Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Entity Registrant Name | 'PACIFIC WEBWORKS INC | ' |
Entity Central Index Key | '0001086303 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 49,713,895 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $1,583,939 | $1,655,801 |
Receivables | ' | ' |
Trade, less allowance for doubtful receivables of $0 in 2012 and $0 in 2013 | 77,812 | 51,552 |
Prepaid expenses and other current assets | 91,687 | 6,142 |
Inventory | 378,037 | 377,972 |
Notes receivable | 750,000 | 750,000 |
Interest receivable | 33,438 | 23,958 |
Total current assets | 2,914,913 | 2,865,425 |
PROPERTY AND EQUIPMENT, NET | 6,395 | 1,781,383 |
Restricted cash | 111,860 | 507,854 |
Security deposit | 4,825 | ' |
Available-for-sale securities | 82,531 | 82,531 |
Investments | 204,932 | 208,717 |
Goodwill | 1,946,253 | 1,946,253 |
Deferred Tax Asset | 2,734,700 | 2,589,200 |
Total Assets | 8,006,409 | 9,981,363 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 25,623 | 80,638 |
Accrued liabilities | 138,103 | 632,582 |
Accrued interest payable | ' | 209,328 |
Notes payable, current portion | 43,677 | ' |
Deferred revenue | 62,177 | 11,195 |
Total current liabilities | 269,580 | 933,743 |
LONG-TERM LIABILITIES | ' | ' |
Notes payable | ' | 1,166,627 |
Total long term liabilities | ' | 1,166,627 |
Total liabilities | 269,580 | 2,100,370 |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock - par value $0.001; authorized 50,000,000; issued and outstanding 49,713,895 and 49,713,895, respectively | 49,714 | 49,714 |
Additional paid-in capital | 18,069,715 | 18,069,715 |
Accumulated deficit | -10,382,600 | -10,238,436 |
Total stockholders' equity | 7,736,829 | 7,880,993 |
Total liabilities and stockholders' equity | $8,006,409 | $9,981,363 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Trade receivables, allowance for doubtful receivables | $0 | $0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 49,713,895 | 49,713,895 |
Common stock, shares outstanding | 49,713,895 | 49,713,895 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues | ' | ' | ' | ' |
Hosting, gateway and maintenance fees | $401,586 | $249,549 | $761,399 | $861,602 |
Product sales | 59,162 | ' | 200,351 | ' |
Revenues | 460,748 | 249,549 | 961,750 | 861,602 |
Cost of sales | 291,285 | 46,142 | 450,941 | 151,979 |
Gross profit | 169,463 | 203,407 | 510,809 | 709,623 |
Selling expenses | 39,875 | 9,414 | 115,003 | 30,316 |
Research and development | 55,072 | 57,130 | 175,810 | 166,289 |
General and administrative | 249,011 | 317,156 | 755,877 | 1,055,628 |
Depreciation and amortization | 1,773 | 9,105 | 16,385 | 27,316 |
Total operating expenses | 345,731 | 392,805 | 1,063,075 | 1,279,549 |
Loss from operations | -176,268 | -189,398 | -552,266 | -569,926 |
Other income (expense) | ' | ' | ' | ' |
Interest income (expense), net | 21,924 | 33,794 | 32,443 | 88,654 |
Loss on equity investment | ' | -20,137 | -5,785 | -77,996 |
Other income | ' | ' | ' | 13,700 |
Gain on sale of assets | ' | ' | 143,290 | ' |
Total other income (expense) | 21,924 | 13,657 | 169,948 | 24,358 |
Loss before income taxes | -154,344 | -175,741 | -382,318 | -545,568 |
Deferred income tax benefit | -56,500 | -67,900 | -145,500 | -251,400 |
Income tax expense (benefit) | -92,654 | 80 | -92,654 | 535 |
Net loss | ($5,190) | ($107,921) | ($144,164) | ($294,703) |
LOSS PER SHARE | ' | ' | ' | ' |
Basic | $0 | $0 | $0 | ($0.01) |
Diluted | $0 | $0 | $0 | ($0.01) |
Weighted-average common shares outstanding | ' | ' | ' | ' |
Basic | 49,713,895 | 49,713,895 | 49,713,895 | 49,713,895 |
Fully Diluted | 49,713,895 | 49,713,895 | 49,713,895 | 49,713,895 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flow From Operating Activities | ' | ' |
Net loss | ($144,164) | ($294,703) |
Adjustments to reconcile net loss to net cash used for operating activities | ' | ' |
Depreciation and amortization | 16,385 | 27,316 |
Loss on equity method investments | 5,785 | 77,996 |
Gain on sale of assets | -143,290 | ' |
Changes in assets and liabilities | ' | ' |
Deferred tax asset | -145,500 | -251,400 |
Deposits | -4,825 | ' |
Receivables | -26,260 | 36,045 |
Restricted cash | 395,994 | -314,703 |
Prepaid expenses and other assets | -89,819 | ' |
Inventory | -65 | 11,056 |
Interest receivable | -9,480 | -44,930 |
Accounts payable and accrued liabilities | -706,929 | 19,291 |
Deferred revenue | 50,982 | -17,208 |
Net cash used by operating activities | -801,186 | -751,240 |
Cash Flows From Investing Activities | ' | ' |
Purchase of property and equipment | ' | -2,200 |
Purchase of investments | -2,000 | -37,500 |
Cash paid for notes receivable | ' | -500,000 |
Purchase of available-for-sale securities | ' | -25,000 |
Proceeds from note receivable | ' | 500,000 |
Proceeds from sale of available-for-securities | ' | 250,000 |
Proceeds from sale of property and equipment | 1,850,000 | ' |
Net cash provided by investing activities | 1,848,000 | 185,300 |
Cash Flows From Financing Activities | ' | ' |
Proceeds from notes payable | 42,738 | 150,000 |
Cash paid on notes payable | -1,161,414 | -9,663 |
Net cash provided by (used for) financing activities | -1,118,676 | 140,337 |
Net increase (decrease) in cash and cash equivalents | -71,862 | -425,603 |
Cash and cash equivalents at beginning of period | 1,655,801 | 1,283,569 |
Cash and cash equivalents at end of period | 1,583,939 | 857,966 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 440 | 874 |
Cash paid for income taxes | ' | ' |
BASIS_OF_FINANCIAL_STATEMENT_P
BASIS OF FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
BASIS OF FINANCIAL STATEMENT PRESENTATION [Abstract] | ' |
BASIS OF FINANCIAL STATEMENT PRESENTATION | ' |
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION | |
The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented adequately ensure that the information is not misleading, it is suggested that these interim consolidated financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its December 31, 2012 Annual Report on Form 10-K. Operating results for the nine month period ending September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. | |
Reclassifications | |
Certain prior period balances have been reclassified to conform to current period presentation. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | ||
Sep. 30, 2013 | |||
NOTES PAYABLE [Abstract] | ' | ||
NOTES PAYABLE | ' | ||
NOTE 2 - NOTES PAYABLE | |||
On January 27, 2010, the Company executed a Promissory Note Secured by a Deed of Trust with Assignment of Rents in the principal amount of $1,000,000. The holder of the note was entitled to receive the entire principal amount with all accrued interest, at 7% interest per annum, payable on or before January 27, 2012. On January 25, 2012, the maturity date of the note was extended to January 27, 2015. | |||
On July 10, 2012, the Company executed a Promissory Note Secured by a Deed of Trust with Assignment of Rents in the principal amount of $100,000. The holder of the note was entitled to receive the entire principal amount with all accrued interest, at 7% interest per annum, payable on or before December 31, 2012. On November 2, 2012, the maturity date of the note was extended to January 10, 2014. | |||
On August 31, 2012, the Company executed a Promissory Note Secured by a Deed of Trust with Assignment of Rents in the principal amount of $50,000. The holder of the note was entitled to receive the entire principal amount with all accrued interest, at 7% interest per annum, payable on or before December 31, 2012. On November 2, 2012, the maturity date of the note was extended to January 10, 2014. | |||
The January 27, 2010, July 10, 2012 and August 31, 2012 Promissory Notes were secured by a deed of trust with assignment of rents on the Company's principal office building and a second commercial building the Company owned in Salt Lake City, Utah. Also, the Note holder was entitled to collect rents and lease amounts, if any, from the buildings upon any default and could at its option elect to foreclose on the properties. The Company could make payments prior to the due date and any payments were to be applied first to the reduction of interest and the balance to the outstanding principal. In the event that the Company failed to pay any amount when due, then the amount owing would become immediately due and a default interest rate of 15% would apply to the principal amount. On June 6, 2013, the Company sold its principal office building and second commercial building in Salt Lake City, Utah for a total of $1,850,000. The proceeds of the sale satisfied the $1,340,597 in Promissory Notes dated January 27, 2010, July 10, 2012 and August 31, 2012 in full including all accrued interest, with the remaining cash proceeds of $509,023 remitted directly to the Company. A gain of $143,290 was recognized on the sale of these assets during the nine month period ended September 30, 2013. | |||
On December 2, 2011, the Company assumed a Promissory Note in the principal amount of $30,000 as part of its acquisition of Asher, LLC. The holder of the note is entitled to receive the entire principal amount with all accrued interest, at 5% interest per annum, on or before December 31, 2013. During the nine month period ended September 30, 2013 the Company made principal payments on the note totaling $11,414 and interest of $440. | |||
On August 28, 2013 the Company entered into a $42,738 financing agreement for payment of its business insurance. The financing agreement carries a 5.24% annual rate of interest and requires the Company to make 10 monthly payments of $4,377. During the nine month period ended September 30, 2013, the Company made principal payments of $4,274 and interest of $103. | |||
Following is the five year maturity schedule for our notes payable: | |||
Year Ended December 31, | Amount Due | ||
2013 | $ 18,034 | ||
2014 | $ 25,643 | ||
2015 | $ - | ||
2016 | $ - | ||
2017 | $ - |
NOTES_RECEIVABLE
NOTES RECEIVABLE | 9 Months Ended |
Sep. 30, 2013 | |
NOTES RECEIVABLE [Abstract] | ' |
NOTES RECEIVABLE | ' |
NOTE 3 - NOTES RECEIVABLE | |
On July 28, 2011, the Company, through its Headlamp Ventures, LLC subsidiary, established a revolving line of credit facility and issued an initial $400,000 promissory note to Bsquare Red, LLC, a Utah limited liability company, to be used as working capital in their internet marketing business. The note carries a 15% effective annual rate of interest. On October 3, 2011, the principal amount of the promissory note was increased to $500,000. On July 31, 2012, the maturity date of the promissory note was extended to August 1, 2013. On July 23, 2013, the maturity date of the promissory note was extended to August 1, 2014. It is noted that Bsquare Red, LLC is owned by family members of the Company's CEO. | |
On August 3, 2011, the Company, through its World Commerce Network, LLC subsidiary, issued a $250,000 promissory note to Bryan Development, LLC, a Utah limited liability company, for use as working capital in its business investment activities. On December 31, 2012, the maturity date of the promissory note was extended to December 31, 2013. | |
On August 15, 2011, Headlamp Ventures established a revolving line of credit facility and issued an initial $400,000 promissory note to Grupo Zapata Arce, a division of Metales y Minerales S.A. De C.V., a corporation organized under the laws of Mexico, for use in its iron ore exporting business. Interest is charged on amounts outstanding in the form of a fee of $3.00 per metric ton of iron ore purchased with proceeds of the note. On September 20, 2011, Grupo Zapata Arce Division Metales y Minerals S.A. de C.V., LLC was added as a party to the revolving line of credit and promissory note originally established on August 15, 2011 for Grupo Zapata Arce. Grupo Zapata Arce is positioned in an industry experiencing resurgent demand that is especially driven by emerging markets around the world. However, as of August 31, 2013 Grupo Zapata Arce is in default under the promissory note and Headlamp Ventures has initiated legal action to collect the amount due. (See Note 6 - Litigation Matters, below.) |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2013 | |
INVESTMENTS [Abstract] | ' |
INVESTMENTS | ' |
NOTE 4 - INVESTMENTS | |
On April 21, 2011, Pacific WebWorks invested $250,000 in common units of Middlebury Ventures II, LLC, a Delaware limited liability company formed for the purpose of participating in the Fisker Holdings, Inc. Series C-1 and subsequent rounds of financing. On December 27, 2011, the Company invested an additional $93,280 in common units of Middlebury Ventures II, LLC. On March 28, 2012, the Company invested an additional $25,000 in common units of Middlebury Ventures II, LLC. The funds are to be used by Middlebury Ventures II, LLC for the acquisition of Fisker Holdings, Inc. Series D-1 Shares pursuant to the Fisker Series D-1 transaction documents. Fisker Holdings, Inc. is an automotive company competing in the luxury hybrid-electric vehicle market. During August, 2012, Middlebury Ventures II, LLC changed its name to Ridgemaker Ventures II, LLC. On December 31, 2012, the Company recognized a $285,749 unrealized loss on its investment to impair its carrying value to the current estimated market value. | |
On November 11, 2011, the Company, through its Headlamp Ventures, LLC subsidiary, invested a total of $250,000 in Payroll Innovations, LLC and PickYourPayday.com, LLC, sister companies having common ownership and management and providing payroll debit card and online payroll advance service to small and mid-sized employers. For value received, the Company holds a 25% ownership position in Payroll Innovations, LLC and PickYourPayday.com, LLC. On May 30, 2012, the Company invested an additional total of $30,000 in Payroll Innovations, LLC and PickYourPayday.com, LLC to meet a capital call approved by the members. During September, October and November, 2012, the Company invested an additional total of $34,500 and in March, 2013, the Company invested an additional total of $2,000 in Payroll Innovations, LLC and PickYourPayday.com, LLC to meet capital calls approved by the members. For the year ended December 31, 2011 the Company recognized a $21,186 loss on its equity investment and for the year ended December 31, 2012 the Company recognized an $84,597 loss on its equity investment. For the nine month period ended September 30, 2013 the Company recognized a $5,785 loss on its equity investment. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 5 - COMMITMENTS & CONTINGENCIES | |
The Ridgemaker Ventures II, LLC operating agreement contains a 40% capital call provision specifically associated with the Fisker D-1 round of financing, which includes a 40% capital call component. Members of Ridgemaker Ventures II, LLC are required to invest an amount up to 40% of their investment to date at the time of the capital call, based on the percentage of the total capital call. Those members failing to meet the capital call encounter an automatic conversion of their shares into common shares on a 2:1 basis. Those members that meet the capital call will convert their shares into common shares on a 1:1 basis at such time when there is a market for Fisker securities. An updated operating agreement was instituted in association with the Fisker E-1 round of financing. The updated operating agreement contains a 30% capital call provision specifically associated with the Fisker E-1 round of financing, which provides for an exchange of D-1 shares on a 1:5.8418 basis for investors that meet their E-1 capital call obligation. | |
The Payroll Innovations, LLC and PickYourPayday.com, LLC operating agreements provide for capital calls upon approval by 75% of the membership voting interest. The total amount of each approved capital call is also subject to approval by 75% of the membership voting interest. In a capital call each member is required to invest its proportionate share based on its membership interest. No member's interest in the companies can be diluted without unanimous approval by the members. | |
During the second quarter of 2013 the Company entered into a lease agreement for commercial office space. The lease runs through May 31, 2018 and provides for monthly payments of $4,300 in year one, $4,425 in year two, $4,550 in year three, $4,700 in year four and $4,825 in year five. A security deposit in the amount of $4,825 was required upon lease execution. |
LITIGATION_MATTERS
LITIGATION MATTERS | 9 Months Ended |
Sep. 30, 2013 | |
LITIGATION MATTERS [Abstract] | ' |
LITIGATION MATTERS | ' |
NOTE 6 - LITIGATION MATTERS | |
During the year ended December 31, 2012, the Company was involved in five class action law suits. All plaintiffs in these cases were represented by the same legal firm and each complaint sought class action certification. The complaints alleged that Pacific WebWorks violated consumer protection laws, committed fraud and used deceptive trade practices in relation to the manner in which Pacific WebWorks charged for purchases of its products. Each action sought compensatory and punitive damages, plus reasonable costs and attorney fees. The actions are as follows: | |
On November 9, 2009, Barbara Ford filed an action in the Circuit Court of Cook County, Illinois, Chancery Division. A second action was filed on November 12, 2009, by Deanna Pelletier in the Superior Court of the State of California, County of Solano. A third action was filed by Lisa Rasmussen on November 20, 2009, in the Superior Court of Washington, Snohomish County. On December 18, 2009, the Barbara Ford matter was removed to the United States District Court for the Northern District of Illinois. On December 18, 2009, the Deanna Pelletier matter was removed to the United States District Court for the Eastern District of California. On December 23, 2009, the Lisa Rasmussen matter was removed to the United States District Court for the Western District of Washington. | |
On July 10, 2010, Thomas Aikens filed an action in the Circuit Court of Jackson County, Missouri, which matter was removed to the United States District Court for the Western District of Missouri. This matter was brought by the same law firm as the above cases. | |
On September 19, 2011, Lynette Booth filed an action in the Circuit Court of Cook County, Illinois, Chancery Division alleging violations of consumer protection laws by Pacific WebWorks. This case was removed to the United States District Court for the Northern District of Illinois on December 1, 2011. Damages are unspecified in this action. Pacific WebWorks answered the complaint and denied liability, intent to defend against all such claims. | |
In response to these actions, Pacific WebWorks retained legal counsel to vigorously defend the Company in these lawsuits. Discovery began on the class certification phase in the Illinois, Washington and California lawsuits. Our legal counsel opposed class certification and filed motions to dismiss all claims in the Illinois and Washington actions, which motions were granted in part and denied in part. Pacific WebWorks renewed its motion to dismiss in the Illinois action, which motion has not yet been ruled upon. In addition, Pacific Webworks brought motions to dismiss the Pelletier, Guffey and Aikens actions, which motions have not yet been ruled upon. | |
On May 24, 2012, the Company entered into a Stipulation of Class Action Settlement relating to its outstanding class action lawsuits. The settlement agreement required the Company to contribute a maximum of $400,000 to the settlement fund, class counsel and claims administration fees. The Company's entry into the settlement agreement was intended to reduce its overall litigation expense by putting an end to the significant legal fees continually incurred to defend against the actions. As of December 31, 2011 and 2012, the Company had recorded a liability of $400,000 in contemplation of reaching settlement on its outstanding class action lawsuits. As a part of the settlement agreement, the Company agreed to establish an escrow account and deposit the amount of their maximum contribution into the escrow account to be held there during the settlement approval process. The escrow account was established and fully funded by the Company with the appropriate $400,000 maximum contribution on July 2, 2012. | |
On November 28, 2012, the Class Action Settlement received final approval in the Circuit Court of Cook County, Illinois. On January 10, 2013, the $400,000 held in escrow was contributed to the settlement fund, class counsel and claims administration fees. The Company considers this matter to be closed. | |
As a result of the above class actions suits, Blooksy Interactive, LLC had threatened claims of indemnification against Pacific WebWorks. We denied that we had any duty to defend or indemnify Blooksy Interactive, LLC. | |
On May 18, 2012, the Company entered into a settlement agreement with Bloosky Interactive, LLC in which the parties agreed to waive any and all indemnification claims against one another. The Company considers this matter to be closed. | |
On February 3, 2010, a suit was brought against Pacific WebWorks by Tommy Tompkins in the Circuit Court of Jefferson County, Alabama. The complaint in that case alleged that Pacific WebWorks violated the Telephone Consumer Protection Act by calling Mr. Tompkins' cellular telephone to make a sales solicitation. Pacific WebWorks has denied that it ever improperly called Mr. Tompkins, or that it otherwise violated the Telephone Consumer Protection Act. In response to this action, Pacific WebWorks retained the law firm of Snell & Wilmer as legal counsel to vigorously defend the Company. The plaintiffs, along with other parties and the Company have come to resolution as to a settlement of this dispute with a Settlement Agreement being fully executed on March 29, 2012. Under the terms of this Settlement Agreement, the Company paid $15,000 to the client trust account of Henninger Garrison Davis, LLC to be allocated and distributed at the discretion of the plaintiffs and their counsel. | |
On November 1, 2011, the Company was named in a suit brought by Adrian O. Alegria in the District Court of the Central District of California. The complaint in that case alleged breach of contract and fraud. Pacific WebWorks retained Hirschi, Steele & Baer, PLLC and Single Oak Law Offices, APC as legal counsel to defend the Company. On April 24, 2012 the Company's motion to dismiss was granted by the Court and this matter is considered to be closed. | |
On September 6, 2013 our subsidiary, Headlamp Ventures, LLC, filed a complaint against Marc Didier in the Third District Court Salt Lake County State of Utah. The complaint alleges that Headlamp Ventures loaned Grupo Zapata Arce ("Zapata") $400,000 and Mr. Didier guaranteed the Loan Agreement and Note. Zapata failed to repay the loan by the due date of August 31, 2013 and is in default. Pursuant to the Guaranty and Security Agreement, Mr. Didier is obligated for all amounts due and owing. Headlamp Ventures seeks repayment of the loan amount, plus interest, attorneys' fees and punitive damages. As of the date of this report, Mr. Didier has not responded to the complaint. | |
We are involved in various other disputes and claims arising in the normal course of our business. In the opinion of management, any resulting litigation from these disputes and claims will not have a material effect on our financial position and results of operations. |
SEGMENT_REPORTING
SEGMENT REPORTING | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||
SEGMENT REPORTING | ' | ||||||||
NOTE 7 - SEGMENT REPORTING | |||||||||
Three Months Ended | Three Months Ended | ||||||||
September 30, 2012a | September 30, 2013a | ||||||||
Business Unit | Revenues, net | Net income (loss) | Revenues, net | Net income (loss) | |||||
Pacific Web Works | $ 94,721 | $ (199,046) | $ 33,370 | $ (85,067) | |||||
IntelliPay | 113,331 | 91,787 | 116,617 | 97,759 | |||||
Headlamp Ventures | 39,321 | 270 | 59,080 | 25,320 | |||||
TradeWorks | 930 | 930 | 950 | 950 | |||||
FundWorks | - | - | - | - | |||||
Thrifty Seeker | 1,246 | (293) | 82 | (57) | |||||
Promontory Marketing | - | (44) | - | (45) | |||||
World Commerce Network | - | 3,135 | - | 3,134 | |||||
Dynamic WebTools | - | (4,660) | 250,649 | (47,185) | |||||
Total | $ 249,549 | $ (107,921) | $ 460,748 | $ (5,191) | |||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination | |||||||||
for consolidation. | |||||||||
Nine Months Ended | Nine Months Ended | ||||||||
September 30, 2012a | September 30, 2013a | ||||||||
Business Unit | Revenues, net | Net income (loss) | Revenues, net | Net income (loss) | |||||
Pacific Web Works | $ 390,457 | $ (580,418) | $ 126,805 | $ (471,416) | |||||
IntelliPay | 352,227 | 287,156 | 354,204 | 303,344 | |||||
Headlamp Ventures | 100,585 | (8,561) | 199,098 | 91,395 | |||||
TradeWorks | 4,831 | 4,698 | 3,220 | 3,088 | |||||
FundWorks | - | - | - | - | |||||
Thrifty Seeker | 13,502 | (8,856) | 1,253 | (300) | |||||
Promontory Marketing | - | (146) | - | (459) | |||||
World Commerce Network | - | 16,084 | - | 9,299 | |||||
Dynamic WebTools | - | (4,660) | 277,170 | (79,115) | |||||
Total | $ 861,602 | $ (294,703) | $ 961,750 | $ (144,164) | |||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination | |||||||||
for consolidation. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | |||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||
NOTE 8 - FAIR VALUE MEASUREMENTS | ||||||||||||
We adopted ASC Topic 820 (originally issued as SFAS 157, "Fair Value Measurements") as of January 1, 2008 for financial instruments measured at fair value on a recurring basis. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | ||||||||||||
Fair value is defined 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. ASC Topic 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. | ||||||||||||
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: | ||||||||||||
· | ||||||||||||
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||||||||||||
· | ||||||||||||
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||||||||||||
· | ||||||||||||
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | ||||||||||||
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2013: | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | Significant | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | ||||||||||||
Available-for-sale securities | $ | 82,531 | $ | - | $ | - | $ | 82,531 | ||||
Total assets measured at fair value | $ | 82,531 | $ | - | $ | - | $ | 82,531 | ||||
The table below presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at September 30, 2013. We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. We relied upon a third-party valuation utilizing the market approach in determining the fair value of our Level 3 assets. | ||||||||||||
Available-for-sale securities | Total | |||||||||||
Balance at December 31, 2012 | $ | 82,531 | $ | 82,531 | ||||||||
Total gains or losses (realized and unrealized) | ||||||||||||
Included in net loss | - | - | ||||||||||
Valuation adjustment | - | - | ||||||||||
Purchases, issuances, and settlements, net | - | - | ||||||||||
Transfers to Level 3 | - | - | ||||||||||
Balance at September 30, 2013 | $ | 82,531 | $ | 82,531 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
SUBSEQUENT EVENTS [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 9 - SUBSEQUENT EVENTS | |
The Company has evaluated subsequent events in accordance with the provisions of ASC 855 and has identified no reportable subsequent events. |
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
NOTES PAYABLE [Abstract] | ' | ||
Schedule of Future Maturities of Notes Payable | ' | ||
Following is the five year maturity schedule for our notes payable: | |||
Year Ended December 31, | Amount Due | ||
2013 | $ 18,034 | ||
2014 | $ 25,643 | ||
2015 | $ - | ||
2016 | $ - | ||
2017 | $ - |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||
Summary of Business Unit Information | ' | ||||||||
Three Months Ended | Three Months Ended | ||||||||
September 30, 2012a | September 30, 2013a | ||||||||
Business Unit | Revenues, net | Net income (loss) | Revenues, net | Net income (loss) | |||||
Pacific Web Works | $ 94,721 | $ (199,046) | $ 33,370 | $ (85,067) | |||||
IntelliPay | 113,331 | 91,787 | 116,617 | 97,759 | |||||
Headlamp Ventures | 39,321 | 270 | 59,080 | 25,320 | |||||
TradeWorks | 930 | 930 | 950 | 950 | |||||
FundWorks | - | - | - | - | |||||
Thrifty Seeker | 1,246 | (293) | 82 | (57) | |||||
Promontory Marketing | - | (44) | - | (45) | |||||
World Commerce Network | - | 3,135 | - | 3,134 | |||||
Dynamic WebTools | - | (4,660) | 250,649 | (47,185) | |||||
Total | $ 249,549 | $ (107,921) | $ 460,748 | $ (5,191) | |||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination | |||||||||
for consolidation. | |||||||||
[See following page.] | |||||||||
Nine Months Ended | Nine Months Ended | ||||||||
September 30, 2012a | September 30, 2013a | ||||||||
Business Unit | Revenues, net | Net income (loss) | Revenues, net | Net income (loss) | |||||
Pacific Web Works | $ 390,457 | $ (580,418) | $ 126,805 | $ (471,416) | |||||
IntelliPay | 352,227 | 287,156 | 354,204 | 303,344 | |||||
Headlamp Ventures | 100,585 | (8,561) | 199,098 | 91,395 | |||||
TradeWorks | 4,831 | 4,698 | 3,220 | 3,088 | |||||
FundWorks | - | - | - | - | |||||
Thrifty Seeker | 13,502 | (8,856) | 1,253 | (300) | |||||
Promontory Marketing | - | (146) | - | (459) | |||||
World Commerce Network | - | 16,084 | - | 9,299 | |||||
Dynamic WebTools | - | (4,660) | 277,170 | (79,115) | |||||
Total | $ 861,602 | $ (294,703) | $ 961,750 | $ (144,164) | |||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination | |||||||||
for consolidation. |
FAIR_VALUE_MEASUREMENTS_Table
FAIR VALUE MEASUREMENTS (Table) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | |||||||||||
Schedule of Assets and Liabilities Measured At Fair Value on a Recurring Basis | ' | |||||||||||
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2013: | ||||||||||||
Significant | ||||||||||||
Quoted Prices in | Other | Significant | ||||||||||
Active Markets for | Observable | Unobservable | ||||||||||
Identical Assets | Inputs | Inputs | ||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets | ||||||||||||
Available-for-sale securities | $ | 82,531 | $ | - | $ | - | $ | 82,531 | ||||
Total assets measured at fair value | $ | 82,531 | $ | - | $ | - | $ | 82,531 | ||||
Schedule of Significant Unobservable Inputs | ' | |||||||||||
Available-for-sale securities | Total | |||||||||||
Balance at December 31, 2012 | $ | 82,531 | $ | 82,531 | ||||||||
Total gains or losses (realized and unrealized) | ||||||||||||
Included in net loss | - | - | ||||||||||
Valuation adjustment | - | - | ||||||||||
Purchases, issuances, and settlements, net | - | - | ||||||||||
Transfers to Level 3 | - | - | ||||||||||
Balance at September 30, 2013 | $ | 82,531 | $ | 82,531 |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Aug. 31, 2012 | Jul. 10, 2012 | Jan. 27, 2010 | Aug. 28, 2013 | Sep. 30, 2013 | Dec. 02, 2011 | |
Secured Debt [Member] | Secured Debt [Member] | Secured Debt [Member] | Notes Payable, Other Payables [Member] | Notes Payable, Other Payables [Member] | Notes Payable, Other Payables [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | $50,000 | $100,000 | $1,000,000 | $42,738 | ' | $30,000 |
Notes payable | ' | ' | ' | ' | 1,166,627 | ' | ' | ' | ' | ' | ' |
Annual rate | ' | ' | ' | ' | ' | 7.00% | 7.00% | 7.00% | 5.24% | ' | 5.00% |
Default, interest rate | ' | ' | ' | ' | ' | 15.00% | 15.00% | 15.00% | ' | ' | ' |
Gain on sale of buildings | ' | ' | 1,850,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory notes payable | 1,340,597 | ' | 1,340,597 | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | 509,023 | ' | 509,023 | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly payments | ' | ' | ' | ' | ' | ' | ' | ' | 4,377 | ' | ' |
Principal payment | ' | ' | 11,414 | ' | ' | ' | ' | ' | ' | 4,274 | ' |
Interest payment | ' | ' | 440 | ' | ' | ' | ' | ' | ' | 103 | ' |
Gain on sale of assets | ' | ' | 143,290 | ' | ' | ' | ' | ' | ' | ' | ' |
Future maturities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2013 | 18,034 | ' | 18,034 | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 25,643 | ' | 25,643 | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_RECEIVABLE_Details
NOTES RECEIVABLE (Details) (USD $) | 1 Months Ended | ||||||
Jul. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 03, 2011 | Aug. 15, 2011 | Aug. 03, 2011 | Jul. 28, 2011 | |
NOTES RECEIVABLE [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Notes receivable | ' | $750,000 | $750,000 | ' | $400,000 | $250,000 | $400,000 |
Related party receivables | ' | ' | ' | $500,000 | ' | ' | ' |
Interest rate on loans | 15.00% | ' | ' | ' | ' | ' | ' |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 01, 2013 | Nov. 30, 2012 | 30-May-12 | Nov. 11, 2011 | Dec. 31, 2012 | Mar. 28, 2012 | Dec. 27, 2011 | Apr. 21, 2011 | |
Equity Securities [Member] | Equity Securities [Member] | Equity Securities [Member] | Equity Securities [Member] | |||||||||||
Schedule of Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available-for-sale securities | $82,531 | ' | $82,531 | ' | $82,531 | ' | ' | ' | ' | ' | ' | $25,000 | $93,280 | $250,000 |
Investments | 204,932 | ' | 204,932 | ' | 208,717 | ' | 2,000 | 34,500 | 30,000 | 250,000 | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' |
Loss on equity investment | ' | ($20,137) | ($5,785) | ($77,996) | ($84,597) | ($21,186) | ' | ' | ' | ' | $285,749 | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ' |
Ridgemaker Ventures II, LLC capital call provision, percent of investment | 40.00% | ' |
Fisker round of financing, capital call provision | 30.00% | ' |
Ridgemaker Ventures II, LLC conversion ratio, failed requirement | 2 | ' |
Ridgemaker Ventures II, LLC conversion ratio | 1 | ' |
Fisker round of financing, conversion ratio | 1 | ' |
Membership voting approval interest percentage for Payroll Innovations, LLC and PickYourPayday.com, LLC capital calls | 75.00% | ' |
Monthly rent payments for the first year of the leased commercial office space | $4,300 | ' |
Monthly rent payments for the second year of the leased commercial office space | 4,425 | ' |
Monthly rent payments for the third year of the leased commercial office space | 4,550 | ' |
Monthly rent payments for the forth year of the leased commerical office space | 4,700 | ' |
Monthly rent payments for the fifth year of the leased commerical office space | 4,825 | ' |
Security deposit | $4,825 | ' |
Lease expiration period | 31-May-18 | ' |
LITIGATION_MATTERS_Details
LITIGATION MATTERS (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
LITIGATION MATTERS [Abstract] | ' |
Settlement fund, amount | $400,000 |
Settlement expense | $15,000 |
SEGMENT_REPORTING_Schedule_of_
SEGMENT REPORTING (Schedule of Segment Reporting By Business Unit) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | $460,748 | $249,549 | $961,750 | $861,602 |
Net income (loss) | -5,191 | -107,921 | -144,164 | -294,703 |
Pacific Web Works [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 33,370 | 94,721 | 126,805 | 390,457 |
Net income (loss) | -85,067 | -199,046 | -471,416 | -580,418 |
Headlamp Ventures [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 59,080 | 39,321 | 199,098 | 100,585 |
Net income (loss) | 25,320 | 270 | 91,395 | -8,561 |
IntelliPay [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 116,617 | 113,331 | 354,204 | 352,227 |
Net income (loss) | 97,759 | 91,787 | 303,344 | 287,156 |
Thrifty Seeker [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 82 | 1,246 | 1,253 | 13,502 |
Net income (loss) | -57 | -293 | -300 | -8,856 |
Trade Works [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 950 | 930 | 3,220 | 4,831 |
Net income (loss) | 950 | 930 | 3,088 | 4,698 |
Fund Works [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | ' |
Promontory Marketing [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | ' | ' | ' | ' |
Net income (loss) | -45 | -44 | -459 | -146 |
Dynamic WebTools [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | 250,649 | ' | 277,170 | ' |
Net income (loss) | -47,185 | -4,660 | -79,115 | -4,660 |
World Commerce Network [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues, net | ' | ' | ' | ' |
Net income (loss) | $3,134 | $3,135 | $9,299 | $16,084 |
FAIR_VALUE_MEASUREMENTS_Schedu
FAIR VALUE MEASUREMENTS (Schedule of Assets and Liabilities Measured at Fair Value) (Details) (USD $) | Sep. 30, 2013 |
Assets: | ' |
Available-for-sale securities | $82,531 |
Total assets measured at fair value | 82,531 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' |
Assets: | ' |
Available-for-sale securities | ' |
Total assets measured at fair value | ' |
Significant Other Observable Inputs (Level 2) [Member] | ' |
Assets: | ' |
Available-for-sale securities | ' |
Total assets measured at fair value | ' |
Significant Unobservable Inputs (Level 3) [Member] | ' |
Assets: | ' |
Available-for-sale securities | 82,531 |
Total assets measured at fair value | $82,531 |
FAIR_VALUE_MEASUREMENTS_Schedu1
FAIR VALUE MEASUREMENTS (Schedule of Significant Unobservable Inputs) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Balance at December 31, 2012 | $82,531 |
Total gains or losses (realized and unrealized) included in net loss | ' |
Valuation adjustment | ' |
Purchases, issuances, and settlements, net | ' |
Transfers to Level 3 | ' |
Balance at June 30, 2013 | 82,531 |
Available-for-sale Securities [Member] | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Balance at December 31, 2012 | 82,531 |
Total gains or losses (realized and unrealized) included in net loss | ' |
Valuation adjustment | ' |
Purchases, issuances, and settlements, net | ' |
Transfers to Level 3 | ' |
Balance at June 30, 2013 | $82,531 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | Oct. 03, 2011 |
Subsequent Event [Line Items] | ' |
Related party receivables | $500,000 |