipping promotions. On October 7, 2015, the Company, through a newly formed limited liability company named PAID Run, LLC, entered into an asset purchase agreement to purchase assets related to BeerRun Software and SpiritRun Software and related intellectual property. The purchase price and additional development for these assets was $297,500, which include all of the client lists, along with all rights, benefits and privileges associated with the software and intellectual property, associated contracts, and books and records. At September 30, 2016 and December 31, 2015, intangible assets consisted of the following: September 30, December 31, Patents $ 16,000 $ 16,000 Software 83,750 83,750 Client list 213,750 213,750 Accumulated amortization (111,703 ) (36,622 ) $ 201,797 $ 276,878 Amortization expenses of intangible assets for the nine months ended September 30, 2016 were $75,801. Estimated future annual amortization expense is approximately $100,000 for each year through 2018 and $900 for 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note Payable On October 2, 2015, the Company entered into a $35,677 note payable with a financial institution. The term of the note was for a period of one year and was payable in 10 monthly installments of $3,089 at an interest rate of 6.35%. The balance due on the note payable as of September 30, 2016 and December 31, 2015 was $0 and $24,202, respectively. The note payable was repaid in full during the third quarter of 2016. Stock Price Guarantee In connection with the Company’s advance royalties with a client, the Company guaranteed that shares of common stock would sell for at least $6.00 per share as adjusted for the reverse stock split. If the shares are not at the required $6.00 per share when they are sold, the Company has the option of issuing additional shares at their fair value or making a cash payment for the difference between the guaranteed price per share and the fair value of the stock. As of September 30, 2016 and December 31, 2015, the stock price guarantee was $885,041 and $913,582, respectively, as the Company’s stock price was below $6.00 per share at September 30, 2016 and December 31, 2015, although some or all of the stock may already be sold and no longer subject to a guaranty and any required payment would be disputed by the Company. For the nine months ended September 30, 2016 the Company recorded an unrealized gain on the stock price guarantee of $28,541 and for the nine months ended September 30, 2015, the Company recorded an unrealized loss on stock price guarantee of ($345,542). Legal Matters In the normal course of business, the Company periodically becomes involved in litigation. As of September 30, 2016, in the opinion of management, the Company had no pending litigation that would have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. The Company commenced on December 20, 2013 patent infringement litigation against eBay, Inc. (Paid, Inc. v. eBay, Inc.; CV No. 4:13-cv-40151-TSH) in the United States District Court for the District of Massachusetts Central Division. This litigation has been settled pursuant to a Confidential Settlement and License Agreement dated March 11, 2016. Under the agreement, the Company received $53,500, which has been recorded in other income in the condensed consolidated statements of operations, after costs as full and final payment for such settlement of the lawsuit and non-exclusive licensing of the Company’s patents. The payment was received in full in April 2016. Indemnities and Guarantees The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its facility lease, the Company has agreed to indemnify its lessor for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets. |
Shareholder's Deficit
Shareholder's Deficit | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Shareholder's Deficit | Common Stock From January 1, 2016 through September 30, 2016, the Company issued a total of 2,057,142 shares of common stock for gross proceeds of $180,000 from the exercise of warrants. Share-based Incentive Plans During the period ended September 30, 2016, the Company had three stock option plans that include both incentive and non-qualified options to be granted to certain eligible employees, non-employee directors, or consultants of the Company. 90,000 stock options were granted to board members and an employee on April 1 and June 13, 2016. During the period ended September 30, 2016, the board of directors approved the repricing of outstanding stock options held by members of the board, management, employee and former employee to $0.0975 per share. The expense related to the repricing was not significant. In addition to the repricing of the outstanding options the board approved to vest any outstanding unvested options for two employees. |
Amalgamation Agreement
Amalgamation Agreement | 9 Months Ended |
Sep. 30, 2016 | |
Amalgamation Agreement | |
Amalgamation Agreement | On September 1, 2016, the Company entered into an amalgamation agreement with emergeIT Inc., an Ontario corporation to acquire emergeIT and two new PAID subsidiaries (“Amalgamation Agreement”). emergeIT (which does business as “ShipTime”) is a cloud-based shipping platform bringing individuals and small and medium sized businesses together with many of the world’s leading carriers to save time and money. emergeIT generates monthly recurring revenue through transactions and “software as a service” offerings. It currently serves in excess of 30,000 members in North America with plans to expand its services into Europe and then worldwide. The amalgamation, or merger, requires shareholder approval and is expected to close, upon receipt of approval, in the fourth quarter of 2016. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company has evaluated subsequent events through the filing date of this Form 10-Q, and have determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto, other than as disclosed herein. On November 9, 2016, the Company submitted its proxy to solicit approval from its shareholders of the Amalgamation Agreement. The results of solicitation have not been determined as of the date of the filing of this Form 10-Q. |
Organization and Significant 13
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
General Presentation and Basis of Consolidated Financial Statements | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2015 that was filed on March 30, 2016. In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited consolidated financial statements, and these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2016. On October 7, 2015, the board of directors agreed to effectuate a reverse split of the Company’s common stock. The process was completed with FINRA on November 13, 2015. As a result of the split every fifty shares of common stock outstanding prior to the reverse split were consolidated into one share, reducing the number of common shares outstanding on the effective date from 446,623,300 to 8,932,466. All share and per share information on this Form 10-Q has been retroactively adjusted to reflect the reverse stock split. |
Going Concern And Management Plan | The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has continued to incur losses, although it has taken significant steps to reduce them. For the nine months ended September 30, 2016, the Company reported a net loss of $317,008. The Company has an accumulated deficit of $55,376,253 at September 30, 2016 and used $157,780 of cash and cash equivalents in operations for the nine months ended September 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management feels that AuctionInc, BeerRun and SpiritRun will be a beneficial portion of our business and provide more opportunity for growth. The costs of doing business have been and will be significantly reduced in hopes of eliminating the net loss and providing positive cash flow from operations. On September 1, 2016 the Company entered into an amalgamation agreement with emergeIT. The amalgamation is contingent on the approval of certain proposals by the shareholders of the Company. See Note 6. Although there can be no assurances, the Company believes that the above management plan will be sufficient to meet the Company's working capital requirements through the end of 2016. |
Principles of Consolidation | The consolidated financial statements include the accounts of PAID, Inc. and its wholly owned subsidiary PAID Run, LLC. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to the collectability of accounts receivable, the recoverability of long-lived assets, the valuation of deferred tax assets and liabilities, and the estimated fair value of the royalty and advance guarantee, and share-based transactions. Actual results could materially differ from those estimates. |
Fair Value Measurements | The Company measures the fair value of certain of its financial assets on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2016 and December 31, 2015, the Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, capital leases, note payable and accrued expenses. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, capital leases, note payable and accrued expenses approximate fair value due to the short-term maturities of these instruments. |
Cash and Cash Equivalents | The Company considers all highly liquid temporary cash investments with an initial maturity of three months or less to be cash equivalents. |
Concentration of Credit Risk | The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2016, the Company had no amounts in these accounts in excess of the FDIC limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to these deposits. Management believes that it has invested in high credit quality institutions for which the Company has not experienced any loss in its accounts and believes it is not exposed to any significant credit risk related to these accounts. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts. At both September 30, 2016 and December 31, 2015, the Company has recorded an allowance for doubtful accounts of $40,609. For the nine months ended September 30, 2016, and September 30, 2015 no revenues from any one individual client accounted for more than 10% of total revenues. These revenues were generated primarily from the sales of our line of AuctionInc products, brewery management software and merchandising and fulfillment services. |
Advanced Royalties | Advanced royalties represent amounts the Company has advanced to certain clients and are recoupable against future royalties earned by the clients. Advances are issued in either cash or shares of the Company’s common stock and advanced amounts are calculated based on the clients’ projected earning potential over a fixed period of time. Advances made by issuing stock or common stock options are recorded at their fair value on the date of issue. If the shares do not reach the required price per share, the Company has the option of issuing additional shares or making cash payment of the difference between the sales price and the fair value of the stock. The Company records a liability for the difference between the fair value of the stock and the guaranteed sales price amount, which is included in accrued expenses in the accompanying condensed consolidated balance sheets. The change in fair value of the stock price guarantee is recorded in the accompanying condensed consolidated statements of operations. |
Property and Equipment | Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 3 to 5 years. Any leasehold improvements are depreciated at the lesser of the useful life of the asset or the lease term. Equipment purchased under capital leases is amortized on a straight-line basis over the estimated useful life of the asset or the term of the lease, whichever is shorter. |
Intangible Assets | Intangible assets consist of patents, client lists and brewery and distillery management software which are being amortized on a straight-line basis over their estimated useful life. Currently there are intangible assets that are being amortized over 3 and 17 years. |
Long-Lived Assets | The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset. No impairment charges were incurred during the nine months ended September 30, 2016 and 2015. There can be no assurance, however, that market conditions will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in the future. |
Revenue Recognition | The Company generates revenue principally from sales of shipping calculator subscriptions, brewery management software subscriptions, and entertainment services. The Company recognizes revenues in accordance with the FASB ASC Topic 605. Accordingly, the Company recognizes revenues when there is persuasive evidence that an arrangement exists, product delivery and acceptance have occurred, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. For shipping calculator revenues and brewery management software revenues the Company recognizes subscription revenue on a monthly basis. Shipping calculator customers’ renewal dates are based on their date of installation and registration of the shipping calculator line of products. The payments for shipping calculator services are made via credit card for the month preceding the service and are recorded as deferred revenues until the service has been provided. Brewery management software subscribers are billed on a calendar month at the first of the month with payments processed via credit card for the month following. Entertainment services revenues include web development and design, creative services, marketing services and general business consulting services. For contracts that are of a short duration and fixed price, revenue is recognized when there are no significant obligations and upon acceptance by the customer of the completed project. Revenues on longer-term fixed price contracts are recognized using the percentage-of-completion method. Services that are performed on a time and material basis are recognized as the related services are performed. |
Cost of Revenues | Cost of revenues includes web hosting, data storage, and commissions. |
Operating Expenses | Operating expenses include indirect related expenses, including credit card processing fees, payroll, travel, facility costs, and other general and administrative expenses. |
Advertising | Advertising costs are charged to expense as incurred. For the three months ending September 30, 2016 and 2015 advertising expense totaled $0 and $7,180, and for nine months ended September 30, 2016 and 2015, advertising expense totaled $6,874 and $20,282, respectively. These expenses are included in operating expenses in the accompanying condensed consolidated statements of operations. |
Share-based Compensation | The Company grants options to purchase the Company’s common stock to employees, directors and consultants under stock option plans. The benefits provided under these plans are share-based payments that the Company accounts for using the fair value method. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model (“Black-Scholes model”) that uses assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, expected stock price volatility, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatilities are based on the historical volatility of the Company’s common stock and other factors. The expected terms of options granted are based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant. Since the Company does not expect to pay dividends on common stock in the foreseeable future, it estimated the dividend yield to be 0%. Share-based compensation expense recognized during a period is based on the value of the portion of share-based payment awards that is ultimately expected to vest and is amortized under the straight-line attribution method. As share-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2016 and 2015 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The estimated fair value method requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on historical experience. Changes to the estimated forfeiture rate are accounted for as a cumulative effect of change in the period the change occurred. Since the Company has a net operating loss carry-forward as of September 30, 2016 and 2015, no excess tax benefits for tax deductions related to share-based awards were recognized from stock options exercised in the nine months ended September 30, 2016 and 2015 that would have resulted in a reclassification from cash flows from operating activities to cash flows from financing activities. |
Income Taxes | The Company accounts for income taxes and the related accounts under the liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company’s income tax provision consists of state minimum taxes. The Company recognizes any uncertain income tax positions on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had $0 accrued for interest and penalties on the Company’s accompanying condensed consolidated balance sheets at September 30, 2016 and December 31, 2015. The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax years for 2012 and forward for federal and 2011 and forward for state purposes are subject to examination by the U.S., Massachusetts and New Jersey tax authorities due to the carry-forward of unutilized net operating losses. The Company does not foresee material changes to its gross uncertain income tax position liability within the next twelve months. |
Earnings (Loss) Per Common Share | Basic earnings (loss) per share represent income (loss) available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. The potential common shares that may be issued by the Company relate to outstanding stock options and have been excluded from the computation of diluted earnings (loss) per share because they would reduce the reported loss per share and therefore have an anti-dilutive effect. For the three months ended September 30, 2016 and 2015 and the nine months ended September 30, 2016 and 2015, there were approximately 323,000 and 8,000 and 340,000 and 32,000, respectively, dilutive shares that were excluded from the diluted earnings (loss) per share as their effect would have been antidilutive for the period then ended. |
Segment Reporting | The Company reports information about segments of its business in its annual consolidated financial statements and reports selected segment information in its quarterly reports issued to shareholders. The Company also reports on its entity-wide disclosures about the products and services it provides and reports revenues and its major customers. The Company’s three reportable segments are managed separately based on fundamental differences in their operations. At September 30, 2016, the Company operated in the following three reportable segments (see below): a. Entertainment services, b. Shipping calculator services, and c. Brewery management software. The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in this summary of significant accounting policies. The Company’s chief operating decision maker is the President, Chief Executive Officer and Chief Financial Officer. The following table compares total revenue for the periods indicated. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 2,275 $ 6,398 $ 12,937 $ 21,044 Shipping calculator services 46,141 39,793 135,862 118,549 Brewery management software 78,830 — 242,210 — Total revenue $ 127,246 $ 46,191 $ 391,009 $ 139,593 The following table compares total loss from operations for the periods indicated. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 3,404 $ 4,572 $ 11,971 $ 15,078 Shipping calculator services (110,655 ) (189,434 ) (442,629 ) (641,017 ) Brewery management software 10,629 — 24,262 — Total loss from operations $ (96,622 ) $ (184,862 ) $ (406,396 ) $ (625,939 ) |
Recent Accounting Pronouncements | In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which addresses certain aspects of accounting for share-based payment award transactions. This guidance will be effective in the first quarter of fiscal year 2017 and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating ASU 2016-02, the Company expects the adoption of ASU 2016-02 to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company does not expect ASU 2016-02 to have a material effect on the Company’s results of operations and cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial statements. This guidance will be effective in the first quarter of fiscal year 2019 and early adoption is not permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods ending after December 15, 2016 and early application is permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This updated guidance supersedes the current revenue recognition guidance, including industry-specific guidance. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The updated guidance is effective for interim and annual periods beginning after December 15, 2016, and early adoption is not permitted. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 until December 15, 2017. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The Company is currently evaluating which transition method it will adopt and the expected impact of the updated guidance, but does not believe the adoption of the updated guidance will have a significant impact on its condensed consolidated financial statements. |
Organization and Significant 14
Organization and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Segment Reporting | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 2,275 $ 6,398 $ 12,937 $ 21,044 Shipping calculator services 46,141 39,793 135,862 118,549 Brewery management software 78,830 — 242,210 — Total revenue $ 127,246 $ 46,191 $ 391,009 $ 139,593 |
Condensed Income Statement | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Entertainment services $ 3,404 $ 4,572 $ 11,971 $ 15,078 Shipping calculator services (110,655 ) (189,434 ) (442,629 ) (641,017 ) Brewery management software 10,629 — 24,262 — Total loss from operations $ (96,622 ) $ (184,862 ) $ (406,396 ) $ (625,939 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | September 30, December 31, (unaudited) (audited) Payroll and related costs $ 3,018 $ 3,686 Royalties 51,838 51,838 Stock price guarantee 858,041 913,582 Other 32,252 32,253 Total $ 972,150 $ 1,001,359 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets Tables | |
Schedule of Intangible Assets | September 30, December 31, Patents $ 16,000 $ 16,000 Software 83,750 83,750 Client list 213,750 213,750 Accumulated amortization (111,703 ) (36,622 ) $ 201,797 $ 276,878 |
Organization and Significant 17
Organization and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Organization And Significant Accounting Policies Details Narrative | |||||
Net loss | $ (105,318) | $ (669,996) | $ (317,008) | $ (1,082,050) | |
Accumulated deficit | $ (55,376,253) | (55,376,253) | $ (55,059,245) | ||
Cash used in operations | $ (2,900) | $ (337,645) |
Organization and Significant 18
Organization and Significant Accounting Policies (Details Narrative 2) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Accounting Policies [Line Items] | |||||
Allowance for Doubtful Accounts Receivable | $ 40,609 | $ 40,609 | $ 40,609 | ||
Advertising Expense | $ 0 | $ 7,180 | $ 6,874 | $ 20,282 | |
Antidilutive shares not included in calculation of earnings per share | 323,000 | 8,000 | 340,000 | 32,000 | |
Minimum [Member] | |||||
Accounting Policies [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||
Maximum [Member] | |||||
Accounting Policies [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Finite-Lived Intangible Asset, Useful Life | 17 years |
Organization and Significant 19
Organization and Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Line Items] | ||||
Total revenue | $ 127,246 | $ 46,191 | $ 391,009 | $ 139,593 |
Total loss from operations | (96,622) | (184,862) | (406,396) | (625,939) |
Entertainment services [Member] | ||||
Accounting Policies [Line Items] | ||||
Total revenue | 2,275 | 6,398 | 12,937 | 21,044 |
Total loss from operations | 3,404 | 4,572 | 11,971 | 15,078 |
Shipping Calculator services [Member] | ||||
Accounting Policies [Line Items] | ||||
Total revenue | 46,141 | 39,793 | 135,862 | 118,549 |
Total loss from operations | (110,655) | (189,434) | (442,629) | (641,071) |
Brewery Management Software [Member] | ||||
Accounting Policies [Line Items] | ||||
Total revenue | 78,830 | 0 | 242,210 | 0 |
Total loss from operations | $ 10,629 | $ 0 | $ 24,262 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Payroll and related costs | $ 3,018 | $ 3,686 |
Royalties | 51,838 | 51,838 |
Stock price guarantee | 858,041 | 913,582 |
Other | 32,252 | 32,253 |
Total | $ 972,150 | $ 1,001,359 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Intangible Assets Details | ||
Patents | $ 16,000 | $ 16,000 |
Software | 83,750 | 83,750 |
Client List | 213,750 | 213,750 |
Accumulated amortization | (111,703) | (36,622) |
Intangible asset, net | $ 201,797 | $ 276,878 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Intangible Assets Details Narrative | |
Amortization of Intangible Assets | $ 75,801 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 100,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 100,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 100,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | $ 900 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Note Payable | $ 0 | $ 0 | $ 24,202 | ||
Stock price guarantee | 858,041 | 858,041 | $ 913,582 | ||
Unrealized loss on stock price guarantee | $ (12,812) | $ (376,007) | $ 28,541 | $ (345,542) |
Shareholder's Deficit (Details
Shareholder's Deficit (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Shareholders Deficit Details Narrative | ||
Common stock issued | 2,057,142 | |
Proceeds from exercise of warrants | $ 180,000 | $ 195,000 |