Spendsmart Networks 10-K 16 May 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	May 11, 2017	Jun. 30, 2016
Document And Entity Information
Entity Registrant Name	SPENDSMART NETWORKS, INC.
Entity Central Index Key	1,062,273
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 3,244,891
Entity Common Stock, Shares Outstanding		42,575,571
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 74,523	$ 470,341
Accounts receivable, net of allowance for doubtful accounts of $629,759 at December 31, 2015 and $188,527 at December 31, 2014	292,368	141,830
Customer short term notes receivable, net of allownace for doubtful accounts of $632,422 at December 31, 2015 and $286,571 at December 31, 2014	26,850	276,168
Other current assets	24,901	11,100
Total current assets	418,642	899,439
Long-term assets:
Customer long-term notes receivable, net of allowance for doubtful accounts of $461,702 at December 31, 2015, and $349,954 at December 31, 2014	15,264	199,669
Property and equipment, net of accumulated depreciation of $1,035,960 on December 31, 2015 and $83,854 on December 31, 2014	0	896,146
Intangible assets, net of accumulated amortization of $626,579 on December 31, 2015 and $288,700 on December 31, 2014	399,000	1,570,575
Other assets	18,273	18,274
TOTAL ASSETS	851,179	3,584,103
Current liabilities:
Convertible notes	1,494,174	1,817,320
Notes payable	0	70,262
Notes payable, former CEO	65,000	100,000
Accounts payable and accrued liabilities	1,997,667	1,867,233
Accrued interest payable	66,242	23,090
Deferred revenue	748,774	751,912
Deferred acquisition related payable	0	10,000
Cash received in connection with tender offer	0	661,424
Derivative liabilities - conversion option	88,242	179
Derivative liabilities - warrants	1,366,898	0
Total current liabilities	5,826,997	5,301,420
Stockholders equity:
Series C Preferred; $0.001 par value; 4,299,081 shares authorized; 3,443,061 and 3,700,729 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively	3,444	3,701
Common stock; $0.001 par value; 300,000,000 shares authorized; 41,975,571 and 20,458,761 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively	41,976	20,459
Additional paid-in capital	94,438,312	90,879,480
Accumulated deficit	(99,459,550)	(92,620,957)
Total stockholders' equity	(4,975,818)	(1,717,317)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 851,179	$ 3,584,103

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Accounts receivable, net of allowance for doubtful accounts	$ 629,461	$ 295,759
Short term notes receivable, net of allownace for doubtful accounts	767,138	632,422
Long term notes receivable, net of allowance for doubtful accounts	399,401	461,702
Property and equipment, accumulated depreciation	1,396,223	1,035,960
Accumulated amortization	$ 819,082	$ 626,579
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	41,975,571	20,458,761
Common stock, shares outstanding	41,975,571	20,458,761
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	4,299,081	4,299,081
Series A Preferred Stock
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, shares outstanding	0	0
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	4,299,081	4,299,081
Preferred stock, shares issued	3,443,061	3,700,729
Preferred stock, shares outstanding	3,443,061	3,700,729

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Revenues:
Mobile Marketing / Licensing	$ 5,795,604	$ 5,588,002
Total revenues	5,795,604	5,588,002
Operating expenses:
Selling and marketing	595,031	582,042
Personnel related	1,140,068	6,426,273
Mobile Platform Processing	1,211,284	1,465,576
Amortization of intangible assets	192,503	337,879
General and administrative	2,126,631	3,463,405
Bad debt	552,725	1,417,952
Impairment on software development assets	718,116	0
Impairment on intangible assets	979,072	1,189,246
Impairment on goodwill	0	3,202,276
Change in fair value of earn-out liability	0	(594,216)
Total operating expenses	11,033,545	17,490,433
Loss from operations	(5,237,941)	(11,902,431)
Non-operating income (expense):
Interest income	38,782	140,276
Interest expense	(180,704)	(143,663)
Amortization of debt discount	399,367	456,475
Loss on extinguishment of debt	473,721	0
Inducement for exercise of warrants	(3,560,958)	0
Change in fair value of derivatives	2,975,316	457,811
Total non-operating income (loss)	(1,600,652)	(2,051)
Discontinued operations:
Net loss	$ (6,838,593)	$ (11,904,482)
Basic and diluted net loss per share
Basic and diluted net loss per share	$ (0.18)	$ (0.63)
Basic and diluted weighted average common shares outstanding used in computing net loss per share	37,765,036	18,972,053

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity - USD ($)	Series C Preferred Stock [Member]	Series A Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2014	$ 3,757		$ 18,435	$ 88,064,205	$ (80,716,475)	$ 7,369,922
Beginning Balance, Shares at Dec. 31, 2014	3,757,229		1,843,539
Conversions of preferred stock to common stock, Amount	$ (56)		$ 226	(170)
Conversions of preferred stock to common stock, Shares	(56,500)		226,000
Warrant conversions, Amount			$ 750	126,750		127,500
Warrant conversions, Shares			750,000
Warrants issued in conjunction with convertible notes				386,118		386,118
Issuance of common stock for services, Amount			$ 1,048	495,240		496,288
Issuance of common stock for services, Shares			1,047,522
Stock based compensation from stock options and warrants				1,807,337		1,807,337
Net loss					(11,904,482)	(11,904,482)
Ending Balance, Amount at Dec. 31, 2015	$ 3,701		$ 20,459	90,879,480	(92,620,957)	(1,717,317)
Ending Balance, Shares at Dec. 31, 2015	3,700,729		20,458,761
Conversions of preferred stock to common stock, Amount	$ (257)		$ 1,546	(1,289)
Conversions of preferred stock to common stock, Shares	(257,668)		1,546,008
Warrant exercises, Amount			$ 17,896	2,308,566		2,326,462
Warrant exercises, Shares			17,895,859
Notes converted, Amount			$ 1,564	102,346		103,910
Notes converted, shares			1,563,677
Issuance of common stock for interest, Amount			$ 511	20,989		21,500
Issuance of common stock for interest, Shares			511,266
Warrant modification, Amount				43,897		43,897
Stock based compensation from stock options and warrants				1,084,323		1,084,323
Net loss					(6,838,593)	(6,838,593)
Ending Balance, Amount at Dec. 31, 2016	$ 3,444		$ 41,976	$ 94,438,312	$ (99,388,894)	$ (4,975,818)
Ending Balance, Shares at Dec. 31, 2016	3,443,061		41,975,571

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net loss	$ (6,838,593)	$ (11,904,482)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense	469,987	902,517
Amortization of intangible assets	192,503	337,879
Amortization of debt discount	(399,367)	(456,475)
Stock-based compensation	1,084,323	1,807,337
Issuance of common stock for services and interest	125,410	496,288
Change in fair value of derivatives	(2,975,316)	(457,811)
Accrued interest income on notes receivable from third party	0	(27,339)
Accrued interest expenses on notes payable	50,087	23,090
Impairment of software development assets	718,116	0
Impairment of goodwill	0	3,202,276
Impairment of intangible assets	979,072	1,189,246
Change in earn-out liability	0	(594,216)
Inducement for exercise of warrants	3,560,958	0
Loss on extinguishment of debt	473,721	0
Provision for bad debt	592,914	2,111,418
Changes in operating assets and liabilities:
Accounts receivable	(565,735)	(427,671)
Customer short term notes receivable	72,002	(598,385)
Customer long term notes receivable	184,004	(72,074)
Deferred revenue	(3,138)	(39,792)
Prepaid insurance	(13,801)	(5,010)
Other assets	0	11,726
Accounts payable and accrued liabilities	104,396	806,323
Net cash used in operating activities	(1,347,851)	(2,782,205)
Cash flows from investing activities:
Proceeds from short-term notes receivable from third party	0	121,000
Payment of deferred acquisition payable - intellectual Capital Mgmt, LLC	(10,000)	(10,000)
Software development costs	(291,957)	(912,212)
Purchase of property and equipment	0	(305,326)
Net cash used in investing activities	(291,957)	(1,096,538)
Cash flows from financing activities:
Net proceeds from warrant exercises related to tender offer	1,179,252	0
Net proceeds from liabilities related to tender offer	0	661,424
Payment of deferred acquisition payable-Intellectual Capital Mgmt, LLC	(10,000)	(10,000)
Net proceeds from warrant conversions	0	127,500
Proceeds from issuance of notes	0	200,000
Proceeds from issuance of related party financing		100,000
Repayment of note payable	(70,262)	(129,738)
Repayment of notes to former CFO	(35,000)	0
Repayment of convertible notes	(200,000)	0
Proceeds from issuance of convertible debt	380,000	2,157,743
Net cash provided by financing activities	1,243,990	3,106,929
Net decrease in cash and cash equivalents	(395,818)	(771,814)
Cash and cash equivalents at beginning of the year	470,341	1,242,155
Cash and cash equivalents at end of the year	$ 74,523	$ 470,341

Basis of Presentation and Going

Basis of Presentation and Going Concern	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation and Going Concern	The Company is a Delaware corporation. Through the subsidiary incorporated in the state of California, SpendSmart Networks, Inc. (“SpendSmart-CA”), the Company provides proprietary loyalty systems and a suite of digital engagement and marketing servers through our Mobile and Loyalty Marketing programs and proprietary website building software that help local merchants build relationships with consumers and drive revenues. The Company is a publicly traded company trading on the OTC Bulletin Board under the symbol “SSPC.” The accompanying audited consolidated financial statements include the accounts of the Company and SpendSmart-CA as of December 31, 2016 and 2015 and for the years then ended, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated. As of December 31, 2016, the Company’s audited consolidated financial statements included an opinion containing an explanatory paragraph as to the uncertainty of the Company’s ability to continue as a going concern. The Company has continued to incur net losses through December 31, 2016 and have yet to establish profitable operations. These factors among others create a substantial doubt about our ability to continue as a going concern. The Company’s audited consolidated financial statements as of and for the periods ended December 31, 2016 do not contain any adjustments for this uncertainty. The Company currently plans to raise additional required capital through the sale of shares of the Company’s preferred or common stock. All additional amounts raised will be used for our future investing and operating cash flow needs. However there can be no assurance that we will be successful in consummating such financing. This description of our future plans for financing does not constitute an offer to sell or the solicitation of an offer to buy our securities.

Reclassification

Reclassification	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassification	Certain reclassifications were made to the 2015 financial statement presentation to conform to the 2016 financial statement presentation. These reclassifications relate to balances from discontinued operations.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Loans Receivable and Accounts Receivable The Company extended credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers. Loans and accounts receivable are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time loan and accounts receivable are past due and the customer's current ability to pay its obligation to the Company. The Company writes off loans and accounts receivable when they become uncollectible. The Company is no longer entering into notes with its customers. Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, fair value of financial instruments, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include recoverability and useful lives of intangible assets, the valuation allowance related to the Company's deferred tax assets, the allowance for doubtful accounts related and notes and accounts receivable and the fair value of stock options and warrants granted to employees, consultants, directors, investors and placement agents. Revenue Recognition The Company generates revenues primarily in the form of set up fees, license fees, messaging, equipment and marketing services fees and value added mobile marketing and mobile commerce services. License fees are charged monthly for support services. Set-up fees primarily consist of fees for website development services (including support and unspecified upgrades and enhancements when and if they are available), training and professional services that are not essential to functionality. The Company offers two licenses consisting of our Engage license and our Thrive license. The Company now offers both licenses in a combined package known as the Customer Loyalty System License (“CLS”). We recognize revenues when all of the following conditions are met: ● there is persuasive evidence of an arrangement; ● the products or services have been delivered to the customer; ● the amount of fees to be paid by the customer is fixed or determinable; and ● the collection of the related fees is probable. Signed agreements are used as evidence of an arrangement. Electronic delivery occurs when we provide the customer with access to the software. We assess whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. The Company offered extended payment terms in 2014 and 2015 with regards to the setup fee with typical terms of payment due between one and three years from delivery of license. The Company no longer offers extended payment terms. We assess collectability of the set-up fee based on a number of factors such as collection history and creditworthiness of the customer. If we determine that collectability is not probable, revenue is deferred until collectability becomes probable, generally upon receipt of cash. License arrangements may also include set-up fees such as website development, delivery of tablets, professional services and training services, which are typically delivered within 30-60 days of the contract term. In determining whether set-up fee revenues should be accounted for separately from license revenues, we evaluate whether the set-up fees are considered essential to the functionality of the license using factors such as the nature of our products; whether they are ready for use by the customer upon receipt; the nature of our implementation services, which typically do not involve significant customization to or development of the underlying software code; the availability of services from other vendors; whether the timing of payments for license revenues is coincident with performance of services; and whether milestones or acceptance criteria exist that affect the realizability of the license fee. Substantially all of our set-up fee arrangements are recognized as the services are performed. Payments received in advance of services performed are deferred and recognized when the related services are performed. We do not offer refunds and therefore have not recorded any sales return allowance for any of the periods presented. Upon a periodic review of outstanding accounts and notes receivable, amounts that are deemed to be uncollectible are written off against the allowance for doubtful accounts. Deferred revenue consists substantially of amounts invoiced in advance of revenue recognition for our products and services described above. We recognize deferred revenue as revenue only when the revenue recognition criteria are met. Debt discount and issuance costs Debt issuance costs, including the value of warrants issued in connection with debt financing and fees or costs paid to lender, are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt. The Company amortizes the discount to interest expense over the term of the respective debt using the effective interest method. Cash and cash equivalents The Company considers all investments with an original maturity of three months or less to be cash equivalents. Cash equivalents primarily represent funds invested in money market funds, bank certificates of deposit and U.S. government debt securities whose cost equals fair market value. From time to time, the Company has maintained bank balances in excess of insurance limits established by the Federal Deposit Insurance Corporation. The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash and cash equivalents. Property and Equipment Property and equipment (including kiosks) had been recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets (generally three to five years). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. Depreciation expense for the years ended December 31, 2016 and 2015 was $0 and $628,999, respectively. The Company accelerated the depreciation in the amount of approximately $496,000 on the kiosks, which have seven inch screens, to reduce their net book value to zero due to technological obsolescence in 2015. In the fourth quarter 2015, they were replaced by new ten inch screens and some new seven inch screens which will be able to run offline from wifi, have faster processors and ultra-sharp screens, and have licensee reporting tools. Currently the Company sells the equipment to the customer. Therefore the cost of equipment is included in operating expenses and not capitalized as property and equipment. Software Capitalization The Company accounts for computer software used in the business in accordance with ASC 350 “Intangibles-Goodwill and Other”. ASC 350 requires computer software costs associated with internal use software to be charged to operations as incurred until certain capitalization criteria are met. Costs incurred during the preliminary project stage and the post-implementation stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property, equipment and software. These costs generally consist of internal labor during configuration, coding, and testing activities. Capitalization begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used to perform the function intended. We capitalized $291,957 and $912,212 in software for the years ended December 31, 2016 and 2015, respectively. Software depreciation expense for the years ended December 31, 2016 and 2015 was $469,987 and $273,517, respectively. We recorded impairment expense of $718,116 related to our SMS software for the year ended December 31, 2016. Valuation of Long-Lived Assets The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the estimated fair value of the assets. We recorded impairment expense on our intangible assets of $922,688 related to our SMS technology assets, $38,853 related to trademarks, and $17,531 related to our TechXpress technology assets for the year ended December 31, 2016. We conducted an impairment analysis on our intangible assets and goodwill and determined that we had an impairment related to our intangible assets of $1,189,246 and on our goodwill of $3,202,276 at December 31, 2015 Income Tax Expense Estimates and Policies As part of the income tax provision process of preparing the Company’s financial statements, the Company is required to estimate the Company’s provision for income taxes. This process involves estimating our current tax liabilities together with assessing temporary differences resulting from differing treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. Management then assesses the likelihood that the Company deferred tax assets will be recovered from future taxable income and to the extent believed that recovery is not likely, a valuation allowance is established. Further, to the extent a valuation allowance is established and changes occur to this allowance in a financial accounting period, such changes are recognized in the Company’s tax provision in the Company’s consolidated statement of operations. The Company’s use of judgment in making estimates to determine the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance is recorded against our net deferred tax assets. There are various factors that may cause these tax assumptions to change in the near term, and the Company may have to record a future valuation allowance against our deferred tax assets. The Company recognizes the benefit of an uncertain tax position taken or expected to be taken on the Company’s income tax returns if it is “more likely than not” that such tax position will be sustained based on its technical merits. Stock Based Compensation The Company accounts for stock based compensation arrangements through the measurement and recognition of compensation expense for all stock based payment awards to employees and directors based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of the Company’s stock options and warrants at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of options and warrants. The Company uses historical company data among other information to estimate the expected price volatility and the expected forfeiture rate. Derivatives – Warrant Liability The Company accounts for the common stock warrants granted and still outstanding as of December 31, 2016 in connection with certain financing transactions (“Transactions”) in accordance with the guidance contained in ASC 815-40-15-7D, "Contracts in Entity's Own Equity" whereby under that provision they do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection with the transactions has been estimated using a Monte Carlo simulation. The Company accounts for certain of its outstanding warrants issued in fiscal 2010, 2012 and 2013 (“2010 Warrants,” “2012 Warrants” and “2013 Warrants, respectively) as derivative liabilities. These warrants were determined to be ineligible for equity classification due to provisions of the respective instruments that may result in an adjustment to their conversion or exercise prices. The Company recognized a gain of $0 and $47,209 in the fair value of derivatives for the years ended December 31, 2016 and 2015, respectively. These derivative liabilities which arose from the issuance of these warrants resulted in an ending balance of derivative liabilities of $0 at December 31, 2015, and expired in 2016. The Company accounts for certain of its outstanding warrants issued in fiscal 2016 (“2016 Warrants”) as derivative liabilities. The 2016 Warrants were determined to be ineligible for equity classification due to provisions of the respective instruments that may result in an adjustment to their conversion or exercise prices. The Company recognized a gain of $2,732,444 in the fair value of these derivatives for the year ended December 31, 2016. These derivative liabilities which arose from the issuance of the 2016 Warrants resulted in an ending balance of derivative liabilities of $1,366,898 as of December 31, 2016. Derivatives - Bifurcated Conversion Option in Convertible Notes The Company issued Convertible Notes with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, Accounting for Derivative Financial Instruments and Hedging Activities The Convertible Notes issued during the years ended December 31, 2016 and 2015 are subject to anti-dilution adjustments that allow for the reduction in the Conversion Price, as defined in the agreement, in the event the Company subsequently issues equity securities including Common Stock or any security convertible or exchangeable for shares of Common Stock for a price less than the current conversion price. The Company bifurcated and accounted for the conversion option in accordance with ASC 815 as a derivative liability, since this conversion feature is not considered to be indexed to the Company’s own stock. The Company’s derivative liability has been measured at fair value at December 31, 2016 using a Monte-Carlo Simulation. Inputs into the model require estimates, including such items as estimated volatility of the Company’s stock, estimated probabilities of additional financing, risk-free interest rate, and the estimated life of the financial instruments being fair valued. In addition, since the conversion price contains an anti-dilution adjustment, the probability that the Conversion Price of the Notes would decrease as the share price decreased was also incorporated into the valuation calculation. The Company recognized a gain of $242,231 and a gain of $410,602 in the fair value of conversion option derivatives for the year ended December 31, 2016 and 2015, respectively. These derivative liabilities resulted in an ending balance of conversion option derivative liabilities of $88,242 and $179 as of December 31, 2016 and December 31, 2015, respectively. Subsequent changes to the fair value of the derivative liabilities will continue to require adjustments to their carrying value that will be recorded as other income (in the event that their value decreases) or as other expense (in the event that their value increases). In general (all other factors being equal), the Company will record income when the market value of the Company’s common stock decreases and will record expense when the value of the Company’s stock increases. The fair value of these liabilities is estimated using Monte Carlo pricing models that are based on the individual characteristics of the Company’s warrants, preferred and common stock, as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. Net Loss per Share The Company calculates basic earnings per share (“EPS”) by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding for the period, without considering common stock equivalents. Diluted EPS is computed by dividing net income or net loss applicable to common shareholders by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, such as options and warrants. Options and warrants are only included in the calculation of diluted EPS when their effect is dilutive. Fair value of assets and liabilities Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, we consider the principal or most advantageous market in which we would transact and we consider assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows: ● Level 1: Observable inputs such as quoted prices in active markets; ● Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company’s financial instruments are cash and cash equivalents, accounts payable, and derivative liabilities. The recorded values of cash equivalents and accounts payable approximate their fair values based on their short-term nature. The fair value of derivative liabilities is estimated using option pricing models that are based on the individual characteristics of our warrants, preferred and common stock, the derivative liability on the valuation date as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative liabilities are the only Level 3 fair value measures. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s warrant derivative liabilities that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 and 2015 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Number of assumed financings 1 1 Total shares outstanding 41,975,571 20,458,761 Strike Price 0.01 0.75 Risk-free Rate 1.34 % 0.96 % Maturity Date 7/15/2019 7/15/2019 Expected Life N/A N/A A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s conversion option derivative that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Strike Price N/A 0.75 Risk-free Rate 1.40 % 1.40 % Maturity Date 5/5/2017 6/26/2016 At December 31, 2016 and 2015, the estimated fair values of the liabilities measured on a recurring basis are as follows: Fair Value Measurements at Carrying December 31, 2016: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Warrant derivative liability 1,366,898 - - 1,366,898 Conversion option derivative liability 88,242 - - 88,242 Total $ 1,455,140 $ - $ - $ 1,455,140 Fair Value Measurements at Carrying December 31, 2015: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Conversion option derivative liability 179 - - 179 Total $ 179 $ - $ - $ 179 The following tables present the activity for Level 3 liabilities for the years ended December 31, 2016 and 2015: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2015 $ - $ 179 Additions during the year 4,099,344 330,933 Total (gains) or losses included in net loss (2,732,446 ) (242,870 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2016 $ 1,366,898 $ 88,242 Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2014 $ 47,209 $ - Additions during the year - 410,781 Total (gains) or losses included in net loss (47,209 ) (410,602 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2015 $ - $ 179 Changes in fair value of our Level 3 earn-out liability for the years ended December 31, 2016 and 2015 were as follows: Fair Value Measurements Using Level 3 Inputs Warrant Conversion Earn-out Derivative Liability Option Derivative Liability Liability Total Balance - December 31, 2015 $ - 179 - $ 179 Additions during the period 4,099,344 330,933 - 4,430,277 Total (gains) or losses include in net loss (2,732,446 ) (242,870 ) - (2,975,316 ) Balance - December 31, 2016 $ 1,366,898 88,242 - $ 1,455,140 Advertising The Company expenses advertising costs as incurred. The Company has no existing arrangements under which we provide or receive advertising services from others for any consideration other than cash. Advertising expenses totaled $208,530 and $320,044 for the years ended December 31, 2016 and 2015, respectively. Litigation From time to time, the Company may become involved in litigation and other legal actions. The Company estimates the range of liability related to any pending litigation where the amount and range of loss can be estimated. The Company records its best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. On July 8, 2015, Intellectual Capital Management, LLC dba SMS Masterminds and SpendSmart Networks, Inc. were named in a potential class-action lawsuit entitled Peter Marchelos, et al v. Intellectual Capital Management, et al, filed in the United States District Court Eastern District of New York relating to alleged violations of the Telephone Consumer Protection Act of 1991. This litigation involves the same licensee and merchant as a previous lawsuit and the same attorneys represent the plaintiffs in this action. The claim of one of the two plaintiffs was resolved for $1,701. The Company believes the Plaintiff’s allegations have no merit. There are no other legal claims currently pending or threatened against us that in the opinion of our management would be likely to have a material adverse effect on our financial position, results of operations or cash flows. Earn Out The Company agreed to pay the sellers an earn-out payment relating to fifteen percent of the earnings generated by SMS Masterminds after the acquisition and an additional earn-out payment tied to the EBITDA of the Company after the acquisition of SMS Masterminds, of up to $2,000,000 in aggregate. The Company paid $0 during the years ended December 31, 2016 and 2015 related to this earn-out agreement. The change in fair value of Earn-out liability expenses totaled $0 for the year ended December 31, 2016 and $594,216 for the year ended December 31, 2015. We recorded the change in earn-out liability due to our updated operating assumptions in the underlying valuation related to the SMS acquisition. The Company agreed to pay the sellers a guaranteed payment of $400,000 of which $390,000 had been paid as of December 31, 2015 and $10,000 was paid in January, 2016. As of December 31, 2016, the remaining balance was $0. Goodwill The Company accounted for goodwill under ASC 350 “Intangibles – Goodwill and Other” (“ASC 350”). ASC 350 requires an evaluation of impairment by assessing qualitative factors, and if necessary, applying a fair-value based test. The goodwill impairment test requires qualitative analysis to determine whether is it more likely than not that the fair value of a reporting unit is less than the carrying amount, including goodwill. An indication of impairment through analysis of these qualitative factors initiates a two-step process, which requires management to make judgments in determining what assumptions to use in the calculation. The first step of the process consists of estimating the fair value of the Company’s reporting units based on discounted cash flow models using revenue and profit forecasts and comparing the estimated fair values with the carrying values of the Company’s reporting units which include the goodwill. If the estimated fair values are less than the carrying values, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill. The determination of the Company’s “implied fair value” requires the Company to allocate the estimated fair value to the assets and liabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carrying value. The Company tested goodwill impairment at December 31, 2015 and concluded that goodwill was fully impaired. Goodwill was written down in the amount of $3,202,276 in 2015. Intangible assets Intangible assets consist of intellectual property/technology, customer lists, and trade-name/marks acquired in business combinations under the purchase method of accounting are recorded at fair value net of accumulated amortization since the acquisition date. Amortization is calculated using the straight line method over the estimated useful lives at the following annual rates: Useful Lives IP/technology 10 Trade-name/marks 10 December 31, 2016 December 31, 2015 Intangible assets beginning balance 1,570,575 3,097,700 Amortization (192,503 ) (337,879 ) Impairment (979,072 ) (1,189,246 ) Intangible assets ending balance 399,000 1,570,575 The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of finite-lived intangible asset may not be recoverable. Recoverability of a finite-lived intangible asset is measured by a comparison of its carrying amount to the undiscounted future cash flows expected to be generated by the asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is determined based on discounted cash flows. The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended December 31, 2016, the Company recorded an impairment loss of $979,072 related to an intangible asset. Recently Issued Accounting Pronouncements On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, as amended, (Topic 606), with an effective date for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations, with an expected completion date of June 30, 2017. Presentation of Financial Statements—Going Concern , . In February 2016, the FASB issued ASU 2016-02, Leases which amended guidance for lease arrangements in order to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 - Compensation - Stock Compensation, which simplifies the accounting for the tax effects related to stock based compensation, including adjustments to how excess tax benefits and a company’s payments for tax withholdings should be classified, amongst other items. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We do not expect this to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13), that requires entities to use a new impairment model based on expected losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for us beginning January 1, 2020 with early adoption permitted January 1, 2019. Credit losses under the new model will consider relevant information about past events, current conditions and reasonable and supportable forecasts, resulting in recognition of lifetime expected credit losses. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. Segments The Company operates in one reportable segment. Accordingly, no segment disclosures have been presented herein.

Accounts Receivable, Short-Term

Accounts Receivable, Short-Term and Long-Term Notes Receivable	12 Months Ended
	Dec. 31, 2016
Receivables [Abstract]
Accounts Receivable, Short-Term and Long-Term Notes Receivable	Notes receivable aged over 60 days past due are considered delinquent and notes receivable aged over 90 days past due with known collection issues are placed on non-accrual status. Interest revenue is not recognized on notes receivable while on non-accrual status. Cash payments received on non-accrual receivables are applied towards the principal. When notes receivable on non-accrual status are again less than 60 days past due, recognition of interest revenue for notes receivable is resumed. We charge interest rates on our notes receivable averaging 13% which approximates a fair value. We recorded approximately $38,782 in interest income for the year ended December 31, 2016. Based upon the Company's methodology, the notes receivable balances with reserves and the reserves associated with those balances are as follows: December 31, 2015 Gross Reserve Net Current Long-Term Current Long-Term Current Long-Term Customer Notes Receivable 908,590 661,371 632,422 461,702 276,168 199,669 Accounts Receivable 437,589 - 295,759 - 141,830 - December 31, 2016 Gross Reserve Net Current Long-Term Current Long-Term Current Long-Term Customer Notes Receivable 793,988 414,665 767,138 399,401 26,850 15,264 Accounts Receivable 921,829 - 529,461 - 292,368 - The roll forward of the allowance for doubtful accounts related to notes receivable and accounts receivable is as follows: Notes Receivable Reserve Accounts Current Long-Term Receivable Reserve Balance at December 31, 2014 286,571 349,954 188,527 Incremental Provision 796,063 551,256 441,627 Recoveries - - - Charge offs (450,212 ) (439,508 ) (334,395 ) Balance at December 31, 2015 632,422 461,702 295,759 Notes Receivable Reserve Accounts Current Long-Term Receivable Reserve Balance at December 31, 2015 $ 632,422 $ 461,702 $ 295,759 Incremental Provision 177,316 401 415,197 Recoveries - - - Charge offs (42,600 ) (62,702 ) (81,495 ) Balance at December 31, 2016 $ 767,138 $ 399,401 $ 629,461

Short Term Note Receivable

Short Term Note Receivable	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Short Term Note Receivable	The Company issued a Secured Convertible Promissory Note (the “Note”) in the principal amount of $410,000 to a third party in September 2014. The Note bears interest at the rate of 5.25% per annum and matured in four months. For the years ended December 31, 2016 and December 31, 2015, the Company has recorded $0 and $27,380 of interest income from this Note. $130,000 of the principal amount was paid in 2015. The remaining balance of $322,430 was written off during the year ended December 31, 2015, which was made up of $280,000 in principal and $42,430 in interest.

Redeemable Preferred Stock and

Redeemable Preferred Stock and Warrants	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Redeemable Preferred Stock and Warrants

Convertible Promissory Notes

Convertible Promissory Notes	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Convertible Promissory Notes	On November 30, 2016, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $100,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has six-month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. We recorded $2,250 in interest expense for the year ended December 31, 2016. On November 7, 2016, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $100,000. Mr. Blech, a member of the board of directors, is the trustee. The Convertible Promissory Note bears an interest at the rate of 9%, has a six month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. We recorded $2,817 in interest expense for the year ended December 31, 2016. On July 19, 2016, the Company issued the following Convertible Promissory Notes: Joe Proto ($40,000), John Eyler ($40,000), Francis J. Liddy ($20,000), Isaac Blech ($40,000), and Transpac Investments Ltd. ($40,000). All of the individuals listed are members of the board of directors. The Convertible Promissory Notes bear interest at the rate of 9%, have a six month maturity date, and a mandatory conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. We recorded $7,283 in interest expense for the year ended December 31, 2016. During the year ended December 31, 2015, the Company closed on a private offering and issued and six 9% Convertible Promissory Notes with principal amounts of $300,000, $262,500, $275,000, $75,000, 50,000, and $150,0000 (the “Notes”) and warrants to purchase 400,002, 350,002, 366,667, 66,667, 100,001, and 200,001 shares of the Company’s common stock (the “Warrant”), respectively. The Company also agreed to provide piggy-back registration rights to the holders of the Units. The Notes have a term of twelve (12) months, pay interest semi-annually at 9% per annum and can be voluntarily converted by the holder into shares of common stock at an exercise price of $0.75 per share, subject to adjustments for stock dividends, splits, combinations and similar events as described in the Notes. In addition, if the Company issues or sells common stock at a price below the conversion price then in effect, the conversion price of the Notes shall be adjusted downward to such price but in no event shall the conversion price be reduced to a price less than $0.50 per share. The Warrants have an exercise price of $0.75 per share and have a term of four years. The holders of the Warrants may exercise the Warrants on a cashless basis for as long as the shares of common stock underlying the Warrants are not registered on an effective registration statement. The relative fair value ascribed to the 1,483,340 warrants issued was approximately $337,118 and was recorded to additional paid-in capital. The embedded conversion feature was bifurcated and accounted for as a derivative liability at approximately $393,000 on the day of issuance. The remaining proceeds were allocated based on the relative fair value of the debt and the warrant, and accordingly, approximately $730,520 of debt discount was recorded and was amortized over the initial term of the debt using the effective interest method. These notes were modified in second quarter 2016 and again in fourth quarter 2016. See below for further discussion. During the second quarter 2016, the Company amended four of the outstanding 9% Convertible Promissory Notes with principal amounts of $275,000, $75,000, 50,000, and $150,000 as follows: the maturity dates were extended to November 5, 2016, September 2, 2016, November 22, 2016, and September 26, 2016, respectively; the conversion price was lowered to $0.15 per share, the provision limiting the conversion price adjustment to that of the Series C Preferred Stock was removed, and an option to be repaid prior to the maturity date in the event the Company raises capital in excess of three million dollars was added. The Company also amended the warrant issued in conjunction with the Convertible Promissory Note reducing the exercise price to $0.15 and issued new warrants to purchase 666,669 shares of the Company's common stock with a $0.15 exercise price and a three year expiration. According to FASB ASC 470-50, the modification is accounted for as a debt extinguishment, whereby the new debt instrument is initially recorded at fair value, and that amount is used to determine the debt extinguishment gain or loss to be recognized and the effective rate of the new instrument. We recognized a loss on the extinguishment of debt of $415,689 for the year ended December 31, 2016. During the fourth quarter 2016, the Company amended six of the outstanding 9% Convertible Promissory Notes with principal amounts of $300,000, $262,500, $275,000, $75,000, $50,000, and $150,000 as follows: the maturity dates were extended to May 5, 2017; the interest rate for the extension period was increased to 15%; the conversion price was changed to the per share price at the time of the next financing of $2,000,000 or greater. According to FASB ASC 470-50, the modification is accounted for as a debt extinguishment, whereby the new debt instrument is initially recorded at fair value, and that amount is used to determine the debt extinguishment gain or loss to be recognized and the effective rate of the new instrument. We recognized a loss on the extinguishment of debt of $58,032 for the year ended December 31, 2016. On July 15, 2015, the Company issued a Convertible Promissory Note in the principal amount of $400,000 inclusive of interest. The Note is for a term of six months. The Note bears interest at twelve percent per annum. The Note is secured by the assets of the Company. The Note may be converted into shares of the Company’s common stock at $0.75 per share. The Company also issued the holder warrants to purchase 500,000 shares of the Company’s common stock. The proceeds were allocated based on the relative fair value of the debt and the warrant. The warrants have an exercise price of $0.75 per share and have a term of two years. The relative fair value ascribed to the 500,000 warrants issued was approximately $49,000 and was recorded to additional paid-in capital. This amount will be amortized over the term of the debt using the effective interest rate method. As part of the closing of the Tender Offer, $200,000 of these notes converted into 1,333,334 shares of common stock and the investor received common stock and 1,333,333 warrants with a three year term at an exercise price of $0.15. The remaining $200,000 of notes was paid in February 2016. During the year ended December 31, 2015, the Company issued Convertible Promissory Notes to investors in the principal amount of $150,000, $150,000, $287,333, and $48,000. The Notes feature a mandatory conversion feature obligating the holder to participate and apply the principal and interest into a “Qualified Financing” meaning a financing taking place prior to January 31, 2016, wherein the Company receives gross proceeds totaling at least $1,000,000. In the event the entire principal plus accrued interest under this Note is not eligible for conversion into a Qualified Financing, then any remaining balance of this Note shall be converted into restricted common stock at the price of the Qualified Financing and Holder shall receive three (3) times any warrant coverage provided for in the Qualified Financing. The Notes bear interest at nine percent per annum and has a maturity date of six months. The embedded conversion feature of the note was bifurcated and accounted for as a derivative liability at approximately $17,379 on the day of issuance. As part of the closing of the Tender Offer, these notes converted into 4,291,679 shares of common stock and the investors received 12,875,037 warrants with a three year term at an exercise price of $0.15.

Notes Payable

Notes Payable	12 Months Ended
	Dec. 31, 2016
Notes Payable [Abstract]
Notes Payable	On August 26, 2015, the Company entered into a Business Promissory Note and Security Agreement with Bank of Lake Mills for the principal sum of $200,000 and a daily interest rate of 0.22%. The Note is for a term of six months with a weekly repayment schedule ending February 22, 2016. The Note included standard representations and warranties. The Note was secured by certain assets of the Company as well as a personal guarantee by Alex Minicucci, our then CEO. The total repayment amount including interest and principal is $244,637 and was to be paid pro-rata weekly ending February 22, 2016. For the year ended December 31, 2015, we recorded interest expense related to the note of $39,585. For the year ended December 31, 2015, we have paid approximately $129,738 in principal repayments related to the Note. For the year ended December 31, 2016, we paid approximately $70,262 in principal repayments related to the Note. As of February 25, 2016, the note has been fully repaid.

Due to Related Party

Due to Related Party	12 Months Ended
	Dec. 31, 2016
Due To Related Party
Due to Related Party	On August 14, 2015 and September 28, 2015, the Company entered into Loan Agreements with Alex Minicucci for the principal sum of $65,000 and $35,000, respectively. The Loans were to be paid off by December 31, 2016 and include an interest rate of 7%. For the years ended December 31, 2016 and 2015, we recorded interest expense related to the loans of $4,756 and $3,034. The $35,000 loan has been repaid during 2016 and the Company extended the terms related to the $65,000 loan to May 10, 2017.

Common Stock and Warrants

Common Stock and Warrants	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Common Stock and Warrants	Common stock During the year ended December 31, 2016, the company issued 17,895,859 shares of common stock upon warrant exercises related to the tender offer. The Company issued 1,563,677 shares of common stock related to services rendered and recognized expense of $103,910 and issued 511,266 shares of common stock related to interest due and recognized expense of $21,500. 257,668 shares of Series C Stock converted to 1,546,008 shares of common shares during the year ended December 31, 2016. During the year ended December 31, 2015, the company issued 1,047,522 shares of common stock and the Company recognized expense of $496,288 for services rendered and interest. Tender Offer and Debt Conversion Between December 11, 2015 and February 3, 2016, the Company entered into agreements with investors, pursuant to which on February 3, 2016, warrant holders exercised 12,270,846 Warrants to purchase an aggregate of 12,270,846 shares of our common stock for gross proceeds of $1.84 million. The Company issued new warrants to purchase an aggregate of 26,479,217 shares of common stock at an exercise price of $0.15 per share, in consideration for the immediate exercise of the warrants. In August, 2016, the exercise price on 13,209,609 of these warrants was reduced to $0.01, as the Company had not met its six-month targets related to these warrants. In January, 2017, the exercise price on 13,209,608 of these warrants was reduced to $.01, as the Company had not met its twelve-month target related to these warrants. The following paragraph discusses the accounting treatment related to this reduction. The Warrants have a cash settlement feature; as a result, they were classified as a derivative liability and recorded at fair value. Fair value of the Warrants, in the total amount of $3,918,924 was calculated using the Monte-Carlo model, using the following assumptions: 68.7% expected volatility, a risk-free interest rate of 0.91%, estimated life of 3 years and no dividend yield. The fair value of the common stock was $0.148. The transaction was accounted for as an inducement. ASC 470-20-40 addresses the accounting for altered conversion privileges, including the issuance of warrants or other securities (not provided for in the original conversion terms) to induce conversion. As a result of this transaction, the Company recognized an inducement expense of $3,560,958 equal to the fair value of all securities and other consideration transferred in the transaction in excess of the fair value of securities issuable pursuant to the original conversion terms, as of the date of the conversion. In connection with the tender offer, investors converted $843,751 in Convertible Notes at a conversion price of $0.15 per share into 5,625,013 shares of our common stock during 2016.

Convertible Preferred Stock

Convertible Preferred Stock	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Convertible Preferred Stock	Series A Preferred Stock At December 31, 2016 and 2015 we had 0 shares of Series A Cumulative Convertible Preferred Stock (the “Series A Stock”) outstanding. Series B Preferred Stock At December 31, 2016 and 2015 we had 0 shares of Series B convertible preferred stock (“Series B Stock”) outstanding. Series C Convertible Preferred Stock At December 31, 2016 and 2015, we had 3,443,061 and 3,700,729 shares, respectively, of Series C convertible preferred stock (“Series C Stock”) outstanding that were issued to investors for $3.00 per share. We issued 4,299,081 shares of Series C Stock and had conversions of 56,500 shares for the year ended December 31, 2015. For the year ended December 31, 2016, we had conversions of 257,668 shares. Number of Shares: Stated Value: Voluntary Conversion: Mandatory Conversion Voting Rights: Liquidation Preferences:

Net Loss per Share Applicable t

Net Loss per Share Applicable to Common Stockholders	12 Months Ended
	Dec. 31, 2016
Earnings Per Share [Abstract]
Net Loss per Share Applicable to Common Stockholders	Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the year ended December 31, 2016 and 2015 due to net losses. The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented: For the year ended December 31, 2016 2015 Common stock options 26,865,017 10,337,113 Investor warrants 37,836,680 23,752,410 Compensation warrants 1,981,667 2,645,000 Excluded potentially dilutive securities 66,683,364 36,734,523

Stockholder's equity

Stockholder's equity	12 Months Ended
	Dec. 31, 2016
Equity [Abstract]
Stockholder's equity	Stock options In March 2016, our Company granted options to purchase up to 3,517,067 shares of our common stock to members of our Board of Directors. The options vest immediately; have an exercise price of $0.12 per share; and expire five years after the date of grant. The fair value at grant date of these options was $246,141 and the entire amount was expensed in 2016. In March 2016, our Company granted options to purchase up to 1,459,326 shares of our common stock to four employees. The options vest over four years; have an exercise price of $0.12 per share; and expire five years after the date of grant. The fair value at grant date of these options was $112,147 and $48,145 was expensed in 2016. In March 2016, our Company granted options to purchase up to 1,859,623 shares of our common stock to thirty-three employees. The options vest immediately; have an exercise price of $0.11 per share; and expire five years after the date of grant. The fair value at grant date of these options was $142,006 and the entire amount was expensed in 2016. In May 2016, our Company granted options to purchase up to 264,000 shares of our common stock to Frank Liddy. The options vest immediately; have an exercise price of $0.08 per share; and expire five years after the date of grant. The fair value at grant date of these options was $20,256 and the entire amount was expensed in 2016. In May 2016, our Company granted options to purchase up to 450,000 shares of our common stock to two employees. The options vest over two years; have an exercise price of $0.06 per share; and expire five years after the date of grant. The fair value at grant date of these options was $17,979 and $8,088 was expensed in 2016. In June 2016, our Company granted options to purchase up to 2,104,751 shares of our common stock to thirty-two employees. The options vest immediately; have an exercise price of $0.09 per share; and expire five years after the date of grant. The fair value at grant date of these options was $151,431 and the entire amount was expensed in 2016. Effective July 22, 2016, the Company cancelled the following stock and stock options granted to its board of directors on March 21, 2016: (a) Joseph Proto, 350,000 restricted shares of common stock; (b) John Eyler, options to purchase 464,331 shares of common stock; (c) Pat Kolenik 350,000 restricted shares of common stock; (d) Chris Leong, options to purchase 464,331 shares of common stock, and (e) Isaac Blech, options to purchase 663,330 shares of common stock. In September 2016, our Company granted options to purchase up to 2,674,940 shares of our common stock to twenty-five employees. The options vest immediately; have an exercise price of $0.06 per share; and expire five years after the date of grant. The fair value at grant date of these options was $139,316 and the entire amount was expensed in 2016. In December 2016, our Company granted options to purchase up to 7,371,357 shares of our common stock to twenty-two employees. The options vest immediately; have an exercise price of $0.02 per share; and expire five years after the date of grant. The fair value at grant date of these options was $131,947 and the entire amount was expensed in 2016. In 2016, we expensed $222,357, related to the issuance of options from 2014 and 2015, that continued to vest in 2016. For the year ended December 31, 2015, we issued 3,666,476 options, as follows. During first quarter, 2015, our Company granted options to purchase up to 165,000 shares of our common stock to five employees. The options vest over four years; have exercise prices of $.90 to $.95 per share; and expire five years after the date of grant. The fair value at grant date of these options was $101,759. The amount expensed in 2015 was $21,564 and the amount expensed in 2016 was 16,142. On March 5, 2015, our Company granted options to purchase up to 360,000 shares of our common stock to members of our Board of Directors. The options vest immediately; have an exercise price of $0.92 per share; and expire five years after the date of grant. Each of the following Board members received 45,000 options each related to this issuance: Joe Proto, Isaac Blech, Alex Minicucci, Cary Sucoff, Patrick Kolenik, Chris Leong, Jerold Rubinstein, and Mike McCoy. The fair value at grant date of these options was $208,974 and the entire amount was expensed in 2015. In May 2015, our Company granted options to purchase up to 75,000 shares of our common stock to Bruce Neuschwander. The options vest over four years; have an exercise price of $0.65; and expire five years after the date of grant. The fair value at grant date of this option was $31,622. The amount expensed in 2015 was $10,794 and the amount expensed in 2016 was $3,763. On October 1, 2015, our Company granted options to purchase up to 1,358,696 shares of our common stock to Jerold Rubinstein. The options vest immediately; have an exercise price of $.46 per share; and expire five years after the date of grant. The fair value at grant date of these options was $410,559 and the entire amount was expensed in 2015. In November 2015, the Company repriced the 1,358,696 previously issued options to Jerold Rubinstein. The replacement stock options have an exercise price equal to $0.17 and a term of 4.8 years. The cancellation and reissuance of these stock options was treated as a modification under ASC 718 and, accordingly, total stock-based compensation expense related to these awards increased $35,713, which was recognized in 2015. In December, 2015, our Company granted options to purchase up to 278,500 shares of our common stock to four employees. The options vest immediately; have an exercise price of $.14 per share; and expire five years after the date of grant. The fair value at grant date of these options was $26,792 and the entire amount was expensed in 2015. In December, 2015, our Company granted options to purchase up to 70,584 shares of our common stock to five employees. The options vest immediately; have an exercise price of $.75 per share; and expire five years after the date of grant. The fair value at grant date of these options was $3,876 and the entire amount was expensed in 2015. Stock option activity during the following periods was as follows: For the year ended December 31, 2016 2015 Beginning balance outstanding 10,337,113 8,807,667 Options issued during the year 19,701,064 2,307,780 Options forfeited during the year (1,011,800 ) - Options cancelled during the year (1,591,992 ) - Options expired during the year (569,368 ) (778,334 ) Ending balance outstanding 26,865,017 10,337,113 Warrants The Company issued warrants to purchase shares of the Company’s common stock to investors in connection with the issuances of restricted shares of common stock during the years ended December 31, 2016 and 2015 (the value of which was offset against the proceeds of the issuance of common stock and not charged to operations). Outstanding warrants from all sources have terms ranging from two to five and a half years. For the year ended December 31, 2016, we did not issue any warrants to advisors, consultants and in connection with the purchase of intellectual property. Warrants to purchase up to 2,204,100 shares of common stock have expired. Warrants to purchase up to 1,981,667 shares of common stock remain outstanding at December 31, 2016, of which 1,981,667 have vested. For the year ended December 31, 2016, we issued 27,895,890 warrants to investors, of which 26,479,217 related to the Tender Offer above and 1,416,673 related to the Convertible Notes amendments above. 1,540,767 warrants expired and 12,270,853 warrants were exercised for the year ended December 31, 2016. In recompense for services performed on our behalf, we issued warrants to purchase up to 750,000 shares of our common stock during the year ended December 31, 2015, to Siskey Capital at an exercise price of $.75. 187,500 of those warrants vested immediately. On December 1, 2015, these warrants were repriced to an exercise price of $.17 and exercised on December 2, 2015, resulting in gross proceeds to the company of $127,500. Through December 31, 2015, we have also issued warrants to purchase up to 22,835,951 shares of our common stock to investors (and as compensation to third parties in connection with investments) related to the sale of our common stock, 26,397,410 of which remain outstanding net of exercises, cancellations and expirations (all of which are fully vested). On October 1, 2015, we issued 750,000 warrants to Siskey Capital for consulting services as noted above. 187,500 of those warrants vested immediately. Those 187,500 warrants were repriced on December 1, 2015 and the remaining 562,500 warrants were vested on December 1, 2015, with the full 750,000 warrants exercised on December 2, 2015. Warrants to purchase up to 118,858 shares of common stock have expired. Warrants to purchase up to 2,645,000 shares of common stock remain outstanding at December 31, 2015, of which 2,645,000 have vested. For the year ended December 31, 2015, we issued 1,983,340 warrants to new investors and 150,994 warrants had expired. Warrant activity (including warrants issued to investors and for consulting and advisory services) for the years ended December 31, 2016 and 2015 was as follows: For the twelve months ended December 31, 2016 2015 Beginning balance outstanding 26,397,410 23,933,922 Warrants issued during the year For consulting and advisory services - 1,500,000 In connection with sales of common, preferred stock, and notes 27,895,890 1,983,340 Warrants expired or cancelled during the year (2,204,100 ) (269,852 ) Warrants exercised (12,270,853 ) (750,000 ) Ending balance outstanding 39,818,347 26,397,410 The numbers and exercise prices of all options and warrants outstanding at December 31, 2016 was as follows: Shares Issuable Weighted Average Exercise Price Expiration Fiscal Period 34,749 7.99 1st Qtr, 2017 1,349,183 6.90 2nd Qtr, 2017 536,500 1.14 3rd Qtr, 2017 1,162,088 6.45 4th Qtr, 2017 10,000 6.60 1st Qtr, 2018 750,000 0.25 4th Qtr, 2018 37,504,567 0.37 1st Qtr, 2019 1,850,007 0.44 2nd Qtr, 2019 1,309,002 0.92 3rd Qtr, 2019 2,603,000 1.15 4th Qtr, 2019 480,000 0.92 1st Qtr, 2020 1,704,446 0.19 4th Qtr, 2020 4,785,376 0.12 1st Qtr, 2021 2,469,995 0.09 2nd Qtr, 2021 2,629,760 0.06 3rd Qtr, 2021 7,371,357 0.02 4th Qtr, 2021 133,334 7.05 4th Qtr, 2022 66,683,364 0.59 Stock based compensation Results of operations for the years ended December 31, 2016 and 2015 include stock based compensation costs totaling $1,084,323 and $1,807,337, respectively. For purposes of accounting for stock based compensation, the fair value of each option and warrant award is estimated on the date of grant using the Black-Scholes-Merton option pricing formula. Compensation expense is recognized upon actual vesting of the options. The following weighted average assumptions were utilized for the calculations during the year ended December 31, 2016 and 2015: For the years ended December 31, 2016 2015 Expected life (in years) 2.60 years 2.61 years Weighted average volatility 167.74 % 98.05 % Forfeiture rate 21.92 % 10.27 % Risk-free interest rate 1.05 % 0.95 % Expected dividend rate 0.00 % 0.00 % The weighted average expected option and warrant term for employee stock options granted reflects the application of the simplified method set out in SEC Staff Accounting Bulletin No. 107, Share-Based Payment As of December 31, 2016, $696,544 of total unrecognized compensation cost related to unvested stock based compensation arrangements is expected to be recognized over a weighted-average period of 16.3 months. The following table summarizes option activity in connection with stock options and warrants (which resulted in stock based compensation charges) as of and for the years ended December 31, 2016 and 2015: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Instrinsic Shares Price Term Value Outstanding at December 31, 2015 12,982,113 $ 1.97 Granted 19,701,064 0.07 Cancelled (2,883,792 ) (0.29 ) Forfeited (952,701 ) (6.70 ) Exercised - - Outstanding at December 31, 2016 28,849,184 $ 0.68 45.8 months $ - Exercisable 26,735,358 $ 0.71 45.7 months $ - Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Instrinsic Shares Price Term Value Outstanding at December 31, 2014 10,821,525 $ 2.44 Granted 3,807,780 0.31 Cancelled (775,834 ) (0.92 ) Expired (118,858 ) (7.24 ) Exercised (750,000 ) (0.17 ) Outstanding at December 31, 2015 12,982,113 $ 1.98 39.9 months $ - Exercisable 11,711,738 $ 2.06 39.6 months $ - Additional disclosure concerning options and warrants is as follows: For the Year Ended December 31, Deccember 31, 2016 2015 Weighted average grant date fair value of options and warrants granted $ 0.05 $ 0.18 Aggregate intrinsic value of options and warrants exercised - - Weighted average fair value of options and warrants vested 0.43 0.66 The range of exercise prices for options and warrants granted and outstanding (which resulted in stock based compensation charges) was as follows at December 31, 2016 and 2015: Exercise Number of Options and Warrants Price December 31, December 31, Range 2016 2015 $ .01 - .74 $ 19,643,684 2,462,196 $ .75 - 1.20 $ 7,529,000 7,878,584 $ 1.21 - 3.00 $ 114,000 218,000 $ 3.01 - 4.50 $ - - $ 4.51 - 12.00 $ 1,560,000 2,423,333 28,846,684 12,982,113 A summary of the activity of our non-vested options and warrants for the following periods: For the year ended December 31, 2016 2015 Non-vested outstanding, beginning 1,270,375 3,285,639 Granted 19,701,064 3,807,780 Vested (17,238,203 ) (5,279,016 ) Forfeited (825,915 ) Cancelled (795,995 ) (544,028 ) Non-vested outstanding, ending 2,111,326 1,270,375 Common Shares Reserved for Future Issuance The following table summarizes shares of our common stock reserved for future issuance at December 31, 2016: December 31, December 31, 2016 2015 Stock options outstanding 26,865,017 10,337,113 Stock options available for future grant 9,437,000 9,437,000 Warrants 39,818,347 26,397,410 Total common shares reserved for future issuance 76,120,364 46,171,523

Income taxes

Income taxes	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income taxes	Deferred tax assets at December 31, 2016 and 2015 consisted of the following: Dec. 31, 2016 Dec. 31, 2015 Deferred tax asset Net operating loss carryovers 29,294,157 26,991,694 Accrued Payroll 26,400 32,400 Sharebased Compensation 2,734,156 2,292,027 Charitable Contribution 4,700 4,700 Amortization 1,954,508 1,584,975 Depreciation 768,381 258,828 Allowance for Doubtful Account 687,104 555,953 Total deferred tax assets 36,209,406 31,720,577 Valuation allowance (36,209,406 ) (31,720,577 ) Deferred tax asset, net of allowance — — As of December 31, 2016 and 2015, the Company had federal and state net operating loss carryovers of approximately $75.3 million and $73.5 million, which will begin to expire in 2029. The net operating loss carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50% ownership change as determined under the regulations. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. The Company has determined that, based on objective evidence currently available, it is more likely than not that the deferred tax assets will not be realized in future periods. Accordingly, the Company has provided a valuation allowance for the full amount of the deferred tax assets at December 31, 2016 and 2015. The valuation allowance increased by $4,488,829 and $4,700,682 in 2016 and 2015, respectively, due to the increase in deferred tax assets, primarily due to net operating loss carryforwards. A reconciliation of the expected tax benefit computed at the U.S. federal and state statutory income tax rates to our tax benefit is as follows: For the years ended December 31, 2016 2015 Statutory federal income tax rate -34.0 % -34.0 % State taxes, net of federal tax benefit -5.0 % -5.0 % Valuation Allowance 39.0 % 39.0 % Income tax provision (benefit) 0.0 % 0.0 % We file income tax returns in the U.S. and in the state of California with varying statutes of limitations. Our policy is to recognize interest expense and penalties related to income tax matters as a component of our provision for income taxes. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2016. The majority of our operations are in California and the Company believes it has no tax positions which could more-likely-than not be challenged by tax authorities. We have no unrecognized tax benefits and thus no interest or penalties included in the financial statements.

Commitments

Commitments	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments	We currently lease space in two locations in San Luis Obispo, California.

Employee benefit plan

Employee benefit plan	12 Months Ended
	Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]
Employee benefit plan	We have an employee savings plan (the “Plan”) pursuant to Section 401(k) of the Internal Revenue Code (the “Code”), covering all of our employees. Participants in the Plan may contribute a percentage of compensation, but not in excess of the maximum allowed under the Code. Our Company may make contributions at the discretion of its Board of Directors. During the years ended December 31, 2016 and 2015, we made contributions to the Plan totaling $0 and $83,359, respectively.

Subsequent events

Subsequent events	12 Months Ended
	Dec. 31, 2016
Subsequent Events [Abstract]
Subsequent events	On January 9, 2017, the Company issued a Convertible Promissory Note to Isaac Blech, a member of the Company’s board of directors, in the sum of $22,000. The Convertible Promissory Notes bear interest at the rate of 9%, has a six month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes a financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. On January 23, 2017, the Company issued a Convertible Promissory Note to Isaac Blech, a member of the Company’s board of directors, in the sum of $100,000. The Convertible Promissory Notes bear interest at the rate of 9%, has a six month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes a financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. On February 2, 2017, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $62,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has six-month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. On February 27, 2017, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $45,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has six-month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. On March 24, 2017, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $90,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has six-month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. On April 18, 2017, the Company issued a Convertible Promissory Note to the Daniel Jonathan Blech Trust DTD 9/01/2005 in the amount of $45,000. Mr. Blech, a member of the Company’s board of directors, is the trustee. The Convertible Promissory Note bears interest at the rate of 9% has six-month maturity date, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing. The company was served with a lawsuit in February 2017 alleging breach of contract by Bryan Sarlitt. The action relates to the acquisition of TechXpress in 2014 and additional compensation that Mr. Sarlitt is claiming. The Company believes the Plaintiff's allegations have no merit. There are no other legal claims currently pending or threatened against us that in the opinion of our management would be likely to have a material adverse effect on out financial position, results of operations or cash flows. On May 3, 2017, the Company amended one May 5, 2015 9% Convertible Promissory Note with a principal amount of $275,000 as follows: the maturity date was extended to July 7, 2017 and in the event the borrower completes an asset sale or capital raise of more than $275,000, then the Notes shall automatically immediately become due and payable. On May 15, 2017, the Company amended one May 5, 2015 9% Convertible Promissory Note with a principal amount of $262,500 as follows: the maturity date was extended to July 7, 2017 and in the event the borrower completes an asset sale or capital raise of more than $275,000, then the Notes shall automatically immediately become due and payable.

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Loans Receivable and Accounts Receivable	The Company extended credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers. Loans and accounts receivable are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time loan and accounts receivable are past due and the customer's current ability to pay its obligation to the Company. The Company writes off loans and accounts receivable when they become uncollectible. The Company is no longer entering into notes with its customers.
Use of Estimates	The preparation of the consolidated financial statements in conformity with US GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, fair value of financial instruments, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include recoverability and useful lives of intangible assets, the valuation allowance related to the Company's deferred tax assets, the allowance for doubtful accounts related and notes and accounts receivable and the fair value of stock options and warrants granted to employees, consultants, directors, investors and placement agents.
Revenue Recognition	The Company generates revenues primarily in the form of set up fees, license fees, messaging, equipment and marketing services fees and value added mobile marketing and mobile commerce services. License fees are charged monthly for support services. Set-up fees primarily consist of fees for website development services (including support and unspecified upgrades and enhancements when and if they are available), training and professional services that are not essential to functionality. The Company offers two licenses consisting of our Engage license and our Thrive license. The Company now offers both licenses in a combined package known as the Customer Loyalty System License (“CLS”). We recognize revenues when all of the following conditions are met: ● there is persuasive evidence of an arrangement; ● the products or services have been delivered to the customer; ● the amount of fees to be paid by the customer is fixed or determinable; and ● the collection of the related fees is probable. Signed agreements are used as evidence of an arrangement. Electronic delivery occurs when we provide the customer with access to the software. We assess whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. The Company offered extended payment terms in 2014 and 2015 with regards to the setup fee with typical terms of payment due between one and three years from delivery of license. The Company no longer offers extended payment terms. We assess collectability of the set-up fee based on a number of factors such as collection history and creditworthiness of the customer. If we determine that collectability is not probable, revenue is deferred until collectability becomes probable, generally upon receipt of cash. License arrangements may also include set-up fees such as website development, delivery of tablets, professional services and training services, which are typically delivered within 30-60 days of the contract term. In determining whether set-up fee revenues should be accounted for separately from license revenues, we evaluate whether the set-up fees are considered essential to the functionality of the license using factors such as the nature of our products; whether they are ready for use by the customer upon receipt; the nature of our implementation services, which typically do not involve significant customization to or development of the underlying software code; the availability of services from other vendors; whether the timing of payments for license revenues is coincident with performance of services; and whether milestones or acceptance criteria exist that affect the realizability of the license fee. Substantially all of our set-up fee arrangements are recognized as the services are performed. Payments received in advance of services performed are deferred and recognized when the related services are performed. We do not offer refunds and therefore have not recorded any sales return allowance for any of the periods presented. Upon a periodic review of outstanding accounts and notes receivable, amounts that are deemed to be uncollectible are written off against the allowance for doubtful accounts. Deferred revenue consists substantially of amounts invoiced in advance of revenue recognition for our products and services described above. We recognize deferred revenue as revenue only when the revenue recognition criteria are met.
Debt Discount and Issuance Costs	Debt issuance costs, including the value of warrants issued in connection with debt financing and fees or costs paid to lender, are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt. The Company amortizes the discount to interest expense over the term of the respective debt using the effective interest method.
Cash and cash equivalents	The Company considers all investments with an original maturity of three months or less to be cash equivalents. Cash equivalents primarily represent funds invested in money market funds, bank certificates of deposit and U.S. government debt securities whose cost equals fair market value. From time to time, the Company has maintained bank balances in excess of insurance limits established by the Federal Deposit Insurance Corporation. The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash and cash equivalents.
Property and Equipment	Property and equipment (including kiosks) had been recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets (generally three to five years). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. Depreciation expense for the years ended December 31, 2016 and 2015 was $0 and $628,999, respectively. The Company accelerated the depreciation in the amount of approximately $496,000 on the kiosks, which have seven inch screens, to reduce their net book value to zero due to technological obsolescence in 2015. In the fourth quarter 2015, they were replaced by new ten inch screens and some new seven inch screens which will be able to run offline from wifi, have faster processors and ultra-sharp screens, and have licensee reporting tools. Currently the Company sells the equipment to the customer. Therefore the cost of equipment is included in operating expenses and not capitalized as property and equipment.
Software Capitalization	The Company accounts for computer software used in the business in accordance with ASC 350 “Intangibles-Goodwill and Other”. ASC 350 requires computer software costs associated with internal use software to be charged to operations as incurred until certain capitalization criteria are met. Costs incurred during the preliminary project stage and the post-implementation stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property, equipment and software. These costs generally consist of internal labor during configuration, coding, and testing activities. Capitalization begins when (i) the preliminary project stage is complete, (ii) management with the relevant authority authorizes and commits to the funding of the software project, and (iii) it is probable both that the project will be completed and that the software will be used to perform the function intended. We capitalized $291,957 and $912,212 in software for the years ended December 31, 2016 and 2015, respectively. Software depreciation expense for the years ended December 31, 2016 and 2015 was $469,987 and $273,517, respectively. We recorded impairment expense of $718,116 related to our SMS software for the year ended December 31, 2016.
Valuation of Long-Lived Assets	The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the estimated fair value of the assets. We recorded impairment expense on our intangible assets of $922,688 related to our SMS technology assets, $38,853 related to trademarks, and $17,531 related to our TechXpress technology assets for the year ended December 31, 2016. We conducted an impairment analysis on our intangible assets and goodwill and determined that we had an impairment related to our intangible assets of $1,189,246 and on our goodwill of $3,202,276 at December 31, 2015
Income Tax Expense Estimates and Policies	As part of the income tax provision process of preparing the Company’s financial statements, the Company is required to estimate the Company’s provision for income taxes. This process involves estimating our current tax liabilities together with assessing temporary differences resulting from differing treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. Management then assesses the likelihood that the Company deferred tax assets will be recovered from future taxable income and to the extent believed that recovery is not likely, a valuation allowance is established. Further, to the extent a valuation allowance is established and changes occur to this allowance in a financial accounting period, such changes are recognized in the Company’s tax provision in the Company’s consolidated statement of operations. The Company’s use of judgment in making estimates to determine the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance is recorded against our net deferred tax assets. There are various factors that may cause these tax assumptions to change in the near term, and the Company may have to record a future valuation allowance against our deferred tax assets. The Company recognizes the benefit of an uncertain tax position taken or expected to be taken on the Company’s income tax returns if it is “more likely than not” that such tax position will be sustained based on its technical merits.
Stock Based Compensation	The Company accounts for stock based compensation arrangements through the measurement and recognition of compensation expense for all stock based payment awards to employees and directors based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of the Company’s stock options and warrants at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of options and warrants. The Company uses historical company data among other information to estimate the expected price volatility and the expected forfeiture rate.
Derivatives - Warrants	The Company accounts for the common stock warrants granted and still outstanding as of December 31, 2016 in connection with certain financing transactions (“Transactions”) in accordance with the guidance contained in ASC 815-40-15-7D, "Contracts in Entity's Own Equity" whereby under that provision they do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection with the transactions has been estimated using a Monte Carlo simulation. The Company accounts for certain of its outstanding warrants issued in fiscal 2010, 2012 and 2013 (“2010 Warrants,” “2012 Warrants” and “2013 Warrants, respectively) as derivative liabilities. These warrants were determined to be ineligible for equity classification due to provisions of the respective instruments that may result in an adjustment to their conversion or exercise prices. The Company recognized a gain of $0 and $47,209 in the fair value of derivatives for the years ended December 31, 2016 and 2015, respectively. These derivative liabilities which arose from the issuance of these warrants resulted in an ending balance of derivative liabilities of $0 at December 31, 2015, and expired in 2016. The Company accounts for certain of its outstanding warrants issued in fiscal 2016 (“2016 Warrants”) as derivative liabilities. The 2016 Warrants were determined to be ineligible for equity classification due to provisions of the respective instruments that may result in an adjustment to their conversion or exercise prices. The Company recognized a gain of $2,732,444 in the fair value of these derivatives for the year ended December 31, 2016. These derivative liabilities which arose from the issuance of the 2016 Warrants resulted in an ending balance of derivative liabilities of $1,366,898 as of December 31, 2016.
Derivatives - Bifurcated Conversion Option in Convertible Notes	The Company issued Convertible Notes with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, Accounting for Derivative Financial Instruments and Hedging Activities The Company’s derivative liability has been measured at fair value at December 31, 2016 using a Monte-Carlo Simulation. Inputs into the model require estimates, including such items as estimated volatility of the Company’s stock, estimated probabilities of additional financing, risk-free interest rate, and the estimated life of the financial instruments being fair valued. In addition, since the conversion price contains an anti-dilution adjustment, the probability that the Conversion Price of the Notes would decrease as the share price decreased was also incorporated into the valuation calculation. The Company recognized a gain of $242,231 and a gain of $410,602 in the fair value of conversion option derivatives for the year ended December 31, 2016 and 2015, respectively. These derivative liabilities resulted in an ending balance of conversion option derivative liabilities of $88,242 and $179 as of December 31, 2016 and December 31, 2015, respectively. Subsequent changes to the fair value of the derivative liabilities will continue to require adjustments to their carrying value that will be recorded as other income (in the event that their value decreases) or as other expense (in the event that their value increases). In general (all other factors being equal), the Company will record income when the market value of the Company’s common stock decreases and will record expense when the value of the Company’s stock increases. The fair value of these liabilities is estimated using Monte Carlo pricing models that are based on the individual characteristics of the Company’s warrants, preferred and common stock, as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread.
Net Loss per Share	The Company calculates basic earnings per share (“EPS”) by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding for the period, without considering common stock equivalents. Diluted EPS is computed by dividing net income or net loss applicable to common shareholders by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, such as options and warrants. Options and warrants are only included in the calculation of diluted EPS when their effect is dilutive.
Warrant Liability
Fair value of assets and liabilities	Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, we consider the principal or most advantageous market in which we would transact and we consider assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows: ● Level 1: Observable inputs such as quoted prices in active markets; ● Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company’s financial instruments are cash and cash equivalents, accounts payable, and derivative liabilities. The recorded values of cash equivalents and accounts payable approximate their fair values based on their short-term nature. The fair value of derivative liabilities is estimated using option pricing models that are based on the individual characteristics of our warrants, preferred and common stock, the derivative liability on the valuation date as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative liabilities are the only Level 3 fair value measures. A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s warrant derivative liabilities that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 and 2015 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Number of assumed financings 1 1 Total shares outstanding 41,975,571 20,458,761 Strike Price 0.01 0.75 Risk-free Rate 1.34 % 0.96 % Maturity Date 7/15/2019 7/15/2019 Expected Life N/A N/A A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s conversion option derivative that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Strike Price N/A 0.75 Risk-free Rate 1.40 % 1.40 % Maturity Date 5/5/2017 6/26/2016 At December 31, 2016 and 2015, the estimated fair values of the liabilities measured on a recurring basis are as follows: Fair Value Measurements at Carrying December 31, 2016: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Warrant derivative liability 1,366,898 - - 1,366,898 Conversion option derivative liability 88,242 - - 88,242 Total $ 1,455,140 $ - $ - $ 1,455,140 Fair Value Measurements at Carrying December 31, 2015: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Conversion option derivative liability 179 - - 179 Total $ 179 $ - $ - $ 179 The following tables present the activity for Level 3 liabilities for the years ended December 31, 2016 and 2015: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2015 $ - $ 179 Additions during the year 4,099,344 330,933 Total (gains) or losses included in net loss (2,732,446 ) (242,870 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2016 $ 1,366,898 $ 88,242 Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2014 $ 47,209 $ - Additions during the year - 410,781 Total (gains) or losses included in net loss (47,209 ) (410,602 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2015 $ - $ 179 Changes in fair value of our Level 3 earn-out liability for the years ended December 31, 2016 and 2015 were as follows: Fair Value Measurements Using Level 3 Inputs Warrant Conversion Earn-out Derivative Liability Option Derivative Liability Liability Total Balance - December 31, 2015 $ - 179 - $ 179 Additions during the period 4,099,344 330,933 - 4,430,277 Total (gains) or losses include in net loss (2,732,446 ) (242,870 ) - (2,975,316 ) Balance - December 31, 2016 $ 1,366,898 88,242 - $ 1,455,140
Advertising	The Company expenses advertising costs as incurred. The Company has no existing arrangements under which we provide or receive advertising services from others for any consideration other than cash. Advertising expenses totaled $208,530 and $320,044 for the years ended December 31, 2016 and 2015, respectively.
Litigation	From time to time, the Company may become involved in litigation and other legal actions. The Company estimates the range of liability related to any pending litigation where the amount and range of loss can be estimated. The Company records its best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. On July 8, 2015, Intellectual Capital Management, LLC dba SMS Masterminds and SpendSmart Networks, Inc. were named in a potential class-action lawsuit entitled Peter Marchelos, et al v. Intellectual Capital Management, et al, filed in the United States District Court Eastern District of New York relating to alleged violations of the Telephone Consumer Protection Act of 1991. This litigation involves the same licensee and merchant as a previous lawsuit and the same attorneys represent the plaintiffs in this action. The claim of one of the two plaintiffs was resolved for $1,701. The Company believes the Plaintiff’s allegations have no merit. There are no other legal claims currently pending or threatened against us that in the opinion of our management would be likely to have a material adverse effect on our financial position, results of operations or cash flows.
Earnout	The Company agreed to pay the sellers an earn-out payment relating to fifteen percent of the earnings generated by SMS Masterminds after the acquisition and an additional earn-out payment tied to the EBITDA of the Company after the acquisition of SMS Masterminds, of up to $2,000,000 in aggregate. The Company paid $0 during the years ended December 31, 2016 and 2015 related to this earn-out agreement. The change in fair value of Earn-out liability expenses totaled $0 for the year ended December 31, 2016 and $594,216 for the year ended December 31, 2015. We recorded the change in earn-out liability due to our updated operating assumptions in the underlying valuation related to the SMS acquisition. The Company agreed to pay the sellers a guaranteed payment of $400,000 of which $390,000 had been paid as of December 31, 2015 and $10,000 was paid in January, 2016. As of December 31, 2016, the remaining balance was $0.
Goodwill	The Company accounted for goodwill under ASC 350 “Intangibles – Goodwill and Other” (“ASC 350”). ASC 350 requires an evaluation of impairment by assessing qualitative factors, and if necessary, applying a fair-value based test. The goodwill impairment test requires qualitative analysis to determine whether is it more likely than not that the fair value of a reporting unit is less than the carrying amount, including goodwill. An indication of impairment through analysis of these qualitative factors initiates a two-step process, which requires management to make judgments in determining what assumptions to use in the calculation. The first step of the process consists of estimating the fair value of the Company’s reporting units based on discounted cash flow models using revenue and profit forecasts and comparing the estimated fair values with the carrying values of the Company’s reporting units which include the goodwill. If the estimated fair values are less than the carrying values, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill. The determination of the Company’s “implied fair value” requires the Company to allocate the estimated fair value to the assets and liabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carrying value. The Company tested goodwill impairment at December 31, 2015 and concluded that goodwill was fully impaired. Goodwill was written down in the amount of $3,202,276 in 2015.
Intangible assets	Intangible assets consist of intellectual property/technology, customer lists, and trade-name/marks acquired in business combinations under the purchase method of accounting are recorded at fair value net of accumulated amortization since the acquisition date. Amortization is calculated using the straight line method over the estimated useful lives at the following annual rates: Useful Lives IP/technology 10 Trade-name/marks 10 December 31, 2016 December 31, 2015 Intangible assets beginning balance 1,570,575 3,097,700 Amortization (192,503 ) (337,879 ) Impairment (979,072 ) (1,189,246 ) Intangible assets ending balance 399,000 1,570,575 The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of finite-lived intangible asset may not be recoverable. Recoverability of a finite-lived intangible asset is measured by a comparison of its carrying amount to the undiscounted future cash flows expected to be generated by the asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is determined based on discounted cash flows. The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended December 31, 2016, the Company recorded an impairment loss of $979,072 related to an intangible asset.
Recently Issued Accounting Pronouncements	On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, as amended, (Topic 606), with an effective date for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations, with an expected completion date of June 30, 2017. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern , . In February 2016, the FASB issued ASU 2016-02, Leases which amended guidance for lease arrangements in order to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 - Compensation - Stock Compensation, which simplifies the accounting for the tax effects related to stock based compensation, including adjustments to how excess tax benefits and a company’s payments for tax withholdings should be classified, amongst other items. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We do not expect this to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (ASU 2016-13), that requires entities to use a new impairment model based on expected losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for us beginning January 1, 2020 with early adoption permitted January 1, 2019. Credit losses under the new model will consider relevant information about past events, current conditions and reasonable and supportable forecasts, resulting in recognition of lifetime expected credit losses. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.
Segments	The Company operates in one reportable segment. Accordingly, no segment disclosures have been presented herein.

Summary of Significant Accoun25

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Schedule of Valuation Methodology	A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s warrant derivative liabilities that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 and 2015 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Number of assumed financings 1 1 Total shares outstanding 41,975,571 20,458,761 Strike Price 0.01 0.75 Risk-free Rate 1.34 % 0.96 % Maturity Date 7/15/2019 7/15/2019 Expected Life N/A N/A A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s conversion option derivative that are categorized within Level 3 of the fair value hierarchy as of December 31, 2016 is as follows: Date of Valuation December 31, 2016 December 31, 2015 Stock Price 0.02 0.15 Volatility (Annual) 140 % 66 % Strike Price N/A 0.75 Risk-free Rate 1.40 % 1.40 % Maturity Date 5/5/2017 6/26/2016
Schedule of Fair Value of the Liabilities Measured on a Recurring Basis	Fair Value Measurements at Carrying December 31, 2016: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Warrant derivative liability 1,366,898 - - 1,366,898 Conversion option derivative liability 88,242 - - 88,242 Total $ 1,455,140 $ - $ - $ 1,455,140 Fair Value Measurements at Carrying December 31, 2015: Value Level 1 Level 2 Level 3 Financial Assets Earn-out liability $ - $ - $ - $ - Conversion option derivative liability 179 - - 179 Total $ 179 $ - $ - $ 179
Schedule of Activity for Liabilities Measured at Fair Value using Unobservable Inputs	The following tables present the activity for Level 3 liabilities for the years ended December 31, 2016 and 2015: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2015 $ - $ 179 Additions during the year 4,099,344 330,933 Total (gains) or losses included in net loss (2,732,446 ) (242,870 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2016 $ 1,366,898 $ 88,242 Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Warrant Derivative Liability Conversion Option Derivative Liability Beginning balance at December 31, 2014 $ 47,209 $ - Additions during the year - 410,781 Total (gains) or losses included in net loss (47,209 ) (410,602 ) Transfers in and/or out of Level 3 - - Ending balance at December 31, 2015 $ - $ 179
Changes in fair value of our Level 3 earn-out liability	Fair Value Measurements Using Level 3 Inputs Warrant Conversion Earn-out Derivative Liability Option Derivative Liability Liability Total Balance - December 31, 2015 $ - 179 - $ 179 Additions during the period 4,099,344 330,933 - 4,430,277 Total (gains) or losses include in net loss (2,732,446 ) (242,870 ) - (2,975,316 ) Balance - December 31, 2016 $ 1,366,898 88,242 - $ 1,455,140
Intangible assets, estimated useful life	Useful Lives IP/technology 10 Trade-name/marks 10 December 31, 2016 December 31, 2015 Intangible assets beginning balance 1,570,575 3,097,700 Amortization (192,503 ) (337,879 ) Impairment (979,072 ) (1,189,246 ) Intangible assets ending balance 399,000 1,570,575

Accounts Receivable, Short-Te26

Accounts Receivable, Short-Term and Long-Term Notes Receivable (Tables)	12 Months Ended
	Dec. 31, 2016
Receivables [Abstract]
Schedule of Accounts, Notes, Loans and Financing Receivable	December 31, 2015 Gross Reserve Net Current Long-Term Current Long-Term Current Long-Term Customer Notes Receivable 908,590 661,371 632,422 461,702 276,168 199,669 Accounts Receivable 437,589 - 295,759 - 141,830 - December 31, 2016 Gross Reserve Net Current Long-Term Current Long-Term Current Long-Term Customer Notes Receivable 793,988 414,665 767,138 399,401 26,850 15,264 Accounts Receivable 921,829 - 529,461 - 292,368 -
Allowance for doubtful accounts related to notes receivable and accounts receivable	Notes Receivable Reserve Accounts Current Long-Term Receivable Reserve Balance at December 31, 2014 286,571 349,954 188,527 Incremental Provision 796,063 551,256 441,627 Recoveries - - - Charge offs (450,212 ) (439,508 ) (334,395 ) Balance at December 31, 2015 632,422 461,702 295,759 Notes Receivable Reserve Accounts Current Long-Term Receivable Reserve Balance at December 31, 2015 $ 632,422 $ 461,702 $ 295,759 Incremental Provision 177,316 401 415,197 Recoveries - - - Charge offs (42,600 ) (62,702 ) (81,495 ) Balance at December 31, 2016 $ 767,138 $ 399,401 $ 629,461

Net Loss per Share Applicable27

Net Loss per Share Applicable to Common Stockholders (Tables)	12 Months Ended
	Dec. 31, 2016
Earnings Per Share [Abstract]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	For the year ended December 31, 2016 2015 Common stock options 26,865,017 10,337,113 Investor warrants 37,836,680 23,752,410 Compensation warrants 1,981,667 2,645,000 Excluded potentially dilutive securities 66,683,364 36,734,523

Stockholder's equity (Tables)

Stockholder's equity (Tables)	12 Months Ended
	Dec. 31, 2016
Options and warrants outstanding	Shares Issuable Weighted Average Exercise Price Expiration Fiscal Period 34,749 7.99 1st Qtr, 2017 1,349,183 6.90 2nd Qtr, 2017 536,500 1.14 3rd Qtr, 2017 1,162,088 6.45 4th Qtr, 2017 10,000 6.60 1st Qtr, 2018 750,000 0.25 4th Qtr, 2018 37,504,567 0.37 1st Qtr, 2019 1,850,007 0.44 2nd Qtr, 2019 1,309,002 0.92 3rd Qtr, 2019 2,603,000 1.15 4th Qtr, 2019 480,000 0.92 1st Qtr, 2020 1,704,446 0.19 4th Qtr, 2020 4,785,376 0.12 1st Qtr, 2021 2,469,995 0.09 2nd Qtr, 2021 2,629,760 0.06 3rd Qtr, 2021 7,371,357 0.02 4th Qtr, 2021 133,334 7.05 4th Qtr, 2022 66,683,364 0.59
Fair value of stock options	Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Instrinsic Shares Price Term Value Outstanding at December 31, 2015 12,982,113 $ 1.97 Granted 19,701,064 0.07 Cancelled (2,883,792 ) (0.29 ) Forfeited (952,701 ) (6.70 ) Exercised - - Outstanding at December 31, 2016 28,849,184 $ 0.68 45.8 months $ - Exercisable 26,735,358 $ 0.71 45.7 months $ - Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Instrinsic Shares Price Term Value Outstanding at December 31, 2014 10,821,525 $ 2.44 Granted 3,807,780 0.31 Cancelled (775,834 ) (0.92 ) Expired (118,858 ) (7.24 ) Exercised (750,000 ) (0.17 ) Outstanding at December 31, 2015 12,982,113 $ 1.98 39.9 months $ - Exercisable 11,711,738 $ 2.06 39.6 months $ -
Additional disclosure of options and warrants	Additional disclosure concerning options and warrants is as follows: For the Year Ended December 31, Deccember 31, 2016 2015 Weighted average grant date fair value of options and warrants granted $ 0.05 $ 0.18 Aggregate intrinsic value of options and warrants exercised - - Weighted average fair value of options and warrants vested 0.43 0.66 The range of exercise prices for options and warrants granted and outstanding (which resulted in stock based compensation charges) was as follows at December 31, 2016 and 2015: Exercise Number of Options and Warrants Price December 31, December 31, Range 2016 2015 $ .01 - .74 $ 19,643,684 2,462,196 $ .75 - 1.20 $ 7,529,000 7,878,584 $ 1.21 - 3.00 $ 114,000 218,000 $ 3.01 - 4.50 $ - - $ 4.51 - 12.00 $ 1,560,000 2,423,333 28,846,684 12,982,113
Stock option [Member]
Summary of option activity	For the year ended December 31, 2016 2015 Beginning balance outstanding 10,337,113 8,807,667 Options issued during the year 19,701,064 2,307,780 Options forfeited during the year (1,011,800 ) - Options cancelled during the year (1,591,992 ) - Options expired during the year (569,368 ) (778,334 ) Ending balance outstanding 26,865,017 10,337,113
Fair value of stock options	For the years ended December 31, 2016 2015 Expected life (in years) 2.60 years 2.61 years Weighted average volatility 167.74 % 98.05 % Forfeiture rate 21.92 % 10.27 % Risk-free interest rate 1.05 % 0.95 % Expected dividend rate 0.00 % 0.00 %
Schedule of Nonvested Share Activity	For the year ended December 31, 2016 2015 Non-vested outstanding, beginning 1,270,375 3,285,639 Granted 19,701,064 3,807,780 Vested (17,238,203 ) (5,279,016 ) Forfeited (825,915 ) Cancelled (795,995 ) (544,028 ) Non-vested outstanding, ending 2,111,326 1,270,375
Schedule of Shares Reserved for Future Issuance	December 31, December 31, 2016 2015 Stock options outstanding 26,865,017 10,337,113 Stock options available for future grant 9,437,000 9,437,000 Warrants 39,818,347 26,397,410 Total common shares reserved for future issuance 76,120,364 46,171,523
Warrant [Member]
Summary of option activity	For the twelve months ended December 31, 2016 2015 Beginning balance outstanding 26,397,410 23,933,922 Warrants issued during the year For consulting and advisory services - 1,500,000 In connection with sales of common, preferred stock, and notes 27,895,890 1,983,340 Warrants expired or cancelled during the year (2,204,100 ) (269,852 ) Warrants exercised (12,270,853 ) (750,000 ) Ending balance outstanding 39,818,347 26,397,410

Income taxes (Tables)

Income taxes (Tables)	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Schedule of Deferred Tax Assets	Dec. 31, 2016 Dec. 31, 2015 Deferred tax asset Net operating loss carryovers 29,294,157 26,991,694 Accrued Payroll 26,400 32,400 Sharebased Compensation 2,734,156 2,292,027 Charitable Contribution 4,700 4,700 Amortization 1,954,508 1,584,975 Depreciation 768,381 258,828 Allowance for Doubtful Account 687,104 555,953 Total deferred tax assets 36,209,406 31,720,577 Valuation allowance (36,209,406 ) (31,720,577 ) Deferred tax asset, net of allowance — —
Schedule of the Reconciliation of the Expected Tax Benefit	For the years ended December 31, 2016 2015 Statutory federal income tax rate -34.0 % -34.0 % State taxes, net of federal tax benefit -5.0 % -5.0 % Valuation Allowance 39.0 % 39.0 % Income tax provision (benefit) 0.0 % 0.0 %

Summary of Significant Accoun30

Summary of Significant Accounting Policies (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Stock Price	$ 0.02	$ .15
Volatility (Annual)	140.00%	66.00%
Number of assumed financings	1	1
Total shares outstanding	41,975,571	20,458,761
Strike Price	$ 0.01	$ .75
Risk-free Rate	1.34%	0.96%
Maturity Date	Jul. 15, 2019	Jul. 15, 2119
Level 3 [Member]
Stock Price	$ 0.02	$ .02
Volatility (Annual)	140.00%	15.00%
Strike Price		$ .75
Risk-free Rate	1.40%	0.14%
Maturity Date	May 5, 2017	Jun. 26, 2016

Summary of Significant Accoun31

Summary of Significant Accounting Policies (Details 1) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Financial Assets
Warrant derivative liability	$ 1,366,898
Conversion option derivative liability	88,242	$ 179
Total	1,455,140	179
Level 1 [Member]
Financial Assets
Earn-out liability	0	0
Warrant derivative liability	1,366,898
Conversion option derivative liability	88,242	179
Total	1,455,140	179
Level 2 [Member]
Financial Assets
Earn-out liability	0	0
Warrant derivative liability	0
Conversion option derivative liability	0	0
Total	0	0
Level 3 [Member]
Financial Assets
Earn-out liability	0	0
Warrant derivative liability	0
Conversion option derivative liability	0	0
Total	$ 0	$ 0

Summary of Significant Accoun32

Summary of Significant Accounting Policies (Details 2) - Level 3 [Member] - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Warrant Derivative Liabilities
Beginning balance	$ 0	$ 47,209
Additions during the year	4,099,344	0
Total unrealized (gains) or losses included in net loss	(2,732,446)	(47,209)
Transfers in and/or out of Level 3	0	0
Ending balance	1,366,898	0
Conversion Notes
Beginning balance	179	0
Additions during the year	330,933	410,781
Total unrealized (gains) or losses included in net loss	(242,870)	(410,602)
Transfers in and/or out of Level 3	0	0
Ending balance	$ 88,242	179
Earnout Liability
Beginning balance		0
Additions during the year		607,798
Total unrealized (gains) or losses included in net loss		(13,582)
Ending balance		$ 594,216

Summary of Significant Accoun33

Summary of Significant Accounting Policies (Details 4) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Beginning balance	$ 1,570,575	$ 3,097,700
Amortization	(192,503)	(337,879)
Impairment	(979,072)	(1,189,246)
Ending balance	$ 399,000	$ 1,570,575
Customer lists [Member]
Intangible assets Useful Lives	10 years
Trade-name marks [Member]
Intangible assets Useful Lives	10 years
IP Technology [Member]
Intangible assets Useful Lives	10 years

Summary of Significant Accoun34

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Depreciation expense	$ 469,987	$ 902,517
Advertising expenses	208,530	320,044
Impairment loss	979,072
Software [Member]
Software capitalization	$ 291,957	$ 912,212

Accounts Receivable, Short-Te35

Accounts Receivable, Short-Term and Long-Term Notes Receivable (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Customer Notes Receivable
Current, gross	$ 793,988	$ 908,590
Long-Term, gross	414,665	661,371
Current Reserve	767,138	632,422
Long-Term Reserve	399,401	461,702
Current, net	26,850	276,168
Long-Term	15,264	199,669
Accounts Receivable
Current, gross	921,829	437,589
Current Reserve	629,461	295,759	$ 188,527
Current, net	$ 292,368	$ 141,830

Accounts Receivable, Short-Te36

Accounts Receivable, Short-Term and Long-Term Notes Receivable (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Accounts Receivable Reserve
Balance, beginning	$ 295,759	$ 188,527
Incremental Provision	415,197	441,627
Recoveries	0	0
Charge offs	(81,495)	(334,395)
Balance. ending	629,461	295,759
Long-Term [Member]
Notes Receivable Reserve
Balance, beginning	461,702	349,954
Incremental Provision	401	551,256
Recoveries	0	0
Charge offs	(62,702)	(439,508)
Balance, ending	399,401	461,702
Current [Member]
Notes Receivable Reserve
Balance, beginning	632,422	286,571
Incremental Provision	177,316	796,063
Recoveries	0	0
Charge offs	(42,600)	(450,212)
Balance, ending	$ 767,138	$ 632,422

Short Term Note Receivable (Det

Short Term Note Receivable (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Short Term Note Receivable Details Narrative
Interest received	$ 0	$ 27,380

Common Stock and Warrants (Deta

Common Stock and Warrants (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Common Stock And Warrants Details Narrative
Shares issued for services	1,563,677	1,047,522
Shares issued for services, expense	$ 125,410	$ 496,288

Convertible Preferred Stock (De

Convertible Preferred Stock (Details Narrative) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Number of shares issued for each share of convertible preferred stock	4,299,081	4,299,081
Series C Preferred Stock [Member]
Convertible preferred stock, shares outstanding	3,443,061	3,700,729
Convertible preferred stock, par value	$ 3	$ 3
Number of shares issued for each share of convertible preferred stock	4,299,081	4,299,081
Conversion of preferred stock, shares converted	257,668
Series A Preferred Stock
Convertible preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Convertible preferred stock, shares outstanding	0	0

Net Loss per Share Applicable40

Net Loss per Share Applicable to Common Stockholders (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Excluded potentially dilutive securities	66,683,364	36,734,523
Investor Warrants [Member]
Excluded potentially dilutive securities	37,836,680	23,752,410
Compensation warrants [Member]
Excluded potentially dilutive securities	1,981,667	10,337,113
Stock option [Member]
Excluded potentially dilutive securities	26,865,017	2,645,000

Stockholders' equity (Details)

Stockholders' equity (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Shares
Outstanding, ending balance	66,683,364
Stock option [Member]
Shares
Outstanding, beginning balance	10,337,113	8,807,667
Issued	19,701,064	2,307,780
Forfeited	(1,011,800)	0
Cancelled	(1,591,992)	0
Expired	(3,173,160)	(778,334)
Outstanding, ending balance	26,865,017	10,337,113
Warrant [Member]
Shares
Outstanding, beginning balance	26,397,410	23,933,922
Issued	0	1,500,000
Expired	(2,204,100)	(269,852)
Outstanding, ending balance	39,818,347	26,397,410

Stockholders' equity (Details 1

Stockholders' equity (Details 1) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Shares
Outstanding, ending balance	66,683,364
Stock option [Member]
Shares
Outstanding, beginning balance	10,337,113	8,807,667
Warrants issued during the year for consulting and advisory services	19,701,064	2,307,780
Warrants expired	(3,173,160)	(778,334)
Outstanding, ending balance	26,865,017	10,337,113
Warrant [Member]
Shares
Outstanding, beginning balance	26,397,410	23,933,922
Warrants issued during the year for consulting and advisory services	0	1,500,000
Warrants issued in connection with sales of common and preferred stock and notes	27,895,890	1,983,340
Warrants expired	(2,204,100)	(269,852)
Warrants exercised	(12,270,853)	(750,000)
Outstanding, ending balance	39,818,347	26,397,410

Stockholders' equity (Details 2

Stockholders' equity (Details 2)	Dec. 31, 2016$ / sharesshares
Outstanding | shares	66,683,364
Weighted Average Exercise Price | $ / shares	$ 0.59
1st Qtr, 2017 [Member]
Outstanding | shares	34,749
Weighted Average Exercise Price | $ / shares	$ 7.99
2nd Qtr, 2017 [Member]
Outstanding | shares	1,349,183
Weighted Average Exercise Price | $ / shares	$ 6.9
3rd Qtr, 2017 [Member]
Outstanding | shares	536,500
Weighted Average Exercise Price | $ / shares	$ 1.14
4th Qtr, 2017 [Member]
Outstanding | shares	1,162,088
Weighted Average Exercise Price | $ / shares	$ 6.45
1st Qtr, 2018 [Member]
Outstanding | shares	10,000
Weighted Average Exercise Price | $ / shares	$ 6.6
4th Qtr, 2018 [Member]
Outstanding | shares	750,000
Weighted Average Exercise Price | $ / shares	$ 0.25
1st Qtr, 2019 [Member]
Outstanding | shares	37,504,567
Weighted Average Exercise Price | $ / shares	$ 0.37
2nd Qtr, 2019 [Member]
Outstanding | shares	1,850,007
Weighted Average Exercise Price | $ / shares	$ 0.44
3rd Qtr, 2019 [Member]
Outstanding | shares	1,309,002
Weighted Average Exercise Price | $ / shares	$ 0.92
4th Qtr, 2019 [Member]
Outstanding | shares	2,603,000
Weighted Average Exercise Price | $ / shares	$ 1.15
1st Qtr, 2020 [Member]
Outstanding | shares	480,000
Weighted Average Exercise Price | $ / shares	$ 0.92
4th Qtr, 2020 [Member]
Outstanding | shares	1,704,446
Weighted Average Exercise Price | $ / shares	$ 0.19
1st Qtr, 2021 [Member]
Outstanding | shares	4,785,376
Weighted Average Exercise Price | $ / shares	$ 0.12
2nd Qtr, 2021 [Member]
Outstanding | shares	2,469,995
Weighted Average Exercise Price | $ / shares	$ 0.09
3rd Qtr, 2021 [Member]
Outstanding | shares	2,629,760
Weighted Average Exercise Price | $ / shares	$ 0.06
3th Qtr, 2021 [Member]
Outstanding | shares	7,371,357
Weighted Average Exercise Price | $ / shares	$ 0.02
4th Qtr, 2022 [Member]
Outstanding | shares	133,334
Weighted Average Exercise Price | $ / shares	$ 7.05

Stockholder's equity (Details 3

Stockholder's equity (Details 3)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Stockholders Equity Details 3
Expected life (in years)	2 years 7 months 6 days	2 years 7 months 10 days
Weighted average volatility	167.74%	98.05%
Forfeiture rate	21.92%	10.27%
Risk-free interest rate	1.05%	0.95%
Expected dividend rate	0.00%	0.00%

Stockholder's equity (Details 4

Stockholder's equity (Details 4) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Outstanding, ending balance	66,683,364
Weighted Average Exercise Price Price, Ending	$ 0.59
Stock options and warrants [Member]
Outstanding, beginning balance	12,982,113	10,821,525
Granted	19,701,064	3,807,780
Cancelled	(2,883,792)	(775,834)
Forfeited	(952,701)	(118,858)
Exercised		(750,000)
Outstanding, ending balance	28,849,184	12,982,113
Outstanding, Exercisable	26,735,358	11,711,738
Weighted Average Exercise Price Price, Beginning	$ 1.97	$ 2.44
Granted	0.07	.31
Cancelled	(.29)	(0.92)
Forfeited	(6.70)	(7.24)
Exercised		(0.17)
Weighted Average Exercise Price Price, Ending	0.68	1.97
Weighted Average Exercise Price Price, Exercisable	$ 0.71	$ 2.06
Weighted Average Remaining Contractual Term	45 months 17 days	39 months 19 days
Weighted Average Remaining Contractual Term, Exercisable	45 years 21 days	39 months 17 days
Aggregate Instrinsic Value	$ 0	$ 0
Aggregate Instrinsic Value, Exercisable	$ 0	$ 0

Stockholder's equity (Details 5

Stockholder's equity (Details 5) - Stock options and warrants [Member] - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Weighted average grant date fair value of options and warrants granted	$ .05	$ 0.18
Aggregate intrinsic value of options and warrants exercised	0	0
Weighted average fair value of options and warrants vested	$ .43	$ 0.66

Stockholder's equity (Details 6

Stockholder's equity (Details 6) - shares	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of Options and Warrants	66,683,364
Stock options and warrants [Member]
Number of Options and Warrants	28,849,184	12,982,113	10,821,525
Exercise Price Range $.01 - $.74 [Member]
Number of Options and Warrants	19,643,684	2,462,196
Exercise Price Range $.75 - $1.20 [Member]
Number of Options and Warrants	7,529,000	7,878,584
Exercise Price Range $.1.21 - $3.00 [Member]
Number of Options and Warrants	114,000	218,000
Exercise Price Range $3.01 - $4.50 [Member]
Number of Options and Warrants	0	0
Exercise Price Range $4.51 - $12.00 [Member]
Number of Options and Warrants	1,560,000	2,423,333
Exercise Price Range $12.01 - $15.00 [Member]
Number of Options and Warrants		0

Stockholder's equity (Details 7

Stockholder's equity (Details 7) - Non-vested options and warrants [Member] - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Non-vested outstanding, beginning	1,270,375	3,285,639
Granted	19,701,064	3,807,780
Vested	(17,238,203)	(5,279,016)
Forfeited	(825,915)	0
Cancelled	(1,621,910)	(544,028)
Non-vested outstanding, ending	2,111,326	1,270,375

Stockholder's equity (Details 8

Stockholder's equity (Details 8) - shares	Dec. 31, 2016	Dec. 31, 2015
Stockholders Equity Details 3
Stock options outstanding	26,865,017	10,337,113
Stock options available for future grant	9,437,000	9,437,000
Warrants	39,818,347	26,397,410
Total common shares reserved for future issuance	76,120,364	46,171,523

Stockholder's equity (Details N

Stockholder's equity (Details Narrative) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Outstanding	66,683,364
Stock option [Member]
Outstanding	26,865,017	10,337,113	8,807,667
Issued	19,701,064	2,307,780
Warrant [Member]
Outstanding	39,818,347	26,397,410	23,933,922
Issued	0	1,500,000

Income Taxes (Details)

Income Taxes (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Deferred tax asset
Net operating loss carryovers	$ 29,294,157	$ 26,991,694
Accrued Payroll	26,400	32,400
Sharebased Compensation	2,734,156	2,292,027
Charitable Contribution	4,700	4,700
Amortization	1,954,508	1,584,975
Depreciation	768,381	258,828
Allowance for Doubtful Account	687,104	555,953
Total deferred tax assets	36,209,406	31,720,577
Valuation allowance	(36,209,406)	(31,720,577)
Deferred tax asset, net of allowance

Income Taxes (Details 1)

Income Taxes (Details 1)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Details 1
Statutory federal income tax rate	(34.00%)	(34.00%)
State taxes, net of federal tax benefit	(5.00%)	(5.00%)
Valuation Allowance	39.00%	39.00%
Income tax provision (benefit)	0.00%	0.00%

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Details Narrative
Federal and state net operating loss carryovers	$ 75,300,000	$ 73,500,000
Federal and state net operating loss carryovers expiration date	2,019
Accrued interest and penalties	$ 0	0
Valuation allowance increase	$ 4,488,829	$ 4,700,682

Commitments (Details Narrative)

Commitments (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Commitments Details Narrative
Rent expense	$ 188,746	$ 169,511
Future rental commitments under contract	$ 193,073

Employee benefit plan (Details

Employee benefit plan (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Employee Benefit Plan Details Narrative
Contributions to Plan	$ 0	$ 83,359