Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2014 | |
Document And Entity Information | |
Entity Registrant Name | Mobiquity Technologies, Inc. |
Entity Central Index Key | 1084267 |
Document Type | S-1 |
Document Period End Date | 30-Sep-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets: | |||
Cash and cash equivalents | $1,460,473 | $1,740,989 | $362,598 |
Accounts receivable, net of allowance for doubtful accounts of $30,000 and $30,000 and $20,000 as of 2014 and 2013 and 2012, respectively | 361,939 | 433,856 | 444,262 |
Inventory | 202,737 | 109,073 | 92,615 |
Prepaid expenses and other current assets | 126,838 | 141,921 | 170,960 |
Total Current Assets | 2,151,987 | 2,425,839 | 1,070,435 |
Property and equipment, net of accumulated depreciation of $772,977 and $597,396 and $378,190 as of September 30, 2014 and December 31 2013 and 2012, respectively | 315,893 | 466,772 | 581,567 |
Intangible assets, net of accumulated amortization of $221,696 and $153,416 and $83,333 as of 2014 and 2013 and 2012, respectively | 233,504 | 301,784 | 166,667 |
Other Assets | 34,030 | 34,109 | 27,501 |
Total Assets | 2,735,414 | 3,228,504 | 1,846,170 |
Current Liabilities: | |||
Accounts payable | 539,237 | 485,401 | 348,712 |
Accrued expenses | 99,666 | 177,943 | 160,098 |
Convertible Promissory Note | 322,000 | 322,000 | 298,376 |
Note Payable-Investors | 253,083 | 0 | |
Total Current Liabilities | 1,213,986 | 985,344 | 807,186 |
Commitments and Contingencies | |||
Stockholders' Equity: | |||
Preferred Stock, $.0001 par value; 5,000,000 shares authorized, 0 and 0 shares issued and outstanding at September 30, 2014 and December 31, 2013 respectively and 220,000 shares issued and outstanding at December 31, 2012 | 0 | 0 | 22 |
Common stock, $.0001 par value; 200,000,000 and 100,000,000 shares authorized; 63,805,451 and 52,402,247 and 30,252,938 shares issued and outstanding at 2014 and 2013 and 2012, respectively | 6,381 | 5,240 | 3,025 |
Additional paid-in capital | 27,400,241 | 21,948,920 | 14,485,740 |
Stock subscription receivable | 0 | -175,000 | 0 |
Accumulated other comprehensive income (loss) | -459 | 1,268 | 0 |
Accumulated deficit | -25,853,234 | -19,505,767 | -13,418,302 |
Total | 1,552,929 | 2,274,661 | 1,070,485 |
Less: Treasury Stock, at cost, 23,334 shares | -31,501 | -31,501 | -31,501 |
Total Stockholders' Equity | 1,521,428 | 2,243,160 | 1,038,984 |
Total Liabilities and Stockholders' Equity | $2,735,414 | $3,228,504 | $1,846,170 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Consolidated Balance Sheets Parenthetical | |||
Allowance for doubtful accounts | $30,000 | $30,000 | $20,000 |
Accumulated depreciation | 772,977 | 597,396 | 378,190 |
Accumulated amortization | $221,696 | $153,416 | $83,333 |
Preferred Stock par value | $0.00 | $0.00 | $0.00 |
Preferred Stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred Stock shares issued | 0 | 0 | 220,000 |
Preferred stock shares outstanding | 0 | 0 | 220,000 |
Common stock par value | $0.00 | $0.00 | $0.00 |
Common stock shares authorized | 200,000,000 | 100,000,000 | 100,000,000 |
Common stock shares issued | 63,805,451 | 52,402,247 | 30,252,938 |
Common stock outstanding | 63,805,451 | 52,402,247 | 30,252,938 |
Treasury Stock shares | 23,334 | 23,334 | 23,334 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Consolidated Statements Of Operations | ||||||
Revenues, net | $714,044 | $668,719 | $2,273,395 | $2,263,812 | $3,157,532 | $2,890,652 |
Cost of Revenues | 610,119 | 441,061 | 1,859,497 | 1,652,449 | 2,353,095 | 2,170,265 |
Gross Profit | 103,925 | 227,658 | 413,898 | 611,363 | 804,437 | 720,387 |
Operating Expenses: | ||||||
Selling, general and administrative expenses | 2,144,255 | 1,396,637 | 6,697,392 | 4,658,596 | 6,665,082 | 4,667,122 |
Total Operating Expenses | 2,144,255 | 1,396,637 | 6,697,392 | 4,658,596 | 6,665,082 | 4,667,122 |
Loss from Operations | -2,040,330 | -1,168,979 | -6,283,494 | -4,047,233 | -5,860,645 | -3,946,735 |
Other Income (Expense): | ||||||
Interest expense | -40,621 | -24,602 | -64,111 | -85,586 | -227,094 | -182,943 |
Interest income | 45 | 53 | 138 | 221 | 274 | 436 |
Loss on abandonment of fixed assets | 0 | -4,819 | ||||
Total Other Income (Expense) | -40,576 | -24,549 | -63,973 | -85,365 | -226,820 | -187,326 |
Net Loss | -2,080,906 | -1,193,528 | -6,347,467 | -4,132,598 | -6,087,465 | -4,134,061 |
Other Comprehensive Income (Loss) | -569 | 0 | -1,727 | 0 | ||
Net Comprehensive Loss | ($2,081,475) | ($1,193,528) | ($6,349,194) | ($4,132,598) | ($6,086,197) | ($4,134,061) |
Net Loss Per Common Share: | ||||||
Basic | ($0.03) | ($0.03) | ($0.11) | ($0.10) | ($0.13) | ($0.16) |
Weighted Average Common Shares Outstanding: | ||||||
Basic | 62,383,258 | 45,490,256 | 58,354,759 | 40,177,948 | 42,438,849 | 26,216,795 |
Statement_of_Stockholders_Equi
Statement of Stockholders' Equity (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscription [Member] | Other Comprehensive Income / Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] |
Beginning balance, amount at Dec. 31, 2011 | $1,683,993 | $2,328 | $10,997,407 | ($9,284,241) | ||||
Beginning balance, shares at Dec. 31, 2011 | 23,284,236 | |||||||
Stock purchase, shares | 4,208,872 | |||||||
Stock purchase, amount | 1,752,240 | 434 | 1,751,806 | |||||
Closing costs on equity issuance | -334,684 | -334,684 | ||||||
Stock grant, shares | 1,926,496 | |||||||
Stock grant, amount | 1,210,911 | 179 | 1,210,732 | |||||
Stock purchase Preferred, shares | 470,000 | |||||||
Stock purchase Preferred, value | 470,000 | 47 | 469,953 | |||||
Conversion of Preferred Stock, shares | -250,000 | 833,334 | ||||||
Conversion of Preferred Stock, amount | -25 | 84 | -59 | |||||
Option grant | 219,647 | 219,647 | ||||||
Beneficial Conversion Feature | 120,254 | 120,254 | ||||||
Warrant grant, amount | 50,684 | 50,684 | ||||||
Net loss | -4,134,061 | -4,134,061 | ||||||
Ending balance, amount at Dec. 31, 2012 | 1,038,984 | 22 | 3,025 | 14,485,740 | -13,418,302 | -31,501 | ||
Ending balance, shares at Dec. 31, 2012 | 220,000 | 30,352,938 | 23,334 | |||||
Stock purchase, shares | 19,125,006 | |||||||
Stock purchase, amount | 5,562,816 | 1,913 | 5,735,903 | -175,000 | ||||
Offering costs | -182,184 | -182,184 | ||||||
Stock grant, shares | 2,402,969 | |||||||
Stock grant, amount | 1,048,091 | 240 | 1,047,851 | |||||
Conversion of Preferred Stock, shares | -220,000 | 528,000 | ||||||
Conversion of Preferred Stock, amount | -22 | 53 | -31 | |||||
Option grant | 716,983 | 716,983 | ||||||
Conversion of debt, shares | 93,334 | |||||||
Conversion of debt, amount | 28,000 | 9 | 27,991 | |||||
Beneficial Conversion Feature | 116,667 | 116,667 | ||||||
Net loss | -6,086,197 | 1,268 | -6,087,465 | |||||
Ending balance, amount at Dec. 31, 2013 | 2,243,160 | 0 | 5,240 | 21,948,920 | -175,000 | 1,268 | -19,505,767 | -31,501 |
Ending balance, shares at Dec. 31, 2013 | 0 | 52,402,247 | 23,334 | |||||
Stock purchase, shares | 9,884,635 | |||||||
Stock purchase, amount | 3,735,300 | 989 | 3,559,311 | 175,000 | ||||
Offering costs | -254,000 | -254,000 | ||||||
Stock grant, shares | 1,319,000 | |||||||
Stock grant, amount | 204,574 | 132 | 204,442 | |||||
Option grant | 1,453,811 | 1,453,811 | ||||||
Warrant exercise, shares | 49,569 | |||||||
Warrant exercise, amount | 5 | -5 | ||||||
Stock compensation, shares | 150,000 | |||||||
Stock compensation, amount | 166,174 | 15 | 166,159 | |||||
Warrant grant, amount | 321,603 | 321,603 | ||||||
Net loss | -6,349,194 | -1,727 | -6,347,467 | |||||
Ending balance, amount at Sep. 30, 2014 | $1,521,428 | $0 | $6,381 | $27,400,241 | $0 | ($459) | ($25,853,234) | ($31,501) |
Ending balance, shares at Sep. 30, 2014 | 0 | 63,805,451 | 23,334 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows from Operating Activities: | ||||
Net loss | ($6,349,194) | ($4,132,598) | ($6,086,197) | ($4,134,061) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 243,861 | 199,090 | 289,289 | 233,825 |
Stock-based compensation | 2,146,162 | 1,383,638 | 1,765,074 | 1,481,242 |
Beneficial Conversion Feature | 116,667 | 120,254 | ||
Amortization of deferred financing costs | 0 | 42,238 | 51,624 | 32,851 |
Loss on sale of assets | 0 | 4,819 | ||
(Increase) decrease in operating assets: | ||||
Accounts receivable | 71,917 | 144,656 | 10,406 | 90,662 |
Inventory | -93,664 | 0 | -16,458 | 8,077 |
Prepaid expenses and other assets | 15,162 | -347,152 | 22,431 | 51,233 |
Increase (decrease) in operating liabilities: | ||||
Accounts payable | 53,836 | -110,833 | 136,689 | -51,211 |
Accrued expenses | -78,277 | 0 | 17,845 | 38,276 |
Increase (decrease) in foreign assets and liabilities, currency translation | 1,268 | 0 | ||
Total adjustments | 2,358,997 | 1,311,637 | 2,394,835 | 2,010,028 |
Net Cash Used in Operating Activities | -3,990,197 | -2,820,961 | -3,692,630 | -2,124,033 |
Cash Flows from Investing Activities: | ||||
Purchase of property and equipment | -24,702 | -24,358 | -104,411 | -272,013 |
Acquisition of intellectual property | 0 | 0 | -205,200 | 0 |
Net Cash Used in Investing Activities | -24,702 | -24,358 | -309,611 | -272,013 |
Cash Flows from Financing Activities: | ||||
Proceeds from Loan | 253,083 | 0 | 0 | 265,525 |
Principal payments on Loan | 0 | 0 | ||
Proceeds from issuance of stock | 3,481,300 | 4,006,500 | 5,380,632 | 1,887,556 |
Net Cash Provided by Financing Activities | 3,734,383 | 4,006,500 | 5,380,632 | 2,153,081 |
Net Increase (Decrease) in Cash and Cash Equivalents | -280,516 | 1,161,181 | 1,378,391 | -242,965 |
Cash and Cash Equivalents, beginning of period | 1,740,989 | 362,598 | 362,598 | 605,563 |
Cash and Cash Equivalents, end of period | 1,460,473 | 1,523,779 | 1,740,989 | 362,598 |
Supplemental Disclosure Information: | ||||
Cash paid for interest | 64,112 | 43,348 | 58,803 | 62,689 |
Cash paid for taxes | 0 | 0 | 0 | 0 |
Non-cash Disclosures: | ||||
Financing and extinguishment of debt | 350,000 | 0 | ||
Exchanged debt for common shares | $28,000 | $0 |
1_NATURE_OF_OPERATIONS
1. NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. NATURE OF OPERATIONS | NOTE 1: NATURE OF OPERATIONS |
Mobiquity Technologies, Inc., a New York corporation (the “Company”), operates a national location-based mobile advertising network comprised of a consumer-focused proximity network. The Company’s integrated suite of proprietary location based mobile advertising technologies allows clients to execute more personalized and contextually relevant experiences, driving brand awareness and incremental revenue. The Company has currently installed its location-based mobile advertising solutions in approximately 180 locations as of October 2014 and is currently expanding to 240 retail destinations across the U.S. to create "smart malls" using Bluetooth-enabled iBeacon compatible technology. The Company plans to expand outside the malls with additional synergistic venues that will allow for cross marketing opportunities in such venues as stadiums, arenas, additional college campuses, airports and retail chains. | |
The Company operates through its wholly-owned subsidiaries, Ace Marketing & Promotions, Inc. (“Ace Marketing”) and Mobiquity Networks, Inc. (“Mobiquity Networks”). Mobiquity Networks operates an office in Spain, which operates under a wholly-owned Spanish subsidiary. Ace Marketing is the Company’s legacy marketing and promotions business which provides integrated marketing services to commercial customers. While Ace Marketing currently represents substantially all of the Company’s revenue, the Company anticipates that activity from Ace Marketing will represent a diminishing portion of corporate revenue as the Company is presently focused principally on developing and executing on opportunities in its Mobiquity Networks business. | |
As used herein, the term “Common Stock” means the Company’s common stock, par value $0.0001 per share. |
2_SUMMARY_OF_SELECTED_SIGNIFIC
2. SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||
Accounting Policies [Abstract] | ||||||
2. SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS – | ||||
BASIS OF PRESENTATION | On September 10, 2013, Mobiquity Technologies, Inc. changed its name from Ace Marketing & Promotions, Inc. (the "Company" or "Mobiquity"). | |||||
The accompanying condensed consolidated financial statements include the accounts of the Company (formerly known as Ace Marketing & Promotions, Inc.), and its wholly owned subsidiaries, Mobiquity Networks, Ace Marketing and Mobiquity Wireless S.L.U. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements and footnotes thereto are unaudited. | Mobiquity Technologies, Inc. is an advertising technology (Ad Tech) company focusing on connecting Fans (consumers) and Brands through a single platform utilizing Online, Social and Mobile. Mobiquity leverages leading edge mobile technologies including Bluetooth (Push & Beacon BLE), Wi-Fi, NFC (Near Field Communications) and QR (Quick Response) code and employs propriety devices through retail environments to build physical networks. Assets are managed in a single platform creating a new class of consumer engagement and data intelligence. | |||||
The Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, the Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2014 and 2013 and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 have been prepared by the Company without audit, and in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of Company management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly in all material respects our financial position as of September 30, 2014, results of operations for the three months and nine months ended September 30, 2014 and 2013 and cash flows for the nine months ended September 30, 2014 and 2013. All such adjustments are of a normal recurring nature. The results of operations and cash flows for the nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year. The Company has evaluated subsequent events through the filing of this Form 10-Q with the SEC, and determined there have not been any events that have occurred that would require adjustments to our unaudited Condensed Financial Statements. | Mobiquity Technologies has developed and acquired a number of innovative marketing technologies, spanning location-based mobile marketing, mobile customer data analytics, web content and customer relationship management, that it will continue to leverage through its two wholly-owned U.S. subsidiaries: Mobiquity Networks and Ace Marketing & Promotions and Mobiquity Wireless SLU, a company incorporated in Spain. | |||||
The information contained in this report on Form 10-Q should be read in conjunction with our Form 10-K for the Company’s fiscal year ended December 31, 2013. | Ace Marketing, Inc., which recently changed its name to its parent corporation’s old name, namely, Ace Marketing & Promotions, Inc. (“AMI”), is an Integrated Marketing Company focused on marketing process analysis and technology-based growth acceleration strategies. AMI offers Brand Analysis & Development, Website Analysis & Development, Database Analysis & Building, and Integrated Marketing Campaigns using: direct mail, email marketing, mobile marketing, promotional products and other mediums that help its clients connect with their customers and acquire new business | |||||
ESTIMATES | Mobiquity Networks, Inc. is a leading provider of hyper-local mobile marketing solutions. Mobiquity is continuing to attempt to build one of the nation's largest Location-Based Mobile Marketing networks. Location-Based Mobile Marketing is a mobile marketing tool that delivers rich digital content to any Bluetooth or Wi-Fi enabled device within a 300ft radius of a central terminal. Our technology permits delivery to virtually any mobile device and properly formats each message to ensure that every user receives the best possible experience. Results are fully trackable, giving campaigns full performance accountability. We offer brands the opportunity to reach millions of consumers with relevant, engaging content that is 100% free to the end user. The Mobiquity network is the largest mall-based Bluetooth network of its kind. It is currently installed in 100 malls across the US, covering each of the top 10 designated marketing areas (“DMA’s”), and has the ability to reach approximately 120 million shopping visits per month. | |||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | Mobiquity Wireless SLU is a corporation incorporated in Spain. This corporation has an office in Spain to support our U.S. operations. See “Note 2” below regarding “Acquisition of Assets of FuturLink.” | |||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | Agreement with Simon Property Group, L.P. | |||||
Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | In April 2011, we signed an exclusive rights agreement with a Top Mall Developer (the "Simon Property Group") to create a location-based mobile marketing network utilizing Bluetooth technology called Mobiquity Networks. In August 2013, we amended the original agreement to now provide for a 75 mall agreement by the end of 2013, which contract runs through December 31, 2017 and includes top malls in the Simon Mall portfolio. Through our partnership agreement with Eye Corp., we also are located in 25 Macerich malls. These agreements provide advertisers the opportunity to reach millions of mall visitors per month with mobile content and offers when they are most receptive to advertising messages. | |||||
ASC 820 defines fair value as the price 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | Our Location-Based Mobile advertising medium is designed to reach on-the-go shoppers via their mobile devices with free rich media content delivered using Bluetooth or Wi-Fi. This advertising medium offers extremely targeted messaging engineered to engage and influence shoppers as they move about the mall environment. | |||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | Mobiquity Networks Mobi-units will be strategically positioned in shopping malls near entrances, anchor stores, escalators and other high-traffic, and high dwell-time areas. Mobiquity Networks Mobi-unit placement takes advantage of the opportunity to provide a reminder to consumers and touch them just before making a purchase decision. These units generate high awareness and brand recognition at the right time and place. | ||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements include the accounts of Mobiquity Technologies, Inc., formerly known as Ace Marketing & Promotions, Inc., and its wholly owned subsidiaries, Mobiquity Networks, Inc., Ace Marketing, Inc., (which has had its name changed to Ace Marketing & Promotions, Inc. and Mobiquity Wireless S.L.U.). All intercompany accounts and transactions have been eliminated in consolidation. | ||||
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2014 and 2013. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. | ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of September 30, 2014 and 2013, because of the relatively short-term maturity of these instruments and their market interest rates. | FAIR VALUE OF FINANCIAL INSTRUMENTS - Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | |||||
CASH AND CASH EQUIVALENTS | ASC 820 defines fair value as the price 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | |||||
The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | ||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||
REVENUE RECOGNITION - Ace Marketing | Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | ||||
Revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the customer's receipt of the merchandise. Revenue is recognized on a gross basis since the Company has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. The Company records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided. | Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of December 31, 2013 and 2012. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. | |||||
Revenue Recognition – Mobiquity Networks | The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of December 31, 2013 and 2012 , because of the relatively short-term maturity of these instruments and their market interest rates. | |||||
Mobiquity has three avenues of income with our beacon platform, Bluetooth Push and Wi-Fi. Revenue is realized with the signing of the contract. The customer signs for a specific campaign costing a specific amount billed before the campaign is put into action. Revenue is recognized the same way for the three avenues of income. | RECLASSIFICATIONS - Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses. | |||||
The first option to earn revenue with the beacon platform is for customers to do campaigns, advertising on our platform, either directly through their app or through 3rd party apps. The second option to earn revenue is through a share on campaigns, a retailer would install our beacon SDK on their app, to which they would sell advertising on. Revenue they earn would be shared with Mobiquity. The third option would be though selling data. | CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. | |||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the uncollectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. | CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents. | |||||
INVENTORY - Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There has been no reserves placed on inventory, based on this arrangement. | Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited. | |||||
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. | The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash. Management does not believe significant credit risk exists at December 31, 2013 and 2012. | |||||
LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. | REVENUE RECOGNITION - Revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the customer's receipt of the merchandise. Revenue is recognized on a gross basis since the Company has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. | |||||
WEBSITE TECHNOLOGY - Website technology developed during the year was capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985. | The Company records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. | |||||
ADVERTISING COSTS - Advertising costs are expensed as incurred. For the three months ended September 30, 2014 and 2013 there were advertising costs of zero and $500, respectively. In the nine months ended September 30, 2014 and 2013, there were advertising costs of $288 and $3,840, respectively. | Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided. | |||||
ACCOUNTING FOR STOCK BASED COMPENSATION - Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Common Stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. | ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the uncollectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. | |||||
BENEFICIAL CONVERSIONS - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair value of the underlying Common Stock less the proceeds that have been received for the debt instrument limited to the value received. The beneficial conversion amount is recorded as interest expense and an increase to additional paid-in-capital. The beneficial conversion has been fully accreted to the face value of the original loan and interest expense has been recognized. | INVENTORY – Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There has been no reserves placed on inventory, based on this arrangement. | |||||
FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows: | PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. | |||||
(i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. | LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. | ||||
(ii) | Fixed assets and equity transactions at historical rates. | |||||
(iii) | Revenue and expense items at the average rate of exchange prevailing during the period. | WEBSITE TECHNOLOGY - Website technology developed during the year was capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985. | ||||
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income. | ADVERTISING COSTS - Advertising costs are expensed as incurred. For the years ended December 31, 2013 and 2012 there were advertising costs of $3,840 and $1,404, respectively. | |||||
No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to September 30, 2014. | ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. Refer to Note 8 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion. | |||||
INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. | BENEFICIAL CONVERSIONS - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair value of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received. The beneficial conversion amount is recorded as interest expense and an increase to additional paid-in-capital. The beneficial conversion has been fully accreted to the face value of the original loan and interest expense has been recognized. | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows: | |||||
In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction and industry specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however management believes that there will be no material effect on the consolidated financial statements. | (i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. | ||||
(ii) | Fixed assets and equity transactions at historical rates. | |||||
In September 2014, FASB issued Accounting Standards Update (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. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements. | (iii) | Revenue and expense items at the average rate of exchange prevailing during the period. | ||||
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. | Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income. | |||||
No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to December 31, 2013. | ||||||
INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||||
NET INCOME PER SHARE - Basic net income per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 26,185,000 and 18,895,000 because they are anti-dilutive, as a result of a net loss for the years ended December 31, 2013 and 2012, respectively. | ||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||||||
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. |
2a_PROPERTY_AND_EQUIPMENT
2a. PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
PROPERTY AND EQUIPMENT | Property and equipment, net, consist of the following at December 31: | ||||||||||
USEFUL LIVES | 2013 | 2012 | |||||||||
Furniture and Fixtures | 5 years | $ | 1,060,084 | $ | 955,673 | ||||||
Leasehold Improvements | 5 years | 4,084 | 4,084 | ||||||||
1,064,168 | 959,757 | ||||||||||
Less Accumulated Depreciation | 596,035 | 378,190 | |||||||||
$ | 466,772 | $ | 581,567 | ||||||||
Depreciation expense for the years ended December 31, 2013 and 2012 was $219,206 and $183,825, respectively. |
2b_INTANGIBLE_ASSETS
2b. INTANGIBLE ASSETS | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
INTANGIBLE ASSETS | Intangible assets, net, consist of the following at December 31: | ||||||||||
USEFUL LIVES | 2013 | 2012 | |||||||||
Contractual license | 5 years | $ | 250,000 | $ | 250,000 | ||||||
Acquisition of intellectual property (FuturLink) | 5 years | 160,200 | – | ||||||||
Website technology development | 5 years | 45,000 | – | ||||||||
455,200 | 250,000 | ||||||||||
Less Accumulated Depreciation | 153,416 | 83,333 | |||||||||
$ | 301,784 | $ | 166,667 | ||||||||
Future amortization, for the years ending December 31, is as follows: | |||||||||||
2013 | $ | 91,040 | |||||||||
2014 | 91,040 | ||||||||||
2015 | 57,707 | ||||||||||
2016 | 41,040 | ||||||||||
2017 | 20,957 | ||||||||||
thereafter | – | ||||||||||
301,784 | |||||||||||
Amortization expense for the years ended December 31, 2013 and 2012 was $70,083 and $50,000, respectively. | |||||||||||
Acquisition of Assets of FuturLink | |||||||||||
On March 7, 2013, the Company acquired the assets of FuturLink at a cost of approximately $160,200, which cash was paid from the Company’s current working capital. These assets include, without limitation, the FuturLink technology (patents and source codes), trademark(s) and access point (proximity marketing) component parts. At the time of acquisition, FuturLink’s assets were minimal; the purchase price was apportioned to the intellectual property received in exchange. The Company changed its name to Mobility Networks upon acquisition and is a consolidated component of these financial statements. |
3_LOSS_PER_SHARE
3. LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2014 | |
Net Loss Per Common Share: | |
3. LOSS PER SHARE | NOTE 3: LOSS PER SHARE |
Basic loss per common share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Dilutive loss per share gives effect to stock options and warrants, which are considered to be dilutive Common Stock equivalents. Basic loss per common share was computed by dividing net loss by the weighted average number of shares of Common Stock outstanding. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 37,304,000 and 23,179,000 because they are anti-dilutive as a result of a net loss for the three months ended September 30, 2014 and 2013, respectively. |
4_CONVERTIBLE_PROMISSORY_NOTE
4. CONVERTIBLE PROMISSORY NOTE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ||
4. CONVERTIBLE PROMISSORY NOTE | NOTE 4: CONVERTIBLE PROMISSORY NOTE | On June 12, 2012, the Company closed on a security agreement (the “Security Agreement”) with TCA related to a $350,000 convertible promissory note issued by the Company in favor of TCA (the “Convertible Note”), which Convertible Note was funded by TCA on June 12, 2012. The maturity date of the Convertible Note was December 2013, and the Convertible Note bears interest at a rate of twelve percent (12%) per annum. The Convertible Note is convertible into shares of the Company’s common stock at a price equal to ninety-five percent (95%) of the average of the lowest daily volume weighted average price of the Company’s common stock during the five (5) trading days immediately prior to the date of conversion. The Convertible Note may be prepaid in whole or in part at the Company’s option without penalty. The Security Agreement granted to TCA a continuing, first priority security interest in all of the Company’s assets, wheresoever located and whether now existing or hereafter arising or acquired. The Company’s wholly-owned subsidiary, Mobiquity Networks, Inc., also entered into a similar Security Agreement and Guaranty Agreement. On December 12, 2013, TCA sold its entire interest in the Company’s $350,000 secured promissory note to Thomas Arnost, a director of the Company, at face value. Mr. Arnost entered into an amendment to the note to extend the maturity date of the note to June 12, 2014, subject to his right to declare the note due and payable at any time in his sole discretion. Also, the interest rate was raised from 12% per annum to 15% and the conversion price of the shares issuable upon conversion of the note was fixed at $.30 per share. The aforementioned note is convertible at the sole discretion of the noteholder. The noteholder immediately converted $28,000 into 93,334 shares of common stock in December 2013. The balance on the note is $322,000 as of December 31, 2013 and interest accrued in the amount of $2,158, included in accrued expense. |
In July 2014, the Company raised $250,000 in gross proceeds from the sale of convertible promissory notes in the principal amount of $250,000 with a maturity date of July 31, 2017. The noteholders also received Class CC Warrants to purchase 125,000 shares of common Stock, exercisable at $1.20 per share through July 31, 2017. The placement agent received $17,500 in cash, 25,000 shares of restricted Common Stock and five-year warrants to purchase 7,500 shares of Common Stock at an exercise price of $.60 per share. The notes bear interest at the rate of 6% per annum with semi-annual payments to be paid on January 31st and July 31st of each year with the first interest payment due on January 31, 2015. At the option of the noteholder, the principal and accrued interest thereon is convertible at the greater of $.50 per share or 85% of the average daily volume weighted average price of the Company’s Common Stock on the OTCQB during the 20 trading days immediately preceding the applicable interest date or conversion date. In the event the Company’s Common Stock has a closing sales price of at least $1.00 per share on the OTCQB for a period of at least 10 trading days with an average daily volume weighted average of at least 25,000 shares, then the Company’s promissory notes shall automatically converted into shares of the Company’s Common Stock at 85% of the average VWAP during the 20 trading days immediately preceding the conversion date. | The Company evaluated the terms of the new note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized a beneficial conversion feature in the amount of $116,667. The beneficial conversion feature was recorded as an increase in additional paid-in capital and recognized interest expense in the period. | |
On June 12, 2012, the Company closed on a security agreement (the “Security Agreement”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”) related to a $350,000 convertible promissory note issued by the Company in favor of TCA (the “Convertible Note”) (see Note 13). The maturity date of the Convertible Note was December 2013, and the Convertible Note bears interest at a rate of twelve percent (12%) per annum. The Convertible Note was convertible into shares of Common Stock at a price equal to ninety-five percent (95%) of the average of the lowest daily volume weighted average price of the Common Stock during the five (5) trading days immediately prior to the date of conversion. The Convertible Note may be prepaid in whole or in part at the Company’s option without penalty. The Security Agreement granted to TCA a continuing, first priority security interest in all of the Company’s assets, wheresoever located and whether now existing or hereafter arising or acquired. The Company’s wholly-owned subsidiary, Mobiquity Networks, Inc., also entered into a similar Security Agreement and Guaranty Agreement. On December 12, 2013, TCA sold its entire interest in the Company’s $350,000 secured promissory note to Thomas Arnost, a director of the Company, at face value. Mr. Arnost entered into an amendment to the note to extend the maturity date of the note to June 12, 2014, subject to his right to declare the note due and payable at any time in his sole discretion. Also, the interest rate was raised from 12% per annum to 15% per annum with interest payable monthly and the conversion price of the shares issuable upon conversion of the note was fixed at $.30 per share. The due date of the note was further extended to December 12, 2014 and is convertible at the sole discretion of the noteholder. The noteholder immediately converted $28,000 into 93,334 shares of Common Stock in December 2013. The principal balance on the note is $322,000 as of September 30, 2014 and December 31, 2013. | ||
The Company evaluated the terms of the new note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying Common Stock at the inception of the note. Therefore, the Company recognized a beneficial conversion feature in the amount of $116,667. The beneficial conversion feature was recorded as an increase in additional paid-in capital and recognized interest expense in the year ended December 31, 2013. |
4a_INCOME_TAXES
4a. INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | The provision for income taxes for the years ended December 31, 2013 and 2012 is summarized as follows: | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | – | – | ||||||
State | – | – | |||||||
– | – | ||||||||
Deferred: | |||||||||
Federal | – | – | |||||||
State | – | – | |||||||
$ | – | $ | – | ||||||
The Company has federal and state net operating loss carry forwards of approximately $12,235,000, which can be used to reduce future taxable income through 2030. The Company is open for tax years for the years ended 2008 through present. | |||||||||
The tax effects of temporary differences which give rise to deferred tax assets (liabilities) are summarized as follows: | |||||||||
YEARS ENDED DECEMBER 31, | |||||||||
2013 | 2012 | ||||||||
Deferred Tax Assets: | |||||||||
Net operating loss carry-forwards | $ | 6,698,000 | $ | 4,446,000 | |||||
Stock based compensation | 2,605,000 | 1,939,000 | |||||||
Beneficial Conversion Feature | 46,000 | 46,000 | |||||||
Allowance for doubtful accounts | 8,000 | 8,000 | |||||||
Deferred Tax Assets | 9,357,000 | 6,439,000 | |||||||
Less Valuation Allowance | 9,357,000 | 6,439,000 | |||||||
Net Deferred Tax Asset | $ | – | $ | – | |||||
A reconciliation of the federal statutory rate to the Company's effective tax rate is as follows: | |||||||||
YEARS ENDED DECEMBER 31, | |||||||||
2013 | 2012 | ||||||||
Federal Statutory Tax Rate | 34 | % | 34 | % | |||||
State Taxes, net of Federal benefit | 6 | % | 6 | % | |||||
Change in Valuation Allowance | (40.00 | %) | (40.00 | %) | |||||
Total Tax Expense | 0 | % | 0 | % | |||||
4b_STOCKHOLDERS_EQUITY
4b. STOCKHOLDERS' EQUITY | 12 Months Ended | ||
Dec. 31, 2013 | |||
Equity [Abstract] | |||
STOCKHOLDERS' EQUITY | On January 30, 2012, the Company’s private placement offering was terminated. Rockwell Global Capital LLC acted as Placement Agent. The Company received gross proceeds of $575,000 from the sale of 958,338 shares of Common Stock at a purchase price of $.60 per share. The private placement offering also included the sale of Warrants to purchase 191,671 shares of Common Stock, exercisable at $.60 per share and expiring on January 18, 2016. The Placement Agent received a $25,000 advisory fee, $51,750 in commissions and warrants to purchase 95,833 shares identical to the warrants sold to investors in the offering. Exemption is claimed for the sale of securities pursuant to Rule 506 and/or Section 4(2) of the Securities Act of 1933, as amended. | ||
The Company is required to file a Registration Statement with the Securities and Exchange Commission (“SEC”) to register the resale of the shares of Common Stock sold in the private placement offering and the resale of the shares of Common Stock issuable upon exercise of the Class AA Warrants (collectively the “Registrable Shares”). If a Registration Statement covering the Registrable Shares is not filed with the SEC on or before March 15, 2012 or is not declared effective within 120 days of January 30, 2012 (subject to a 60 day extension in the event the SEC is performing a full review of the Registration Statement), the Company shall pay to each investor as liquidated damages, a payment equal to 1.5% of the aggregate amount invested by such investor in the offering, cumulative for every 30 day period until such Registration Statement has been filed or declared effective or a portion thereof, up to a maximum of 15% per annum. The Company, at its sole discretion, elected to pay the liquidated damage payment in Common Stock. As of December 31, 2012, the Registration Statement has not been filed and the Company has elected to issue the maximum liquidation damages for a period of one year of an aggregate of 197,860 shares. | |||
In April 2012, the Company received $270,000 from the exercise of Warrants and issued 900,000 shares of its Common Stock. Between April 1, 2012 and May 15, 2012, the Company sold 470,000 shares of Series 1 Convertible Preferred Stock at $1.00 per share pursuant to an ongoing plan of financing. The Series 1 Preferred Stock had the following rights, preferences and privileges: | |||
· | Automatic Conversion into Common Stock. Each Preferred Share shall automatically convert on March 31, 2013 into shares of the Company’s Common Stock (the “Common Shares”) based on a conversion price of the lower of $.60 per share or an amount equal to 90% of the average closing sales price for the Company’s Common Stock on the OTC Bulletin Board (or Pink Sheets) for the 20 trading days immediately preceding March 31, 2013, with a floor of $.45 per share. The number of shares of Common Stock issuable pursuant to the automatic conversion ranges from a minimum of 366,666 shares to a maximum of 488,888 shares. | ||
· | Optional Conversion into Common Stock. Commencing July 1, 2012, each Preferred Share shall at the option of the holder become convertible into Common Shares based on a conversion price of the lower of $.60 per share or 85% of the average closing sales price for the Company’s Common Stock on the OTC Bulletin Board (or Pink Sheets) for the 20 trading days immediately preceding the Conversion Date, with a floor of $.45 per share. The number of shares of Common Stock issuable pursuant to the optional conversion ranges from a minimum of 366,666 shares to a maximum of 488,888 shares. | ||
· | Conversion Premium. Upon calculation of the number of Common Shares, the Preferred Shareholder is entitled to receive upon conversion of Series 1 Preferred Stock into Common Stock; the investor will receive an additional 8% premium. Accordingly, once the number of Common Shares is determined based upon the automatic conversion or optional conversion formulas set forth above, the investor will have that number of Common Stock multiplied by 1.08 (i.e. 108%) to determine the actual number of Common Shares to be issued upon conversion. | ||
· | Voting. The Preferred Shares shall have no voting rights until converted into Common Shares, except as otherwise required by applicable state law. | ||
· | Dividends. The Preferred Shares shall have no dividend rights until converted into Common Shares, except as otherwise required by applicable state law. | ||
· | Liquidation Preference. The Preferred Shares shall have no liquidation preference and shall be treated the same as a holder of Common Shares. | ||
· | Call Option. The Company may call the Preferred Shares for redemption at a price of $1.08 per share at any time on or after July 1, 2012, subject to the investor’s right of conversion upon no less than 10 days prior written notice of redemption to each Preferred Shareholder, which notice may only be provided to the holders so long as the Company completes a financing or series of financings totaling at least $2 million in gross proceeds (excluding monies raised from the sale of the Series 1 Preferred Stock). | ||
On July 10, 2012, the Company sold 1,347,201 shares of its Common Stock to various investors at $.45 per share subject to certain anti-dilution rights for a period of twenty four months. Due to the Company’s November 2012 offering at $.30 per share as described below, the Company issued an additional 673,598 shares pursuant to the aforementioned anti-dilution rights. The Company received gross proceeds of $606,240 before offering costs. Each investor received Fixed Price Warrants to purchase 50% of the number of shares of Common Stock purchased in the Offering. The Fixed Price Warrants are exercisable at any time from the date of issuance through July 10, 2017 at an exercise price of $.55. Each investor also received a Warrant to purchase 20% of the number of shares that were purchased in the Offering (the “Milestone Warrants”). The Milestone Warrants provided that they would automatically be exercised without any additional consideration to be paid in the event the Company reports audited gross revenues of less than $5,000,000 for the period July 1, 2012 through June 30, 2013 unless the volume weighted average price for the Company’s Common Stock exceeds $1.00 per share for a period of at least 30 trading days prior to January 5, 2013. In August 2013, the Company issued 258,327 shares of Common Stock pursuant to the Milestone Warrants without any cash consolidation being paid. Exemption from registration for the sale of securities is claimed under Rule 506 of Regulation D promulgated pursuant to Section 4(2) of the Securities Act of 1933, as amended. | |||
In November, 2012, the Series 1 preferred stock investors who invested an aggregate of $250,000 in April 2012 at a $1 per share agreed to convert their 250,000 preferred shares into an aggregate of 833,334 common shares and warrants to purchase 416,667 shares, which warrants are identical to the warrants which were sold to the Legend investors described below. The remaining 220,000 shares of outstanding Series 1 Preferred Stock automatically converted into 528,000 shares of restricted Common Stock on March 31, 2013. | |||
In November 2012, the aforementioned Series 1 stock investors, who invested an aggregate of $250,000 in April 2012 together with another Common Stock holder, invested $301,000 at an offering price of $.30 per share and received 1,003,334 shares of Common Stock and Warrants to purchase 501,667 shares, exercisable at $.50 per share through December 15, 2017. Exemption from registration for the sale of securities is claimed under Rule 506 of Regulation D promulgated pursuant to Section 4(2) of the Securities Act of 1933, as amended. | |||
During 2013, the Company raised $5,562,816 in gross proceeds from the sale of its Common Stock at $.30 per share and a subscription for an additional $175,000, which was received in January 2014. Pursuant to said offering, the Company sold 19,125,006 shares of its Common Stock and Class BB Warrants to purchase 9,562,503 shares of Common Stock exercisable at $.50 per share through December 15, 2017. A total of $182,184 was incurred for offering costs, including $150,000 of commissions paid to a licensed member of FINRA together with Warrants to purchase 625,000 shares. Exemption from registration for the sale of the aforementioned securities is claimed under Rule 506 of Regulation D promulgated pursuant to Section 4(2) of the Securities Act of 1933, as amended. Thomas Arnost, Sean Trepeta, and Sean McDonnell, officers and/or directors of the Company, purchased $200,000, $90,000 and $50,000, respectively, of securities pursuant to said offering. |
4c_SHAREBASED_COMPENSATION
4c. SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | In July 2012 and November 2012 the Company issued to consultants five year warrants to purchase 37,250 shares and 125,000 shares respectively, at exercise prices ranging from $.35 per share to $.55 per share. |
In January 2013, the Company issued to consultants, warrants to purchase 600,000 shares exercisable at $.30 per share through January 2017. In June 2013, the Company issued to consultants, options to purchase 500,000 shares exercisable at $.30 per share through April 11, 2018. | |
During the past three years, the Company has granted under our 2005 Plan certain employees and consultants restricted stock awards for services for the prior year with vesting to occur after the passage of an additional 12 months. These awards totaled 51,000 Shares for 2009, subject to continued services with the Company through December 31, 2009. These awards totaled 105,000 Shares for 2010 subject to continued services with the Company through December 31, 2010. These awards totaled 45,000 Shares for 2011 subject to continued services with the Company through December 31, 2012. | |
All stock options under the Plan are granted at or above the fair market value of the common stock at the grant date. Employee and non-employee stock options generally vest over periods ranging from one to three years and generally expire either five or ten years from the grant date. | |
The Company's Plan is accounted for, in accordance with the recognition and measurement provisions requires compensation costs related to share-based payment transactions, including employee stock options, to be recognized in the financial statements. In addition, the Company adheres to the guidance set forth within Securities and Exchange Commission which provides the staff's views regarding the interaction between certain SEC rules and regulations and provides interpretations with respect to the valuation of share-based payments for public companies. | |
The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon historical volatility of the Company's stock and other contributing factors. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. Previously such assumptions were determined based on historical data. | |
In June, 2011, the Company hired an advisor to provide investor awareness and business advisory services at a cost of $10,000 per month and 25,000 shares of restricted stock. For January through June 2012 the Company issued 150,000 shares of common stock for consulting services. Pursuant to an agreement effective June, 2012 the Company agreed to pay the adviser $10,000 per month plus 100,000 shares per quarter. A total of 200,000 shares of common stock were issued for the last six months of 2012. The advisory agreement was terminated in November 2012 and then a new agreement was entered into pursuant to which the adviser received five year warrants to purchase 125,000 shares of common stock exercisable at $.35 per share through November, 2017. | |
In April 2012 the Company entered into various business advisory agreements pursuant to which a total of 535,000 shares were issued in connection with services rendered. In September 2012, an aggregate of 71,040 shares of common stock were returned to the Company for cancellation to settle a dispute between the Company and certain consultants. | |
For the year 2013, the Company issued an aggregate of 2,402,969 shares in connection with business advisory services, at a fair market value of $1,048,091. |
5_STOCK_COMPENSATION
5. STOCK COMPENSATION | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||
5. STOCK COMPENSATION | NOTE 5: STOCK COMPENSATION | The Company's results for the years ended December 31, 2013 and 2012 include employee share-based compensation expense totaling $1,765,074 and $1,481,242, respectively. Such amounts have been included in the Statements of Operations within selling, general and administrative expenses. No income tax benefit has been recognized in the statement of operations for share-based compensation arrangements due to a history of operating losses. | ||||||||||||||||||||||||
Compensation costs related to share-based payment transactions, including employee stock options, are recognized in the financial statements utilizing the straight line method for the cost of these awards. The Company's results for the three month periods ended September 30, 2014 and 2013 include employee share-based compensation expense totaling approximately $504,000 and $332,000, respectively. The Company's results for the nine month periods ended September 30, 2014 and 2013 include employee share-based compensation expense totaling approximately $2,146,200 and $1,383,600, respectively. Such amounts have been included in the Condensed Consolidated Statements of Operations within selling, general and administrative expenses. No income tax benefit has been recognized in the statement of operations for share-based compensation arrangements due to a history of operating losses. The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013: | The following table summarizes stock-based compensation expense for the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Years Ended December 31, | ||||||||||||||||||||||||
September 30, | September 30, | 2013 | 2012 | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Employee stock based compensation-option grants | $ | 258,511 | $ | 238,500 | ||||||||||||||||||
Employee stock-based compensation - option grants | $ | 430,466 | $ | 51,928 | $ | 1,343,803 | $ | 175,248 | Employee stock based compensation-stock grants | – | 13,500 | |||||||||||||||
Employee stock-based compensation - stock grants | – | – | – | – | Non-Employee stock based compensation-option grants | 347,138 | 297,011 | |||||||||||||||||||
Non-Employee stock-based compensation - option grants | 73,502 | 55,055 | 110,008 | 284,655 | Non-Employee stock based compensation-stock grants | 1,048,091 | 881,547 | |||||||||||||||||||
Non-Employee stock-based compensation - stock grants | – | 186,904 | 370,748 | 812,401 | Non-Employee stock based compensation-stock warrant | 111,334 | 50,684 | |||||||||||||||||||
Non-Employee stock-based compensation-stock warrant | 38,110 | 321,603 | 111,334 | $ | 1,765,074 | $ | 1,481,242 | |||||||||||||||||||
Total | $ | 503,968 | $ | 331,997 | $ | 2,146,162 | $ | 1,383,638 |
6_STOCK_OPTION_PLAN
6. STOCK OPTION PLAN | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||
6. STOCK OPTION PLAN | NOTE 6: STOCK OPTION PLAN | During Fiscal 2005, the Company established, and the stockholders approved, an Employee Benefit and Consulting Services Compensation Plan (the "2005 Plan") for the granting of up to 2,000,000 non-statutory and incentive stock options and stock awards to directors, officers, consultants and key employees of the Company. On June 9, 2005, the Board of Directors amended the Plan to increase the number of stock options and awards to be granted under the Plan to 4,000,000. During Fiscal 2009, the Company established a plan of long-term stock-based compensation incentives for selected Eligible Participants of the Company covering 4,000,000 shares. This plan was adopted by the Board of Directors and approved by stockholders in October 2009 and shall be known as the 2009 Employee Benefit and Consulting Services Compensation Plan (the "2009 Plan"). In September 2013, the Company’s stockholders approved an increase in the number of shares covered by the 2009 Plan to 10,000,000. (The 2005 and 2009 Plans are collectively referred to as the “Plans” and the Company has a combined 14,000,000 shares available for issuance under the Plans.) | ||||||||||||||||||||||||||||||||||||
During Fiscal 2005, the Company established, and the stockholders approved, an Employee Benefit and Consulting Services Compensation Plan (the "2005 Plan") for the granting of up to 2,000,000 non-statutory and incentive stock options and stock awards to directors, officers, consultants and key employees of the Company. On September 9, 2005, the Board of Directors amended the Plan to increase the number of stock options and awards to be granted under the Plan to 4,000,000. During Fiscal 2009, the Company established a plan of long-term stock-based compensation incentives for selected Eligible Participants of the Company covering 4,000,000 shares. This plan was adopted by the Board of Directors and approved by stockholders in October 2009 and shall be known as the 2009 Employee Benefit and Consulting Services Compensation Plan (the "2009 Plan"). In September 2013, the Company’s stockholders approved an increase in the number of shares covered by the 2009 Plan to 10,000,000. (The 2005 and 2009 Plans are collectively referred to as the “Plans” and the Company has a combined 14,000,000 shares available for issuance under the Plans.) | All stock options under the Plans are granted at or above the fair market value of the common stock at the grant date. Employee and non-employee stock options vest over varying periods and generally expire either 5 or 10 years from the grant date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For option grants, the Company will take into consideration payments subject to the provisions of ASC 718 "Stock Compensation", previously Revised SFAS No. 123 "Share-Based Payment" ( "SFAS 123 (R)"). The fair values of these restricted stock awards are equal to the market value of the Company's stock on the date of grant, after taking into certain discounts. The expected volatility is based upon historical volatility of our stock and other contributing factors. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. Previously, such assumptions were determined based on historical data. | |||||||||||||||||||||||||||||||||||||
All stock options under the Plans are granted at or above the fair market value of the Common Stock at the grant date. Employee and non-employee stock options vest over varying periods and generally expire either 5 or 10 years from the grant date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For option grants, the Company will take into consideration payments subject to the provisions of ASC 718 "Stock Compensation", previously Revised SFAS No. 123 "Share-Based Payment" ( "SFAS 123 (R)"). The fair values of these restricted stock awards are equal to the market value of the Company's stock on the date of grant, after taking into certain discounts. The expected volatility is based upon historical volatility of our stock and other contributing factors. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. Previously, such assumptions were determined based on historical data. | The weighted average assumptions made in calculating the fair values of options granted during the years ended December 31, 2013 and 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
The weighted average assumptions made in calculating the fair values of options granted during the three and nine months ended September 30, 2014 and 2013 are as follows: | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
30-Sep | 30-Sep | Expected volatility | 134.99 | % | 303.1 | % | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Expected dividend yield | – | – | ||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.7 | % | 1.06 | % | ||||||||||||||||||||||||||||||||||
Expected volatility | 78.68% | 172.77% | 46.67% | 127.49% | Expected term (in years) | 5.45 | 6.65 | |||||||||||||||||||||||||||||||
Expected dividend yield | – | – | ||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.95% | 0.57% | 2.43% | 0.78% | Weighted | |||||||||||||||||||||||||||||||||
Expected term (in years) | 6.25 | 5 | 8.34 | 5.57 | Weighted | Average | ||||||||||||||||||||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||||||||||||||||||||||||
Share | Weighted | Weighted | Aggregate | Exercise | Contractual | Intrinsic | ||||||||||||||||||||||||||||||||
Average | Average | Intrinsic | Share | Price | Term | Value | ||||||||||||||||||||||||||||||||
Exercise | Remaining | Value | ||||||||||||||||||||||||||||||||||||
Price | Contractual | Outstanding, January 1, 2013 | 4,575,000 | $ | 0.76 | 4.36 | 27,000 | |||||||||||||||||||||||||||||||
Term | Granted | 2,470,000 | $ | 0.38 | 6.44 | |||||||||||||||||||||||||||||||||
Exercised | – | – | ||||||||||||||||||||||||||||||||||||
Outstanding, January 1, 2014 | 7,045,000 | 0.63 | 2.04 | $ | 314,750 | Cancelled / Expired | – | – | ||||||||||||||||||||||||||||||
Granted | 6,785,000 | 0.42 | 7.87 | 150,000 | ||||||||||||||||||||||||||||||||||
Exercised | – | Outstanding, December 31, 2013 | 7,045,000 | $ | 0.49 | 4.52 | 314,750 | |||||||||||||||||||||||||||||||
Cancelled & Expired | (100,000 | ) | 0.9 | |||||||||||||||||||||||||||||||||||
Options exercisable, December 31, 2013 | 7,045,000 | $ | 0.49 | 4.52 | – | |||||||||||||||||||||||||||||||||
Outstanding, September 30, 2014 | 13,730,000 | 0.52 | 5.83 | $ | 253,250 | |||||||||||||||||||||||||||||||||
The weighted-average grant-date fair value of options granted during the years ended December 31, 2013 and 2012 was $.41 and $0.54, respectively. | ||||||||||||||||||||||||||||||||||||||
Options exercisable, September 30, 2014 | 12,063,332 | 0.53 | 5.98 | $ | 253,250 | |||||||||||||||||||||||||||||||||
The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2013 is calculated as the difference between the exercise price of the underlying options and the market price of the Company's common stock for the shares that had exercise prices, that were lower than the $.47 closing price of the Company's common stock on December 31, 2013. | ||||||||||||||||||||||||||||||||||||||
The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2014 and 2013 was $0.41 and $0.42, respectively. | ||||||||||||||||||||||||||||||||||||||
As of December 31, 2013, the fair value of unamortized compensation cost related to unvested stock option awards was zero. | ||||||||||||||||||||||||||||||||||||||
The aggregate intrinsic value of options outstanding and options exercisable at September 30, 2014 is calculated as the difference between the exercise price of the underlying options and the market price of the Common Stock for the shares that had exercise prices, that were lower than the $0.35 closing price of the Common Stock on September 30, 2014. | ||||||||||||||||||||||||||||||||||||||
The option information provided above includes options granted outside of the Plans, which total 1,600,000 as of December 31, 2013. | ||||||||||||||||||||||||||||||||||||||
As of September 30, 2014, the fair value of unamortized compensation cost related to unvested stock option awards was $492,363. | ||||||||||||||||||||||||||||||||||||||
The weighted average assumptions made in calculating the fair value of warrants granted during the years ended December 31, 2013 and 2012 are as follows: | ||||||||||||||||||||||||||||||||||||||
The weighted average assumptions made in calculating the fair value of warrants granted during the three and nine months ended September 30, 2014 and 2013 are as follows: | ||||||||||||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
30-Sep | 30-Sep | |||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Expected volatility | 70.66 | % | 52.88 | % | ||||||||||||||||||||||||||||||
Expected dividend yield | – | – | ||||||||||||||||||||||||||||||||||||
Expected volatility | 0% | 61.13% | 138.35% | 65.61% | Risk-free interest rate | 0.88 | % | 0.3 | % | |||||||||||||||||||||||||||||
Expected dividend yield | – | – | Expected term (in years) | 4.44 | 3.5 | |||||||||||||||||||||||||||||||||
Risk-free interest rate | 0% | 0.57% | 1.49% | 0.78% | ||||||||||||||||||||||||||||||||||
Expected term (in years) | 0 | 2.03 | 4.42 | 4.13 | Weighted | |||||||||||||||||||||||||||||||||
Weighted | Average | |||||||||||||||||||||||||||||||||||||
Share | Weighted | Weighted | Aggregate | Average | Remaining | Aggregate | ||||||||||||||||||||||||||||||||
Average | Average | Intrinsic | Exercise | Contractual | Intrinsic | |||||||||||||||||||||||||||||||||
Exercise | Remaining | Value | Share | Price | Term | Value | ||||||||||||||||||||||||||||||||
Price | Contractual | Outstanding, January 1, 2013 | 14,319,532 | $ | 0.55 | 1.56 | 0 | |||||||||||||||||||||||||||||||
Term | Granted | 11,172,508 | $ | 0.51 | 3.98 | |||||||||||||||||||||||||||||||||
Outstanding, January 1, 2014 | 19,640,375 | $ | .55 | 2.32 | $ | – | Exercised | – | – | |||||||||||||||||||||||||||||
Granted | 5,566,339 | $ | 0.7 | 3.73 | – | Cancelled/Expired | (5,851,665 | ) | – | |||||||||||||||||||||||||||||
Exercised | (185,000 | ) | Outstanding, December 31, 2013 | 19,640,375 | $ | 0.56 | 2.88 | 209,500 | ||||||||||||||||||||||||||||||
Expired | (1,447,800 | ) | ||||||||||||||||||||||||||||||||||||
Outstanding, September 30, 2014 | 23,573,914 | $ | 0.59 | 2.65 | 47,500 | Warrants exercisable, December 31, 2013 | 19,640,375 | $ | 0.56 | 2.88 | 209,500 | |||||||||||||||||||||||||||
Warrants exercisable, September 30, 2014 | 23,573,914 | $ | 0.59 | 2.65 | $ | 47,500 | ||||||||||||||||||||||||||||||||
7_CONSULTING_AGREEMENTS_AND_SH
7. CONSULTING AGREEMENTS AND SHARE BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2014 | |
Consulting Agreements And Share Based Compensation | |
7. CONSULTING AGREEMENTS AND SHARE BASED COMPENSATION | NOTE 7: CONSULTING AGREEMENTS AND SHARE BASED COMPENSATION |
For the year 2013, the Company issued an aggregate of 2,402,969 shares in connection with business advisory services, at a fair market value of $1,048,091. | |
In January 2013, the Company issued to consultants, warrants to purchase 600,000 shares exercisable at $.30 per share through January 2017. In September 2013, the Company issued to consultants, options to purchase 500,000 shares exercisable at $.30 per share through April 11, 2018. | |
In February 2013, the Company entered into an additional financial consulting agreement for a period of 90 days. Pursuant to said agreement, the Company agreed to pay $5,000 per month and to issue 100,000 restricted shares of Common Stock during the term of the agreement. | |
In April 2013, the Company entered into a business development and consulting contract for a term commencing in April and expiring December 31, 2013. Pursuant to said agreement, the Company agreed to pay the consultant a fee of $5,000 per month, plus 1,500,000 shares of restricted Common Stock and warrants to purchase 500,000 restricted shares of Common Stock, exercisable at $.30 per share, over a period of five years. The warrants contain cashless exercise provisions in the event there is not an effective registration statement covering the resale of the underlying shares. | |
On September 30, 2013, the Company entered into an agreement with a consultant to perform financial related services and to assist the Company in raising additional financing. For the consultant’s services, the consultant received, irrespective of success or the amount raised, $65,000 paid on or before December 31, 2013; $150,000 paid on or about March 31, 2014 together with warrants to purchase 700,000 shares at an exercise price of $.30 per share over a term of five years; and 150,000 shares of restricted Common Stock issuable on April 1, 2014. | |
On October 30, 2013, the Company entered into a consulting agreement with a term of six months. Pursuant to the consulting contract, the Company agreed to pay a monthly retainer of $10,000 beginning November 1, 2013 and up to 350,000 shares and up to $100,000 in discretionary bonuses. Of the 350,000 shares, 90,000 shares were issued in December 2013 and the remaining 260,000 shares were issued in February 2014. The $100,000 discretionary bonus was paid in the first quarter of 2014. In February 2014, the board of directors approved and the Company entered into an amendment to the consulting agreement, to extend the contract for an additional three months through July 31, 2014. During the extension period, the Company will continue to pay consultant a fee of $10,000 per month and the consultant is eligible to receive the same discretionary bonuses of up to 350,000 shares (or warrants) and up to an additional $100,000 in discretionary cash bonuses. | |
On April 30, 2014, the Company entered into an agreement with a financial and business advisor to assist the Company in developing relationships with potential strategic business partners and to provide advice with respect to capital raising and other transactions. Pursuant to this agreement, the Company issued five-year warrants to purchase 1,000,000 shares of Common Stock which were fully vested no later than May 30, 2014. In the event the consultant introduces a strategic business partner, then a 1% finder’s fee will be paid to consultant in the same form of consideration as that received by the Company. | |
The Company approved issuing 34,000 shares to a consultant in the second quarter of 2014 for technology services. |
8_PRIVATE_PLACEMENT
8. PRIVATE PLACEMENT | 9 Months Ended | ||
Sep. 30, 2014 | |||
Private Placement | |||
8. PRIVATE PLACEMENT | NOTE 8: PRIVATE PLACEMENT FINANCING | ||
Since 1999, we have relied primarily on equity financings from outside investors to supplement our cash flow from operations. Since January 1, 2012, we have completed the various financing summarized below. | |||
Date | Dollar Amount | # of Securities Sold | |
Jan-12 | $575,000 | 958,338 common shares and warrants to purchase 191,671 common shares; also issued 197,860 penalty shares for electing not to register resale of securities. | |
Apr-12 | 270,000 | Exercise of 900,000 warrants | |
April/May 2012 | 470,000 | Issued preferred stock, which was subsequently converted into 1,361,333 shares and warrants to purchase 41,667 common shares | |
Jul-12 | 606,240 | Issued 2,020,799 common shares, 673,600 warrants and 258,333 additional common shares for failing to reach certain performance milestones. | |
Nov-12 | $301,000 | Issued 1,003,334 common shares and warrants to purchase 501,667 shares. | |
2013 | 5,562,816 (1) | Issued 19,125,000 common shares and warrants to purchase 9,562,000 shares | |
January/February 2014 | 2,160,300 | Issued 7,201,000 common shares and warrants to purchase 3,600,000 shares | |
Mar-14 | 500,000 | Issued 2,000,000 common shares. | |
Jul-14 | 1,000,000 | Issued 2,000,000 shares and warrants to purchase 1,000,000 shares | |
Jul-14 | 250,000 (2) | Issued convertible note in the principal amount of $250,000 and warrants to purchase 125,000 shares | |
____________________ | |||
-1 | Three of our officers and directors purchase a total of $340,000 of securities sold in 2013/2014 private placements. | ||
-2 | Convertible notes: bear interest at 6%, with semiannual interest payments on January 31 and July 31, commencing on January 31, 2015; maturing on July 31, 2017, unless redeemed. At the option of the note holder the principle and accrued interest is convertible at the greater of $0.50 per share or 85% of the variable weighted average price “VWAP”). In the event of the Company’s closing sales price of $1.00 per share on the OTCQB for at least 10 trading days with a VWAP of at least 25,000 shares, then the Notes shall automatically convert at 85% of the VWAP. Each warrant is exercisable at the option of the warrant holder at an exercise price of $1.20 per share through July 31, 2017. | ||
9_SEGMENT_INFORMATION
9. SEGMENT INFORMATION | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||
9. SEGMENT INFORMATION | Reportable operating segment is determined based on Mobiquity Technologies, Inc.'s management approach. The management approach, as defined by accounting standards which have been codified into FASB ASC 280, Segment Reporting,” is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our chief operating decision-maker is our Chief Executive Officer and Chief Financial Officer. | Reportable operating segment is determined based on Mobiquity Technologies, Inc.'s management approach. The management approach, as defined by accounting standards which have been codified into FASB ASC 280, Segment Reporting,” is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our chief operating decision-maker is our Chief Executive Officer and Chief Financial Officer. | ||||||||||||||||||||||||
While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in two operating segments: (i) Ace Marketing and Promotions, Inc. captures Branding & Branded Merchandise (ii) Mobiquity Networks represent our Mobile Marketing. | While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in two operating segments: (i) Ace Marketing and Promotions, Inc. captures Branding & Branded Merchandise (ii) Mobiquity Networks represent our Mobil Marketing. | |||||||||||||||||||||||||
Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below: | Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below: | |||||||||||||||||||||||||
Quarter Ended September 30, 2014 | Ace Marketing | Mobiquity | Total | |||||||||||||||||||||||
Ace Marketing & Promotions, Inc. | Mobiquity Networks, Inc. | Total | & Promotions, Inc. | Networks | ||||||||||||||||||||||
Revenues, net | $ | 712,544 | 1,500 | $ | 714,044 | Inc. | ||||||||||||||||||||
Operating (loss), before interest amortization, depreciation and taxes | -891,940 | -1,067,634 | -1,959,574 | Net sales | $ | 2,995,032 | 162,500 | $ | 3,157,532 | |||||||||||||||||
Interest income | 45 | 45 | Operating (loss) | (3,775,827 | ) | (1,795,529 | ) | (5,571,356 | ) | |||||||||||||||||
Interest (expense) | -40,621 | -40,621 | Interest income | 274 | – | 274 | ||||||||||||||||||||
Depreciation and amortization | -26,506 | -54,250 | -80,756 | Interest (expense) | (227,094 | ) | – | (227,094 | ) | |||||||||||||||||
Net Loss | -959,022 | -1,121,884 | -2,080,906 | Depreciation and amortization | (99,860 | ) | (189,429 | ) | (289,289 | ) | ||||||||||||||||
Assets at September 30, 2014 | 2,041,210 | 694,204 | 2,735,414 | Net Loss | (4,102,507 | ) | (1,984,958 | ) | (6,087,465 | ) | ||||||||||||||||
Total assets at December 31, 2013 | 2,287,313 | 941,191 | 3,228,504 | |||||||||||||||||||||||
All intersegment sales and expenses have been eliminated from the table above. | ||||||||||||||||||||||||||
All intersegment sales and expenses have been eliminated from the table above. | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||||
Ace Marketing & Promotions, Inc. | Mobiquity Networks, Inc. | Total | ||||||||||||||||||||||||
Revenues, net | $ | 2,155,895 | 117,500 | $ | 2,273,395 | |||||||||||||||||||||
Operating (loss), before interest amortization, depreciation and taxes | -3,307,802 | -2,731,778 | -6,039,580 | |||||||||||||||||||||||
Interest income | 138 | 138 | ||||||||||||||||||||||||
Interest (expense) | -64,111 | -64,111 | ||||||||||||||||||||||||
Depreciation and amortization | -78,170 | -165,744 | -243,914 | |||||||||||||||||||||||
Net Loss | -3,449,945 | -2,897,522 | -6,347,467 | |||||||||||||||||||||||
Assets at September 30, 2014 | 2,041,210 | 694,204 | 2,735,414 | |||||||||||||||||||||||
All intersegment sales and expenses have been eliminated from the table above. |
10_EMPLOYMENT_CONTRACTS
10. EMPLOYMENT CONTRACTS | 9 Months Ended |
Sep. 30, 2014 | |
Employment Contracts | |
10. EMPLOYMENT CONTRACTS | NOTE 10: EMPLOYMENT CONTRACTS |
On March 1, 2005, the Company entered into employment contracts with two of its officers, namely, Dean L. Julia and Michael D. Trepeta. The employment agreements provide for minimum annual salaries plus bonuses equal to 5% of pre-tax earnings (as defined) and other perquisites commonly found in such agreements. In addition, pursuant to the employment contracts, the Company granted the officers options to purchase up to an aggregate of 400,000 shares of Common Stock. | |
On August 22, 2007, the Company approved a three year extension of the employment contracts with two of its officers expiring on February 28, 2011. The employment agreements provided for minimum annual salaries with scheduled increases per annum to occur on every anniversary date of the contract and extension commencing on March 1, 2008. A signing bonus of options to purchase 150,000 shares granted to each executive were fully vested at the date of the grant and exercisable at $1.20 per share through August 22, 2017. Ten year options to purchase 50,000 shares of Common Stock are to be granted at fair market value on each anniversary date of the contract and extension commencing March 1, 2008. Termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year, plus the amount of bonuses paid (or entitle to be paid) to the executive for the current fiscal year of the preceding fiscal year, whichever is higher. | |
On April 7, 2010, the Board of Directors approved a five-year extension of the employment contract of Dean L. Julia and Michael D. Trepeta to expire on March 1, 2015. The Board approved the continuation of each officer’s current salary and scheduled salary increases on March 1st of each year. The Board also approved a signing bonus of stock options to purchase 200,000 shares granted to each officer which is fully vested at the date of grant and exercisable at $.50 per share through April 7, 2020; ten-year stock options to purchase 100,000 shares of Common Stock to be granted to each officer at fair market value on each anniversary date of the contract and extension thereof commencing March 1, 2011; and termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year plus the amount of bonuses paid or entitled to be paid to the executive for the current fiscal year or the preceding fiscal year, whichever is higher. In the event of termination, the executives will continue to receive all benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof. | |
In July 2012, the Company approved and in January 2013 the Company implemented amending the employment agreements of Messrs. Julia and M. Trepeta to expire on February 28, 2017, subject to an automatic one year renewal on March 1, 2013 and on each March 1stthereafter, unless the Employment Agreement is terminated in accordance with its terms on or before December 30th of the prior calendar year. In the event of termination without cause, the executives will continue to receive all salary and benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof, plus one year termination pay. | |
On May 28, 2013, the Company approved amending the employment agreements of Messrs. Julia and Trepeta to provide that each officer may choose an annual bonus equal to 5% of pre-tax earnings for the most recently completed year before deduction of annual bonuses paid to officers or, in the event majority control of the Company is acquired by a person or a group of persons during the prior fiscal year, the officer may choose to receive the aforementioned bonus or 1% of the control consideration paid by acquirer(s) to acquire majority control of the Company. |
11_FACILITIES
11. FACILITIES | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Facilities | |||||
11. FACILITIES | NOTE 11: FACILITIES | ||||
In February 2012, the Company entered into a lease agreement for new executive office space of approximately 4,200 square feet located at 600 Old Country Road, Suite 541, Garden City, NY 11530. The lease agreement is for 63 months, commencing April 2012 and expiring September 2017. The annual rent under this office facility for the first year is estimated at $127,000, including electricity, subject to an annual increase of 3%. In the event of a default in which the Company is evicted from the office space, Mobiquity would be responsible to the landlord for an additional payment of rent of $160,000 in the first year of the lease, an additional payment of $106,667 in the second year of the lease and an additional payment of rent of $53,333 in the third year of the lease. Such additional rent would be payable at the discretion of the Company in cash or in Common Stock of the Company. | |||||
In July of 2014, the Company acquired additional rental space on a month to month basis to provide working space for the Mobiquity segment of the Company. The additional space is located in the current office building as the executive offices, located at 600 Old Country Road in Garden City New York. | |||||
The Company leases office space under non-cancelable operating leases in Farmingville, NY expiring in November 2014. The Company is obligated for the payment of real estate taxes under these leases. The Company is also currently leasing additional office space on a month-to-month basis. The Company also leases approximately 1,200 square feet of office and warehouse space in Spain at a monthly cost of approximately $2,200. Minimum future rentals under non-cancelable lease commitments are as follows: | |||||
YEARS ENDING DECEMBER 31, | |||||
2014 | 32,000 | ||||
2015 | 135,000 | ||||
2016 | 139,000 | ||||
2017 and thereafter | 36,000 | ||||
$ | 342,000 | ||||
Rent and real estate tax expense was approximately $359,762 and $199,704 for the three months ended September 30, 2014 and 2013, respectively. Rent and real estate tax expense was approximately $955,283 and $595,291 for the nine months ended September 30, 2014 and 2013, respectively. | |||||
In July 2014, we entered into an amendment to our master lease agreement with Simon Property Group. This amendment provides for us to expand our location-based mobile mall network footprint to 240 Simon malls across the United States. Our agreement with Simon currently expires December 31, 2017, subject to possible annual extension pursuant to the terms of said agreement. Our agreement with Simon requires the company to maintain letters of credit for each calendar year under the agreement represented by the minimum amount of rent due for such calendar year. For 2015, the minimum rent of $2.7 million has been secured through two bank letters of credit, one of which was issued in the amount of $1,350,000 utilizing the funds of a non-affiliated stockholder and the second letter of credit was obtained in the same amount through the funds of Thomas Arnost, our Executive Chairman. In the event Simon draws down upon either letter of credit, we have 30 days after the draw down to obtain replacement letters of credit. Each person who secured our letters of credit has the opportunity to notify us that they wish to turn the cash funds securing the letters of credit over to us and to convert such funds into Common Stock at a conversion price of $1.00 per share. In the event Mr. Arnost were to elect to convert his letter of credit into shares of Common Stock, he would receive 1,350,000 shares of Common Stock. Also, each person who issued the letter of credit is receiving quarterly, while the letters of credit are outstanding, options to purchase 12,500 shares of Common Stock, exercisable at the prevailing market price per share on the date of grant and interest at the rate of 6% per annum on the monies that they have had to set aside in their bank accounts and are unable to have access to such monies. |
12_ACQUISITION_OF_CERTAIN_ASSE
12. ACQUISITION OF CERTAIN ASSETS OF FUTURLINK | 9 Months Ended |
Sep. 30, 2014 | |
Acquisition Of Certain Assets Of Futurlink | |
12. ACQUISITION OF CERTAIN ASSETS OF FUTURLINK | NOTE 12: ACQUISITION OF CERTAIN ASSETS OF FUTURLINK |
In March 2013, the Company formed as a wholly-owned subsidiary, Mobiquity Wireless, SLU in Spain. Mobiquity Wireless then acquired the assets of FuturLink at a cost of approximately $160,200, which cash was paid from the Company’s current working capital. These assets include, without limitation, the FuturLink technology (U.S. patent applications and source codes), trademark(s) and access point (proximity marketing) component parts. | |
As the technology owner, the Company realized immediate benefits and will leverage the hardware and software included in its purchase to expand its mall-based footprint in the United States. The acquisition of FuturLink’s technology and corresponding U.S. patent applications provides the Company with the flexibility and autonomy to; improve, upgrade and integrate new ideas and cutting edge technologies into its existing platform. This will allow the Company to evolve as new technologies emerge. | |
The Company believes that the intellectual property of FuturLink which is now owned by the Company will be a valuable asset to the Company as it moves forward with its technology platform. In the event our intellectual property positions are challenged, invalidated, circumvented or expire, or if we fail to prevail in future intellectual property litigation, our business could be adversely affected. Our success depends in part on our ability to defend our intellectual property rights. Third parties may seek to challenge, invalidate or circumvent our intellectual property rights. In addition, our intellectual property positions might not protect us against competitors with similar products or technologies because competing products or technologies may not infringe our intellectual property rights. Also, there are third parties who have patents or pending patent applications that they may claim necessitate payment of a royalty or prevent us from commercializing our proprietary rights in certain territories. Intellectual property disputes are frequent, costly and can preclude, delay or increase the cost of commercialization of products and/or services. |
13_COMMITTED_EQUITY_FACILITY_A
13. COMMITTED EQUITY FACILITY AGREEMENT/REGISTRATION RIGHTS AGREEMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Committed Equity Facility Agreementregistration Rights Agreement | ||
13. COMMITTED EQUITY FACILITY AGREEMENT/REGISTRATION RIGHTS AGREEMENT | NOTE 13: COMMITTED EQUITY FACILITY AGREEMENT/REGISTRATION RIGHTS AGREEMENT | On June 12, 2012, Mobiquity finalized a committed equity facility (the “Equity Facility”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”), whereby the parties entered into as of May 31, 2012 (i) a committed equity facility agreement (the “Equity Agreement”) and (ii) a registration rights agreement (the “Registration Rights Agreement”). |
On December 12, 2012, the Company finalized a committed equity facility (the “Equity Facility”) with TCA whereby the parties entered into as of May 31, 2012 (i) a committed equity facility agreement (the “Equity Agreement”) and (ii) a registration rights agreement (the “Registration Rights Agreement”). | Committed Equity Facility Agreement | |
Committed Equity Facility Agreement | On June 12, 2012, the Company finalized an Equity Agreement with TCA. Pursuant to the terms of the Equity Agreement, for a period of twenty-four months commencing on the effective date of the Registration Statement (as defined herein), TCA shall commit to purchase up to $2,000,000 of the Company’s common stock (the “Shares”), pursuant to Advances (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Equity Agreement is equal to ninety-five percent (95%) of the lowest daily volume weighted average price of the Company’s common stock during the five (5) consecutive trading days after the Company delivers to TCA an Advance notice in writing requiring TCA to advance funds (an “Advance”) to the Company, subject to the terms of the Equity Agreement. | |
On December 12, 2012, the Company finalized an Equity Agreement with TCA. Pursuant to the terms of the Equity Agreement, for a period of twenty-four months commencing on the effective date of the Registration Statement (as defined herein), TCA shall commit to purchase up to $2,000,000 of Common Stock (the “Shares”), pursuant to Advances (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Equity Agreement is equal to ninety-five percent (95%) of the lowest daily volume weighted average price of the Common Stock during the five (5) consecutive trading days after the Company delivers to TCA an Advance notice in writing requiring TCA to advance funds (an “Advance”) to the Company, subject to the terms of the Equity Agreement. | The “Registrable Securities” include (i) the Shares; and (ii) any securities issued or issuable with respect to the Shares by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. | |
The “Registrable Securities” include (i) the Shares; and (ii) any securities issued or issuable with respect to the Shares by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. | As further consideration for TCA entering into and structuring the Equity Facility, the Company shall pay to TCA a fee by issuing to TCA that number of shares of the Company’s common stock that equal a dollar amount of one hundred thousand dollars ($100,000) (the “Facility Fee Shares”). It is the intention of the Company and TCA that the value of the Facility Fee Shares shall equal $100,000. In the event the value of the Facility Fee Shares issued to TCA does not equal $100,000 after a ninth month evaluation date, the Equity Agreement provides for an adjustment provision allowing for necessary action to adjust the number of shares issued. In June 2012, the Company issued 196,078 shares of common stock as the initial Facility Fee Shares. As of December 31, 2013, a total of 8,000 shares have been issued and paid for pursuant to the Equity Facility. | |
As further consideration for TCA entering into and structuring the Equity Facility, the Company shall pay to TCA a fee by issuing to TCA that number of shares of the Common Stock that equal a dollar amount of one hundred thousand dollars ($100,000) (the “Facility Fee Shares”). In the event the value of the Facility Fee Shares issued to TCA does not equal $100,000 after a ninth month evaluation date, the Equity Agreement provides for an adjustment provision allowing for necessary action to adjust the number of shares issued. In September 2012, the Company issued 196,078 shares of Common Stock as the initial Facility Fee Shares. In March 2013, TCA notified the Company that the facility fee of $100,000 needed to be paid in additional shares or cash. In this respect, the 196,078 shares of Common Stock previously advance by the Company to TCA toward the facility fee were sold by TCA and it realized net proceeds of approximately $48,000. In March 2013, the Company elected to pay the remaining facility fee in cash. | Registration Rights Agreement | |
Registration Rights Agreement | On June 12, 2012, the Company finalized the Registration Rights Agreement with TCA. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. On April 12, 2013, a Registration Statement was declared effective by the SEC covering the resale of up to 5,000,000 shares under the Equity Agreement. | |
On December 12, 2012, the Company finalized the Registration Rights Agreement with TCA. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. The Registration Statement on Form S-1 was filed by the Company with the SEC in March 2013 and was declared effective by the SEC in April 2013. | ||
Termination of Committed Equity Facility Agreement and Registration Rights Agreement | ||
In March 2014, the Company and TCA agreed to terminate the Committed Equity Facility Agreement and Registration Rights Agreement with no further obligations to each other. A total of 8,000 shares were sold pursuant to the Facility Agreement. On April 22, 2014, the Company removed from registration the unsold 4,992,000 shares of Common Stock. |
14_COMMON_STOCK_PURCHASE_AGREE
14. COMMON STOCK PURCHASE AGREEMENT | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | |
14. COMMON STOCK PURCHASE AGREEMENT | NOTE 14: COMMON STOCK PURCHASE AGREEMENT |
On March 31, 2014, the Company entered into a common stock purchase agreement (referred to herein as the “Purchase Agreement”), with Aspire Capital Fund, LLC, an Illinois limited liability company (referred to herein as “Aspire Capital”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $15.0 million of Common Stock over the approximately 24-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, we issued to Aspire Capital 1,000,000 shares of Common Stock as a commitment fee (referred to in herein as the “Commitment Shares”). Upon execution of the Purchase Agreement, we sold to Aspire Capital 1,000,000 shares of Common Stock (referred to herein as the “Initial Purchase Shares”). Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital (referred to herein as the “Registration Rights Agreement”), in which we agreed to file one or more registration statements as permissible and necessary to register under the Securities Act of 1933, as amended, or the Securities Act, the sale of the shares of Common Stock that have been and may be issued to Aspire Capital under the Purchase Agreement. | |
Pursuant to the Purchase Agreement and the Registration Rights Agreement, the Company was obligated to register 15,000,000 shares of Common Stock under the Securities Act, which includes the Commitment Shares and Initial Purchase Shares that have already been issued to Aspire Capital and an additional 13,000,000 shares of Common Stock which the Company may issue to Aspire Capital after the registration statement is declared effective under the Securities Act. Said Registration Statement was declared effective by the SEC on April 28, 2014. | |
Since April 28, 2014, the effective date of the Registration Statement, on any trading day on which the closing sale price of our Common Stock exceeds $0.16, we have the right, in our sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 200,000 shares of Common Stock per trading day, provided that the aggregate price of such purchase shall not exceed $250,000 per trading day, up to $15.0 million of Common Stock in the aggregate at a per share price (the “Purchase Price”) calculated by reference to the prevailing market price of the Common Stock (as more specifically described below). | |
In addition, on any date on which we submit a Purchase Notice for 200,000 shares to Aspire Capital and the closing sale price of the Common Stock is equal to or greater than $0.50 per share, we also have the right, in our sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on the OTCQB on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares we may determine (the “VWAP Purchase Share Volume Maximum”) and a minimum trading price (the “VWAP Minimum Price Threshold”) (as more specifically described below). The purchase price per Purchase Share pursuant to such VWAP Purchase Notice (the “VWAP Purchase Price”) is calculated by reference to the prevailing market price of Common Stock (as more specifically described below). | |
The Purchase Agreement provides that the Company and Aspire Capital shall not affect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Common Stock is less than $0.16 per share (the “Floor Price”). This Floor Price and the respective prices and share numbers in the preceding paragraphs shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by us, but is obligated to make purchases from us as the Company directs in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any penalty or cost to the Company. |
14a_COMMITMENTS_AND_CONTINGENC
14a. COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
COMMITMENTS AND CONTINGENCIES | LEASE COMMITMENTS – | ||||
In February 2012, the Company entered into a lease agreement for new executive office space of approximately 4,200 square feet located at 600 Old Country Road, Suite 541, Garden City, NY 11530. The lease agreement is for 63 months, commencing April 2012 and expiring June 2017. The annual rent under this office facility for the first year is estimated at $127,000, including electricity, subject to an annual increase of 3%. In the event of a default in which the Company is evicted from the office space, Mobiquity would be responsible to the landlord for an additional payment of rent of $160,000 in the first year of the lease, an additional payment of $106,667 in the second year of the lease and an additional payment of rent of $53,333 in the third year of the lease. Such additional rent would be payable at the discretion of the Company in cash or in Common Stock of the Company. | |||||
The Company leases office space under non-cancelable operating leases in Farmingville, NY expiring in November 2014. The Company is obligated for the payment of real estate taxes under these leases. The Company is also currently leasing additional office space on a month-to-month basis. The Company also leases approximately 1,200 square feet of office and warehouse space in Spain at a monthly cost of approximately $2,200. Minimum future rentals under non-cancelable lease commitments are as follows: | |||||
YEARS ENDING DECEMBER 31, | |||||
2014 | 126,000 | ||||
2015 | 135,000 | ||||
2016 | 139,000 | ||||
2017 and thereafter | 36,000 | ||||
$ | 436,000 | ||||
Rent and real estate tax expense was approximately $869,800 and $736,700 for the years December 31, 2013 and 2012, respectively. | |||||
EMPLOYMENT CONTRACTS – | |||||
On March 1, 2005, the Company entered into employment contracts with two of its officers, namely, Dean L. Julia and Michael D. Trepeta. The employment agreements provide for minimum annual salaries plus bonuses equal to 5% of pre-tax earnings (as defined) and other perquisites commonly found in such agreements. In addition, pursuant to the employment contracts, the Company granted the officers options to purchase up to an aggregate of 400,000 shares of common stock. | |||||
On August 22, 2007, the Company approved a three year extension of the employment contracts with two of its officers expiring on February 28, 2011. The employment agreements provided for minimum annual salaries with scheduled increases per annum to occur on every anniversary date of the contract and extension commencing on March 1, 2008. A signing bonus of options to purchase 150,000 shares granted to each executive were fully vested at the date of the grant and exercisable at $1.20 per share through August 22, 2017. Ten year options to purchase 50,000 shares of common stock are to be granted at fair market value on each anniversary date of the contract and extension commencing March 1, 2008. Termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year, plus the amount of bonuses paid (or entitle to be paid) to the executive for the current fiscal year of the preceding fiscal year, whichever is higher. | |||||
On April 7, 2010, the Board of Directors approved a five-year extension of the employment contract of Dean L. Julia and Michael D. Trepeta to expire on March 1, 2015. The Board approved the continuation of each officer’s current salary and scheduled salary increases on March 1st of each year. The Board also approved a signing bonus of stock options to purchase 200,000 shares granted to each officer which is fully vested at the date of grant and exercisable at $.50 per share through April 7, 2020; ten-year stock options to purchase 100,000 shares of Common Stock to be granted to each officer at fair market value on each anniversary date of the contract and extension thereof commencing March 1, 2011; and termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year plus the amount of bonuses paid or entitled to be paid to the executive for the current fiscal year or the preceding fiscal year, whichever is higher. In the event of termination, the executives will continue to receive all benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof. | |||||
In July 2012, the Company approved and in January 2013 the Company implemented amending the employment agreements of Messrs. Julia and M. Trepeta to expire on February 28, 2017, subject to an automatic one year renewal on March 1, 2013 and on each March 1st thereafter, unless the Employment Agreement is terminated in accordance with its terms on or before December 30th of the prior calendar year. In the event of termination without cause, the executives will continue to receive all salary and benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof, plus one year termination pay. | |||||
On May 28, 2013, the Company approved amending the employment agreements of Messrs. Julia and Trepeta to provide that each officer may choose an annual bonus equal to 5% of pre-tax earnings for the most recently completed year before deduction of annual bonuses paid to officers or, in the event majority control of the Company is acquired by a person or a group of persons during the prior fiscal year, the officer may choose to receive the aforementioned bonus or 1% of the control consideration paid by acquirer(s) to acquire majority control of the Company. | |||||
TRANSACTIONS WITH MAJOR CUSTOMERS – | |||||
The Company sells its products to a geographically diverse group of customers, performs ongoing credit evaluations of its customers and generally does not require collateral. During the year ended December 31, 2013 a customer accounted for approximately 8% of net revenues and for the year ended December 31, 2012 a customer accounted for approximately 5% of net revenues. The Company holds on hand certain items that are ordered on a regular basis. |
14b_SUPPLEMENTARY_INFORMATION
14b. SUPPLEMENTARY INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||
SUPPLEMENTARY INFORMATION | Cash paid during the years for: | ||||||||
YEARS ENDED DECEMBER 31, | |||||||||
2013 | 2012 | ||||||||
Interest | $ | 58,803 | $ | 62,689 | |||||
Income Taxes | $ | – | $ | – | |||||
Non cash disclosures: | |||||||||
On December 12, 2013 a director of the Company was assigned the $350,000 note held by TCA Global. The note assigned was negotiated for extension of maturity date, to June 12, 2014, interest payable at 15%. Any outstanding balance and any accrued interest thereon may be converted into common stock at a price of $.30 per share. The Company may prepay the note without penalties. In December 2013, request was made to convert $28,000 of the note balance, into 93,334 shares of common stock. |
15_SUBSEQUENT_EVENTS
15. SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Subsequent Events | ||
15. SUBSEQUENT EVENTS | NOTE 15: SUBSEQUENT EVENTS | There are no subsequent events required to be disclosed in the Notes to Financial Statements through the date of the report, except as follows: |
In November 2014, the Company borrowed on an unsecured basis $2.5 million. These loans are repayable in two years together with interest at the rate of 4% per annum. | Between January 1, 2014 and the date of this report, the Company has raised gross proceeds of $2,160,300 from the sale of its Common Stock (including $175,000 of the stock subscription receivables) at $.30 per share. In connection with this private placement offering, the Company has issued 7,201,000 shares of Common Stock and Class BB Warrants to purchase 3,600,500 shares of Common Stock at an exercise price of $.50 per share through December 15, 2017. | |
The Company has evaluated all subsequent events through the filing date of its quarterly report for the quarter ended September 30, 2014 for appropriate accounting and disclosures. |
2_SUMMARY_OF_SELECTED_SIGNIFIC1
2. SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements include the accounts of Mobiquity Technologies, Inc., formerly known as Ace Marketing & Promotions, Inc., and its wholly owned subsidiaries, Mobiquity Networks, Inc., Ace Marketing, Inc., (which has had its name changed to Ace Marketing & Promotions, Inc. and Mobiquity Wireless S.L.U.). All intercompany accounts and transactions have been eliminated in consolidation. | |||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION | |||||
The accompanying condensed consolidated financial statements include the accounts of the Company (formerly known as Ace Marketing & Promotions, Inc.), and its wholly owned subsidiaries, Mobiquity Networks, Ace Marketing and Mobiquity Wireless S.L.U. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements and footnotes thereto are unaudited. | ||||||
The Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, the Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2014 and 2013 and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 have been prepared by the Company without audit, and in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of Company management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly in all material respects our financial position as of September 30, 2014, results of operations for the three months and nine months ended September 30, 2014 and 2013 and cash flows for the nine months ended September 30, 2014 and 2013. All such adjustments are of a normal recurring nature. The results of operations and cash flows for the nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year. The Company has evaluated subsequent events through the filing of this Form 10-Q with the SEC, and determined there have not been any events that have occurred that would require adjustments to our unaudited Condensed Financial Statements. | ||||||
The information contained in this report on Form 10-Q should be read in conjunction with our Form 10-K for the Company’s fiscal year ended December 31, 2013. | ||||||
ESTIMATES | ESTIMATES | ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS - Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||
Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ASC 820 defines fair value as the price 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | |||||
ASC 820 defines fair value as the price 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | ||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | |||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of December 31, 2013 and 2012. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. | ||||
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2014 and 2013. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. | The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of December 31, 2013 and 2012 , because of the relatively short-term maturity of these instruments and their market interest rates. | |||||
The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of September 30, 2014 and 2013, because of the relatively short-term maturity of these instruments and their market interest rates. | ||||||
RECLASSIFICATIONS | RECLASSIFICATIONS - Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses. | |||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. | ||||
The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. | ||||||
CONCENTRATION OF CREDIT RISK | CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents. | |||||
Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited. | ||||||
The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash. Management does not believe significant credit risk exists at December 31, 2013 and 2012. | ||||||
REVENUE RECOGNITION | REVENUE RECOGNITION - Revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the customer's receipt of the merchandise. Revenue is recognized on a gross basis since the Company has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. | |||||
The Company records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. | ||||||
Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided. | ||||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the uncollectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. | ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the uncollectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. | ||||
INVENTORY | INVENTORY - Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There has been no reserves placed on inventory, based on this arrangement. | INVENTORY – Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There has been no reserves placed on inventory, based on this arrangement. | ||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. | PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. | ||||
LONG LIVED ASSETS | LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. | LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. | ||||
WEBSITE TECHNOLOGY | WEBSITE TECHNOLOGY - Website technology developed during the year was capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985. | WEBSITE TECHNOLOGY - Website technology developed during the year was capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985. | ||||
ADVERTISING COSTS | ADVERTISING COSTS - Advertising costs are expensed as incurred. For the three months ended September 30, 2014 and 2013 there were advertising costs of zero and $500, respectively. In the nine months ended September 30, 2014 and 2013, there were advertising costs of $288 and $3,840, respectively. | ADVERTISING COSTS - Advertising costs are expensed as incurred. For the years ended December 31, 2013 and 2012 there were advertising costs of $3,840 and $1,404, respectively. | ||||
ACCOUNTING FOR STOCK BASED COMPENSATION | ACCOUNTING FOR STOCK BASED COMPENSATION - Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Common Stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. | ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. Refer to Note 8 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion. | ||||
BENEFICIAL CONVERSIONS | BENEFICIAL CONVERSIONS - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair value of the underlying Common Stock less the proceeds that have been received for the debt instrument limited to the value received. The beneficial conversion amount is recorded as interest expense and an increase to additional paid-in-capital. The beneficial conversion has been fully accreted to the face value of the original loan and interest expense has been recognized. | BENEFICIAL CONVERSIONS - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair value of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received. The beneficial conversion amount is recorded as interest expense and an increase to additional paid-in-capital. The beneficial conversion has been fully accreted to the face value of the original loan and interest expense has been recognized. | ||||
FOREIGN CURRENCY TRANSLATIONS | FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows: | FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows: | ||||
(i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. | (i) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. | |||
(ii) | Fixed assets and equity transactions at historical rates. | (ii) | Fixed assets and equity transactions at historical rates. | |||
(iii) | Revenue and expense items at the average rate of exchange prevailing during the period. | (iii) | Revenue and expense items at the average rate of exchange prevailing during the period. | |||
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income. | Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income. | |||||
No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to September 30, 2014. | No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to December 31, 2013. | |||||
INCOME TAXES | INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. | INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||
NET INCOME PER SHARE | NET INCOME PER SHARE - Basic net income per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 26,185,000 and 18,895,000 because they are anti-dilutive, as a result of a net loss for the years ended December 31, 2013 and 2012, respectively. | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||||
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. | ||||||
In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction and industry specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however management believes that there will be no material effect on the consolidated financial statements. | ||||||
In September 2014, FASB issued Accounting Standards Update (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. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements. | ||||||
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. | ||||||
Ace Marketing and Promotions, Inc. [Member] | ||||||
REVENUE RECOGNITION | REVENUE RECOGNITION - Ace Marketing | |||||
Revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the customer's receipt of the merchandise. Revenue is recognized on a gross basis since the Company has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. The Company records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided. | ||||||
Mobiquity Networks Inc [Member] | ||||||
REVENUE RECOGNITION | Revenue Recognition – Mobiquity Networks | |||||
Mobiquity has three avenues of income with our beacon platform, Bluetooth Push and Wi-Fi. Revenue is realized with the signing of the contract. The customer signs for a specific campaign costing a specific amount billed before the campaign is put into action. Revenue is recognized the same way for the three avenues of income. | ||||||
The first option to earn revenue with the beacon platform is for customers to do campaigns, advertising on our platform, either directly through their app or through 3rd party apps. The second option to earn revenue is through a share on campaigns, a retailer would install our beacon SDK on their app, to which they would sell advertising on. Revenue they earn would be shared with Mobiquity. The third option would be though selling data. |
2a_PROPERTY_AND_EQUIPMENT_Tabl
2a. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
Property and equipment | USEFUL LIVES | 2013 | 2012 | ||||||||
Furniture and Fixtures | 5 years | $ | 1,060,084 | $ | 955,673 | ||||||
Leasehold Improvements | 5 years | 4,084 | 4,084 | ||||||||
1,064,168 | 959,757 | ||||||||||
Less Accumulated Depreciation | 596,035 | 378,190 | |||||||||
$ | 466,772 | $ | 581,567 |
2b_INTANGIBLE_ASSETS_Tables
2b. INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Intangible asset schedule | USEFUL LIVES | 2013 | 2012 | ||||||||
Contractual license | 5 years | $ | 250,000 | $ | 250,000 | ||||||
Acquisition of intellectual property (FuturLink) | 5 years | 160,200 | – | ||||||||
Website technology development | 5 years | 45,000 | – | ||||||||
455,200 | 250,000 | ||||||||||
Less Accumulated Depreciation | 153,416 | 83,333 | |||||||||
$ | 301,784 | $ | 166,667 | ||||||||
Future accumulated amortization schedule | 2013 | $ | 91,040 | ||||||||
2014 | 91,040 | ||||||||||
2015 | 57,707 | ||||||||||
2016 | 41,040 | ||||||||||
2017 | 20,957 | ||||||||||
thereafter | – | ||||||||||
301,784 |
4a_INCOME_TAXES_Tables
4a. INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Provision for income taxes | 2013 | 2012 | |||||||
Current: | |||||||||
Federal | $ | – | – | ||||||
State | – | – | |||||||
– | – | ||||||||
Deferred: | |||||||||
Federal | – | – | |||||||
State | – | – | |||||||
$ | – | $ | – | ||||||
Schedule of deferred income taxes | YEARS ENDED DECEMBER 31, | ||||||||
2013 | 2012 | ||||||||
Deferred Tax Assets: | |||||||||
Net operating loss carry-forwards | $ | 6,698,000 | $ | 4,446,000 | |||||
Stock based compensation | 2,605,000 | 1,939,000 | |||||||
Beneficial Conversion Feature | 46,000 | 46,000 | |||||||
Allowance for doubtful accounts | 8,000 | 8,000 | |||||||
Deferred Tax Assets | 9,357,000 | 6,439,000 | |||||||
Less Valuation Allowance | 9,357,000 | 6,439,000 | |||||||
Net Deferred Tax Asset | $ | – | $ | – | |||||
Reconciliation of federal statutory rate | YEARS ENDED DECEMBER 31, | ||||||||
2013 | 2012 | ||||||||
Federal Statutory Tax Rate | 34 | % | 34 | % | |||||
State Taxes, net of Federal benefit | 6 | % | 6 | % | |||||
Change in Valuation Allowance | (40.00 | %) | (40.00 | %) | |||||
Total Tax Expense | 0 | % | 0 | % |
5_STOCK_COMPENSATION_Tables
5. STOCK COMPENSATION (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||
Schedule of stock based compensation expense | Three Months Ended | Nine Months Ended | Years Ended December 31, | |||||||||||||||||||||||
September 30, | September 30, | 2013 | 2012 | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Employee stock based compensation-option grants | $ | 258,511 | $ | 238,500 | ||||||||||||||||||
Employee stock-based compensation - option grants | $ | 430,466 | $ | 51,928 | $ | 1,343,803 | $ | 175,248 | Employee stock based compensation-stock grants | – | 13,500 | |||||||||||||||
Employee stock-based compensation - stock grants | – | – | – | – | Non-Employee stock based compensation-option grants | 347,138 | 297,011 | |||||||||||||||||||
Non-Employee stock-based compensation - option grants | 73,502 | 55,055 | 110,008 | 284,655 | Non-Employee stock based compensation-stock grants | 1,048,091 | 881,547 | |||||||||||||||||||
Non-Employee stock-based compensation - stock grants | – | 186,904 | 370,748 | 812,401 | Non-Employee stock based compensation-stock warrant | 111,334 | 50,684 | |||||||||||||||||||
Non-Employee stock-based compensation-stock warrant | 38,110 | 321,603 | 111,334 | $ | 1,765,074 | $ | 1,481,242 | |||||||||||||||||||
Total | $ | 503,968 | $ | 331,997 | $ | 2,146,162 | $ | 1,383,638 |
6_STOCK_OPTION_PLAN_Tables
6. STOCK OPTION PLAN (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||
Schedule of weighted average assumptions made in calculating the fair value of options | The weighted average assumptions made in calculating the fair values of options granted during the three and nine months ended September 30, 2014 and 2013 are as follows: | Years Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
30-Sep | 30-Sep | Expected volatility | 134.99 | % | 303.1 | % | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Expected dividend yield | – | – | ||||||||||||||||||||||
Risk-free interest rate | 2.7 | % | 1.06 | % | ||||||||||||||||||||||||
Expected volatility | 78.68% | 172.77% | 46.67% | 127.49% | Expected term (in years) | 5.45 | 6.65 | |||||||||||||||||||||
Expected dividend yield | – | – | ||||||||||||||||||||||||||
Risk-free interest rate | 1.95% | 0.57% | 2.43% | 0.78% | ||||||||||||||||||||||||
Expected term (in years) | 6.25 | 5 | 8.34 | 5.57 | ||||||||||||||||||||||||
Option activity | Share | Weighted | Weighted | Aggregate | ||||||||||||||||||||||||
Average | Average | Intrinsic | ||||||||||||||||||||||||||
Exercise | Remaining | Value | ||||||||||||||||||||||||||
Price | Contractual | |||||||||||||||||||||||||||
Term | ||||||||||||||||||||||||||||
Outstanding, January 1, 2014 | 7,045,000 | 0.63 | 2.04 | $ | 314,750 | |||||||||||||||||||||||
Granted | 6,785,000 | 0.42 | 7.87 | 150,000 | ||||||||||||||||||||||||
Exercised | – | |||||||||||||||||||||||||||
Cancelled & Expired | (100,000 | ) | 0.9 | |||||||||||||||||||||||||
Outstanding, September 30, 2014 | 13,730,000 | 0.52 | 5.83 | $ | 253,250 | |||||||||||||||||||||||
Options exercisable, September 30, 2014 | 12,063,332 | 0.53 | 5.98 | $ | 253,250 | |||||||||||||||||||||||
Assumptions for Warrants | The weighted average assumptions made in calculating the fair value of warrants granted during the three and nine months ended September 30, 2014 and 2013 are as follows: | Years Ended | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
30-Sep | 30-Sep | Expected volatility | 70.66 | % | 52.88 | % | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | Expected dividend yield | – | – | ||||||||||||||||||||||
Risk-free interest rate | 0.88 | % | 0.3 | % | ||||||||||||||||||||||||
Expected volatility | 0% | 61.13% | 138.35% | 65.61% | Expected term (in years) | 4.44 | 3.5 | |||||||||||||||||||||
Expected dividend yield | – | – | ||||||||||||||||||||||||||
Risk-free interest rate | 0% | 0.57% | 1.49% | 0.78% | ||||||||||||||||||||||||
Expected term (in years) | 0 | 2.03 | 4.42 | 4.13 | ||||||||||||||||||||||||
Warrant activity | Share | Weighted | Weighted | Aggregate | ||||||||||||||||||||||||
Average | Average | Intrinsic | ||||||||||||||||||||||||||
Exercise | Remaining | Value | ||||||||||||||||||||||||||
Price | Contractual | |||||||||||||||||||||||||||
Term | ||||||||||||||||||||||||||||
Outstanding, January 1, 2014 | 19,640,375 | $ | .55 | 2.32 | $ | – | ||||||||||||||||||||||
Granted | 5,566,339 | $ | 0.7 | 3.73 | – | |||||||||||||||||||||||
Exercised | (185,000 | ) | ||||||||||||||||||||||||||
Expired | (1,447,800 | ) | ||||||||||||||||||||||||||
Outstanding, September 30, 2014 | 23,573,914 | $ | 0.59 | 2.65 | 47,500 | |||||||||||||||||||||||
Warrants exercisable, September 30, 2014 | 23,573,914 | $ | 0.59 | 2.65 | $ | 47,500 | ||||||||||||||||||||||
8_PRIVATE_PLACEMENT_Tables
8. PRIVATE PLACEMENT (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Private Placement | |||
PRIVATE PLACEMENT FINANCING | Since 1999, we have relied primarily on equity financings from outside investors to supplement our cash flow from operations. Since January 1, 2012, we have completed the various financing summarized below. | ||
Date | Dollar Amount | # of Securities Sold | |
Jan-12 | $575,000 | 958,338 common shares and warrants to purchase 191,671 common shares; also issued 197,860 penalty shares for electing not to register resale of securities. | |
Apr-12 | 270,000 | Exercise of 900,000 warrants | |
April/May 2012 | 470,000 | Issued preferred stock, which was subsequently converted into 1,361,333 shares and warrants to purchase 41,667 common shares | |
Jul-12 | 606,240 | Issued 2,020,799 common shares, 673,600 warrants and 258,333 additional common shares for failing to reach certain performance milestones. | |
Nov-12 | $301,000 | Issued 1,003,334 common shares and warrants to purchase 501,667 shares. | |
2013 | 5,562,816 (1) | Issued 19,125,000 common shares and warrants to purchase 9,562,000 shares | |
January/February 2014 | 2,160,300 | Issued 7,201,000 common shares and warrants to purchase 3,600,000 shares | |
Mar-14 | 500,000 | Issued 2,000,000 common shares. | |
Jul-14 | 1,000,000 | Issued 2,000,000 shares and warrants to purchase 1,000,000 shares | |
Jul-14 | 250,000 (2) | Issued convertible note in the principal amount of $250,000 and warrants to purchase 125,000 shares | |
____________________ | |||
-1 | Three of our officers and directors purchase a total of $340,000 of securities sold in 2013/2014 private placements. | ||
-2 | Convertible notes: bear interest at 6%, with semiannual interest payments on January 31 and July 31, commencing on January 31, 2015; maturing on July 31, 2017, unless redeemed. At the option of the note holder the principle and accrued interest is convertible at the greater of $0.50 per share or 85% of the variable weighted average price “VWAP”). In the event of the Company’s closing sales price of $1.00 per share on the OTCQB for at least 10 trading days with a VWAP of at least 25,000 shares, then the Notes shall automatically convert at 85% of the VWAP. Each warrant is exercisable at the option of the warrant holder at an exercise price of $1.20 per share through July 31, 2017. |
9_SEGMENT_INFORMATION_Tables
9. SEGMENT INFORMATION (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||
Schedule of segment information | Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below: | Ace Marketing | Mobiquity | Total | ||||||||||||||||||||||
& Promotions, Inc. | Networks | |||||||||||||||||||||||||
Quarter Ended September 30, 2014 | Inc. | |||||||||||||||||||||||||
Ace Marketing & Promotions, Inc. | Mobiquity Networks, Inc. | Total | Net sales | $ | 2,995,032 | 162,500 | $ | 3,157,532 | ||||||||||||||||||
Revenues, net | $ | 712,544 | 1,500 | $ | 714,044 | Operating (loss) | (3,775,827 | ) | (1,795,529 | ) | (5,571,356 | ) | ||||||||||||||
Operating (loss), before interest amortization, depreciation and taxes | -891,940 | -1,067,634 | -1,959,574 | Interest income | 274 | – | 274 | |||||||||||||||||||
Interest income | 45 | 45 | Interest (expense) | (227,094 | ) | – | (227,094 | ) | ||||||||||||||||||
Interest (expense) | -40,621 | -40,621 | Depreciation and amortization | (99,860 | ) | (189,429 | ) | (289,289 | ) | |||||||||||||||||
Depreciation and amortization | -26,506 | -54,250 | -80,756 | Net Loss | (4,102,507 | ) | (1,984,958 | ) | (6,087,465 | ) | ||||||||||||||||
Net Loss | -959,022 | -1,121,884 | -2,080,906 | Total assets at December 31, 2013 | 2,287,313 | 941,191 | 3,228,504 | |||||||||||||||||||
Assets at September 30, 2014 | 2,041,210 | 694,204 | 2,735,414 | |||||||||||||||||||||||
All intersegment sales and expenses have been eliminated from the table above. | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||||
Ace Marketing & Promotions, Inc. | Mobiquity Networks, Inc. | Total | ||||||||||||||||||||||||
Revenues, net | $ | 2,155,895 | 117,500 | $ | 2,273,395 | |||||||||||||||||||||
Operating (loss), before interest amortization, depreciation and taxes | -3,307,802 | -2,731,778 | -6,039,580 | |||||||||||||||||||||||
Interest income | 138 | 138 | ||||||||||||||||||||||||
Interest (expense) | -64,111 | -64,111 | ||||||||||||||||||||||||
Depreciation and amortization | -78,170 | -165,744 | -243,914 | |||||||||||||||||||||||
Net Loss | -3,449,945 | -2,897,522 | -6,347,467 | |||||||||||||||||||||||
Assets at September 30, 2014 | 2,041,210 | 694,204 | 2,735,414 |
11_FACILITIES_Tables
11. FACILITIES (Tables) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||
Facilities Tables | ||||||||||
Minimum future rentals under non-cancelable lease commitments | Minimum future rentals under non-cancelable lease commitments are as follows: | YEARS ENDING DECEMBER 31, | ||||||||
2014 | 126,000 | |||||||||
YEARS ENDING DECEMBER 31, | 2015 | 135,000 | ||||||||
2014 | 32,000 | 2016 | 139,000 | |||||||
2015 | 135,000 | 2017 and thereafter | 36,000 | |||||||
2016 | 139,000 | $ | 436,000 | |||||||
2017 and thereafter | 36,000 | |||||||||
$ | 342,000 | |||||||||
14a_COMMITMENTS_AND_CONTINGENC1
14a. COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||
Future lease commitments | Minimum future rentals under non-cancelable lease commitments are as follows: | YEARS ENDING DECEMBER 31, | ||||||||
2014 | 126,000 | |||||||||
YEARS ENDING DECEMBER 31, | 2015 | 135,000 | ||||||||
2014 | 32,000 | 2016 | 139,000 | |||||||
2015 | 135,000 | 2017 and thereafter | 36,000 | |||||||
2016 | 139,000 | $ | 436,000 | |||||||
2017 and thereafter | 36,000 | |||||||||
$ | 342,000 | |||||||||
14b_SUPPLEMENTARY_INFORMATION_
14b. SUPPLEMENTARY INFORMATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||
Schedule of cash paid | YEARS ENDED DECEMBER 31, | ||||||||
2013 | 2012 | ||||||||
Interest | $ | 58,803 | $ | 62,689 | |||||
Income Taxes | $ | – | $ | – |
2_SUMMARY_OF_SELECTED_SIGNIFIC2
2. SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies [Abstract] | ||||||
Advertising costs | $0 | $500 | $288 | $3,840 | $3,840 | $1,404 |
Antidilutive shares excluded from earnings per share calculation | 37,304,000 | 23,179,000 | 26,185,000 | 18,895,000 |
2a_Property_and_Equipment_Deta
2a. Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2012 | |
Property and equipment, gross | $1,064,168 | $959,757 | |
Accumulated depreciation | 597,396 | 772,977 | 378,190 |
Property and equipment, net | 466,772 | 315,893 | 581,567 |
Leasehold Improvements [Member] | |||
Property and equipment, gross | 4,084 | 4,084 | |
Useful lives | 5 years | ||
Furniture and Fixtures [Member] | |||
Property and equipment, gross | $1,060,084 | $955,673 | |
Useful lives | 5 years |
2a_Property_and_Equipment_Deta1
2a. Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $219,206 | $183,825 |
2b_Intangible_Assets_DetailsIn
2b. Intangible Assets (Details-Intangible Assets) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2012 | |
Intangible assets, gross | $455,200 | $250,000 | |
Acculumated depreciation | 153,416 | 221,696 | 83,333 |
Intangible assets, net | 301,784 | 233,504 | 166,667 |
Intellectual Property [Member] | |||
Intangible assets, gross | 160,200 | 0 | |
Useful lives | 5 years | ||
Website Technology Development [Member] | |||
Intangible assets, gross | 45,000 | 0 | |
Useful lives | 5 years | ||
Contractual License [Member] | |||
Intangible assets, gross | $250,000 | $250,000 | |
Useful lives | 5 years |
2b_Intangible_Assets_Details_A
2b. Intangible Assets (Details - Amortization Schedule) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Future amortization 2013 | $91,040 | ||
Future amortization 2014 | 91,040 | ||
Future amortization 2015 | 57,707 | ||
Future amortization 2016 | 41,040 | ||
Future amortization 2017 | 20,957 | ||
Thereafter | 0 | ||
Total future amortization | $233,504 | $301,784 | $166,667 |
2b_Intangible_Assets_Details_N
2b. Intangible Assets (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $70,083 | $50,000 |
3_LOSS_PER_SHARE_Details_Narra
3. LOSS PER SHARE (Details Narrative) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net Loss Per Common Share: | ||||
Number of anti-dilutive common shares | 37,304,000 | 23,179,000 | 26,185,000 | 18,895,000 |
4_CONVERTIBLE_PROMISSORY_NOTE_
4. CONVERTIBLE PROMISSORY NOTE (Details Narrative) (USD $) | 12 Months Ended | 9 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | |
Convertible promissory note balance | $322,000 | $298,376 | $322,000 |
Accrued interest | 2,158 | ||
Beneficial conversion feature | 116,667 | 120,254 | |
Convertible Promissory Note [Member] | |||
Proceeds from convertible notes | 250,000 | ||
Maturity date | 31-Jul-17 | ||
Warrants issued | 125,000 | ||
Conversion price | $1.20 | ||
Security Agreement [Member] | |||
Convertible promissory note balance | 322,000 | 322,000 | |
Beneficial conversion feature | $116,667 |
4a_Income_Taxes_DetailsProvisi
4a. Income Taxes (Details-Provision) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | ||
Federal | $0 | $0 |
State | 0 | 0 |
Total Current | 0 | 0 |
Deferred: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total Deferred | $0 | $0 |
4a_Income_Taxes_DetailsDeferre
4a. Income Taxes (Details-Deferred Taxes) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Tax Assets: | ||
Net operating loss carry-forwards | $6,698,000 | $4,446,000 |
Stock based compensation | 2,605,000 | 1,939,000 |
Beneficial Conversion Feature | 46,000 | 46,000 |
Allowance for doubtful accounts | 8,000 | 8,000 |
Deferred Tax Assets | 9,357,000 | 6,439,000 |
Less Valuation Allowance | 9,357,000 | 6,439,000 |
Net Deferred Tax Asset | $0 | $0 |
4a_Income_Taxes_DetailsFederal
4a. Income Taxes (Details-Federal Statutory Rate) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory Tax Rate | 34.00% | 34.00% |
State Taxes, net of Federal benefit | 6.00% | 6.00% |
Change in Valuation Allowance | -40.00% | -40.00% |
Total Tax Expense | 0.00% | 0.00% |
4a_Income_Taxes_Details_Narrat
4a. Income Taxes (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |
State net operating loss carryforward | $12,235,000 |
Operating loss expiration date | 31-Dec-30 |
4b_Stockholders_Equity_Details
4b. Stockholders' Equity (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stockholders Equity Details Narrative | ||||
Proceeds from sale of stock | $3,481,300 | $4,006,500 | $5,380,632 | $1,887,556 |
Offering costs incurred | $182,184 |
5_STOCK_COMPENSATION_Details
5. STOCK COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Total stock-based compensation expense | $503,968 | $331,997 | $2,146,162 | $1,383,638 | $1,765,074 | $1,481,242 |
Option Grants [Member] | ||||||
Total stock-based compensation expense | 430,466 | 51,928 | 1,343,803 | 175,248 | ||
Stock Grants [Member] | ||||||
Total stock-based compensation expense | 0 | 0 | 0 | 0 | ||
Non-Employee Option Grants [Member] | ||||||
Total stock-based compensation expense | 73,502 | 55,055 | 110,008 | 284,655 | ||
Non-Employee Stock Grants [Member] | ||||||
Total stock-based compensation expense | 0 | 186,904 | 370,748 | 812,401 | ||
Non-Employee Stock Warrants [Member] | ||||||
Total stock-based compensation expense | $0 | $38,110 | $321,603 | $111,334 |
5_Stock_Compensation_DetailsSt
5. Stock Compensation (Details-Stock compensation expense) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Total stock-based compensation expense | $1,765,074 | $1,481,242 |
Non-Employee Stock Grants | ||
Total stock-based compensation expense | 1,048,091 | 881,547 |
Non-Employee Option Grants | ||
Total stock-based compensation expense | 347,138 | 297,011 |
Option Grants | ||
Total stock-based compensation expense | 258,511 | 238,500 |
Stock Grants | ||
Total stock-based compensation expense | 0 | 13,500 |
Non-Employee Stock Warrants | ||
Total stock-based compensation expense | $111,334 | $50,684 |
6_STOCK_OPTION_PLAN_DetailsAss
6. STOCK OPTION PLAN (Details-Assumptions) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options [Member] | ||||||
Expected volatility | 78.68% | 172.77% | 46.67% | 127.49% | 134.99% | 303.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 1.95% | 0.57% | 2.43% | 0.78% | 2.70% | 1.06% |
Expected term (in years) | 6 years 3 months | 5 years | 8 years 4 months 2 days | 5 years 6 months 26 days | 5 years 5 months 12 days | 6 years 7 months 24 days |
Warrants [Member] | ||||||
Expected volatility | 0.00% | 61.13% | 138.35% | 65.61% | 70.66% | 52.88% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 0.00% | 0.57% | 1.49% | 0.78% | 0.88% | 0.30% |
Expected term (in years) | 2 years 11 days | 4 years 5 months 1 day | 4 years 1 month 17 days | 4 years 5 months 8 days | 3 years 6 months |
6_Stock_Option_Plans_Details_A
6. Stock Option Plans (Details - Assumptions) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options | ||||||
Expected volatility | 78.68% | 172.77% | 46.67% | 127.49% | 134.99% | 303.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 1.95% | 0.57% | 2.43% | 0.78% | 2.70% | 1.06% |
Expected term (in years) | 6 years 3 months | 5 years | 8 years 4 months 2 days | 5 years 6 months 26 days | 5 years 5 months 12 days | 6 years 7 months 24 days |
Warrants | ||||||
Expected volatility | 0.00% | 61.13% | 138.35% | 65.61% | 70.66% | 52.88% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 0.00% | 0.57% | 1.49% | 0.78% | 0.88% | 0.30% |
Expected term (in years) | 2 years 11 days | 4 years 5 months 1 day | 4 years 1 month 17 days | 4 years 5 months 8 days | 3 years 6 months |
6_STOCK_OPTION_PLAN_DetailsOpt
6. STOCK OPTION PLAN (Details-Option activity) (Options [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Options [Member] | |
Shares | |
Shares outstanding - beginning | 7,045,000 |
Shares granted | 6,785,000 |
Shares exercised | 0 |
Shares cancelled and expired | -100,000 |
Shares outstanding - ending | 13,730,000 |
Shares exercisable | 12,063,332 |
Weighted Average Exercise Price | |
Weighted average exercise price - beginning | $0.63 |
Weighted average exercise price - shares granted | $0.42 |
Weighted average exercise price - shares Cancelled | $0.90 |
Weighted average exercise price - ending | $0.52 |
Weighted average exercise price - exercisable | $0.53 |
Weighted Average Remaining Contractural Term | |
Weighted average contractural term - beginning | 2 years 15 days |
Weighted average contractural term - granted | 7 years 10 months 13 days |
Weighted average contractural term - ending | 5 years 9 months 29 days |
Weighted average contractural term - exercisable | 5 years 11 months 23 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value - beginning | $314,750 |
Aggregate intrinsic value - granted | 150,000 |
Aggregate intrinsic value - ending | 253,250 |
Aggregate intrinsic value - exercisable | $253,250 |
6_STOCK_OPTION_PLAN_DetailsWar
6. STOCK OPTION PLAN (Details-Warrants outstanding) (Warrants [Member], USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Warrants [Member] | ||
Shares | ||
Shares outstanding - beginning | 19,640,375 | |
Shares granted | 5,566,339 | 11,172,508 |
Shares exercised | -185,000 | 0 |
Shares cancelled and expired | -1,447,800 | -5,851,665 |
Shares outstanding - ending | 23,573,914 | 19,640,375 |
Shares exercisable | 23,573,914 | |
Weighted Average Exercise Price | ||
Weighted average exercise price - beginning | $0.55 | |
Weighted average exercise price - shares granted | $0.70 | $0.51 |
Weighted average exercise price - ending | $0.59 | $0.55 |
Weighted average exercise price - exercisable | $0.59 | $0.56 |
Weighted Average Remaining Contractural Term | ||
Weighted average contractural term - beginning | 2 years 3 months 26 days | 1 year 6 months 22 days |
Weighted average contractural term - granted | 3 years 8 months 23 days | 3 years 11 months 23 days |
Weighted average contractural term - ending | 2 years 7 months 24 days | 2 years 10 months 17 days |
Weighted average contractural term - exercisable | 2 years 7 months 24 days | 2 years 10 months 17 days |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value - beginning | $209,500 | $0 |
Aggregate intrinsic value - ending | 47,500 | 209,500 |
Aggregate intrinsic value - exercisable | $47,500 | $209,500 |
6_Stock_Options_Plans_DetailsW
6. Stock Options Plans (Details-Warrants Outstanding) (Warrants, USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Warrants | ||
Shares | ||
Shares outstanding - beginning | 19,640,375 | 14,319,532 |
Shares granted | 5,566,339 | 11,172,508 |
Shares exercised | 185,000 | 0 |
Shares cancelled and expired | -1,447,800 | -5,851,665 |
Shares outstanding - ending | 19,640,375 | |
Shares exercisable | 19,640,375 | |
Weighted Average Exercise Price | ||
Weighted average exercise price - beginning | $0.56 | $0.55 |
Weighted average exercise price - shares granted | $0.70 | $0.51 |
Weighted average exercise price - ending | $0.56 | |
Weighted average exercise price - exercisable | $0.59 | $0.56 |
Weighted Average Remaining Contractural Term | ||
Weighted average contractural term - beginning | 2 years 3 months 26 days | 1 year 6 months 22 days |
Weighted average contractural term - granted | 3 years 8 months 23 days | 3 years 11 months 23 days |
Weighted average contractural term - ending | 2 years 7 months 24 days | 2 years 10 months 17 days |
Weighted average contractural term - exercisable | 2 years 7 months 24 days | 2 years 10 months 17 days |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value - beginning | $209,500 | $0 |
Aggregate intrinsic value - ending | 47,500 | 209,500 |
Aggregate intrinsic value - exercisable | $47,500 | $209,500 |
6_STOCK_OPTION_PLAN_Details_Na
6. STOCK OPTION PLAN (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Unamortized compensation cost relatd to stock option awards | $492,363 | $0 | ||
Number of shares authorized under the plans | 14,000,000 | |||
Options [Member] | ||||
Weighted average grant date fair value of options | $0.41 | $0.42 | $0.41 | $0.54 |
6_Stock_Option_Plans_Details_N
6. Stock Option Plans (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Unamortized compensation cost relatd to stock option awards | $492,363 | $0 | ||
Options | ||||
Weighted average grant date fair value of options | $0.41 | $0.42 | $0.41 | $0.54 |
8_PRIVATE_PLACEMENT_Details
8. PRIVATE PLACEMENT (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
January 2012 [Member] | |
Private placement financing | $575,000 |
Private placement financing discription | 958,338 common shares and warrants to purchase 191,671common shares; also issued 197,860 penalty shares for electing not to register resale of securities. |
April 2012 [Member] | |
Private placement financing | 270,000 |
Private placement financing discription | Exercise of 900,000 warrants |
April/May 2012 [Member] | |
Private placement financing | 470,000 |
Private placement financing discription | Issued preferred stock, which was subsequently converted into 1,361,333 shares and warrants to purchase 41,667 common shares |
July 2012 [Member] | |
Private placement financing | 606,240 |
Private placement financing discription | Issued 2,020,799 common shares, 673,600 warrants and 258,333 additional common shares for failing to reach certain performance milestones. |
November 2012 [Member] | |
Private placement financing | 301,000 |
Private placement financing discription | Issued 1,003,334 common shares and warrants to purchase 501,667 shares. |
2013 [Member] | |
Private placement financing | 5,562,816 |
Private placement financing discription | Issued 19,125,000 common shares and warrants to purchase 9,562,000 shares |
January/February 2014 [Member] | |
Private placement financing | 2,160,300 |
Private placement financing discription | Issued 7,201,000 common shares and warrants to purchase 3,600,000 shares |
March 2014 [Member] | |
Private placement financing | 500,000 |
Private placement financing discription | Issued 2,000,000 common shares. |
July 2014 [Member] | |
Private placement financing | 1,000,000 |
Private placement financing discription | Issued 2,000,000 shares and warrants to purchase 1,000,000 shares |
July 2014 One [Member] | |
Private placement financing | $250,000 |
Private placement financing discription | Issued convertible note in the principal amount of $250,000 and warrants to purchase 125,000 shares |
9_SEGMENT_INFORMATION_Details
9. SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues, net | $714,044 | $668,719 | $2,273,395 | $2,263,812 | $3,157,532 | $2,890,652 |
Operating (loss), before interest amortization, depreciation and taxes | -1,959,574 | -6,039,580 | ||||
Interest income | 45 | 53 | 138 | 221 | 274 | 436 |
Interest (expense) | -40,621 | -64,111 | ||||
Depreciation and amortization | -80,756 | -243,914 | ||||
Net Loss | -2,080,906 | -1,193,528 | -6,347,467 | -4,132,598 | -6,087,465 | -4,134,061 |
Assets | 2,735,414 | 2,735,414 | 3,228,504 | 1,846,170 | ||
Ace Marketing and Promotions, Inc. [Member] | ||||||
Revenues, net | 712,544 | 2,155,895 | 2,995,032 | |||
Operating (loss), before interest amortization, depreciation and taxes | -891,940 | -3,307,802 | ||||
Interest income | 45 | 138 | 274 | |||
Interest (expense) | -40,621 | -64,111 | ||||
Depreciation and amortization | -26,506 | -78,170 | ||||
Net Loss | -959,022 | -3,449,945 | -4,102,507 | |||
Assets | 2,041,210 | 2,041,210 | 2,287,313 | |||
Mobiquity Networks Inc [Member] | ||||||
Revenues, net | 1,500 | 117,500 | ||||
Operating (loss), before interest amortization, depreciation and taxes | -1,067,634 | -2,731,778 | ||||
Depreciation and amortization | -54,250 | -165,744 | ||||
Net Loss | -1,121,884 | -2,897,522 | ||||
Assets | $694,204 | $694,204 | $941,191 |
9_Segment_Information_Details_
9. Segment Information (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues, net | $714,044 | $668,719 | $2,273,395 | $2,263,812 | $3,157,532 | $2,890,652 |
Operating (loss), before interest amortization, depreciation and taxes | -5,571,356 | |||||
Interest income | 45 | 53 | 138 | 221 | 274 | 436 |
Interest (expense) | -40,621 | -24,602 | -64,111 | -85,586 | -227,094 | -182,943 |
Depreciation and amortization | -289,289 | |||||
Net Loss | -2,080,906 | -1,193,528 | -6,347,467 | -4,132,598 | -6,087,465 | -4,134,061 |
Assets | 2,735,414 | 2,735,414 | 3,228,504 | 1,846,170 | ||
Ace Marketing and Promotions, Inc. | ||||||
Revenues, net | 712,544 | 2,155,895 | 2,995,032 | |||
Operating (loss), before interest amortization, depreciation and taxes | -3,775,827 | |||||
Interest income | 45 | 138 | 274 | |||
Interest (expense) | -227,094 | |||||
Depreciation and amortization | -99,860 | |||||
Net Loss | -959,022 | -3,449,945 | -4,102,507 | |||
Assets | 2,041,210 | 2,041,210 | 2,287,313 | |||
Mobiquity Networks Inc | ||||||
Revenues, net | 162,500 | |||||
Operating (loss), before interest amortization, depreciation and taxes | -1,795,529 | |||||
Interest income | 0 | |||||
Interest (expense) | 0 | |||||
Depreciation and amortization | -189,429 | |||||
Net Loss | -1,984,958 | |||||
Mobiquity Networks Inc. | ||||||
Revenues, net | 1,500 | 117,500 | ||||
Net Loss | -1,121,884 | -2,897,522 | ||||
Assets | $694,204 | $694,204 | $941,191 |
11_FACILITIES_Details
11. FACILITIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Facilities Details | ||
2014 | $32,000 | |
2015 | 135,000 | 135,000 |
2016 | 139,000 | 139,000 |
2017 and thereafter | 36,000 | 36,000 |
Total lease commitment | $342,000 | $436,000 |
11_FACILITIES_Details_Narrativ
11. FACILITIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Facilities Details Narrative | ||||||
Rent and real estate tax expense | $359,762 | $199,704 | $955,283 | $595,291 | $869,800 | $736,700 |
Recovered_Sheet1
14a. Commitments and Contingencies (Details-Lease commitments) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum lease commitment 2014 | $126,000 | |
Minimum lease commitment 2015 | 135,000 | 135,000 |
Minimum lease commitment 2016 | 139,000 | 139,000 |
Minimum lease commitment 2017 and thereafter | 36,000 | 36,000 |
Minimum lease commitment total | $342,000 | $436,000 |
Recovered_Sheet2
14a. Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Rent and real estate expense | $359,762 | $199,704 | $955,283 | $595,291 | $869,800 | $736,700 |