Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Entity Registrant Name | PACIFIC WEBWORKS INC | |
Entity Central Index Key | 1086303 | |
Current Fiscal Year End Date | -19 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 49,713,895 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $276,633 | $609,313 |
Receivables | ||
Trade, less allowance for doubtful receivables of $0 in 2014 and $0 in 2015 | 1,201,862 | 1,081,286 |
Prepaid expenses and other current assets | 37,514 | 56,635 |
Inventory | 14,743 | 20,289 |
Total current assets | 1,530,752 | 1,767,523 |
PROPERTY AND EQUIPMENT, NET | 12,339 | 13,995 |
Restricted cash | 241,059 | 300,208 |
Security deposit | 4,825 | 4,825 |
Deferred Expenses | 260,919 | 60,972 |
Goodwill | 1,946,253 | 1,946,253 |
Total Assets | 3,996,147 | 4,093,776 |
CURRENT LIABILITIES | ||
Accounts payable | 220,030 | 50,528 |
Accrued liabilities | 153,064 | 149,487 |
Notes payable, current portion | 9,840 | 24,601 |
Deferred revenue | 348,174 | 169,229 |
Total current liabilities | 731,108 | 393,845 |
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 | -14,854,390 | -14,419,498 |
Total stockholders' equity | 3,265,039 | 3,699,931 |
Total liabilities and stockholders' equity | $3,996,147 | $4,093,776 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues | ||
Hosting, gateway and maintenance fees | $1,509,829 | $405,976 |
Product sales | 29,030 | 70,188 |
Revenues | 1,538,859 | 476,164 |
Cost of sales | 1,316,540 | 240,003 |
Gross profit | 222,319 | 236,161 |
Selling expenses | 52,064 | 82,420 |
Research and development | 54,463 | 54,933 |
General and administrative | 548,790 | 364,404 |
Depreciation and amortization | 1,656 | 1,065 |
Total operating expenses | 656,973 | 502,822 |
Loss from operations | -434,654 | -266,661 |
Other income (expense) | ||
Interest income (expense), net | -238 | 3,032 |
Total other income (expense) | -238 | 3,032 |
Loss before income taxes | -434,892 | -263,629 |
Income tax expense | ||
Net loss | ($434,892) | ($263,629) |
LOSS PER SHARE | ||
Basic | ($0.01) | ($0.01) |
Diluted | ($0.01) | ($0.01) |
Weighted-average common shares outstanding | ||
Basic | 49,713,895 | 49,713,895 |
Fully Diluted | 49,713,895 | 49,713,895 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash Flows From Operating Activities | ||
Net loss | ($434,892) | ($263,629) |
Adjustments to reconcile net loss to net cash used for operating activities | ||
Depreciation and amortization | 1,656 | 1,065 |
Changes in assets and liabilities | ||
Receivables | -120,576 | 8,907 |
Restricted cash | 59,149 | -21,416 |
Prepaid expenses and other assets | -180,826 | 22,988 |
Inventory | 5,546 | -39,879 |
Interest receivable | -3,125 | |
Accounts payable and accrued liabilities | 173,079 | 163 |
Deferred revenue | 178,945 | -13,821 |
Net cash used for operating activities | -317,919 | -308,747 |
Cash Flows From Investing Activities | ||
Net cash used for investing activities | ||
Cash Flows From Financing Activities | ||
Cash paid on notes payable | -14,761 | -12,822 |
Net cash used for financing activities | -14,761 | -12,822 |
Net decrease in cash and cash equivalents | -332,680 | -321,569 |
Cash and cash equivalents at beginning of period | 609,313 | 1,928,821 |
Cash and cash equivalents at end of period | 276,633 | 1,607,252 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 324 | 310 |
Cash paid for income taxes |
BASIS_OF_FINANCIAL_STATEMENT_P
BASIS OF FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2015 | |
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 U.S. 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, 2014 Annual Report on Form 10-K. Operating results for the three month period ending March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. | |
Reclassifications | |
Certain prior period balances have been reclassified to conform to current period presentation. | |
NOTES_PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2015 | |
NOTES PAYABLE [Abstract] | |
NOTES PAYABLE | NOTE 2 – NOTES PAYABLE |
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 three month period ended March 31, 2014, the Company made principal payments of $12,821 and interest of $310. | |
On September 2, 2014 the Company entered into a $44,281 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 9 monthly payments of $5,028. During the three month period ended March 31, 2015, the Company made principal payments of $14,761 and interest of $324. | |
NOTES_RECEIVABLE
NOTES RECEIVABLE | 3 Months Ended |
Mar. 31, 2015 | |
NOTES RECEIVABLE [Abstract] | |
NOTES RECEIVABLE | NOTE 3 – NOTES RECEIVABLE |
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 December 31, 2013, the maturity date of the promissory note was extended to June 30, 2014 and on June 30, 2014 the maturity date of the promissory note was extended to August 31, 2015. As of December 31, 2014, the promissory note was repaid in full. | |
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.) | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 4 – COMMITMENTS & CONTINGENCIES |
During the year ended December 31, 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 | 3 Months Ended |
Mar. 31, 2015 | |
LITIGATION MATTERS [Abstract] | |
LITIGATION MATTERS | NOTE 5 – LITIGATION MATTERS |
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. | |
On November 15, 2013 Pacific WebWorks, Inc. was served a summons by the Third Judicial District Court in and for Salt Lake County, State of Utah. The plaintiffs, Allen Stutelberg, Harold Schmunk and Michael Greer, filed a derivative action alleging Pacific WebWorks, Inc. and five former and current members of the board of directors, officers and/or employees of the Company committed corporate waste, breached fiduciary duties and committed civil conspiracy resulting in mismanagement of the Company's assets and affairs and usurpation of corporate opportunities. The plaintiffs seek general and punitive damages in excess of $300,000 for each of the five causes of action to be proven at a jury trial. The Company retained legal counsel to vigorously defend against these allegations. The Company's counsel filed an answer to the summons and filed a motion to disqualify plaintiff's attorney due to a conflict of interest. The Company's motion to disqualify plaintiff's attorney was granted in July 2014. In October 2014 the Company filed a motion to disqualify the remainder of the law firm representing the plaintiffs in this matter. On March 12, 2015, the Court denied this motion. The Company subsequently filed for interlocutory appeal and on April 30, 2015, the Utah Court of Appeals denied this petition. | |
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 | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||
SEGMENT REPORTING | NOTE 6 – SEGMENT REPORTING | ||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||
March 31, 2014a | March 31, 2015a | ||||||||||||||||||||
Business Unit | Revenues, | Net income | Revenues, | Net income | |||||||||||||||||
net | (loss) | net | (loss) | ||||||||||||||||||
Pacific Web Works | $ | 25,208 | $ | (401,252 | ) | $ | - | $ | (366,786 | ) | |||||||||||
IntelliPay | 123,398 | 103,520 | 90,091 | 73,618 | |||||||||||||||||
Headlamp Ventures | 70,168 | (8,068 | ) | 29,030 | (656 | ) | |||||||||||||||
TradeWorks | 900 | 900 | 670 | 670 | |||||||||||||||||
Thrifty Seeker | 20 | (130 | ) | - | (149 | ) | |||||||||||||||
Promontory Marketing | - | (45 | ) | - | (55 | ) | |||||||||||||||
World Commerce Network | - | 3,125 | - | (6 | ) | ||||||||||||||||
Dynamic WebTools | 256,470 | 38,321 | 1,419,068 | (141,528 | ) | ||||||||||||||||
Total | $ | 476,164 | $ | (263,629 | ) | $ | 1,538,859 | $ | (434,892 | ) | |||||||||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination for consolidation. | |||||||||||||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS |
The Company has evaluated subsequent events in accordance with the provisions of ASC 855 and has identified no reportable subsequent events. | |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
SEGMENT REPORTING [Abstract] | |||||||||||||||||||||
Summary of Business Unit Information | Three Months Ended | Three Months Ended | |||||||||||||||||||
March 31, 2014a | March 31, 2015a | ||||||||||||||||||||
Business Unit | Revenues, | Net income | Revenues, | Net income | |||||||||||||||||
net | (loss) | net | (loss) | ||||||||||||||||||
Pacific Web Works | $ | 25,208 | $ | (401,252 | ) | $ | - | $ | (366,786 | ) | |||||||||||
IntelliPay | 123,398 | 103,520 | 90,091 | 73,618 | |||||||||||||||||
Headlamp Ventures | 70,168 | (8,068 | ) | 29,030 | (656 | ) | |||||||||||||||
TradeWorks | 900 | 900 | 670 | 670 | |||||||||||||||||
Thrifty Seeker | 20 | (130 | ) | - | (149 | ) | |||||||||||||||
Promontory Marketing | - | (45 | ) | - | (55 | ) | |||||||||||||||
World Commerce Network | - | 3,125 | - | (6 | ) | ||||||||||||||||
Dynamic WebTools | 256,470 | 38,321 | 1,419,068 | (141,528 | ) | ||||||||||||||||
Total | $ | 476,164 | $ | (263,629 | ) | $ | 1,538,859 | $ | (434,892 | ) | |||||||||||
aAmounts include all intercompany receivables, payables, revenues and expenses prior to elimination for consolidation. | |||||||||||||||||||||
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended |
Aug. 28, 2013 | Mar. 31, 2014 | Sep. 02, 2014 | Mar. 31, 2015 | |
August 28, 2013, Financing Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $42,738 | |||
Annual rate | 5.24% | |||
Debt Instrument, Term | 10 months | |||
Monthly payments | 4,377 | |||
Principal payment | 12,821 | |||
Interest payment | 310 | |||
September Second 2014 Financial Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 44,281 | |||
Annual rate | 5.24% | |||
Debt Instrument, Term | 9 months | |||
Monthly payments | 5,028 | |||
Principal payment | 14,761 | |||
Interest payment | $324 |
NOTES_RECEIVABLE_Details
NOTES RECEIVABLE (Details) (USD $) | Aug. 03, 2011 | Aug. 15, 2011 |
Bryan Development, LLC [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $250,000 | |
Grupo Zapata Arce [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | 400,000 | |
Fee per metric ton of iron ore purchased with proceeds of the note | $3 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Monthly lease obligation | ||
Year one | $4,300 | |
Year two | 4,425 | |
Year three | 4,550 | |
Year four | 4,700 | |
Year five | 4,825 | |
Security deposit | $4,825 | $4,825 |
Lease expiration period | 31-May-18 |
LITIGATION_MATTERS_Details
LITIGATION MATTERS (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
LITIGATION MATTERS [Abstract] | |
Settlement expense | $400,000 |
Damages sought | $300,000 |
SEGMENT_REPORTING_Schedule_of_
SEGMENT REPORTING (Schedule of Segment Reporting By Business Unit) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Revenues, net | $1,538,859 | $476,164 |
Net income (loss) | -434,892 | -263,629 |
Pacific Web Works [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 25,208 | |
Net income (loss) | -366,786 | -401,252 |
IntelliPay [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 90,091 | 123,398 |
Net income (loss) | 73,618 | 103,520 |
Headlamp Ventures [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 29,030 | 70,168 |
Net income (loss) | -656 | -8,068 |
Trade Works [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 670 | 900 |
Net income (loss) | 670 | 900 |
Thrifty Seeker [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 20 | |
Net income (loss) | -149 | -130 |
Promontory Marketing [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | ||
Net income (loss) | -55 | -45 |
World Commerce Network [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | ||
Net income (loss) | -6 | 3,125 |
Dynamic WebTools [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 1,419,068 | 256,470 |
Net income (loss) | ($141,528) | $38,321 |