Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 04, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | MeetMe, Inc. | ||
Entity Central Index Key | 1,078,099 | ||
Trading Symbol | meet | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 47,477,000 | ||
Entity Public Float | $ 73 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 19,298,038 | $ 17,041,050 |
Accounts receivable, net of allowance of $133,000 and $586,000 at December 31, 2015 and 2014, respectively | 16,509,291 | 9,045,269 |
Prepaid expenses and other current assets | 970,239 | 790,031 |
Total current assets | 36,777,568 | 26,876,350 |
Goodwill | 70,646,036 | 70,646,036 |
Property and equipment, net | 2,610,307 | 2,458,897 |
Intangible assets, net | 1,278,498 | 2,894,330 |
Other assets | 178,264 | 338,146 |
TOTAL ASSETS | 111,490,673 | 103,213,759 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 2,776,710 | 2,985,259 |
Accrued liabilities | 4,127,634 | 3,249,404 |
Current portion of capital lease obligations | $ 366,114 | 872,761 |
Current portion of long-term debt | 2,068,326 | |
Deferred revenue | $ 293,414 | 218,484 |
Total current liabilities | 7,563,872 | 9,394,234 |
Long-term capital lease obligations, less current portion, net | $ 221,302 | 587,416 |
Long-term debt, less current portion, net | 556,612 | |
Other liabilities | $ 1,035,137 | 418,530 |
TOTAL LIABILITIES | $ 8,820,311 | 10,956,792 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $.001 par value, authorized - 5,000,000 Shares; Convertible Preferred Stock Series A-1, $.001 par value; authorized - 1,000,000 shares; 0 and 1,000,000 shares issued and outstanding at December 31, 2015 and 2014, respectively | 1,000 | |
Common stock, $.001 par value; authorized - 100,000,000 Shares; 47,179,486 and 44,910,034 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 47,183 | 44,914 |
Additional paid-in capital | 300,725,791 | 297,001,168 |
Accumulated deficit | $ (198,102,612) | (204,072,240) |
Accumulated other comprehensive loss | (717,875) | |
Total stockholders' equity | $ 102,670,362 | 92,256,967 |
Total liabilities and stockholders' equity | $ 111,490,673 | $ 103,213,759 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Series A-1 Preferred Stock [Member] | ||
Convertible preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
Convertible preferred stock shares issued (in shares) | 0 | 1,000,000 |
Convertible preferred stock shares outstanding (in shares) | 0 | 1,000,000 |
Accounts receivable, allowance | $ 133,000 | $ 586,000 |
Convertible preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 47,179,486 | 44,910,034 |
Common stock, shares outstanding (in shares) | 47,179,486 | 44,910,034 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 19,879,839 | $ 14,308,080 | $ 11,086,878 | $ 11,628,976 | $ 13,021,878 | $ 11,604,724 | $ 10,687,330 | $ 9,503,504 | $ 56,903,773 | $ 44,817,436 | $ 40,378,007 |
Operating Costs and Expenses: | |||||||||||
Sales and marketing | 2,826,197 | 1,483,252 | 1,094,068 | 1,215,320 | 1,666,406 | 1,516,547 | 1,935,678 | 2,159,088 | 6,618,837 | 7,277,719 | 7,799,077 |
Product development and content | 6,036,479 | 6,175,566 | 6,083,455 | 6,319,804 | 7,589,911 | 7,021,353 | 6,855,739 | 6,857,440 | 24,615,304 | 28,324,443 | 26,660,709 |
General and administrative | 3,337,599 | 7,802,367 | 1,774,991 | 1,619,904 | 1,962,026 | 1,932,161 | 2,194,138 | 1,929,645 | 14,534,861 | 8,017,970 | 7,875,395 |
Depreciation and amortization | $ 760,200 | $ 762,830 | $ 801,260 | $ 815,915 | $ 922,853 | $ 1,135,263 | $ 1,079,932 | 1,085,459 | $ 3,140,205 | 4,223,507 | 4,387,464 |
Restructuring costs | 120,202 | $ 120,202 | 2,540,896 | ||||||||
Loss on debt restructure | 1,174,269 | ||||||||||
Total Operating Costs and Expenses | $ 12,960,475 | $ 16,224,015 | $ 9,753,774 | $ 9,970,943 | $ 12,141,196 | $ 11,605,324 | $ 12,065,487 | 12,151,834 | $ 48,909,207 | $ 47,963,841 | 50,437,810 |
Income (Loss) from Operations | 6,919,364 | (1,915,935) | 1,333,104 | 1,658,033 | 880,682 | (600) | (1,378,157) | (2,648,330) | 7,994,566 | (3,146,405) | (10,059,803) |
Other Income (Expense): | |||||||||||
Interest income | 5,304 | 5,303 | 5,244 | 5,186 | 5,958 | 2,679 | 549 | 1,166 | 21,037 | 10,352 | 9,725 |
Interest expense | (84,724) | (93,383) | (122,989) | (158,866) | (183,754) | (206,980) | (241,643) | (420,243) | (459,962) | (1,052,620) | $ (848,247) |
Change in warrant liability | (622,819) | 45,532 | 56,408 | (95,728) | $ 144,037 | $ 256,932 | $ 181,493 | $ (355,954) | (616,607) | $ 226,508 | |
Loss on cumulative foreign currency translation adjustment | $ 5,639 | $ (78,987) | $ 11,614 | (794,704) | (856,438) | ||||||
Gain on sale of asset | 163,333 | 163,333 | |||||||||
Total Other Expense | $ (696,600) | $ (121,535) | $ (49,723) | (880,779) | $ (33,759) | $ 52,631 | $ (59,601) | $ (775,031) | (1,748,637) | $ (815,760) | $ (838,522) |
Income (Loss) before Income Taxes | 6,222,764 | (2,037,470) | 1,283,381 | 777,254 | $ 846,923 | $ 52,031 | $ (1,437,758) | $ (3,423,361) | 6,245,929 | $ (3,962,165) | $ (10,898,325) |
Income taxes | (149,500) | 1,849 | (73,450) | (55,200) | (276,301) | ||||||
Net Income (Loss) | $ 6,073,264 | $ (2,035,621) | $ 1,209,931 | $ 722,054 | $ 846,923 | $ 52,031 | $ (1,437,758) | $ (3,423,361) | $ 5,969,628 | $ (3,962,165) | $ (10,898,325) |
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | (65,408) | (74,389) | 12,573 | 27,701 | (99,523) | (52,407) | |||||
Comprehensive income (loss) | $ 6,073,264 | $ (2,035,621) | $ 1,209,931 | $ 722,054 | $ 781,515 | $ (22,358) | $ (1,425,185) | $ (3,395,660) | $ 5,969,628 | $ (4,061,688) | $ (10,950,732) |
Basic and diluted net income (loss) per common stockholders: | |||||||||||
Basic net income (loss) per common stockholders (in dollars per share) | $ 0.13 | $ (0.04) | $ 0.03 | $ 0.02 | $ 0.02 | $ 0 | $ (0.04) | $ (0.09) | $ 0.13 | $ (0.10) | $ (0.29) |
Diluted net income (loss) per common stockholders (in dollars per share) | $ 0.12 | $ (0.04) | $ 0.02 | $ 0.01 | $ 0.02 | $ 0 | $ (0.04) | $ (0.09) | $ 0.12 | $ (0.10) | $ (0.29) |
Basic (in shares) | 46,090,961 | 45,470,686 | 45,191,563 | 44,910,034 | 44,879,982 | 43,092,803 | 38,798,706 | 38,499,171 | 45,419,175 | 41,328,699 | 38,048,446 |
Diluted (in shares) | 51,735,136 | 45,470,686 | 49,022,622 | 48,246,763 | 48,181,596 | 43,092,803 | 38,798,706 | 38,499,171 | 49,535,826 | 41,328,699 | 38,048,446 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance (in shares) at Dec. 31, 2012 | 1,000,000 | 37,046,405 | ||||
Balance at Dec. 31, 2012 | $ 1,000 | $ 37,050 | $ 275,261,794 | $ (189,211,750) | $ (565,945) | $ 85,522,149 |
Vesting of stock options for compensation | 3,758,043 | 3,758,043 | ||||
Issuance of common stock for MeetMoi (in shares) | 306,122 | |||||
Issuance of common stock for MeetMoi | $ 306 | 599,694 | 600,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 122,685 | |||||
Exercise of stock options | $ 123 | 122,563 | 122,686 | |||
Stock Issued During Period, Shares, Other | 1,002,147 | |||||
Issuance of warrants | $ 1,002 | $ 2,754,902 | 2,755,904 | |||
Net income (loss) | $ (10,898,325) | (10,898,325) | ||||
Balance (in shares) at Dec. 31, 2013 | 1,000,000 | 38,477,359 | ||||
Balance at Dec. 31, 2013 | $ 1,000 | $ 38,481 | $ 282,496,996 | $ (200,110,075) | $ (618,352) | 81,808,050 |
Foreign currency translation adjustment | $ (52,407) | (52,407) | ||||
Vesting of stock options for compensation | 3,718,314 | $ 3,718,314 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 38,834 | 38,834 | ||||
Exercise of stock options | $ 39 | $ 12,459 | $ 12,498 | |||
Stock Issued During Period, Shares, Other | 89,230 | |||||
Net income (loss) | $ (3,962,165) | $ (3,962,165) | ||||
Balance (in shares) at Dec. 31, 2014 | 1,000,000 | 44,910,034 | ||||
Balance at Dec. 31, 2014 | $ 1,000 | $ 44,914 | $ 297,001,168 | $ (204,072,240) | $ (717,875) | 92,256,967 |
Exercise of warrants (in shares) | 89,230 | |||||
Exercise of warrants | $ 89 | 174,802 | 174,891 | |||
Issuance of common stock (in shares) | 5,750,000 | |||||
Issuance of common stock | $ 5,750 | 10,599,152 | $ 10,604,902 | |||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 556,475 | 556,475 | ||||
Issuance of common stock for vested RSAs | $ 557 | (557) | ||||
Cancellation of common stock (in shares) | (1,864) | |||||
Cancellation of common stock | $ (2) | 2 | ||||
Foreign currency translation adjustment | $ (99,523) | $ (99,523) | ||||
Vesting of stock options for compensation | 2,916,427 | $ 2,916,427 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 231,900 | 231,900 | ||||
Exercise of stock options | $ 232 | $ 383,695 | $ 383,927 | |||
Net income (loss) | $ 5,969,628 | 5,969,628 | ||||
Balance (in shares) at Dec. 31, 2015 | 47,179,486 | |||||
Balance at Dec. 31, 2015 | $ 47,183 | $ 300,725,791 | $ (198,102,612) | $ 102,670,362 | ||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 557,603 | 557,603 | ||||
Issuance of common stock for vested RSAs | $ 557 | (557) | ||||
Stock compensation expense for warrant modification | 425,538 | $ 425,538 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | (1,000,000) | 1,479,949 | ||||
Conversion of preferred stock to common stock | $ (1,000) | $ 1,480 | $ (480) | |||
Loss on cumulative currency translation adjustment | $ 856,438 | $ 856,438 | ||||
Foreign currency translation adjustment | $ (138,563) | $ (138,563) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 5,969,628 | $ (3,962,165) | $ (10,898,325) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,140,205 | $ 4,223,507 | $ 4,387,464 |
Gain on sale of asset | $ (163,333) | ||
Loss on debt restructure | $ 1,066,765 | ||
Vesting of stock options for compensation | $ 2,916,427 | $ 3,718,313 | $ 3,758,043 |
Stock compensation expense for warrant modification | 425,538 | ||
Loss on cumulative foreign currency translation adjustment | 856,438 | ||
Bad debt expense (recovery) | (453,000) | $ 91,000 | $ (52,000) |
Revaluation of warrant liability | 616,607 | (226,508) | |
Amortization of discounts on notes payable and debt issuance costs | 184,868 | 522,096 | $ 160,069 |
Changes in operating assets and liabilities: | |||
Accounts receivable - trade | (7,023,840) | 985,423 | (385,078) |
Prepaid expenses, other current assets and other assets | (19,967) | (326,114) | 737,476 |
Accounts payable and accrued expenses | 684,745 | (372,038) | 617,180 |
Deferred revenue | 74,929 | (57,277) | (116,851) |
Net cash provided by (used in) operating activities | $ 7,209,245 | $ 4,596,237 | (725,257) |
Cash flows from investing activities: | |||
Loan payments from BRC | 111,569 | ||
Purchase of property and equipment | $ (1,769,964) | $ (1,112,487) | $ (149,064) |
Proceeds from sale of asset | 255,000 | ||
Net cash used in investing activities | (1,514,964) | $ (1,112,487) | $ (37,495) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options and warrants | $ 383,927 | 12,498 | $ 122,685 |
Net proceeds from the issuance of common stock | $ 10,604,902 | ||
Net proceeds from the issuance of note payables | $ 5,000,000 | ||
Payments of capital leases | $ (872,761) | $ (986,449) | (784,190) |
Payments on long-term debt | (2,809,806) | (2,333,966) | (2,240,349) |
Net cash provided by (used in) financing activities | (3,298,640) | 7,296,985 | 2,098,146 |
Change in cash and cash equivalents prior to effects of foreign currency exchange rate on cash | 2,395,641 | 10,780,735 | 1,335,394 |
Effect of foreign currency exchange rate on cash | (138,653) | (70,217) | (26,869) |
Net increase in cash and cash equivalents | 2,256,988 | 10,710,518 | 1,308,525 |
Cash and cash equivalents at beginning of period | 17,041,050 | 6,330,532 | 5,022,007 |
Cash and cash equivalents at end of period | 19,298,038 | 17,041,050 | 6,330,532 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest | $ 275,094 | 530,062 | 618,755 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||
Purchase of property and equipment through capital leases | $ 805,074 | 519,208 | |
Subordinated note payable and accounts receivable offset | 6,025,898 | ||
Warrant exercises and subordinated note payable cancellation | $ 2,756,210 | ||
Warrant exercise settlement | $ 174,891 | ||
Issuance of convertible note payable for settlement loss contingency for trademark dispute | $ 600,000 |
Note 1 - Description of Busines
Note 1 - Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1—Description of Business, Basis of Presentation and Summary of Significant Accounting Policies MeetMe, Inc. (the “Company”) is a location-based social network for meeting new people on mobile platforms, including on iPhone, Android, iPad and other tablets, and the web that facilitate interactions among users and encourages users to connect and chat with each other. The Company monetizes through advertising, in-app purchases, and paid subscriptions. The Company provides users with access to an expansive, multilingual menu of resources that promote social interaction, information sharing and other topics of interest. The Company offers online marketing capabilities, which enable marketers to display their advertisements in different formats and in different locations. The Company works with its advertisers to maximize the effectiveness of their campaigns by optimizing advertisement formats and placement. Just as Facebook has established itself as the social network of friends and family, and LinkedIn as the social network of colleagues and business professionals, the Company is creating the social network not of the people you know but of the people you want to know. The Company believes meeting new people is a basic human need, especially for users aged 18-30, when so many long-lasting relationships are made. The Company believes that it has significant growth opportunities as people increasingly use their mobile devices to discover the people around them. Given the importance of establishing connections within a user’s geographic proximity, the Company believes it is critical to establish a high density of users within the geographic regions it serves. As the Company’s network grows and the number of users in a location increases, the Company believes that users who are seeking to meet new people will incrementally benefit from the quantity of relevant connections. Principles of Consolidation The consolidated financial statements include the accounts of MeetMe and its wholly-owned subsidiaries, Quepasa.com de Mexico, Quepasa Serviços em Solucoes de Publicidade E Tecnologia Ltda (inactive) and MeetMe Online S/S Ltda. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition, accounts receivable valuation, the fair value of financial instruments, the valuation of long-lived assets, valuation of deferred tax assets, income taxes, contingencies, goodwill and intangible assets, and stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. The Company’s estimates often are based on complex judgments, probabilities and assumptions that it believes to be reasonable but that are inherently uncertain and unpredictable. For any given individual estimate or assumption made by the Company, there may also be other estimates or assumptions that are reasonable. The Company regularly evaluates its estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause it to change those estimates and assumptions. Market conditions, such as illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency rates and economic downturn, can increase the uncertainty already inherent in its estimates and assumptions. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in the Company’s consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under the relevant accounting standard. It is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. The Company is also subject to other risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. The Company earns revenue from the display of advertisements on its mobile apps and website, primarily based on a cost per thousand (“CPM”) model. The Company recognizes revenue in accordance with ASC 605, “Revenue Recognition, Agent Considerations” During the years ended December 31, 2015, 2014 and 2013, the Company had transactions with several partners that qualify for principal agent considerations. The Company recognizes revenue net of amounts retained by third party entities, pursuant to revenue sharing agreements with advertising networks for advertising and with other partners for royalties on product sales. The Company considered two key factors when making its revenue recognition determinations: (1) whether the Company performed a service for a fee, similar to an agent or a broker and (2) whether the Company was involved in the determination of product or service specifications. The Company focused on the substance of the agreements and determined that net presentation was representationally faithful to the substance, as well as the form, of the agreements. The form of the agreements was such that the Company provided services in exchange for a fee. In addition, the Company has no latitude in establishing price, and the advertising agencies were solely responsible for determining pricing with third party advertisers. The Company determined only the fee for providing its services to advertising agencies. In instances in which the Company works directly with an advertiser, revenue is recognized on a gross basis. The Company is the primary obligor in arrangements made with direct advertisers, as there is no third party facilitating or managing the sales process. The Company is solely responsible for determining price, product or service specifications, and which advertisers to use. The Company assumes all credit risk in the sales arrangements made with direct advertisers. During the years ended December 31, 2015, 2014 and 2013, the Company’s revenue was generated from two principal sources: revenue earned from the sales of advertising on the Company’s mobile applications and website and revenue earned from in-app products. Advertising Revenue Advertising and custom sponsorship revenues consist primarily of advertising fees earned from the display of advertisements on the Company’s website and mobile applications. Revenue from advertising is generally recognized as advertisements are delivered. The Company recognizes advertising revenue from customers that are advertising networks on a net basis, while advertising revenues earned directly from advertisers are recognized on a gross basis. Approximately 85%, 78% and 69% of the Company’s revenue came from advertising during the years ended December 31, 2015, 2014 and 2013, respectively. In-App Purchases Revenue is earned from in-app purchase products sold to our mobile application and website users. The Company offers in-app products such as Credits. Users buy Credits to purchase the Company’s virtual products. These products put users in the spotlight, helping users to get more attention from the community in order to meet more people faster. Revenue from these virtual products is recognized over time. Credits can be purchased using PayPal on the website and iTunes and Google checkout on mobile applications. Platform users do not own the Credits but have a limited right to use the credits on virtual products offered for sale on the Company’s platform. Credits are non-refundable, the Company may change the purchase price of Credits at any time, and the Company reserves the right to stop issuing Credits in the future. The Company’s in-app products are not transferable, cannot be sold or exchanged outside our platform, are not redeemable for any sum of money, and can only be used on the Company’s platform. In-app products are recorded in deferred revenue when purchased and recognized as revenue when: (i) the credits are used by the customer; or (ii) the Company determines the likelihood of the credits being redeemed by the customer is remote (breakage) and there is not a legal obligation to remit the unredeemed credits to the relevant jurisdiction. The determination of the breakage rate is based upon Company-specific historical redemption patterns. Breakage is recognized in revenue as the credits are used on a pro rata basis over a three month period (life of the user) beginning at the date of the Credits sale and is included in revenue in the consolidated statement of operations and comprehensive income (loss). Breakage recognized during the years ended December 31, 2015, 2014 and 2013 was $845,000, $910,000 and $625,000, respectively. For “MeetMe+” and other subscription based products, the Company recognizes revenue over the term of the subscription. The Company also earns revenue from advertisement products from currency engagement actions (i.e. sponsored engagement advertisements) by users on all of the Company’s platforms, including cost-per-action (“CPA”) currency incented promotions and sales on its proprietary cross-platform currency monetization product, “Social Theater.” The Company controls and develops the Social Theater product and CPA promotions and acts as a user’s principal in these transactions and recognizes the related revenue on a gross basis when collections are reasonably assured and upon delivery of the Credits to the user’s account. When a user performs an action, the user earns Credits and the Company earns product revenue from the advertiser. Social Theater is a product that allows the Company to offer advertisers a way to leverage the Facebook platform through guaranteed actions by Facebook’s user base. Social Theater is also hosted on the Company’s platform. Typical guaranteed actions available to advertisers are video views, fan page growth, quizzes and surveys. Social Theater revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectability is reasonably assured, and the service has been rendered. The Social Theater prices are both fixed and determinable based on the contract with the advertiser. The user completes an action and the electronic record of the transaction triggers the revenue recognition. The collection of the Social Theater revenue is reasonably assured by contractual obligation and historical payment performance. The delivery of virtual currency from the hosting platform to a user evidences the completion of the action required by the customer that the service has been rendered for Social Theater revenue recognition. Beanstock Media Inc. Web Agreement On September 25, 2013, the Company entered into a Media Publisher Agreement (the “Web Agreement”) with Beanstock Media, Inc. (“Beanstock”). The Web Agreement was effective from September 23, 2013 until June 2, 2015 when the Company terminated the Web Agreement as a result of non-payment by Beanstock of amounts owed. Pursuant to the Web Agreement, Beanstock had the exclusive right and obligation to fill all of the Company’s remnant desktop in-page display advertising inventory on www.meetme.com (the “Site”), excluding, (i) any inventory sold to a third party under an insertion order that was campaign or advertiser specific, (ii) any inventory the Company reserved in existing and future agreements with third parties for barter transactions and as additional consideration as part of larger business development transactions, and (iii) any inventory reserved for premium advertising for the Site. The Company could have continued to place inventory outside of the Web Agreement in direct sales. Beanstock was obligated to pay for all advertising requests that the Company delivered, whether or not Beanstock filled them. For the United States, Beanstock was obligated to pay the Company specified CPM rates plus a percentage of revenue in excess of those rates; for the rest of the world, Beanstock was obligated to pay the Company 90% of its net ad revenue for the Site. The Company could terminate the Web Agreement at any time without charge or penalty by providing written notice to Beanstock. Either party could terminate the Web Agreement if the other party was in material breach of its obligations and did not cure such breach, or if the other party filed a petition for bankruptcy, became insolvent, made an assignment for the benefit of its creditors, or a receiver is appointed for such party or its business. For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $2,160,000, $9,800,000 and $3,800,000 under the terms of the Web Agreement, respectively. On June 2, 2015, the Company terminated the Web Agreement as a result of non-payment by Beanstock of amounts owed, and resumed managing its web advertising inventory in-house. In the third quarter of 2015, the Company determined that the approximately $1.3 million receivable in connection with the Web Agreement was deemed uncollectible and as a result the Company incurred a bad debt expense of the entire amount. Mobile Agreement On December 23, 2014, the Company entered into an Advertising Agreement with Beanstock (the “Mobile Agreement”). On June 2, 2015, the Company terminated the Mobile agreement with Beanstock as a result of non-payment by Beanstock of amounts owed. Pursuant to the Mobile Agreement, Beanstock had the right and obligation to fill substantially all of the Company’s advertising inventory on its MeetMe mobile app for iOS and Android, as well as the Site when accessed using a mobile device and as optimized for mobile devices (collectively, the “App”). The Mobile Agreement did not apply to interstitially placed advertisements, advertisements on versions of the App specific to the iPad and other Apple tablet devices, other mobile apps or in-app products or features on the App, including, without limitation, offer wall features and the Company’s Social Theater business. Under the Mobile Agreement, the Company began placing ad calls (not including prior test calls) with Beanstock on March 1, 2015 (the “Effective Date”). The Company could, on a basis substantially consistent with its advertising display logic (as set forth in the Mobile Agreement) (“Ad Logic”), (i) add additional sections or features to the App and provide them with ads, and (ii) change the locations and sizes of particular ad placements within the App; in any such case, all resulting ad placements would be subject to the Mobile Agreement. In addition, if the Company wished to increase the number, type, frequency or scope of placements in the Ad Logic, it would be required to first notify Beanstock and upon Beanstock’s written consent, such additional inventory would be added to the Ad Logic. If Beanstock withheld or denied said consent, then the additional inventory would remain outside of the scope of the Mobile Agreement and the Company could fill it otherwise. Beanstock was required to pay for all ad requests that the Company delivered whether or not Beanstock filled them. Beanstock was required to pay specified CPM rates depending on the type of ad; provided, however, that if more than a stated percentage of impressions originated outside of the United States and Canada, then Beanstock was required to pay the Company a percentage of Beanstock’s gross revenue relating to such international ad impressions in excess of that percentage. Beanstock was required to remit payments due to the Company within thirty days following the last day of each calendar month for that month regardless of advertiser campaign duration; provided, however, that if the balance owing under the Mobile Agreement exceeded a stated amount, then the Company could request Beanstock to accelerate payments so that the balance does not at any point exceed that amount, and Beanstock would be required do so within ten days and for so long as necessary to keep said balance under that amount. Beanstock assumed all risk with regards to collection of all applicable advertiser fees with respect to all of the advertising inventory and was not permitted to delay payment to the Company as a result of non-collection or delay of payment of fees by advertisers. Beanstock was not permitted to withhold or offset amounts owing the Mobile Agreement for any reason. The Company determined the number of ad calls that it would place under the Mobile Agreement. If Beanstock determined that number to be less than 90% of the Company’s number for any particular month and the parties could not resolve the discrepancy, then the ad call number for that month would be 90% of the number that the Company originally determined. Beanstock agreed to comply with the Company’s advertising editorial guidelines as in effect from time to time. The Company could terminate the Mobile Agreement upon written notice (i) from the date thereof to the sixtieth day after the Effective Date, or (ii) if, in the Company’s sole discretion, the placement or running of ads on the App caused a diminution in user experience, including without limitation with respect to the crash rate. In addition, the Mobile Agreement could be terminated upon written notice by (A) either party if the other party (i) was in material breach of its obligations and that party failed to cure said breach within ten days after receipt of written notice thereof from the non-breaching party, or (ii) filed a petition for bankruptcy, became insolvent, made an assignment for the benefit of its creditors, or a receiver was appointed for such other party or its business, or (B) the Company if Beanstock failed to pay any amount thereunder when due (any of the events in this sentence, “Cause”). If the Company terminated the Agreement for Cause or Beanstock terminated it wrongfully, then Beanstock would be required to pay the Company a stated amount as liquidated damages. Effective March 26, 2015, the Company amended the Mobile Agreement with Beanstock (the “Amendment”). Pursuant to the Amendment, the Company provided certain price reductions on its invoices to Beanstock for the months of March, 2015 and April, 2015, contingent upon certain events to which Beanstock was required to certify. The Amendment provided that the Company would implement certain changes to the Ad Logic for the App by May 1, 2015 as well as make certain product changes with respect to the App by June 1, 2015. The Amendment increased the amount of liquidated damages payable by Beanstock under certain circumstances and provided the Company with a right to terminate the Mobile Agreement for convenience until September 1, 2015, and after such date with either sufficient advance notice or by paying a stated termination fee. On May 6, 2015, the Company entered into a second amendment and joinder to the Mobile Agreement (the “Second Amendment”). Pursuant to the Second Amendment, Beanstock would pay in full (i) the invoice dated March 31, 2015, under the Mobile Agreement (a portion of which remained overdue) on or before June 30, 2015 and (ii) all other amounts under the Mobile Agreement and the Web Agreement as they became due. In addition, Adaptive Medias, Inc. (“Adaptive”) joined as a party to the Mobile Agreement to guarantee Beanstock’s payment obligations under both the Mobile Agreement and the Web Agreement. If Beanstock failed to pay any amounts due under either the Mobile Agreement or the Web Agreement, Adaptive would immediately, upon demand, pay all such owed amounts in full. For the year ended December 31, 2015, the Company recognized approximately $5,200,000 under the terms of the Mobile Agreement. On June 2, 2015, the Company terminated the Mobile Agreement as a result of non-payment by Beanstock of amounts owed, and resumed managing its mobile advertising inventory in-house. In the third quarter of 2015, the Company determined that the approximately $4.4 million receivable in connection with the Mobile Agreement was deemed uncollectible and as a result the Company incurred a bad debt expense of the entire amount. As of December 31, 2015, the accounts receivable balance written-off under both agreements was $5.7 million. In addition, Beanstock owes the Company $4.0 million under the Mobile Agreement of liquidated damages that have not been recorded in the financial statements and are not included in the approximately $5.7 million bad debt write-off. Pinsight Media On October 31, 2013, the Company entered into an Advertising Agreement with Pinsight Media+, Inc. (“Pinsight”) (as amended, the “Pinsight Agreement”). The Pinsight Agreement was effective from October 31, 2013 through December 31, 2014, with a post-termination transition period that ended on March 1, 2015. Pursuant to the Pinsight Agreement, Pinsight had the right and obligation to fill all of the Company’s advertising inventory on the App. The Pinsight Agreement did not apply to other mobile apps or virtual currency features on the App, including without limitation offer wall features and the Company’s Social Theater business. Pinsight was obligated to pay for all ad requests that the Company delivered, whether or not Pinsight fills them. Pinsight paid specified CPM rates depending on the type of ad. The stated CPM rates for certain ads were subject to renegotiation under certain conditions; in such case, if the parties did not agree on a modified rate, then such ads would be excluded from the Agreement. Pinsight assumed all risk with regards to collection of all applicable advertiser fees with respect to all advertising inventory and was not permitted to delay payment to the Company as a result of non-collection or delay of payment by the advertisers. Pinsight was obligated to comply with the Company’s advertising editorial guidelines as in effect from time to time. For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $5,100,000, $19,824,000 and $695,000 in revenue under the terms of the Pinsight Agreement, respectively. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash and cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit on a non-collateralized basis to both United States and international customers. The Company extends credit to customers in the normal course of business and maintains an allowance for doubtful accounts resulting from the inability or unwillingness of customers to make required payments. Management determines the allowance for doubtful accounts by evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. The Company prepares an analysis of its ability to collect outstanding receivables that provides a basis for an allowance estimate for doubtful accounts. Based on this evaluation, the Company maintains an allowance for potential credit losses and for potential discounts based on historical experience and other information available to management. Discounts historically represent less than 1% of the related revenues. The fees associated with display advertising are often based on “impressions,” which are created when the ad is viewed. The amount of impressions often differs between non-standardized tracking systems, resulting in discounts on some payments. Difference between ad serving platforms with respect to impressions is primarily due to lag time between serving of advertising and other technical differences. Balance at Beginning of Period Additions, Costs and Expenses Deductions, Write-Offs Balance at End of the Period Allowance For Doubtful Accounts: Year Ended December 31, 2015 $ 586,000 $ 181,398 $ 634,398 $ 133,000 Year Ended December 31, 2014 $ 495,000 $ 367,000 $ 276,000 $ 586,000 Year Ended December 31, 2013 $ 547,000 $ — $ 52,000 $ 495,000 Goodwill Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable the net assets acquired. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company performs its annual impairment test in conjunction with preparing its fourth quarter financial results immediately following the end of the calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit. The Company has determined that there is only one reporting unit, MeetMe, Inc. The impairment model permits, and the Company utilizes, a two-step method for determining goodwill impairment. In the first step, the Company evaluates the recoverability of goodwill by estimating the fair value of the Company’s reporting unit using multiple techniques, including an income approach using a discounted cash flow model and a market approach. Based on an equal weighting of the results of these two approaches, a conclusion of fair value is estimated. The fair value is then compared to the carrying value of the Company’s reporting unit. If the fair value of a reporting unit is less than its carrying value, the Company performs a second step for that reporting unit to determine the amount of impairment loss, if any. The second step requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations. Any residual fair value is allocated to goodwill. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying amount of goodwill over its implied fair value. Intangible Assets Intangible assets consist of acquired trademarks, domain names, advertising customer relationships and mobile applications recorded at fair value. Amortization is recorded using the straight-line method over the estimated useful lives of the assets except for advertising customer relationships are amortized using the straight-line method over the average contract term. Years Trademarks 5 Domain names 5 Mobile Applications, purchased and internally developed 5 Advertising customer relationships 3 Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. The cost of improvements that extend the life of property and equipment are capitalized. All ordinary repair and maintenance costs are expensed as incurred. When capitalized assets are retired or sold, the cost and related accumulated depreciation or amortization is removed from the accounts, with any gain or loss reflected in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Years Software 2 to 3 Servers and computer equipment 3 to 5 Office furniture and equipment 5 to 10 Leasehold improvements are amortized using the straight-line method over the term of the individual lease. Long-Lived Assets and Intangibles with Finite Lives Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an analysis is necessitated by the occurrence of a triggering event, the Company compares the carrying amount of the asset with the estimated future undiscounted cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset with its estimated fair value. Such analyses necessarily involve significant judgments and estimations on the part of the Company. For the years ended December 31, 2015, 2014 and 2013, the Company determined that no impairment charge was necessary. Lease Accounting The Company accounts for operating lease transactions by recording rent expense on a straight-line basis over the expected life of the lease, commencing on the date it gains possession of leased property. The Company includes tenant improvement allowances and rent holidays received from landlords and the effect of any rent escalation clauses as adjustments to straight-line rent expense over the expected life of the lease. Capital lease transactions are reflected as a liability at the inception of the lease based on the present value of the minimum lease payments or, if lower, the fair value of the property. Assets under capital leases are recorded in Property and Equipment, net on the consolidated balance sheets and depreciated in a manner similar to other Property and Equipment. Fair Value Measurements The fair values of the Company’s financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The carrying amounts of the Company’s financial instruments of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and deferred revenue approximates fair value due to their short maturities. Amounts recorded for senior loans payable, net of discount, also approximate fair value because current interest rates available to the Company for debt with similar terms and maturities are substantially the same. Certain common stock warrants are carried at fair value as disclosed in Note 2. The Company has evaluated the estimated fair value of financial instruments using available market information and management's estimates. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. Foreign Currency The functional currency of our foreign subsidiaries is the local currency. The financial statements of these subsidiaries are translated to U.S. dollars using period-end rates of exchange for assets and liabilities and average quarterly rates of exchange for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Net gains and losses resulting from foreign exchange transactions are included in other income (expense). The Company’s foreign operations were substantially liquidated in the first quarter of 2015. Due to our current reporting metrics, providing revenues from users attributed to the U.S. and revenues from users attributed to all other countries is impracticable. Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. The following table shows the computation of basic and diluted net income (loss) per share for the following: For the Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) $ 5,969,628 $ (3,962,165 ) $ (10,898,325 ) Denominator: Weighted-average shares outstanding 45,419,175 41,328,699 38,048,446 Effect of dilutive securities 4,116,651 — — Weighted-average diluted shares 49,535,826 41,328,699 38,048,446 Basic net income (loss) per share $ 0.13 |
Note 2 - Fair Value Measurement
Note 2 - Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | Note 2—Fair Value Measurements Accounting Standards Codification Topic 820, Fair Value Measurement ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes among the following: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Recurring Fair Value Measurements Items measured at fair value on a recurring basis include money market mutual funds and warrants to purchase common stock. During the periods presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value using Level 3 inputs. The following fair value hierarchy table presents information about each major category of the Company's financial assets and liabilities measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total December 31, 2015 Assets Money market $ 10,029,275 $ — $ — $ 10,029,275 Total assets $ 10,029,275 $ — $ — $ 10,029,275 Liabilities Warrants to purchase common stock $ — $ — $ 1,035,137 $ 1,035,137 Total Liabilities $ — $ — $ 1,035,137 $ 1,035,137 December 31, 2014 Assets Money market $ 10,014,243 $ — $ — $ 10,014,243 Total assets $ 10,014,243 $ — $ — $ 10,014,243 Liabilities Warrants to purchase common stock $ — $ — $ 418,530 $ 418,530 Total Liabilities $ — $ — $ 418,530 $ 418,530 The following table sets forth a summary of changes in the fair value of the Company's Common Stock warrant liability, which represents a recurring measurement that is classified within Level 3 of the fair value hierarchy, wherein fair value is estimated using significant unobservable inputs: Convertible Common Stock Warrant Liability Balance as of December 31, 2013 $ 819,930 Settlements (174,892 ) Changes in estimated fair value (226,508 ) Balance as of December 31, 2014 $ 418,530 Changes in estimated fair value 616,607 Balance as of December 31, 2015 $ 1,035,137 The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the years ended December 31, 2015 and 2014. The fair value of the warrants on the date of issuance and on each re-measurement date classified as liabilities is estimated using the Black-Scholes option pricing model using the following assumptions: contractual life according to the remaining terms of the warrants, no dividend yield, weighted average risk-free interest rate of 2.27% at December 31, 2015 and weighted average volatility of 82.96%. For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company's various classes of preferred stock, stock price volatility, the contractual term of the warrants, risk free interest rates and dividend yields. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The warrant liability is recorded in other liabilities on the Company's Consolidated Balance Sheets. The warrant liability is marked-to-market each reporting period with the change in fair value recorded on the Consolidated Statement of Operations and Comprehensive Income (Loss) until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. Nonrecurring Fair Value Measurements For assets and liabilities measured on a non-recurring basis during the year, accounting guidance requires separate quantitative disclosures about the fair value measurements for each major category. There were no remeasured assets or liabilities at fair value on a non-recurring basis for the years ended December 31, 2015 and 2014. |
Note 3 - Goodwill
Note 3 - Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Goodwill Disclosure [Text Block] | Note 3—Goodwill The Company assesses goodwill for impairment annually, or more frequently whenever events or changes in circumstances indicate that an impairment may exist. Goodwill is tested for impairment at the reporting unit level. Management believes the Company has one reporting unit. As of December 31, 2015, the Company completed its annual impairment test. The Company’s management considered both a market approach using comparable company method and income approach using a discounted cash flow method which it believes to be an appropriate valuation methodology. The major assumptions in the market approach include the selected multiples applied to certain operating statistics, such as sales revenues as well as an estimated control premium. The Company’s discounted cash flow model is highly reliant on various assumptions, including estimates of future cash flows, growth rates, discount rate, and expectations about variations in the amount and timing of cash flows and the probability of achieving its estimated cash flow forecast. These assumptions are based on significant inputs not easily observable in the market and thus represent Level 3 measurements within the fair value hierarchy. A discount rate of 14.5% was used, as well as assumptions of growth in revenues of 15.1% and 7.9% over the next 2 years before a terminal value was estimated. The discount rate was determined using the weighted average cost of capital for a typical market participant. The Company notes that the conclusion would have decreased by less than 2%. The Company also notes that the conclusion of value was not overly sensitive to changes in the growth rates used in our analysis. Had the growth rates for the next 2 years been 1% lower, the aggregate valuation conclusion would have decreased by less than 2%. The Company believes the discount rate and other inputs and assumptions are reasonable and consistent with those that a market participant would use. At December 31, 2015, the Company concluded that the fair value of the Company’s reporting unit exceeded its carrying value of the reporting unit’s carrying amount. The most recent analysis concluded that the excess of fair value over carrying amount as of December 31, 2015 was $92 million, which was more than 108.6% of the reporting unit’s carrying amount. Changes in the carrying amount of goodwill consisted of the following at December 31: 2015 2014 2013 Balance at January 1 $ 70,646,036 $ 70,646,036 $ 70,646,036 Goodwill acquired during the period — — — Impairment charges during the period — — — Balance at December 31 $ 70,646,036 $ 70,646,036 $ 70,646,036 |
Note 4 - Intangible Assets
Note 4 - Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | Note 4—Intangible Assets Intangible assets consist of the following: December 31, 2015 December 31, 2014 December 31, 2013 Trademarks and domains names $ 5,849,994 $ 6,124,994 $ 6,124,994 Advertising customer relationships 1,165,000 1,165,000 1,165,000 Mobile applications 1,725,000 1,725,000 1,725,000 8,739,994 9,014,994 9,014,994 Less accumulated amortization (7,461,496 ) (6,120,664 ) (4,227,053 ) Intangible assets - net $ 1,278,498 $ 2,894,330 $ 4,787,941 Amortization expense was approximately $1.5 million, $1.9 million and $2.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. Annual future amortization expense for the Company’s intangible assets is as follows: Year ending December 31, 2016 $ 1,278,498 Total $ 1,278,498 |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | Note 5—Property and Equipment Property and equipment consist of the following: December 31, 2015 December 31, 2014 Servers, computer equipment and software $ 9,105,086 $ 8,221,009 Office furniture and equipment 57,359 62,447 Leasehold improvements 369,137 378,389 9,531,582 8,661,845 Less accumulated depreciation/amortization (6,921,275 ) (6,202,948 ) Property and equipment—net $ 2,610,307 $ 2,458,897 The above amounts as of December 31, 2015 and 2014 include certain leases accounted for as capital leases. The total cost, net of accumulated depreciation, of property and equipment recorded under capital leases at December 31, 2015 and 2014 was approximately $513,000 and $805,000, respectively (see Note 7). Property and equipment depreciation and amortization expense was approximately $1.6 million, $2.3 million and $2.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Note 6 - Long-Term Debt
Note 6 - Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 6—Long-Term Debt The components of the Company’s total indebtedness were as follows: December 31, 2015 December 31, 2014 Senior Loans Payable: Term Loan $ — $ 2,809,806 Less: unamortized discount — (184,868 ) Total long-term debt, net — 2,624,938 Less current portion — (2,068,326 ) Total long-term debt, less current portion, net $ — $ 556,612 Senior Loans Payable Term Loan On April 29, 2013, the Company entered into an $8.0 million loan and security agreement with Venture Lending & Leasing VI, Inc. & Venture Lending and Leasing VII, Inc., at an 11% fixed interest rate, maturing in 36 months, and which was able to be drawn in three tranches (the “Loan”). On April 29, 2013, the Company drew $5.0 million on the facility. Interest is payable monthly for the first six months of the loan term, and monthly principal and interest payments are due thereafter through the maturity date. The Company issued warrants to each of the lenders in conjunction with the loan facility with an initial aggregate exercise price of $800,000, which increased by $200,000 with the first tranche and would have increased by $300,000 with the second and third tranche draw down of the Loan had the Company drawn on either tranche. The Loan is net of the initial value of the warrants. The initial value of the warrants has been capitalized within the other assets section of the consolidated balance sheets and is being amortized utilizing the effective interest method over the term of the loan. Amortization expense was $184,868, $295,588 and $190,225 for the years ended December 31, 2015, 2014 and 2013, respectively, and is included on the statement of operations and comprehensive income (loss) in interest expense. The lenders have a priority first security lien on substantially all assets of the Company. As of December 31 2015, the Company has repaid all outstanding indebtedness under the Term Loan. Subordinated Notes Payable MATT Note Payable On January 25, 2008, the Company entered into a Note Purchase Agreement (the “MATT Agreement”) with Mexicans & Americans Trading Together, Inc. (“MATT Inc.”). Pursuant to the terms of the MATT Agreement: (i) MATT Inc. invested $5,000,000 in the Company and the Company issued MATT Inc. a subordinated promissory note due October 16, 2016 with 4.46% interest per annum (the “MATT Note”); (ii) the exercise price of MATT Inc.’s outstanding Series 1 Warrant to purchase 1,000,000 shares of the Company’s common stock was reduced from $12.50 per share to $2.75 per share; (iii) the exercise price of MATT Inc.’s outstanding Series 2 Warrant to purchase 1,000,000 shares of the Company’s common stock was reduced from $15.00 per share to $2.75 per share (see Note 9); and (iv) the Amended and Restated Support Agreement between the Company and MATT Inc. was terminated, which terminated MATT Inc.’s obligation to provide the Company with the use of a corporate jet for up to 25 hours per year through October 2016. Debt issuance costs of $24,580 related to this transaction have been capitalized within the other assets section of the consolidated balance sheets and are being amortized to interest expense over the life of the note. Amortization expense was $455 for the year ended December 31, 2013. On March 5, 2013, the Company, Altos Hornos de Mexico, S.A.B. de C.V. (“AHMSA”) and MATT Inc. entered into an agreement to offset the MATT Note with approximately $6.0 million of accounts receivable that MATT Inc. and AHMSA owed to the Company (the “Receivable”). As of March 5, 2013, $6,254,178 in principal and accrued interest was outstanding under the MATT Note, and the Receivable had a balance of $6,025,828 plus interest of $222,446 from the agreement. MATT Inc. exercised warrants dated October 17, 2006 at an exercise price of $2.75 per share (the “MATT Warrants”) to purchase 2,147 shares of common stock using the amount by which the outstanding principal and accrued interest under the Note exceeded the amount of the Receivable. As a result of these transactions, both the MATT Note and the Receivable have been deemed fully satisfied. In connection therewith, MATT Inc. has agreed to exercise or forfeit the MATT Warrants with an aggregate exercise price of $2,000,000 over an eleven-month period beginning in March 2013. During 2013, the Company recorded a net loss on debt restructure (see consolidated statement of operations and comprehensive income (loss)) of approximately $712,000 in connection with the debt offset and warrant, attributable to the write-off of unamortized discounts and debt issue costs at the date of the agreement. RSI Note Payable On January 25, 2008, the Company entered into a Note Purchase Agreement (the “RSI Agreement”) with Richard L. Scott Investments, LLC (“RSI”). Pursuant to the terms of the RSI Agreement: (i) RSI invested $2,000,000 in the Company and the Company issued RSI a subordinated promissory note due March 21, 2016 with 4.46% interest per annum (the “RSI Note”); (ii) the exercise price of RSI’s outstanding Series 2 Warrant to purchase 500,000 shares of the Company’s common stock was reduced from $4.00 per share to $2.75 per share, (see Note 9); and (iii) the exercise price of RSI’s outstanding Series 3 Warrant to purchase 500,000 shares of the Company’s common stock was reduced from $7.00 per share to $2.75 per share. Debt issuance costs of $15,901 related to this transaction have been capitalized within the other assets section of the consolidated balance sheet and were amortized to interest expense over the life of the RSI Note. Amortization expense was $315 for the year ended December 31, 2013. On March 5, 2013, the Company and RSI entered into an agreement pursuant to which RSI exercised warrants dated as of March 21, 2006 to purchase one million shares of common stock at an exercise price of $2.75 per share (the “RSI Warrants”). RSI paid the exercise price of the RSI Warrants by offsetting that same amount under the RSI Note. The Company paid RSI $107,504 in cash, which represented the difference between the aggregate exercise price of the RSI Warrants of $2,750,000, and the total amount of principal and interest under the RSI Note that would have accrued through the 2016 due date of $2,857,504. As a result of these transactions, the RSI Warrants have been fully exercised and are of no further force or effect and the RSI Note has been deemed fully satisfied. During 2013, the Company recorded a loss on debt restructure (see consolidated statement of operations and comprehensive income (loss)) of approximately $463,000 in connection with the warrant exercise and debt cancellation, attributable to the write-off of unamortized discounts and debt issue costs, and accelerated interest at the date of the agreement. |
Note 7 - Commitments and Contin
Note 7 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 7—Commitments and Contingencies Operating Leases The Company leases certain fixed assets under capital leases that expire through 2017. The Company leases its operating facilities in the U.S. under certain noncancelable operating leases that expire through 2018. These leases are renewable at the Company’s option. Capital Leases In 2012, the Company executed two non-cancelable master lease agreements, one with Dell Financial Services and one with HP Financial Services. Both are for the purchase or lease of equipment for the Company’s data centers. Principal and interest are payable monthly at interest rates ranging from 4.5% to 8.0% per annum, rates varying based on the type of equipment purchased. The capital leases are secured by the leased equipment, and outstanding principal and interest are due respectively through October 2017. The Company did not enter into any new capital leases for the year ended December 31, 2015. A summary of minimum future rental payments required under capital and operating leases as of December 31, 2015 are as follows: Capital Leases Operating Leases 2016 $ 385,503 $ 1,644,774 2017 225,879 1,207,702 2018 — 42,240 Total minimum lease payments $ 611,382 $ 2,894,716 Less: Amount representing interest (23,966 ) Total present value of minimum payments 587,416 Less: Current portion of such obligations 366,114 Long-term capital lease obligations $ 221,302 Rent expense for under the operating leases was approximately $1.9 million, $2.2 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Litigation From time to time, we are party to certain legal proceedings that arise in the ordinary course and are incidental to our business. We operate our business online, which is subject to extensive regulation by federal and state governments. On April 30, 2015, plaintiff F. Stephen Allen served a complaint on the Company that he filed on April 23, 2015, in the United States District Court for the Northern District of Oklahoma accusing the Company of breach of contract for its alleged failure to maintain the effectiveness of a registration statement for warrant shares. The complaint sought damages of not less than $4 million. On December 22, 2015, the Company entered into a Settlement Agreement and Release of Claims (the “Settlement and Release of Claims”) with F. Stephen Allen, resolving all claims relating to F. Stephen Allen v. MeetMe, Inc., Cause No. 4:15-cv-210-GKF-TLW. Pursuant to the Settlement and Release of Claims, the Company will (i) pay F. Stephen Allen $225,000, (ii) enter into a one year consulting agreement in exchange for a grant of 50,000 stock options, (iii) modify the terms of his outstanding Series 2 and Series 3 warrants, to reduce the amount outstanding under the Series 2 by 50,000 and to extend the expiration date on both Series 2 and Series 3 by 15 months to June 21, 2017. On August 7, 2015, the Company entered into a Settlement and Mutual Release (the “Settlement and Release”) with the People of the State of California (the “People”) resolving all claims relating to People of the State of California, ex rel. Dennis Herrera, San Francisco City Attorney v. MeetMe, Inc., et al. inter alia On September 29, 2015, the Company filed suit in the Court of Common Pleas of Philadelphia County, Pennsylvania, against Beanstock and Adaptive for collection of approximately $10 million, in the aggregate, due under the Web Agreement and the Mobile Agreement. On September 28, 2015, Adaptive filed suit in the Superior Court of California, County of Orange, against the Company, Beanstock, et al., alleging, in pertinent part, that the Company “aided and abetted” an individual who was an officer and director of Adaptive to breach his fiduciary duty to Adaptive with respect to Adaptive’s joining the Mobile Agreement. Adaptive’s complaint seeks from the Company $600,000 plus unspecified punitive damages. The Company believes Adaptive’s allegations against it are without merit, and intends to defend against them and to pursue its collection action against Beanstock and Adaptive vigorously. Future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods. Restructuring Costs During the second quarter of 2013, the Company announced a cost reduction initiative, including a workforce reduction of 15%. In addition, the Company implemented the workforce reduction and initiated further cost reductions by closing certain satellite offices and consolidating real estate facilities. The Company recorded restructuring costs of $2.5 million within operating expense related to the exit costs of non-cancellable leases and workforce reduction costs excluding the impact of stock based compensation expense reversals associated with employee terminations resulting from the restructure. Accrued restructuring expenses were approximately $0 and $7,000 at December 31, 2015 and 2014, respectively. The Company paid approximately $120,000 of restructuring expenses associated with exit costs of the Chief Technology Officer in 2014, and $1.8 million of the restructuring expenses in severance and related employee exit costs to its former Chief Executive Officer and Chief Financial Officer during 2013. Retirement Plan The Company maintains the MeetMe, Inc. 401(k) Retirement Plan (the “Plan”), which is a savings and investment plan intended to be qualified under Section 401(a) of the IRS. The Plan covers the majority of the employees of the Company. In January 2014, the Company began providing company match contributions to the plan, based on a participant’s contribution. The Company’s 401(k) match expense totaled $379,000 and $299,000 for the years ended December 31, 2015 and 2014. The expense is included in sales and marketing, product development, and general and administrative expenses in the consolidated statements of operations. |
Note 8 - Stockholder's Equity
Note 8 - Stockholder's Equity | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 8—Stockholder’s Equity Preferred Stock The Board of Directors may, without further action by the stockholders, issue a series of Preferred Stock and fix the rights and preferences of those shares, including the dividend rights, dividend rates, conversion rights, exchange rights, voting rights, terms of redemption, redemption price or prices, liquidation preferences, the number of shares constituting any series and the designation of such series. In November 2011, the Company sold 1,000,000 shares of Series A-1 Preferred Stock (“Series A-1”) to Mexicans & Americans Trading Together, Inc. (“MATT Inc.”) for $5,000,000. MATT Inc. was an existing stockholder of the Company. The Series A-1 shares were convertible, at MATT Inc.’s option, into 1,479,949 shares of the Company’s common stock, at a purchase price per share of approximately $3.38, and have voting rights on a converted basis. The holders of the Series A-1 did not have any change of control or liquidation preferences. In December 2015, MATT Inc. converted all of its outstanding Series A-1 shares into 1,479,949 shares of the Company’s common stock. Common Stock The total number of shares of common stock, $0.001 par value, that the Company is authorized to issue is 100,000,000. The Company issued 231,900 shares and 38,834 shares of common stock in connection with the exercises of stock options during the years ended December 31, 2015 and 2014. The Company issued 557,603 shares and 556,475 shares of common stock in connection with the vesting of restricted stock awards during the years ended December 31, 2015 and 2014. There were no warrants exercised in the year ended December 31, 2015. During 2014, the Company issued 89,230 common shares in connection with the exercise of warrants (see Note 9). Stock-Based Compensation The fair values of share-based payments are estimated on the date of grant using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of the Company’s common stock. The risk-free rate is based on the U.S. Treasury yield curve in effect over the expected term at the time of grant. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. During 2015, 2014 and 2013, the Company continued to use the simplified method to determine the expected option term since the Company’s stock option exercise experience does not provide a reasonable basis upon which to estimate the expected option term. The Company began granting restricted stock awards (“RSAs”) to its employees in April 2013. The cost of the RSAs is determined using the fair value of the Company’s common stock on the date of grant. Stock-based compensation expense for RSAs is amortized on a straight-line basis over the requisite service period. RSAs generally vest over a three-year period with 33% vesting at the end of one year and the remaining vesting annually thereafter. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. Stock-based compensation expense includes incremental stock-based compensation expense and is allocated on the consolidated statement of operations and comprehensive income (loss) as follows: For the Years Ended December 31, 2015 2014 2013 Sales and marketing $ 309,708 $ 440,284 $ 392,020 Product development and content 1,197,696 2,033,009 1,755,712 General and administrative 1,409,023 1,336,916 1,610,311 Total stock-based compensation for vesting of options and RSA's 2,916,427 3,810,209 3,758,043 Warrant modification 425,538 — — Total stock-based compensation expense $ 3,341,965 $ 3,810,209 $ 3,758,043 As of December 31, 2015, there was approximately $4.6 million of total unrecognized compensation cost relating to stock options and restricted stock awards, which is expected to be recognized over a period of approximately two years. Stock Option Plans 2012 Omnibus Incentive Plan On August 11, 2014, the Company’s stockholders approved the Amended and Restated 2012 Omnibus Incentive Plan (the “2012 Plan”), providing for the issuance of up to 8,700,000 shares of the Company’s common stock, including approximately 2,100,000 shares previously approved by the Company’s stockholders under the Company’s Amended and Restated 2006 Stock Incentive Plan (the “2006 Stock Plan”), less one share of common stock for every one share of common stock that was subject to an option or other award granted after December 31, 2011 under the 2006 Stock Plan, plus an additional number of shares of common stock equal to the number of shares previously granted under the 2006 Stock Plan that either terminate, expire, or are forfeited after December 31, 2011. As of December 31, 2015, there were approximately 3.6 million shares of common stock available for grant. A summary of stock option activity under the 2012 Plan during the year ended December 31, 2015 is as follows: Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 1,951,957 $ 2.25 Granted 1,692,500 1.79 Exercised (190,733 ) 1.79 Forfeited or expired (481,346 ) 2.00 Outstanding at December 31, 2015 2,972,378 $ 2.06 8.0 $ 4,523,214 Exercisable at December 31, 2015 1,239,363 $ 2.27 8.6 $ 1,624,472 The weighted-average grant-date fair value of stock options granted to employees in the years ended December 31, 2015, 2014 and 2013 was $1.79, $2.67 and $1.88 per share, respectively. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the years ended December 31, 2015, 2014 and 2013: For the Years Ended December 31, 2015 2014 2013 Risk-free interest rate 1.37 % 1.62 % 1.25 % Expected term (in years) 5.9 5.9 5.8 Expected dividend yield — — — Expected volatility 87 % 82 % 85 % Restricted Stock Awards The Company granted 1,477,350 RSAs during the year ended December 31, 2015. Shares are forfeited if not vested within three years from the date of grant, and vest in three equal annual increments. The Company recorded stock-based compensation expense related to RSAs of approximately $1.5 million, $1.1 million and $509,000 for the years ended December 31, 2015, 2014 and 2013, respectively. A summary of RSA activity under the 2012 Plan during the year ended December 31, 2015 is as follows: RSA's Number of RSAs Weighted- Average Stock Price Outstanding at December 31, 2014 1,418,227 $ 2.07 Granted 1,477,350 1.70 Exercised (557,603 ) 2.03 Forfeited or expired (265,017 ) 1.93 Outstanding at December 31, 2015 2,072,957 $ 1.84 Unvested at December 31, 2015 2,072,957 $ 1.84 2006 Stock Incentive Plan On June 27, 2007, the Company’s stockholders approved the 2006 Stock Plan, providing for the issuance of up to 3,700,000 shares of common stock plus an additional number of shares of common stock equal to the number of shares previously granted under the 1998 Stock Option Plan that either terminate, expire, or lapse after the date of the Board of Directors’ approval of the 2006 Stock Plan. In 2008, the Company’s Board of Directors and stockholders approved an amendment to the 2006 Stock Plan to authorize the issuance of an additional 2,000,000 shares of common stock. In November 2009, the Company’s Board of Directors approved an amendment to the 2006 Stock Plan to authorize the issuance of an additional 2,000,000 shares of common stock. On June 4, 2010, the Company’s stockholders ratified this amendment to the 2006 Stock Plan. In June 2011 and November 2011, the Company’s Board of Directors and stockholders approved amendments to the 2006 Stock Plan to authorize the issuances of 4,000,000 additional shares of common stock. Pursuant to the terms of the 2006 Stock Plan, eligible individuals could be granted incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, or stock grant awards. A summary of stock option activity under the 2006 Stock Plan during the year ended December 31, 2015 is as follows: Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 7,223,107 $ 2.30 Granted — — Exercised (41,167 ) 1.01 Forfeited or expired (337,639 ) 4.25 Outstanding at December 31, 2015 6,844,301 $ 2.22 3.5 $ 10,754,741 Exercisable at December 31, 2015 6,800,122 $ 2.21 3.5 $ 10,754,741 The total intrinsic values of options exercised during the years ended December 31, 2015, 2014 and 2013 were approximately $1.5 million, $1.1 million and $102,000, respectively. Non-Plan Options The Board of Directors has approved and our stockholders have ratified the issuance of stock options outside of our stock incentive plans. A summary of Non-Plan option activity during the year ended December 31, 2015 is as follows: Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 443,038 $ 1.34 Granted — — Exercised — — Forfeited or expired — — Outstanding at December 31, 2015 443,038 $ 1.34 3.9 $ 992,405 Exercisable at December 31, 2015 443,038 $ 1.34 3.9 $ 992,405 |
Note 9 - Warrant Transactions
Note 9 - Warrant Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Warrants [Text Block] | Note 9—Warrant Transactions Below is a summary of the number of shares issuable upon exercise of outstanding warrants and the terms and accounting treatment for the outstanding warrants: Warrants as of December 31, Weighted- average exercise Balance Sheet Classification as of December 31, 2015 2014 2013 price Expiration 2015 2014 2013 Venture Lending & Leasing VI, Inc. 170,919 170,919 255,102 $ 1.96 2/28/2024 Liability Liability Liability Venture Lending & Leasing VII, Inc. 170,919 170,919 255,102 $ 1.96 2/28/2024 Liability Liability Liability Allen, F. Stephen Series 2 450,000 500,000 500,000 $ 3.55 6/21/2017 Equity Equity Equity Allen, F. Stephen Series 3 500,000 500,000 500,000 $ 3.55 6/21/2017 Equity Equity Equity Stearns, Robert 200,000 200,000 200,000 $ 3.55 3/21/2016 Equity Equity Equity MATT Series 1 270,576 270,576 401,486 $ 2.75 9/19/2016 Equity Equity Equity MATT Series 2 1,000,000 1,000,000 1,000,000 $ 2.75 9/19/2016 Equity Equity Equity All warrants 2,762,414 2,812,414 3,111,690 Venture Lending & Leasing VI and VII Inc. In connection with the Term loan that took place in April 2013, the Company issued warrants to the lender with an initial aggregate exercise value of $800,000, which increased by $200,000 with the first tranche and which would have increased by $300,000 with each of the second and third tranche draw down of the loan had the Company drawn down on them (see Note 6). Each warrant was immediately exercisable and expires ten years from the original date of issuance. The warrants to purchase shares of the Company's common stock have an exercise price equal to the estimated fair value of the underlying instrument as of the initial date such warrants were issued. Each warrant is exercisable on either a physical settlement or net share settlement basis from the date of issuance. The warrant agreement contains a provision requiring an adjustment to the number of shares in the event the Company issues common stock, or securities convertible into or exercisable for common stock, at a price per share lower than the warrant exercise price. The Company concluded the anti-dilution feature required the warrants to be classified as liabilities under ASC Topic 815, Derivatives and Hedging—Contracts in Entity's Own Equity On March 10, 2014, Venture Lending & Leasing VI and VII exercised 168,366 warrants with an exercise price of $1.96 per share. The warrants were net settled resulting in the Company issuing 89,230 shares of common stock. On December 31, 2015, the Company remeasured the fair value of the outstanding warrants, using current assumptions, resulting in an increase in fair value of $616,607, which was recorded in other income (expense) in the consolidated statements of operations and comprehensive income (loss). The Company will continue to re-measure the fair value of the liability associated with the warrants at the end of each reporting period until the earlier of the exercise or the expiration of the applicable warrants. The fair value of the warrants on the date of issuance and on each re-measurement date for those warrants are classified as liabilities, and the fair value is estimated using the Black-Scholes option pricing model. This method of valuation involves using inputs such as the fair value of the Company's common stock, stock price volatility, contractual term of the warrants, risk-free interest rates, and dividend yields. Due to the nature of these inputs and the valuation techniques utilized, the valuation of the warrants are considered a Level 3 measurement (Note 2). The fair value of the warrants was calculated using the Black-Scholes option-pricing model with the following assumptions as of December 31, 2015: Risk-free interest rate: 2.27 % Expected term (years): 8.17 Expected dividend yield: — Expected volatility: 82.96 % Scott, Richard L Series 2 and 3 In March 2006, the Company issued warrants to purchase 1,000,000 shares of common stock each at exercise prices of $4.00, and $7.00 as compensation for certain strategic initiatives. On January 25, 2008, the Company and RSI entered into a Note Purchase Agreement (the “RSI Agreement”). Pursuant to the terms of the RSI Agreement the exercise price of RSI’s outstanding warrants were reduced to $2.75 per share. On March 5, 2013, the Company and RSI entered into an agreement pursuant to which RSI exercised its warrants. At December 31, 2013, the RSI Warrants have been fully exercised and are of no further force or effect. Allen, F. Stephen Series 2 and 3 In March 2006, the Company issued warrants to purchase 1,000,000 shares of common stock each at exercise prices of $4.00, and $7.00 as compensation for certain strategic initiatives. On February 19, 2010, the Company reduced the exercise price of the remaining 1,000,000 outstanding warrants to $3.55 per share. On December 22, 2015, in conjunction with a litigation settlement, the Company repurchased 50,000 Series 2 warrants and extended the warrant expiration date to June 21, 2017. See Note 7 for additional information on the settlement. The fair value of the warrant modification was determined by comparing the fair value of the modified warrant with the fair value of the unmodified warrant on the modification date. As a result of this modification, an additional expense of approximately $426,000 was recorded in General and Administrative expense. The fair value of the modified warrants was calculated using the Black-Scholes option-pricing model with the following assumptions: Risk-free interest rate: 0.83 % Expected term (years): 1.5 Expected dividend yield: — Expected volatility: 60.42 % Stearns, Robert In March 2006, the Company issued warrants to purchase 200,000 shares of common stock at an exercise price of $3.55 per share as compensation to the Company’s then Chief Executive Officer. The awards of warrants to purchase shares of common stock are accounted for as equity instruments. The warrants are exercisable at any time through their respective expiration dates. The fair value at issuance was calculated using the Black-Scholes option-pricing model, and was charged to compensation expense. These warrants were still outstanding on December 31, 2015 and expire in March 2016. MATT Series 1 and 2 In October 2006, the Company issued two series of warrants to purchase 1,000,000 shares of common stock each at exercise prices of $12.50 and $15.00 per share to MATT in connection with the issuance of common stock. On January 25, 2008, the Company entered into a Note Purchase Agreement (the “MATT Agreement”) with MATT. Pursuant to the terms of the MATT Agreement the exercise price of MATT’s outstanding warrants was reduced to $2.75 per share. The warrant re-pricing resulted in a discount on the MATT Note of $1,341,692, to be amortized over the life of the MATT Note. These warrants expire in September 2016. The fair value of the warrant re-pricing was determined by comparing the fair value of the modified warrant with the fair value of the unmodified warrant on the modification date and recording any excess as a discount on the note. No such discount was recorded as the repriced warrants value decreased. On March 5, 2013, MATT exercised warrants to purchase 2,147 shares of common stock using the amount by which the outstanding principal and accrued interest under the MATT Note exceeded the amount of the Receivable (see Note 6). MATT agreed to exercise or forfeit the MATT warrants with an aggregate exercise price of $2,000,000 over an eleven-month period beginning in March 2013. For the year ended December 31, 2013, 400,002 warrants were forfeited. At December 31, 2014, MATT Warrants totaling 1,270,576 were outstanding. The fair value of the modified warrants was calculated using the Black-Scholes option-pricing model with the following assumptions: Risk-free interest rate: 2.81 % Expected term (years): 8.73 Expected dividend yield: — Expected volatility: 100.75 % A summary of warrant activity for the year ended December 31, 2015 is as follows: Warrants Number of warrants Weighted-average exercise price Outstanding at December 31, 2014 2,812,414 $ 3.00 Granted — — Exercised — — Forfeited or expired (50,000 ) $ 3.55 Outstanding at December 31, 2015 2,762,414 $ 2.99 Exercisable at December 31, 2015 2,762,414 $ 2.99 |
Note 10 - Income Taxes
Note 10 - Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 10—Income Taxes The Company provides for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company's income before taxes was $6,245,929 for the year ended December 31, 2015. The Company’s loss before taxes was $3,962,165 and $10,898,325 for the years ended December 31, 2014 and 2013, respectively, and was primarily generated in the U.S. For the year ended December 31, 2015, the Company recorded income tax expense of $276,000, primarily due to the limitation on the utilization of net operating losses to offset Alternative Minimum Taxable (“AMT”) income which creates an AMT liability for federal tax purposes. No current or deferred income tax expense was recorded for the years ended December 31, 2014 or 2013. Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company's deferred tax assets are comprised of the following: December 31, 2015 December 31, 2014 Net operating loss carryforward $ 22,514,000 $ 47,846,000 Property and equipment (163,000 ) (469,000 ) Stock options and warrants 9,419,000 9,229,000 Other 1,685,000 1,031,000 Total deferred tax assets 33,455,000 57,637,000 Valuation allowance (33,455,000 ) (57,637,000 ) Net deferred tax assets $ — $ — The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company's history of operating losses, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2015 and 2014. A reconciliation of income tax expense computed at the statutory federal income tax rate of 34% to income taxes as reflected in the financial statements is as follows: For the Years Ended December 31, 2015 2014 2013 U.S. federal income tax at statutory rate $ 2,124,000 $ (1,347,000 ) $ (3,689,000 ) Nondeductible expenses 34,000 38,000 54,000 Foreign subsidiary loss with no tax benefit 36,000 123,000 — Change in valuation allowance (2,169,000 ) 1,263,000 3,708,000 State tax benefit, net of federal provision (benefit) 21,000 — 2,000 Foreign subsidiary loss — — (22,000 ) Fair market value adjustment for warrants 210,000 (77,000 ) — Other 20,000 — (53,000 ) Income Tax Expense $ 276,000 $ — $ — As of December 31, 2015 and 2014, the Company had U.S. federal net operating loss carryforwards of $61 million and $135 million, respectively, which may be available to offset future income tax liabilities and expire at various dates through 2033. The Company has completed an Internal Revenue Code Section 382 study to determine annual limitations on the usability of its net operating loss carryforwards due to historical changes in ownership. That study concluded that $61 million of such accumulated net operating loss carryforwards, subject to annual limitation, should be available to offset future taxable income during the carryover period which extends through 2033. If unused, these net operating loss carryforwards will expire at various dates through 2033. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company's statements of operations and comprehensive income (loss) for the years ended December 31, 2015, 2014 and 2013. The Company files income tax returns in the United States, and various state jurisdictions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2011 through December 31, 2015. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period. |
Note 11 - Transactions with Aff
Note 11 - Transactions with Affiliates | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 11—Transactions with Affiliates Prior to August 11, 2014, Alonso Ancira served on the Company’s Board of Directors as a non-employee director. Mr. Ancira also serves on the Board of Directors of Mexicans & Americans Thinking Together Foundation, Inc. (the "Organization"), is the Chairman of the Board of Directors of MATT Inc., a principal stockholder of the Company and is the Chairman of the Board of Directors of Altos Hornos de Mexico, S.A.B. de C.V. (“AHMSA”), which owns MATT Inc. The Company has participated in several significant transactions with MATT Inc., the Organization and AHMSA. See Note 6–Long-Term Debt, Note 8–Stockholder’s Equity, and Note 9–Warrant Transactions. John Abbott, the Company's former Chief Executive Officer and Chairman of the Board, serves as a financial advisor to AHMSA. In connection with providing these services, AHMSA paid Mr. Abbott $1,000,000, $180,000 and $360,000 in 2015, 2014 and 2013, respectively. |
Note 12 - Quarterly Results of
Note 12 - Quarterly Results of Operations Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Quarterly Financial Information [Text Block] | Note 12 – Quarterly Results of Operations Data (Unaudited) The following tables set forth our unaudited quarterly consolidated statements of operations data for each of the eight quarters in the period ended December 31, 2015. In the opinion of management, the financial information reflects all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of this data. Three Months Ended, 2015 2014 December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, Revenues $ 19,879,839 $ 14,308,080 $ 11,086,878 $ 11,628,976 $ 13,021,878 $ 11,604,724 $ 10,687,330 $ 9,503,504 Operating Costs and Expenses: Sales and marketing 2,826,197 1,483,252 1,094,068 1,215,320 1,666,406 1,516,547 1,935,678 2,159,088 Product development and content 6,036,479 6,175,566 6,083,455 6,319,804 7,589,911 7,021,353 6,855,739 6,857,440 General and administrative 3,337,599 7,802,367 1,774,991 1,619,904 1,962,026 1,932,161 2,194,138 1,929,645 Depreciation and amortization 760,200 762,830 801,260 815,915 922,853 1,135,263 1,079,932 1,085,459 Restructuring costs — — — — — — — 120,202 Total Operating Costs and Expenses 12,960,475 16,224,015 9,753,774 9,970,943 12,141,196 11,605,324 12,065,487 12,151,834 Income (Loss) from Operations 6,919,364 (1,915,935 ) 1,333,104 1,658,033 880,682 (600 ) (1,378,157 ) (2,648,330 ) Other Income (Expense): Interest income 5,304 5,303 5,244 5,186 5,958 2,679 549 1,166 Interest expense (84,724 ) (93,383 ) (122,989 ) (158,866 ) (183,754 ) (206,980 ) (241,643 ) (420,243 ) Change in warrant liability (622,819 ) 45,532 56,408 (95,728 ) 144,037 256,932 181,493 (355,954 ) Loss on cumulative foreign currency translation adjustment 5,639 (78,987 ) 11,614 (794,704 ) — — — — Gain on sale of asset — — — 163,333 — — — — Total Other Expense (696,600 ) (121,535 ) (49,723 ) (880,779 ) (33,759 ) 52,631 (59,601 ) (775,031 ) Income (Loss) before Income Taxes 6,222,764 (2,037,470 ) 1,283,381 777,254 846,923 52,031 (1,437,758 ) (3,423,361 ) Income taxes (149,500 ) 1,849 (73,450 ) (55,200 ) — — — — Net Income (Loss) $ 6,073,264 $ (2,035,621 ) $ 1,209,931 $ 722,054 $ 846,923 $ 52,031 $ (1,437,758 ) $ (3,423,361 ) Other comprehensive income (loss): Foreign currency translation adjustment — — — — (65,408 ) (74,389 ) 12,573 27,701 Comprehensive income (loss) $ 6,073,264 $ (2,035,621 ) $ 1,209,931 $ 722,054 $ 781,515 $ (22,358 ) $ (1,425,185 ) $ (3,395,660 ) Basic and diluted net income (loss) per common stockholders: Basic net income (loss) per common stockholders $ 0.13 $ (0.04 ) $ 0.03 $ 0.02 $ 0.02 $ (0.00 ) $ (0.04 ) $ (0.09 ) Diluted net income (loss) per common stockholders $ 0.12 $ (0.04 ) $ 0.02 $ 0.01 $ 0.02 $ (0.00 ) $ (0.04 ) $ (0.09 ) Weighted average shares outstanding: Basic 46,090,961 45,470,686 45,191,563 44,910,034 44,879,982 43,092,803 38,798,706 38,499,171 Diluted 51,735,136 45,470,686 49,022,622 48,246,763 48,181,596 43,092,803 38,798,706 38,499,171 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of MeetMe and its wholly-owned subsidiaries, Quepasa.com de Mexico, Quepasa Serviços em Solucoes de Publicidade E Tecnologia Ltda (inactive) and MeetMe Online S/S Ltda. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition, accounts receivable valuation, the fair value of financial instruments, the valuation of long-lived assets, valuation of deferred tax assets, income taxes, contingencies, goodwill and intangible assets, and stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. The Company’s estimates often are based on complex judgments, probabilities and assumptions that it believes to be reasonable but that are inherently uncertain and unpredictable. For any given individual estimate or assumption made by the Company, there may also be other estimates or assumptions that are reasonable. The Company regularly evaluates its estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause it to change those estimates and assumptions. Market conditions, such as illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency rates and economic downturn, can increase the uncertainty already inherent in its estimates and assumptions. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in the Company’s consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under the relevant accounting standard. It is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. The Company is also subject to other risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. The Company earns revenue from the display of advertisements on its mobile apps and website, primarily based on a cost per thousand (“CPM”) model. The Company recognizes revenue in accordance with ASC 605, “Revenue Recognition, Agent Considerations” During the years ended December 31, 2015, 2014 and 2013, the Company had transactions with several partners that qualify for principal agent considerations. The Company recognizes revenue net of amounts retained by third party entities, pursuant to revenue sharing agreements with advertising networks for advertising and with other partners for royalties on product sales. The Company considered two key factors when making its revenue recognition determinations: (1) whether the Company performed a service for a fee, similar to an agent or a broker and (2) whether the Company was involved in the determination of product or service specifications. The Company focused on the substance of the agreements and determined that net presentation was representationally faithful to the substance, as well as the form, of the agreements. The form of the agreements was such that the Company provided services in exchange for a fee. In addition, the Company has no latitude in establishing price, and the advertising agencies were solely responsible for determining pricing with third party advertisers. The Company determined only the fee for providing its services to advertising agencies. In instances in which the Company works directly with an advertiser, revenue is recognized on a gross basis. The Company is the primary obligor in arrangements made with direct advertisers, as there is no third party facilitating or managing the sales process. The Company is solely responsible for determining price, product or service specifications, and which advertisers to use. The Company assumes all credit risk in the sales arrangements made with direct advertisers. During the years ended December 31, 2015, 2014 and 2013, the Company’s revenue was generated from two principal sources: revenue earned from the sales of advertising on the Company’s mobile applications and website and revenue earned from in-app products. Advertising Revenue Advertising and custom sponsorship revenues consist primarily of advertising fees earned from the display of advertisements on the Company’s website and mobile applications. Revenue from advertising is generally recognized as advertisements are delivered. The Company recognizes advertising revenue from customers that are advertising networks on a net basis, while advertising revenues earned directly from advertisers are recognized on a gross basis. Approximately 85%, 78% and 69% of the Company’s revenue came from advertising during the years ended December 31, 2015, 2014 and 2013, respectively. In-App Purchases Revenue is earned from in-app purchase products sold to our mobile application and website users. The Company offers in-app products such as Credits. Users buy Credits to purchase the Company’s virtual products. These products put users in the spotlight, helping users to get more attention from the community in order to meet more people faster. Revenue from these virtual products is recognized over time. Credits can be purchased using PayPal on the website and iTunes and Google checkout on mobile applications. Platform users do not own the Credits but have a limited right to use the credits on virtual products offered for sale on the Company’s platform. Credits are non-refundable, the Company may change the purchase price of Credits at any time, and the Company reserves the right to stop issuing Credits in the future. The Company’s in-app products are not transferable, cannot be sold or exchanged outside our platform, are not redeemable for any sum of money, and can only be used on the Company’s platform. In-app products are recorded in deferred revenue when purchased and recognized as revenue when: (i) the credits are used by the customer; or (ii) the Company determines the likelihood of the credits being redeemed by the customer is remote (breakage) and there is not a legal obligation to remit the unredeemed credits to the relevant jurisdiction. The determination of the breakage rate is based upon Company-specific historical redemption patterns. Breakage is recognized in revenue as the credits are used on a pro rata basis over a three month period (life of the user) beginning at the date of the Credits sale and is included in revenue in the consolidated statement of operations and comprehensive income (loss). Breakage recognized during the years ended December 31, 2015, 2014 and 2013 was $845,000, $910,000 and $625,000, respectively. For “MeetMe+” and other subscription based products, the Company recognizes revenue over the term of the subscription. The Company also earns revenue from advertisement products from currency engagement actions (i.e. sponsored engagement advertisements) by users on all of the Company’s platforms, including cost-per-action (“CPA”) currency incented promotions and sales on its proprietary cross-platform currency monetization product, “Social Theater.” The Company controls and develops the Social Theater product and CPA promotions and acts as a user’s principal in these transactions and recognizes the related revenue on a gross basis when collections are reasonably assured and upon delivery of the Credits to the user’s account. When a user performs an action, the user earns Credits and the Company earns product revenue from the advertiser. Social Theater is a product that allows the Company to offer advertisers a way to leverage the Facebook platform through guaranteed actions by Facebook’s user base. Social Theater is also hosted on the Company’s platform. Typical guaranteed actions available to advertisers are video views, fan page growth, quizzes and surveys. Social Theater revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectability is reasonably assured, and the service has been rendered. The Social Theater prices are both fixed and determinable based on the contract with the advertiser. The user completes an action and the electronic record of the transaction triggers the revenue recognition. The collection of the Social Theater revenue is reasonably assured by contractual obligation and historical payment performance. The delivery of virtual currency from the hosting platform to a user evidences the completion of the action required by the customer that the service has been rendered for Social Theater revenue recognition. Beanstock Media Inc. Web Agreement On September 25, 2013, the Company entered into a Media Publisher Agreement (the “Web Agreement”) with Beanstock Media, Inc. (“Beanstock”). The Web Agreement was effective from September 23, 2013 until June 2, 2015 when the Company terminated the Web Agreement as a result of non-payment by Beanstock of amounts owed. Pursuant to the Web Agreement, Beanstock had the exclusive right and obligation to fill all of the Company’s remnant desktop in-page display advertising inventory on www.meetme.com (the “Site”), excluding, (i) any inventory sold to a third party under an insertion order that was campaign or advertiser specific, (ii) any inventory the Company reserved in existing and future agreements with third parties for barter transactions and as additional consideration as part of larger business development transactions, and (iii) any inventory reserved for premium advertising for the Site. The Company could have continued to place inventory outside of the Web Agreement in direct sales. Beanstock was obligated to pay for all advertising requests that the Company delivered, whether or not Beanstock filled them. For the United States, Beanstock was obligated to pay the Company specified CPM rates plus a percentage of revenue in excess of those rates; for the rest of the world, Beanstock was obligated to pay the Company 90% of its net ad revenue for the Site. The Company could terminate the Web Agreement at any time without charge or penalty by providing written notice to Beanstock. Either party could terminate the Web Agreement if the other party was in material breach of its obligations and did not cure such breach, or if the other party filed a petition for bankruptcy, became insolvent, made an assignment for the benefit of its creditors, or a receiver is appointed for such party or its business. For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $2,160,000, $9,800,000 and $3,800,000 under the terms of the Web Agreement, respectively. On June 2, 2015, the Company terminated the Web Agreement as a result of non-payment by Beanstock of amounts owed, and resumed managing its web advertising inventory in-house. In the third quarter of 2015, the Company determined that the approximately $1.3 million receivable in connection with the Web Agreement was deemed uncollectible and as a result the Company incurred a bad debt expense of the entire amount. Mobile Agreement On December 23, 2014, the Company entered into an Advertising Agreement with Beanstock (the “Mobile Agreement”). On June 2, 2015, the Company terminated the Mobile agreement with Beanstock as a result of non-payment by Beanstock of amounts owed. Pursuant to the Mobile Agreement, Beanstock had the right and obligation to fill substantially all of the Company’s advertising inventory on its MeetMe mobile app for iOS and Android, as well as the Site when accessed using a mobile device and as optimized for mobile devices (collectively, the “App”). The Mobile Agreement did not apply to interstitially placed advertisements, advertisements on versions of the App specific to the iPad and other Apple tablet devices, other mobile apps or in-app products or features on the App, including, without limitation, offer wall features and the Company’s Social Theater business. Under the Mobile Agreement, the Company began placing ad calls (not including prior test calls) with Beanstock on March 1, 2015 (the “Effective Date”). The Company could, on a basis substantially consistent with its advertising display logic (as set forth in the Mobile Agreement) (“Ad Logic”), (i) add additional sections or features to the App and provide them with ads, and (ii) change the locations and sizes of particular ad placements within the App; in any such case, all resulting ad placements would be subject to the Mobile Agreement. In addition, if the Company wished to increase the number, type, frequency or scope of placements in the Ad Logic, it would be required to first notify Beanstock and upon Beanstock’s written consent, such additional inventory would be added to the Ad Logic. If Beanstock withheld or denied said consent, then the additional inventory would remain outside of the scope of the Mobile Agreement and the Company could fill it otherwise. Beanstock was required to pay for all ad requests that the Company delivered whether or not Beanstock filled them. Beanstock was required to pay specified CPM rates depending on the type of ad; provided, however, that if more than a stated percentage of impressions originated outside of the United States and Canada, then Beanstock was required to pay the Company a percentage of Beanstock’s gross revenue relating to such international ad impressions in excess of that percentage. Beanstock was required to remit payments due to the Company within thirty days following the last day of each calendar month for that month regardless of advertiser campaign duration; provided, however, that if the balance owing under the Mobile Agreement exceeded a stated amount, then the Company could request Beanstock to accelerate payments so that the balance does not at any point exceed that amount, and Beanstock would be required do so within ten days and for so long as necessary to keep said balance under that amount. Beanstock assumed all risk with regards to collection of all applicable advertiser fees with respect to all of the advertising inventory and was not permitted to delay payment to the Company as a result of non-collection or delay of payment of fees by advertisers. Beanstock was not permitted to withhold or offset amounts owing the Mobile Agreement for any reason. The Company determined the number of ad calls that it would place under the Mobile Agreement. If Beanstock determined that number to be less than 90% of the Company’s number for any particular month and the parties could not resolve the discrepancy, then the ad call number for that month would be 90% of the number that the Company originally determined. Beanstock agreed to comply with the Company’s advertising editorial guidelines as in effect from time to time. The Company could terminate the Mobile Agreement upon written notice (i) from the date thereof to the sixtieth day after the Effective Date, or (ii) if, in the Company’s sole discretion, the placement or running of ads on the App caused a diminution in user experience, including without limitation with respect to the crash rate. In addition, the Mobile Agreement could be terminated upon written notice by (A) either party if the other party (i) was in material breach of its obligations and that party failed to cure said breach within ten days after receipt of written notice thereof from the non-breaching party, or (ii) filed a petition for bankruptcy, became insolvent, made an assignment for the benefit of its creditors, or a receiver was appointed for such other party or its business, or (B) the Company if Beanstock failed to pay any amount thereunder when due (any of the events in this sentence, “Cause”). If the Company terminated the Agreement for Cause or Beanstock terminated it wrongfully, then Beanstock would be required to pay the Company a stated amount as liquidated damages. Effective March 26, 2015, the Company amended the Mobile Agreement with Beanstock (the “Amendment”). Pursuant to the Amendment, the Company provided certain price reductions on its invoices to Beanstock for the months of March, 2015 and April, 2015, contingent upon certain events to which Beanstock was required to certify. The Amendment provided that the Company would implement certain changes to the Ad Logic for the App by May 1, 2015 as well as make certain product changes with respect to the App by June 1, 2015. The Amendment increased the amount of liquidated damages payable by Beanstock under certain circumstances and provided the Company with a right to terminate the Mobile Agreement for convenience until September 1, 2015, and after such date with either sufficient advance notice or by paying a stated termination fee. On May 6, 2015, the Company entered into a second amendment and joinder to the Mobile Agreement (the “Second Amendment”). Pursuant to the Second Amendment, Beanstock would pay in full (i) the invoice dated March 31, 2015, under the Mobile Agreement (a portion of which remained overdue) on or before June 30, 2015 and (ii) all other amounts under the Mobile Agreement and the Web Agreement as they became due. In addition, Adaptive Medias, Inc. (“Adaptive”) joined as a party to the Mobile Agreement to guarantee Beanstock’s payment obligations under both the Mobile Agreement and the Web Agreement. If Beanstock failed to pay any amounts due under either the Mobile Agreement or the Web Agreement, Adaptive would immediately, upon demand, pay all such owed amounts in full. For the year ended December 31, 2015, the Company recognized approximately $5,200,000 under the terms of the Mobile Agreement. On June 2, 2015, the Company terminated the Mobile Agreement as a result of non-payment by Beanstock of amounts owed, and resumed managing its mobile advertising inventory in-house. In the third quarter of 2015, the Company determined that the approximately $4.4 million receivable in connection with the Mobile Agreement was deemed uncollectible and as a result the Company incurred a bad debt expense of the entire amount. As of December 31, 2015, the accounts receivable balance written-off under both agreements was $5.7 million. In addition, Beanstock owes the Company $4.0 million under the Mobile Agreement of liquidated damages that have not been recorded in the financial statements and are not included in the approximately $5.7 million bad debt write-off. Pinsight Media On October 31, 2013, the Company entered into an Advertising Agreement with Pinsight Media+, Inc. (“Pinsight”) (as amended, the “Pinsight Agreement”). The Pinsight Agreement was effective from October 31, 2013 through December 31, 2014, with a post-termination transition period that ended on March 1, 2015. Pursuant to the Pinsight Agreement, Pinsight had the right and obligation to fill all of the Company’s advertising inventory on the App. The Pinsight Agreement did not apply to other mobile apps or virtual currency features on the App, including without limitation offer wall features and the Company’s Social Theater business. Pinsight was obligated to pay for all ad requests that the Company delivered, whether or not Pinsight fills them. Pinsight paid specified CPM rates depending on the type of ad. The stated CPM rates for certain ads were subject to renegotiation under certain conditions; in such case, if the parties did not agree on a modified rate, then such ads would be excluded from the Agreement. Pinsight assumed all risk with regards to collection of all applicable advertiser fees with respect to all advertising inventory and was not permitted to delay payment to the Company as a result of non-collection or delay of payment by the advertisers. Pinsight was obligated to comply with the Company’s advertising editorial guidelines as in effect from time to time. For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $5,100,000, $19,824,000 and $695,000 in revenue under the terms of the Pinsight Agreement, respectively. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash and cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. |
Receivables, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit on a non-collateralized basis to both United States and international customers. The Company extends credit to customers in the normal course of business and maintains an allowance for doubtful accounts resulting from the inability or unwillingness of customers to make required payments. Management determines the allowance for doubtful accounts by evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. The Company prepares an analysis of its ability to collect outstanding receivables that provides a basis for an allowance estimate for doubtful accounts. Based on this evaluation, the Company maintains an allowance for potential credit losses and for potential discounts based on historical experience and other information available to management. Discounts historically represent less than 1% of the related revenues. The fees associated with display advertising are often based on “impressions,” which are created when the ad is viewed. The amount of impressions often differs between non-standardized tracking systems, resulting in discounts on some payments. Difference between ad serving platforms with respect to impressions is primarily due to lag time between serving of advertising and other technical differences. Balance at Beginning of Period Additions, Costs and Expenses Deductions, Write-Offs Balance at End of the Period Allowance For Doubtful Accounts: Year Ended December 31, 2015 $ 586,000 $ 181,398 $ 634,398 $ 133,000 Year Ended December 31, 2014 $ 495,000 $ 367,000 $ 276,000 $ 586,000 Year Ended December 31, 2013 $ 547,000 $ — $ 52,000 $ 495,000 |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable the net assets acquired. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company performs its annual impairment test in conjunction with preparing its fourth quarter financial results immediately following the end of the calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at a level of reporting referred to as a reporting unit. The Company has determined that there is only one reporting unit, MeetMe, Inc. The impairment model permits, and the Company utilizes, a two-step method for determining goodwill impairment. In the first step, the Company evaluates the recoverability of goodwill by estimating the fair value of the Company’s reporting unit using multiple techniques, including an income approach using a discounted cash flow model and a market approach. Based on an equal weighting of the results of these two approaches, a conclusion of fair value is estimated. The fair value is then compared to the carrying value of the Company’s reporting unit. If the fair value of a reporting unit is less than its carrying value, the Company performs a second step for that reporting unit to determine the amount of impairment loss, if any. The second step requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations. Any residual fair value is allocated to goodwill. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying amount of goodwill over its implied fair value. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible Assets Intangible assets consist of acquired trademarks, domain names, advertising customer relationships and mobile applications recorded at fair value. Amortization is recorded using the straight-line method over the estimated useful lives of the assets except for advertising customer relationships are amortized using the straight-line method over the average contract term. Years Trademarks 5 Domain names 5 Mobile Applications, purchased and internally developed 5 Advertising customer relationships 3 |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. The cost of improvements that extend the life of property and equipment are capitalized. All ordinary repair and maintenance costs are expensed as incurred. When capitalized assets are retired or sold, the cost and related accumulated depreciation or amortization is removed from the accounts, with any gain or loss reflected in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Years Software 2 to 3 Servers and computer equipment 3 to 5 Office furniture and equipment 5 to 10 Leasehold improvements are amortized using the straight-line method over the term of the individual lease. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets and Intangibles with Finite Lives Property and equipment and amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an analysis is necessitated by the occurrence of a triggering event, the Company compares the carrying amount of the asset with the estimated future undiscounted cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset with its estimated fair value. Such analyses necessarily involve significant judgments and estimations on the part of the Company. For the years ended December 31, 2015, 2014 and 2013, the Company determined that no impairment charge was necessary. |
Lease, Policy [Policy Text Block] | Lease Accounting The Company accounts for operating lease transactions by recording rent expense on a straight-line basis over the expected life of the lease, commencing on the date it gains possession of leased property. The Company includes tenant improvement allowances and rent holidays received from landlords and the effect of any rent escalation clauses as adjustments to straight-line rent expense over the expected life of the lease. Capital lease transactions are reflected as a liability at the inception of the lease based on the present value of the minimum lease payments or, if lower, the fair value of the property. Assets under capital leases are recorded in Property and Equipment, net on the consolidated balance sheets and depreciated in a manner similar to other Property and Equipment. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements The fair values of the Company’s financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The carrying amounts of the Company’s financial instruments of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and deferred revenue approximates fair value due to their short maturities. Amounts recorded for senior loans payable, net of discount, also approximate fair value because current interest rates available to the Company for debt with similar terms and maturities are substantially the same. Certain common stock warrants are carried at fair value as disclosed in Note 2. The Company has evaluated the estimated fair value of financial instruments using available market information and management's estimates. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency The functional currency of our foreign subsidiaries is the local currency. The financial statements of these subsidiaries are translated to U.S. dollars using period-end rates of exchange for assets and liabilities and average quarterly rates of exchange for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Net gains and losses resulting from foreign exchange transactions are included in other income (expense). The Company’s foreign operations were substantially liquidated in the first quarter of 2015. Due to our current reporting metrics, providing revenues from users attributed to the U.S. and revenues from users attributed to all other countries is impracticable. |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. The following table shows the computation of basic and diluted net income (loss) per share for the following: For the Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) $ 5,969,628 $ (3,962,165 ) $ (10,898,325 ) Denominator: Weighted-average shares outstanding 45,419,175 41,328,699 38,048,446 Effect of dilutive securities 4,116,651 — — Weighted-average diluted shares 49,535,826 41,328,699 38,048,446 Basic net income (loss) per share $ 0.13 $ (0.10 ) $ (0.29 ) Diluted net income (loss) per share $ 0.12 $ (0.10 ) $ (0.29 ) The following table summarizes the number of dilutive securities, which may dilute future earnings per share, outstanding for each of the periods presented, but not included in the calculation of diluted loss per share: For the Year Ended December 31, 2015 2014 2013 Stock options 8,052,962 9,618,102 9,138,131 Unvested restricted stock awards 184,954 1,418,227 1,361,750 Warrants 2,740,521 2,812,414 3,111,690 Convertible preferred stock — 1,479,949 1,479,949 Totals 10,978,437 15,328,692 15,091,520 |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Significant Customers and Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents and accounts receivable. The Company invests its excess cash in high-quality, liquid money market funds maintained by major U.S. banks and financial institutions. The Company has not experienced any losses on its cash equivalents. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Except with respect to the Beanstock write-offs described above, the Company has no history of significant losses from uncollectible accounts. During the years ended December 31, 2015 and 2014, three customers comprised approximately 41% and 66% of total revenues, respectively. Three customers comprised 52% and 66% of accounts receivable as of December 31, 2015, and 2014. During the year ended December 31, 2013, one customer, an advertising aggregator, comprised approximately 22% of total revenue and three customers comprised 37% of total accounts receivable. The Company does not expect its current or future credit risk exposure to have a significant impact on its operations. However, there can be no assurance that the Company’s business will not experience any adverse impact from credit risk in the future. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event that the Company determines that it will not be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the Company will make an adjustment to the valuation allowance, which will increase the provision for income taxes. The Company’s income tax returns are periodically audited by U.S. federal, state and local, and foreign tax authorities. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. In evaluating the tax benefits associated with the Company’s various tax filing positions, the Company records a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. A number of years may elapse before a particular matter, for which a liability has been established, is audited and effectively settled. The Company adjusts its liability for unrecognized tax benefits in the period in which it determines the issue is effectively settled with the tax authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available. |
Derivatives, Policy [Policy Text Block] | Derivatives All derivatives held by the Company are recognized in the consolidated balance sheets at fair value. The Company issued warrants on its own common stock in conjunction with the term loan discussed in Note 6. These warrants meet the definition of a derivative and are reflected as a warrant liability at fair value in the consolidated balance sheets. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Product Development and Content Costs Product development and content costs, including costs incurred in the classification and organization of listings within our websites, salaries, benefits, and stock-based compensation, utility charges, occupancy and support for our offsite technology infrastructure, bandwidth and content delivery fees, and development and maintenance costs, are charged to expense as incurred. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The fair value of share-based payments are estimated on the grant date using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. The Company has elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in stockholders’ equity during a period from non-owner sources. Comprehensive income (loss) consists of foreign currency translation adjustments which are added to net income (loss) to compute total comprehensive income (loss). |
Commitments and Contingencies, Policy [Policy Text Block] | Contingencies The Company accrues for contingent obligations, including legal costs and restructuring costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known the Company reassess their position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company's chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company's operations and manage its business as one operating segment. All long-lived assets of the Company reside in the U.S. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Issued Accounting Standards In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers In July 2015, the FASB issued ASU 2015-14, which delayed the effective date of ASU 2014-09. As a result, this guidance will be effective 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, including interim reporting periods within that reporting period. The Company is currently evaluating the new guidance, and has not determined the impact this standard may have on the consolidated financial statements, nor decided upon the method of adoption. In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The adoption of ASU 2014-12 will not have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU 2015-03 , Interest – Imputation of Interest (Sub topic 835-30): Simplifying the P resentation of Debt Issuance Costs In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
Note 1 - Description of Busin20
Note 1 - Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Member] | |
Notes Tables | |
Schedule of Estimated Useful Lives [Table Text Block] | Years Trademarks 5 Domain names 5 Mobile Applications, purchased and internally developed 5 Advertising customer relationships 3 |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | Balance at Beginning of Period Additions, Costs and Expenses Deductions, Write-Offs Balance at End of the Period Allowance For Doubtful Accounts: Year Ended December 31, 2015 $ 586,000 $ 181,398 $ 634,398 $ 133,000 Year Ended December 31, 2014 $ 495,000 $ 367,000 $ 276,000 $ 586,000 Year Ended December 31, 2013 $ 547,000 $ — $ 52,000 $ 495,000 |
Schedule of Estimated Useful Lives [Table Text Block] | Years Software 2 to 3 Servers and computer equipment 3 to 5 Office furniture and equipment 5 to 10 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) $ 5,969,628 $ (3,962,165 ) $ (10,898,325 ) Denominator: Weighted-average shares outstanding 45,419,175 41,328,699 38,048,446 Effect of dilutive securities 4,116,651 — — Weighted-average diluted shares 49,535,826 41,328,699 38,048,446 Basic net income (loss) per share $ 0.13 $ (0.10 ) $ (0.29 ) Diluted net income (loss) per share $ 0.12 $ (0.10 ) $ (0.29 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | For the Year Ended December 31, 2015 2014 2013 Stock options 8,052,962 9,618,102 9,138,131 Unvested restricted stock awards 184,954 1,418,227 1,361,750 Warrants 2,740,521 2,812,414 3,111,690 Convertible preferred stock — 1,479,949 1,479,949 Totals 10,978,437 15,328,692 15,091,520 |
Note 2 - Fair Value Measureme21
Note 2 - Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Quoted Prices in Active Markets for Identical Items Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total December 31, 2015 Assets Money market $ 10,029,275 $ — $ — $ 10,029,275 Total assets $ 10,029,275 $ — $ — $ 10,029,275 Liabilities Warrants to purchase common stock $ — $ — $ 1,035,137 $ 1,035,137 Total Liabilities $ — $ — $ 1,035,137 $ 1,035,137 December 31, 2014 Assets Money market $ 10,014,243 $ — $ — $ 10,014,243 Total assets $ 10,014,243 $ — $ — $ 10,014,243 Liabilities Warrants to purchase common stock $ — $ — $ 418,530 $ 418,530 Total Liabilities $ — $ — $ 418,530 $ 418,530 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Convertible Common Stock Warrant Liability Balance as of December 31, 2013 $ 819,930 Settlements (174,892 ) Changes in estimated fair value (226,508 ) Balance as of December 31, 2014 $ 418,530 Changes in estimated fair value 616,607 Balance as of December 31, 2015 $ 1,035,137 |
Note 3 - Goodwill (Tables)
Note 3 - Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Goodwill [Table Text Block] | 2015 2014 2013 Balance at January 1 $ 70,646,036 $ 70,646,036 $ 70,646,036 Goodwill acquired during the period — — — Impairment charges during the period — — — Balance at December 31 $ 70,646,036 $ 70,646,036 $ 70,646,036 |
Note 4 - Intangible Assets (Tab
Note 4 - Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | December 31, 2015 December 31, 2014 December 31, 2013 Trademarks and domains names $ 5,849,994 $ 6,124,994 $ 6,124,994 Advertising customer relationships 1,165,000 1,165,000 1,165,000 Mobile applications 1,725,000 1,725,000 1,725,000 8,739,994 9,014,994 9,014,994 Less accumulated amortization (7,461,496 ) (6,120,664 ) (4,227,053 ) Intangible assets - net $ 1,278,498 $ 2,894,330 $ 4,787,941 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Year ending December 31, 2016 $ 1,278,498 Total $ 1,278,498 |
Note 5 - Property and Equipme24
Note 5 - Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | December 31, 2015 December 31, 2014 Servers, computer equipment and software $ 9,105,086 $ 8,221,009 Office furniture and equipment 57,359 62,447 Leasehold improvements 369,137 378,389 9,531,582 8,661,845 Less accumulated depreciation/amortization (6,921,275 ) (6,202,948 ) Property and equipment—net $ 2,610,307 $ 2,458,897 |
Note 6 - Long-Term Debt (Tables
Note 6 - Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | December 31, 2015 December 31, 2014 Senior Loans Payable: Term Loan $ — $ 2,809,806 Less: unamortized discount — (184,868 ) Total long-term debt, net — 2,624,938 Less current portion — (2,068,326 ) Total long-term debt, less current portion, net $ — $ 556,612 |
Note 7 - Commitments and Cont26
Note 7 - Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Capital and Operating Leases [Table Text Block] | Capital Leases Operating Leases 2016 $ 385,503 $ 1,644,774 2017 225,879 1,207,702 2018 — 42,240 Total minimum lease payments $ 611,382 $ 2,894,716 Less: Amount representing interest (23,966 ) Total present value of minimum payments 587,416 Less: Current portion of such obligations 366,114 Long-term capital lease obligations $ 221,302 |
Note 8 - Stockholder's Equity (
Note 8 - Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 Sales and marketing $ 309,708 $ 440,284 $ 392,020 Product development and content 1,197,696 2,033,009 1,755,712 General and administrative 1,409,023 1,336,916 1,610,311 Total stock-based compensation for vesting of options and RSA's 2,916,427 3,810,209 3,758,043 Warrant modification 425,538 — — Total stock-based compensation expense $ 3,341,965 $ 3,810,209 $ 3,758,043 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 1,951,957 $ 2.25 Granted 1,692,500 1.79 Exercised (190,733 ) 1.79 Forfeited or expired (481,346 ) 2.00 Outstanding at December 31, 2015 2,972,378 $ 2.06 8.0 $ 4,523,214 Exercisable at December 31, 2015 1,239,363 $ 2.27 8.6 $ 1,624,472 Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 7,223,107 $ 2.30 Granted — — Exercised (41,167 ) 1.01 Forfeited or expired (337,639 ) 4.25 Outstanding at December 31, 2015 6,844,301 $ 2.22 3.5 $ 10,754,741 Exercisable at December 31, 2015 6,800,122 $ 2.21 3.5 $ 10,754,741 Options Number of Stock Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2014 443,038 $ 1.34 Granted — — Exercised — — Forfeited or expired — — Outstanding at December 31, 2015 443,038 $ 1.34 3.9 $ 992,405 Exercisable at December 31, 2015 443,038 $ 1.34 3.9 $ 992,405 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 Risk-free interest rate 1.37 % 1.62 % 1.25 % Expected term (in years) 5.9 5.9 5.8 Expected dividend yield — — — Expected volatility 87 % 82 % 85 % |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | RSA's Number of RSAs Weighted- Average Stock Price Outstanding at December 31, 2014 1,418,227 $ 2.07 Granted 1,477,350 1.70 Exercised (557,603 ) 2.03 Forfeited or expired (265,017 ) 1.93 Outstanding at December 31, 2015 2,072,957 $ 1.84 Unvested at December 31, 2015 2,072,957 $ 1.84 |
Note 9 - Warrant Transactions (
Note 9 - Warrant Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Warrant Summary [Table Text Block] | Warrants as of December 31, Weighted- average exercise Balance Sheet Classification as of December 31, 2015 2014 2013 price Expiration 2015 2014 2013 Venture Lending & Leasing VI, Inc. 170,919 170,919 255,102 $ 1.96 2/28/2024 Liability Liability Liability Venture Lending & Leasing VII, Inc. 170,919 170,919 255,102 $ 1.96 2/28/2024 Liability Liability Liability Allen, F. Stephen Series 2 450,000 500,000 500,000 $ 3.55 6/21/2017 Equity Equity Equity Allen, F. Stephen Series 3 500,000 500,000 500,000 $ 3.55 6/21/2017 Equity Equity Equity Stearns, Robert 200,000 200,000 200,000 $ 3.55 3/21/2016 Equity Equity Equity MATT Series 1 270,576 270,576 401,486 $ 2.75 9/19/2016 Equity Equity Equity MATT Series 2 1,000,000 1,000,000 1,000,000 $ 2.75 9/19/2016 Equity Equity Equity All warrants 2,762,414 2,812,414 3,111,690 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | Risk-free interest rate: 2.27 % Expected term (years): 8.17 Expected dividend yield: — Expected volatility: 82.96 % Risk-free interest rate: 0.83 % Expected term (years): 1.5 Expected dividend yield: — Expected volatility: 60.42 % Risk-free interest rate: 2.81 % Expected term (years): 8.73 Expected dividend yield: — Expected volatility: 100.75 % |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Warrants Number of warrants Weighted-average exercise price Outstanding at December 31, 2014 2,812,414 $ 3.00 Granted — — Exercised — — Forfeited or expired (50,000 ) $ 3.55 Outstanding at December 31, 2015 2,762,414 $ 2.99 Exercisable at December 31, 2015 2,762,414 $ 2.99 |
Note 10 - Income Taxes (Tables)
Note 10 - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | December 31, 2015 December 31, 2014 Net operating loss carryforward $ 22,514,000 $ 47,846,000 Property and equipment (163,000 ) (469,000 ) Stock options and warrants 9,419,000 9,229,000 Other 1,685,000 1,031,000 Total deferred tax assets 33,455,000 57,637,000 Valuation allowance (33,455,000 ) (57,637,000 ) Net deferred tax assets $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 U.S. federal income tax at statutory rate $ 2,124,000 $ (1,347,000 ) $ (3,689,000 ) Nondeductible expenses 34,000 38,000 54,000 Foreign subsidiary loss with no tax benefit 36,000 123,000 — Change in valuation allowance (2,169,000 ) 1,263,000 3,708,000 State tax benefit, net of federal provision (benefit) 21,000 — 2,000 Foreign subsidiary loss — — (22,000 ) Fair market value adjustment for warrants 210,000 (77,000 ) — Other 20,000 — (53,000 ) Income Tax Expense $ 276,000 $ — $ — |
Note 12 - Quarterly Results o30
Note 12 - Quarterly Results of Operations Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Quarterly Financial Information [Table Text Block] | Three Months Ended, 2015 2014 December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, Revenues $ 19,879,839 $ 14,308,080 $ 11,086,878 $ 11,628,976 $ 13,021,878 $ 11,604,724 $ 10,687,330 $ 9,503,504 Operating Costs and Expenses: Sales and marketing 2,826,197 1,483,252 1,094,068 1,215,320 1,666,406 1,516,547 1,935,678 2,159,088 Product development and content 6,036,479 6,175,566 6,083,455 6,319,804 7,589,911 7,021,353 6,855,739 6,857,440 General and administrative 3,337,599 7,802,367 1,774,991 1,619,904 1,962,026 1,932,161 2,194,138 1,929,645 Depreciation and amortization 760,200 762,830 801,260 815,915 922,853 1,135,263 1,079,932 1,085,459 Restructuring costs — — — — — — — 120,202 Total Operating Costs and Expenses 12,960,475 16,224,015 9,753,774 9,970,943 12,141,196 11,605,324 12,065,487 12,151,834 Income (Loss) from Operations 6,919,364 (1,915,935 ) 1,333,104 1,658,033 880,682 (600 ) (1,378,157 ) (2,648,330 ) Other Income (Expense): Interest income 5,304 5,303 5,244 5,186 5,958 2,679 549 1,166 Interest expense (84,724 ) (93,383 ) (122,989 ) (158,866 ) (183,754 ) (206,980 ) (241,643 ) (420,243 ) Change in warrant liability (622,819 ) 45,532 56,408 (95,728 ) 144,037 256,932 181,493 (355,954 ) Loss on cumulative foreign currency translation adjustment 5,639 (78,987 ) 11,614 (794,704 ) — — — — Gain on sale of asset — — — 163,333 — — — — Total Other Expense (696,600 ) (121,535 ) (49,723 ) (880,779 ) (33,759 ) 52,631 (59,601 ) (775,031 ) Income (Loss) before Income Taxes 6,222,764 (2,037,470 ) 1,283,381 777,254 846,923 52,031 (1,437,758 ) (3,423,361 ) Income taxes (149,500 ) 1,849 (73,450 ) (55,200 ) — — — — Net Income (Loss) $ 6,073,264 $ (2,035,621 ) $ 1,209,931 $ 722,054 $ 846,923 $ 52,031 $ (1,437,758 ) $ (3,423,361 ) Other comprehensive income (loss): Foreign currency translation adjustment — — — — (65,408 ) (74,389 ) 12,573 27,701 Comprehensive income (loss) $ 6,073,264 $ (2,035,621 ) $ 1,209,931 $ 722,054 $ 781,515 $ (22,358 ) $ (1,425,185 ) $ (3,395,660 ) Basic and diluted net income (loss) per common stockholders: Basic net income (loss) per common stockholders $ 0.13 $ (0.04 ) $ 0.03 $ 0.02 $ 0.02 $ (0.00 ) $ (0.04 ) $ (0.09 ) Diluted net income (loss) per common stockholders $ 0.12 $ (0.04 ) $ 0.02 $ 0.01 $ 0.02 $ (0.00 ) $ (0.04 ) $ (0.09 ) Weighted average shares outstanding: Basic 46,090,961 45,470,686 45,191,563 44,910,034 44,879,982 43,092,803 38,798,706 38,499,171 Diluted 51,735,136 45,470,686 49,022,622 48,246,763 48,181,596 43,092,803 38,798,706 38,499,171 |
Note 1 - Description of Busin31
Note 1 - Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Sales Revenue, Product Line [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||||||||
Concentration Risk, Percentage | 41.00% | 66.00% | |||||||||
Sales Revenue, Product Line [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||||||||
Concentration Risk, Percentage | 22.00% | ||||||||||
Sales Revenue, Product Line [Member] | Customer Concentration Risk [Member] | |||||||||||
Number of Customers | 3 | 3 | 1 | ||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||||||||
Concentration Risk, Percentage | 52.00% | 66.00% | 37.00% | ||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||||||||
Number of Customers | 3 | 3 | 3 | ||||||||
Sales Revenue, Net [Member] | Advertising Revenue [Member] | |||||||||||
Concentration Risk, Percentage | 85.00% | 78.00% | 69.00% | ||||||||
Virtual Currency [Member] | |||||||||||
Recognition of Deferred Revenue | $ 845,000 | $ 910,000 | $ 625,000 | ||||||||
Beanstock Media, Inc. [Member] | |||||||||||
Ad Revenue Percentage | 90.00% | ||||||||||
Provision for Doubtful Accounts | $ 5,700,000 | ||||||||||
Other Receivables, Net, Current | $ 4,000,000 | 4,000,000 | |||||||||
Media Publisher Agreement with Beanstock Media, Inc. [Member] | |||||||||||
Revenues | 2,160,000 | 9,800,000 | 3,800,000 | ||||||||
Provision for Doubtful Accounts | $ 1,300,000 | ||||||||||
Mobile Agreement with Beanstock [Member] | |||||||||||
Revenues | 5,200,000 | ||||||||||
Provision for Doubtful Accounts | 4,400,000 | ||||||||||
Advertising Agreement with Pinsight Media [Member] | |||||||||||
Revenues | 5,100,000 | 19,824,000 | 695,000 | ||||||||
Asset Impairment Charges | 0 | 0 | 0 | ||||||||
Revenues | $ 19,879,839 | $ 14,308,080 | $ 11,086,878 | $ 11,628,976 | $ 13,021,878 | $ 11,604,724 | $ 10,687,330 | $ 9,503,504 | 56,903,773 | 44,817,436 | $ 40,378,007 |
Provision for Doubtful Accounts | $ 181,398 | $ 367,000 | |||||||||
Number of Reporting Units | 1 | ||||||||||
Number of Operating Segments | 1 |
Note 1 - Allowance for Doubtful
Note 1 - Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Year Ended December 31, 2015 | $ 586,000 | $ 495,000 | $ 547,000 |
Provision for Doubtful Accounts | 181,398 | 367,000 | |
Year Ended December 31, 2015 | 634,398 | 276,000 | $ 52,000 |
Year Ended December 31, 2015 | $ 133,000 | $ 586,000 | $ 495,000 |
Note 1 - Estimated Useful Lives
Note 1 - Estimated Useful Lives of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Trademarks [Member] | |
Finite Intangible Asset Useful Life | 5 years |
Internet Domain Names [Member] | |
Finite Intangible Asset Useful Life | 5 years |
Mobile Applications [Member] | |
Finite Intangible Asset Useful Life | 5 years |
Advertising Relationships [Member] | |
Finite Intangible Asset Useful Life | 3 years |
Note 1 - Property and Equipment
Note 1 - Property and Equipment (Details) - Minimum [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Software Development [Member] | |
Property, Plant, and Equipment Useful Lives | 23 years |
Computer Equipment [Member] | |
Property, Plant, and Equipment Useful Lives | 35 years |
Office Equipment [Member] | |
Property, Plant, and Equipment Useful Lives | 510 years |
Note 1 - Basic and Diluted Inco
Note 1 - Basic and Diluted Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income (loss) | $ 5,969,628 | $ (3,962,165) | $ (10,898,325) |
Basic (in shares) | 45,419,175 | 41,328,699 | 38,048,446 |
Effect of dilutive securities (in shares) | 4,116,651 | ||
Weighted-average diluted shares (in shares) | 49,535,826 | 41,328,699 | 38,048,446 |
Basic net income (loss) per common stockholders (in dollars per share) | $ 0.13 | $ (0.10) | $ (0.29) |
Diluted net income (loss) per common stockholders (in dollars per share) | $ 0.12 | $ (0.10) | $ (0.29) |
Note 1 - Summary of Dilutive Se
Note 1 - Summary of Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Stock Option [Member] | |||
Antidilutive Securities (in shares) | 8,052,962 | 9,618,102 | 9,138,131 |
Restricted Stock [Member] | |||
Antidilutive Securities (in shares) | 184,954 | 1,418,227 | 1,361,750 |
Warrant [Member] | |||
Antidilutive Securities (in shares) | 2,740,521 | 2,812,414 | 3,111,690 |
Preferred Stock Convertible [Member] | |||
Antidilutive Securities (in shares) | 1,479,949 | 1,479,949 | |
Antidilutive Securities (in shares) | 10,978,437 | 15,328,692 | 15,091,520 |
Note 2 - Fair Value Measureme37
Note 2 - Fair Value Measurements (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Warrant [Member] | Weighted Average [Member] | ||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |
Fair Value Assumptions, Risk Free Interest Rate | 2.27% | |
Fair Value Assumptions, Expected Volatility Rate | 82.96% | |
Liabilities, Fair Value Disclosure, Nonrecurring | $ 0 | $ 0 |
Assets, Fair Value Disclosure, Nonrecurring | $ 0 | $ 0 |
Note 2 - Financial Assets and L
Note 2 - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Assets, recurring | $ 10,029,275 | $ 10,014,243 |
Fair Value, Inputs, Level 1 [Member] | Warrants to Purchase Common Stock [Member] | ||
Liabilities, recurring | ||
Fair Value, Inputs, Level 1 [Member] | ||
Assets, recurring | $ 10,029,275 | $ 10,014,243 |
Liabilities, recurring | ||
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ||
Assets, recurring | ||
Fair Value, Inputs, Level 2 [Member] | Warrants to Purchase Common Stock [Member] | ||
Liabilities, recurring | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets, recurring | ||
Liabilities, recurring | ||
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | ||
Assets, recurring | ||
Fair Value, Inputs, Level 3 [Member] | Warrants to Purchase Common Stock [Member] | ||
Liabilities, recurring | $ 1,035,137 | $ 418,530 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets, recurring | ||
Liabilities, recurring | $ 1,035,137 | $ 418,530 |
Money Market Funds [Member] | ||
Assets, recurring | 10,029,275 | 10,014,243 |
Warrants to Purchase Common Stock [Member] | ||
Liabilities, recurring | 1,035,137 | 418,530 |
Assets, recurring | 10,029,275 | 10,014,243 |
Liabilities, recurring | $ 1,035,137 | $ 418,530 |
Note 2 - Summary of Changes in
Note 2 - Summary of Changes in Fair Value of Company's Preferred Warrant Liability (Details) - Fair Value, Inputs, Level 3 [Member] - Warrant [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Balance | $ 418,530 | $ 819,930 |
Settlements | (174,892) | |
Changes in estimated fair value | 616,607 | (226,508) |
Balance | $ 1,035,137 | $ 418,530 |
Note 3 - Goodwill (Details Text
Note 3 - Goodwill (Details Textual) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Approach Valuation Technique [Member] | Year 1 [Member] | |
Fair Value Inputs, Long-term Revenue Growth Rate | 15.10% |
Income Approach Valuation Technique [Member] | Year 2 [Member] | |
Fair Value Inputs, Long-term Revenue Growth Rate | 7.90% |
Income Approach Valuation Technique [Member] | |
Fair Value Inputs, Discount Rate | 14.50% |
Decrease of Conclusion Value, Percent | 2.00% |
Alternate Growth Rate Projection [Member] | |
Fair Value Inputs, Long-term Revenue Growth Rate | 1.00% |
Number of Reporting Units | 1 |
Reporting Unit, Amount of Fair Value in Excess of Carrying Amount | $ 92 |
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 108.60% |
Note 3 - Goodwill (Details)
Note 3 - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Balance at January 1 | $ 70,646,036 | $ 70,646,036 | $ 70,646,036 |
Goodwill acquired during the period | 0 | 0 | 0 |
Impairment charges during the period | 0 | 0 | 0 |
Balance at December 31 | $ 70,646,036 | $ 70,646,036 | $ 70,646,036 |
Note 4 - Intangible Assets (Det
Note 4 - Intangible Assets (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amortization of Intangible Assets | $ 1.5 | $ 1.9 | $ 2 |
Note 4 - Intangible Assets (D43
Note 4 - Intangible Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Trademarks [Member] | |||
Intangible assets | $ 5,849,994 | $ 6,124,994 | $ 6,124,994 |
Advertising Relationships [Member] | |||
Intangible assets | 1,165,000 | 1,165,000 | 1,165,000 |
Mobile Applications [Member] | |||
Intangible assets | 1,725,000 | 1,725,000 | 1,725,000 |
Intangible assets | 8,739,994 | 9,014,994 | 9,014,994 |
Less accumulated amortization | (7,461,496) | (6,120,664) | (4,227,053) |
Intangible assets - net | $ 1,278,498 | $ 2,894,330 | $ 4,787,941 |
Note 4 - Annual Future Amortiza
Note 4 - Annual Future Amortization Expense (Details) | Dec. 31, 2015USD ($) |
2,016 | $ 1,278,498 |
Total | $ 1,278,498 |
Note 5 - Property and Equipme45
Note 5 - Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Continuing Operations [Member] | |||||||||||
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | $ 513,000 | $ 805,000 | $ 513,000 | $ 805,000 | |||||||
Depreciation, Depletion and Amortization, Nonproduction | 1,600,000 | 2,300,000 | $ 2,400,000 | ||||||||
Depreciation, Depletion and Amortization, Nonproduction | $ 760,200 | $ 762,830 | $ 801,260 | $ 815,915 | $ 922,853 | $ 1,135,263 | $ 1,079,932 | $ 1,085,459 | $ 3,140,205 | $ 4,223,507 | $ 4,387,464 |
Note 5 - Property and Equipme46
Note 5 - Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Computer Equipment [Member] | ||
Property and equipment, gross | $ 9,105,086 | $ 8,221,009 |
Office Equipment [Member] | ||
Property and equipment, gross | 57,359 | 62,447 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 369,137 | 378,389 |
Property and equipment, gross | 9,531,582 | 8,661,845 |
Less accumulated depreciation/amortization | (6,921,275) | (6,202,948) |
Property and equipment, net | $ 2,610,307 | $ 2,458,897 |
Note 6 - Long-Term Debt (Detail
Note 6 - Long-Term Debt (Details Textual) | 1 Months Ended | 12 Months Ended | ||||||
Apr. 29, 2013USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($) | Mar. 05, 2013USD ($)$ / sharesshares | Jan. 25, 2008USD ($)$ / sharesshares | Oct. 31, 2006$ / shares | Mar. 31, 2006$ / shares | |
Term Loan [Member] | Interest Expense [Member] | ||||||||
Amortization of Debt Discount (Premium) | $ 184,868 | $ 295,588 | $ 190,225 | |||||
Term Loan [Member] | ||||||||
Debt Instrument, Face Amount | $ 8,000,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | |||||||
Debt Instrument, Term | 3 years | |||||||
Debt Instrument, Number of Tranches | 3 | |||||||
Proceeds from Notes Payable | $ 5,000,000 | |||||||
Warrants Aggregate Exercise Price | 800,000 | |||||||
Excercise Value Increase, First Tranche | 200,000 | |||||||
Exercise Value Increase Second and Third Tranche | $ 300,000 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 1 [Member] | Maximum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 12.50 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 1 [Member] | Minimum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 1 [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 1,000,000 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 2 [Member] | Maximum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 15 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 2 [Member] | Minimum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | MATT Series Number 2 [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 1,000,000 | |||||||
Subordinated Debt [Member] | M A T T Inc [Member] | ||||||||
Debt Instrument, Face Amount | $ 5,000,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.46% | |||||||
Deferred Finance Costs, Gross | $ 24,580 | |||||||
Amortization of Financing Costs | 455 | |||||||
Deferred Finance Costs, Net | $ 712,000 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | Scott Richard L Series 2 [Member] | Maximum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 4 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | Scott Richard L Series 2 [Member] | Minimum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | Scott Richard L Series 2 [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 500,000 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | Scott Richard L Series 3 [Member] | Maximum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 7 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | Scott Richard L Series 3 [Member] | Minimum [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | |||||||
Subordinated Debt [Member] | R S I Note [Member] | ||||||||
Debt Instrument, Face Amount | $ 2,000,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.46% | |||||||
Deferred Finance Costs, Gross | $ 15,901 | |||||||
Amortization of Financing Costs | 315 | |||||||
R S I Note [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 1,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | |||||||
Class of Warrant or Right, Aggregate Exercise Price | 2,750,000 | |||||||
Principal and Interest that would have Accrued through Due Date | 2,857,504 | |||||||
Gains (Losses) on Restructuring of Debt | 463,000 | |||||||
MATT Series Number 1 [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | $ 12.50 | ||||||
MATT Series Number 2 [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.75 | $ 15 | ||||||
Scott Richard L Series 2 [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 4 | |||||||
Scott Richard L Series 3 [Member] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 7 | |||||||
AHMSA and MATT Note [Member] | ||||||||
Accounts Receivable, Related Parties | $ 6,000,000 | |||||||
Long-term Debt | $ 6,254,178 | |||||||
Proceeds from Notes Payable | 5,000,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 2,147 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 2.99 | $ 3 | $ 2.75 | $ 2.75 | ||||
Notes Receivable, Related Parties | $ 6,025,828 | |||||||
Interest Receivable | 222,446 | |||||||
Class of Warrant or Right, Aggregate Exercise Price | $ 2,000,000 | |||||||
Payment for RSI Note | 107,504 | |||||||
Gains (Losses) on Restructuring of Debt | $ (1,174,269) |
Note 6 - Components of Long-Ter
Note 6 - Components of Long-Term Debt (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Senior Notes [Member] | Term Loan [Member] | ||
Long-term Debt | $ 2,809,806 | |
Senior Notes [Member] | ||
Less: unamortized discount | (184,868) | |
Long-term Debt | 2,624,938 | |
Less current portion | (2,068,326) | |
Long-term debt, less current portion, net | $ 556,612 |
Note 7 - Commitments and Cont49
Note 7 - Commitments and Contingencies (Details Textual) | Dec. 22, 2015USD ($)shares | Sep. 28, 2015USD ($) | Aug. 07, 2015USD ($) | Apr. 30, 2015USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2012 | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Sep. 29, 2015USD ($) |
Dell Financial Services [Member] | ||||||||||
Number of Capital Leases | 1 | |||||||||
HP Financial Services [Member] | ||||||||||
Number of Capital Leases | 1 | |||||||||
Capital Lease Obligations [Member] | Minimum [Member] | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.50% | |||||||||
Capital Lease Obligations [Member] | Maximum [Member] | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||||||||
F. Stephen Allen [Member] | Series 2 Warrants [Member] | ||||||||||
Class of Warrant or Right, Outstanding | shares | 50,000 | |||||||||
F. Stephen Allen [Member] | Series 2 and Series 3 Warrants [Member] | ||||||||||
Class of Warrant or Right, Extended Expiration Term | 1 year 90 days | |||||||||
F. Stephen Allen [Member] | ||||||||||
Loss Contingency, Damages Sought, Value | $ 4,000,000 | |||||||||
Litigation Settlement, Amount | $ (225,000) | |||||||||
Term of Consulting Agreement | 1 year | |||||||||
Number of Stock Options Granted in Terms of Consulting Agreement | shares | 50,000 | |||||||||
People of the State of California [Member] | ||||||||||
Loss Contingency, Damages Awarded, Value | $ 200,000 | |||||||||
Beanstock and Adaptive [Member] | Adaptive [member] | ||||||||||
Loss Contingency, Damages Sought, Value | $ 600,000 | |||||||||
Beanstock and Adaptive [Member] | ||||||||||
Gain Contingency, Unrecorded Amount | $ 10,000,000 | |||||||||
Employee Severance [Member] | Chief Technology Officer [Member] | ||||||||||
Payments for Restructuring | $ 120,000 | $ 1,800,000 | ||||||||
The 401 K Retirement Plan [Member] | ||||||||||
Defined Contribution Plan, Cost Recognized | $ 379,000 | 299,000 | ||||||||
Number of Capital Leases | 2 | |||||||||
Operating Leases, Rent Expense | $ 1,900,000 | $ 2,200,000 | $ 2,200,000 | |||||||
Class of Warrant or Right, Outstanding | shares | 2,762,414 | 2,812,414 | 3,111,690 | |||||||
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent | 15.00% | |||||||||
Restructuring Costs | $ 2,500,000 | |||||||||
Restructuring Reserve | $ 0 | $ 7,000 |
Note 7 - Future Minimum Rental
Note 7 - Future Minimum Rental Payments for Capital and Operating Leases (Details) | Dec. 31, 2015USD ($) |
2016, Capital Leases | $ 385,503 |
2016, Operating Leases | 1,644,774 |
2017, Capital Leases | 225,879 |
2017, Operating Leases | 1,207,702 |
2018, Operating Leases | 42,240 |
Total minimum lease payments, Capital Leases | 611,382 |
Total minimum lease payments, Operating Leases | 2,894,716 |
Less: Amount representing interest | (23,966) |
Total present value of minimum payments | 587,416 |
Less: Current portion of such obligations | 366,114 |
Long-term capital lease obligations | $ 221,302 |
Note 8 - Stockholder's Equity51
Note 8 - Stockholder's Equity (Details Textual) | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015USD ($)$ / sharesshares | Nov. 30, 2011USD ($)$ / sharesshares | Jun. 30, 2011shares | Nov. 30, 2009shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / shares | Dec. 31, 2008shares | Aug. 11, 2014shares | Jun. 27, 2007shares | |
2006 Stock Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 4,000,000 | 4,000,000 | 2,000,000 | 2,000,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 41,167 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,700,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ | $ 1,500,000 | $ 1,100,000 | $ 102,000 | |||||||
2012 Omnibus Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 190,733 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 8,700,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,600,000 | 3,600,000 | ||||||||
Amended and Restated 2006 Stock Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,100,000 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Preferred Stock, Shares Issued | 1,000,000 | |||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ | $ 5,000,000 | |||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 1,479,949 | |||||||||
Preferred Stock, Redemption Price Per Share | $ / shares | $ 3.38 | |||||||||
Restricted Stock [Member] | End of One Year [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | |||||||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,477,350 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 3 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Number of Annual Increments | 3 | |||||||||
Allocated Share-based Compensation Expense | $ | $ 1,500,000 | $ 1,100,000 | $ 509,000 | |||||||
Employee Stock Option [Member] | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||||||||
Warrant Exercised | 0 | |||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,479,949 | |||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 231,900 | 38,834 | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 557,603 | 556,475 | ||||||||
Stock Issued During Period, Shares, Other | 89,230 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 4,600,000 | $ 4,600,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 1.79 | $ 2.67 | $ 1.88 | |||||||
Allocated Share-based Compensation Expense | $ | $ 2,916,427 | $ 3,810,209 | $ 3,758,043 |
Note 8 - Stock-Based Compensati
Note 8 - Stock-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Continuing Operations [Member] | Selling and Marketing Expense [Member] | |||
Allocated Share-based Compensation Expense | $ 309,708 | $ 440,284 | $ 392,020 |
Continuing Operations [Member] | Product Development And Content [Member] | |||
Allocated Share-based Compensation Expense | 1,197,696 | 2,033,009 | 1,755,712 |
Continuing Operations [Member] | General and Administrative Expense [Member] | |||
Allocated Share-based Compensation Expense | 1,409,023 | 1,336,916 | 1,610,311 |
Allocated Share-based Compensation Expense | 2,916,427 | $ 3,810,209 | $ 3,758,043 |
Stock compensation expense for warrant modification | 425,538 | ||
Total stock-based compensation expense | $ 3,341,965 | $ 3,810,209 | $ 3,758,043 |
Note 8 - Stock Option Activity
Note 8 - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
2012 Omnibus Incentive Plan [Member] | ||
Outstanding at December 31, 2014 (in shares) | 1,951,957 | |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 2.25 | |
Options Granted (in shares) | 1,692,500 | |
Granted, Weighted- Average Exercise Price (in dollars per share) | $ 1.79 | |
Options Exercised (in shares) | (190,733) | |
Exercised, Weighted- Average Exercise Price (in dollars per share) | $ 1.79 | |
Options Forfeited or expired (in shares) | (481,346) | |
Forfeited or expired, Weighted- Average Exercise Price (in dollars per share) | $ 2 | |
Outstanding at December 31, 2015 (in shares) | 2,972,378 | 1,951,957 |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 2.06 | $ 2.25 |
Outstanding, Weighted Average Remaining Contractual Life | 8 years | |
Outstanding, Aggregate Intrinsic Value | $ 4,523,214 | |
Exercisable at December 31, 2015 (in shares) | 1,239,363 | |
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 2.27 | |
Exercisable, Weighted Average Remaining Contractual Life | 8 years 219 days | |
Exercisable, Aggregate Intrinsic Value | $ 1,624,472 | |
2006 Stock Incentive Plan [Member] | ||
Outstanding at December 31, 2014 (in shares) | 7,223,107 | |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 2.30 | |
Options Exercised (in shares) | (41,167) | |
Exercised, Weighted- Average Exercise Price (in dollars per share) | $ 1.01 | |
Options Forfeited or expired (in shares) | (337,639) | |
Forfeited or expired, Weighted- Average Exercise Price (in dollars per share) | $ 4.25 | |
Outstanding at December 31, 2015 (in shares) | 6,844,301 | 7,223,107 |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 2.22 | $ 2.30 |
Outstanding, Weighted Average Remaining Contractual Life | 3 years 182 days | |
Outstanding, Aggregate Intrinsic Value | $ 10,754,741 | |
Exercisable at December 31, 2015 (in shares) | 6,800,122 | |
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 2.21 | |
Exercisable, Weighted Average Remaining Contractual Life | 3 years 182 days | |
Exercisable, Aggregate Intrinsic Value | $ 10,754,741 | |
Non-Plan Option Activity [Member] | ||
Outstanding at December 31, 2014 (in shares) | 443,038 | |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 1.34 | |
Forfeited or expired, Weighted- Average Exercise Price (in dollars per share) | ||
Outstanding at December 31, 2015 (in shares) | 443,038 | 443,038 |
Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 1.34 | $ 1.34 |
Outstanding, Weighted Average Remaining Contractual Life | 3 years 328 days | |
Outstanding, Aggregate Intrinsic Value | $ 992,405 | |
Exercisable at December 31, 2015 (in shares) | 443,038 | |
Exercisable, Weighted- Average Exercise Price (in dollars per share) | $ 1.34 | |
Exercisable, Weighted Average Remaining Contractual Life | 3 years 328 days | |
Exercisable, Aggregate Intrinsic Value | $ 992,405 | |
Options Exercised (in shares) | (231,900) | (38,834) |
Note 8 - Fair Value Assumptions
Note 8 - Fair Value Assumptions (Details) - 2012 Omnibus Incentive Plan [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Risk-free interest rate | 1.37% | 1.62% | 1.25% |
Expected term (in years) | 5 years 328 days | 5 years 328 days | 5 years 292 days |
Expected volatility | 87.00% | 82.00% | 85.00% |
Note 8 - RSA Activity (Details)
Note 8 - RSA Activity (Details) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock Awards Outstanding (in shares) | shares | 1,418,227 |
Restricted Stock Awards Outstanding, Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 2.07 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,477,350 |
Granted, Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 1.70 |
Exercised (in shares) | shares | (557,603) |
Exercised, Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 2.03 |
Forfeited or expired (in shares) | shares | (265,017) |
Forfeited or expired, Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 1.93 |
Restricted Stock Awards Outstanding (in shares) | shares | 2,072,957 |
Restricted Stock Awards Outstanding, Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 1.84 |
Unvested (in shares) | shares | 1,418,227 |
Unvested , Weighted- Average Stock Price (in dollars per share) | $ / shares | $ 2.07 |
Note 9 - Warrant Transactions56
Note 9 - Warrant Transactions (Details Textual) - USD ($) | Dec. 22, 2015 | Mar. 10, 2014 | Feb. 19, 2010 | Apr. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 05, 2013 | Jan. 25, 2008 | Oct. 31, 2006 | Mar. 31, 2006 |
Venture Lending and Leasing VI and VII [Member] | |||||||||||
Warrants Aggregate Exercise Price | $ 800,000 | ||||||||||
Exercise Value Increase, First Tranche | 200,000 | ||||||||||
Exercise Value Increase Second and Third Tranche | $ 300,000 | ||||||||||
Warrants Expiration Term | 10 years | ||||||||||
Warrant Exercised | 168,366 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.96 | ||||||||||
Stock Issued During Period, Shares, Other | 89,230 | ||||||||||
Scott Richard L Series 2 and 3 [Member] | |||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,000,000 | ||||||||||
Scott Richard L Series 2 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4 | ||||||||||
Scott Richard L Series 3 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7 | ||||||||||
Allen F. Stephen Series 2 and 3 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.55 | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,000,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments, Other than Options, Period Balance Outstanding | 1,000,000 | ||||||||||
Allen F. Stephen Series 2 [Member] | General and Administrative Expense [Member] | |||||||||||
Expense For Warrant Modification | $ 426,000 | ||||||||||
Allen F. Stephen Series 2 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.55 | $ 4 | |||||||||
Warrants Repurchased | 50,000 | ||||||||||
Class of Warrant or Right, Outstanding | 450,000 | 500,000 | 500,000 | ||||||||
Allen F. Stephen Series 3 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.55 | $ 7 | |||||||||
Class of Warrant or Right, Outstanding | 500,000 | 500,000 | 500,000 | ||||||||
Stearns, Robert [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.55 | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 200,000 | ||||||||||
Class of Warrant or Right, Outstanding | 200,000 | 200,000 | 200,000 | ||||||||
CEO Compensation [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.55 | ||||||||||
Series 1 and 2 MATT, Inc. [Member] | |||||||||||
Warrants Aggregate Exercise Price | $ 2,000,000 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.75 | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,147 | 1,000,000 | |||||||||
Debt Instrument, Unamortized Discount | $ 1,341,692 | ||||||||||
Class of Warrant or Right, Forfeitures | 400,002 | ||||||||||
Class of Warrant or Right, Outstanding | 1,270,576 | ||||||||||
MATT Series Number 1 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.75 | $ 12.50 | |||||||||
Class of Warrant or Right, Outstanding | 270,576 | 270,576 | 401,486 | ||||||||
MATT Series Number 2 [Member] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.75 | $ 15 | |||||||||
Class of Warrant or Right, Outstanding | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Other Nonoperating Income (Expense) [Member] | |||||||||||
Increase (Decrease) in Fair Value of Outstanding Warrants | $ 616,607 | ||||||||||
Warrant Exercised | 0 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.99 | $ 3 | $ 2.75 | $ 2.75 | |||||||
Stock Issued During Period, Shares, Other | 89,230 | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,147 | ||||||||||
Expense For Warrant Modification | $ 425,538 | ||||||||||
Class of Warrant or Right, Forfeitures | 50,000 | ||||||||||
Class of Warrant or Right, Outstanding | 2,762,414 | 2,812,414 | 3,111,690 |
Note 9 - Warrant Summary (Detai
Note 9 - Warrant Summary (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Venture Lending & Leasing VI, Inc. [Member] | ||
Warrants oustanding (in shares) | 170,919 | 255,102 |
Weighted-average exercise price (in dollars per share) | $ 1.96 | |
Expiration | Feb. 28, 2024 | |
Venture Lending & Leasing VII, Inc. [Member] | ||
Warrants oustanding (in shares) | 170,919 | 255,102 |
Weighted-average exercise price (in dollars per share) | $ 1.96 | |
Expiration | Feb. 28, 2024 | |
Allen F. Stephen Series 2 [Member] | ||
Warrants oustanding (in shares) | 450,000 | 500,000 |
Weighted-average exercise price (in dollars per share) | $ 3.55 | |
Expiration | Jun. 21, 2017 | |
Allen F. Stephen Series 3 [Member] | ||
Warrants oustanding (in shares) | 500,000 | 500,000 |
Weighted-average exercise price (in dollars per share) | $ 3.55 | |
Expiration | Jun. 21, 2017 | |
Stearns, Robert [Member] | ||
Warrants oustanding (in shares) | 200,000 | 200,000 |
Weighted-average exercise price (in dollars per share) | $ 3.55 | |
Expiration | Mar. 21, 2016 | |
MATT Series Number 1 [Member] | ||
Warrants oustanding (in shares) | 270,576 | 401,486 |
Weighted-average exercise price (in dollars per share) | $ 2.75 | |
Expiration | Sep. 19, 2016 | |
MATT Series Number 2 [Member] | ||
Warrants oustanding (in shares) | 1,000,000 | 1,000,000 |
Weighted-average exercise price (in dollars per share) | $ 2.75 | |
Expiration | Sep. 19, 2016 | |
Warrants oustanding (in shares) | 2,762,414 | 3,111,690 |
Weighted-average exercise price (in dollars per share) | $ 2.99 |
Note 9 - Modified Warrants Fair
Note 9 - Modified Warrants Fair Value Assumptions (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Venture Lending and Leasing VI and VII [Member] | |
Risk-free interest rate | 2.27% |
Expected term (years) | 8 years 62 days |
Expected dividend yield | |
Expected volatility | 82.96% |
Allen F. Stephen Series 2 and 3 [Member] | |
Risk-free interest rate | 0.83% |
Expected term (years) | 1 year 182 days |
Expected dividend yield | |
Expected volatility | 60.42% |
Series 1 and 2 MATT, Inc. [Member] | |
Risk-free interest rate | 2.81% |
Expected term (years) | 8 years 266 days |
Expected dividend yield | |
Expected volatility | 100.75% |
Note 9 - Warrant Activity (Deta
Note 9 - Warrant Activity (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Outstanding at December 31, 2014 (in shares) | shares | 2,812,414 |
Outstanding at December 31, 2014 (in dollars per share) | $ 3 |
Forfeited or expired (in shares) | shares | (50,000) |
Forfeited or expired (in dollars per share) | $ 3.55 |
Outstanding at December 31, 2015 (in shares) | shares | 2,762,414 |
Outstanding at December 31, 2015 (in dollars per share) | $ 2.99 |
Exercisable at December 31, 2015 | $ | $ 2,762,414 |
Exercisable at December 31, 2015 (in dollars per share) | $ 2.99 |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense (Benefit) | $ 0 | $ 0 | |||||||||
Deferred Income Tax Expense (Benefit) | 0 | 0 | |||||||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | $ 0 | 0 | 0 | |||||||
Unrecognized Tax Benefits | 0 | $ 0 | 0 | 0 | |||||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 6,245,929 | $ 3,962,165 | $ 10,898,325 | ||||||||
Income Tax Expense (Benefit) | 149,500 | $ (1,849) | $ 73,450 | $ 55,200 | $ 276,301 | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | ||||||||||
Operating Loss Carryforwards | $ 61,000,000 | $ 135,000,000 | $ 61,000,000 | $ 135,000,000 |
Note 10 - Deferred Tax Assets (
Note 10 - Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Net operating loss carryforward | $ 22,514,000 | $ 47,846,000 |
Property and equipment | (163,000) | (469,000) |
Stock options and warrants | 9,419,000 | 9,229,000 |
Other | 1,685,000 | 1,031,000 |
Total deferred tax assets | 33,455,000 | 57,637,000 |
Valuation allowance | $ (33,455,000) | $ (57,637,000) |
Net deferred tax assets |
Note 10 - Reconciliation of Inc
Note 10 - Reconciliation of Income Tax Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
U.S. federal income tax at statutory rate | $ 2,124,000 | $ (1,347,000) | $ (3,689,000) |
Nondeductible expenses | 34,000 | 38,000 | $ 54,000 |
Foreign subsidiary loss with no tax benefit | 36,000 | 123,000 | |
Change in valuation allowance | (2,169,000) | $ 1,263,000 | $ 3,708,000 |
State tax benefit, net of federal provision (benefit) | $ 21,000 | 2,000 | |
Foreign subsidiary loss | $ (22,000) | ||
Fair market value adjustment for warrants | $ 210,000 | $ (77,000) | |
Other | 20,000 | $ (53,000) | |
Income Tax Expense | $ 276,301 |
Note 11 - Transactions with A63
Note 11 - Transactions with Affiliates (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financial Advisory Services [Member] | Former Chief Executive Officer and Chairman of the Board [Member] | |||
Related Party Transaction, Amounts of Transaction | $ 1,000,000 | $ 180,000 | $ 360,000 |
Note 12 - Quarterly Financial I
Note 12 - Quarterly Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 19,879,839 | $ 14,308,080 | $ 11,086,878 | $ 11,628,976 | $ 13,021,878 | $ 11,604,724 | $ 10,687,330 | $ 9,503,504 | $ 56,903,773 | $ 44,817,436 | $ 40,378,007 |
Sales and marketing | 2,826,197 | 1,483,252 | 1,094,068 | 1,215,320 | 1,666,406 | 1,516,547 | 1,935,678 | 2,159,088 | 6,618,837 | 7,277,719 | 7,799,077 |
Product development and content | 6,036,479 | 6,175,566 | 6,083,455 | 6,319,804 | 7,589,911 | 7,021,353 | 6,855,739 | 6,857,440 | 24,615,304 | 28,324,443 | 26,660,709 |
General and administrative | 3,337,599 | 7,802,367 | 1,774,991 | 1,619,904 | 1,962,026 | 1,932,161 | 2,194,138 | 1,929,645 | 14,534,861 | 8,017,970 | 7,875,395 |
Depreciation and amortization | $ 760,200 | $ 762,830 | $ 801,260 | $ 815,915 | $ 922,853 | $ 1,135,263 | $ 1,079,932 | 1,085,459 | $ 3,140,205 | 4,223,507 | 4,387,464 |
Restructuring costs | 120,202 | 120,202 | 2,540,896 | ||||||||
Total Operating Costs and Expenses | $ 12,960,475 | $ 16,224,015 | $ 9,753,774 | $ 9,970,943 | $ 12,141,196 | $ 11,605,324 | $ 12,065,487 | 12,151,834 | $ 48,909,207 | 47,963,841 | 50,437,810 |
Income (Loss) from Operations | 6,919,364 | (1,915,935) | 1,333,104 | 1,658,033 | 880,682 | (600) | (1,378,157) | (2,648,330) | 7,994,566 | (3,146,405) | (10,059,803) |
Interest income | 5,304 | 5,303 | 5,244 | 5,186 | 5,958 | 2,679 | 549 | 1,166 | 21,037 | 10,352 | 9,725 |
Interest expense | (84,724) | (93,383) | (122,989) | (158,866) | (183,754) | (206,980) | (241,643) | (420,243) | (459,962) | (1,052,620) | $ (848,247) |
Change in warrant liability | (622,819) | 45,532 | 56,408 | (95,728) | $ 144,037 | $ 256,932 | $ 181,493 | $ (355,954) | (616,607) | $ 226,508 | |
Loss on cumulative foreign currency translation adjustment | $ 5,639 | $ (78,987) | $ 11,614 | (794,704) | (856,438) | ||||||
Gain on sale of asset | 163,333 | 163,333 | |||||||||
Total Other Expense | $ (696,600) | $ (121,535) | $ (49,723) | (880,779) | $ (33,759) | $ 52,631 | $ (59,601) | $ (775,031) | (1,748,637) | $ (815,760) | $ (838,522) |
Income (Loss) before Income Taxes | 6,222,764 | (2,037,470) | 1,283,381 | 777,254 | $ 846,923 | $ 52,031 | $ (1,437,758) | $ (3,423,361) | 6,245,929 | $ (3,962,165) | $ (10,898,325) |
Income taxes | (149,500) | 1,849 | (73,450) | (55,200) | (276,301) | ||||||
Net income (loss) | $ 6,073,264 | $ (2,035,621) | $ 1,209,931 | $ 722,054 | $ 846,923 | $ 52,031 | $ (1,437,758) | $ (3,423,361) | $ 5,969,628 | $ (3,962,165) | $ (10,898,325) |
Foreign currency translation adjustment | (65,408) | (74,389) | 12,573 | 27,701 | (99,523) | (52,407) | |||||
Comprehensive income (loss) | $ 6,073,264 | $ (2,035,621) | $ 1,209,931 | $ 722,054 | $ 781,515 | $ (22,358) | $ (1,425,185) | $ (3,395,660) | $ 5,969,628 | $ (4,061,688) | $ (10,950,732) |
Basic net income (loss) per common stockholders (in dollars per share) | $ 0.13 | $ (0.04) | $ 0.03 | $ 0.02 | $ 0.02 | $ 0 | $ (0.04) | $ (0.09) | $ 0.13 | $ (0.10) | $ (0.29) |
Diluted net income (loss) per common stockholders (in dollars per share) | $ 0.12 | $ (0.04) | $ 0.02 | $ 0.01 | $ 0.02 | $ 0 | $ (0.04) | $ (0.09) | $ 0.12 | $ (0.10) | $ (0.29) |
Basic (in shares) | 46,090,961 | 45,470,686 | 45,191,563 | 44,910,034 | 44,879,982 | 43,092,803 | 38,798,706 | 38,499,171 | 45,419,175 | 41,328,699 | 38,048,446 |
Diluted (in shares) | 51,735,136 | 45,470,686 | 49,022,622 | 48,246,763 | 48,181,596 | 43,092,803 | 38,798,706 | 38,499,171 | 49,535,826 | 41,328,699 | 38,048,446 |