Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Basic and diluted | ' | ' |
Entity Registrant Name | 'QUOTEMEDIA INC | ' |
Entity Central Index Key | '0001101433 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 90,444,162 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONSOLIDATED_BALANCE_SHEETS_UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash | $447,418 | $658,100 |
Accounts receivable, net | 596,114 | 652,603 |
Prepaid expenses | 54,115 | 72,843 |
Other current assets | 306,655 | 273,577 |
Total current assets | 1,404,302 | 1,657,123 |
Deposits | 21,122 | 21,810 |
Property and equipment, net | 1,356,308 | 1,276,776 |
Goodwill | 110,000 | 110,000 |
Intangible assets | 89,889 | 91,922 |
Total assets | 2,981,621 | 3,157,631 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 1,179,507 | 1,156,289 |
Deferred revenue | 604,766 | 525,026 |
Total current liabilities | 1,784,273 | 1,681,315 |
Long-term portion of amounts due to related parties | 7,173,832 | 6,615,136 |
Stockholders' deficit: | ' | ' |
Preferred stock, nondesignated, 10,000,000 shares authorized, none issued | ' | ' |
Common stock, $0.001 par value, 150,000,000 shares authorized, 90,444,162 and 89,371,320 shares issued and outstanding | 90,445 | 89,372 |
Additional paid-in capital | 8,928,316 | 8,922,108 |
Accumulated deficit | -14,995,245 | -14,150,300 |
Total stockholders' deficit | -5,976,484 | -5,138,820 |
Total liabilities and stockholders' deficit | $2,981,621 | $3,157,631 |
CONSOLIDATED_BALANCE_SHEETS_UN1
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Provision for income taxes | ' | ' |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 90,444,162 | 89,371,320 |
Common stock, shares outstanding | 90,444,162 | 89,371,320 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Consolidated Statements Of Operations | ' | ' | ' | ' |
Revenue | $2,395,733 | $2,388,241 | $7,160,432 | $7,429,241 |
Cost of revenue | 1,298,590 | 1,188,580 | 3,904,274 | 3,590,724 |
Gross profit | 1,097,143 | 1,199,661 | 3,256,158 | 3,838,517 |
Operating expenses | ' | ' | ' | ' |
Sales and marketing | 415,270 | 414,052 | 1,241,560 | 1,316,540 |
General and administrative | 493,039 | 452,638 | 1,545,308 | 1,488,568 |
Software development | 233,133 | 304,477 | 832,446 | 900,853 |
Total operating expenses | 1,141,442 | 1,171,167 | 3,619,314 | 3,705,961 |
Operating profit (loss) | -44,299 | 28,494 | -363,156 | 132,556 |
Other income and (expense) | ' | ' | ' | ' |
Foreign exchange gain | -17,901 | -61,907 | 31,834 | -59,232 |
Interest expense (related party) | -175,381 | -158,934 | -510,693 | -469,118 |
Total other income and (expense) | -193,282 | -220,841 | -478,859 | -528,350 |
Loss before income taxes | -237,581 | -192,347 | -842,015 | -395,794 |
Provision for income taxes | -961 | -1,004 | -2,930 | -2,991 |
Net loss | ($238,542) | ($193,351) | ($844,945) | ($398,785) |
Loss per share | ' | ' | ' | ' |
Basic and diluted loss per share | $0 | $0 | ($0.01) | $0 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic and diluted | 90,039,311 | 89,371,320 | 89,596,430 | 89,371,320 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Operating activities: | ' | ' |
Net loss | ($844,945) | ($398,785) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 601,513 | 561,890 |
Bad debt expense | 152,461 | 70,386 |
Stock-based compensation expense | 7,281 | 7,549 |
Noncash barter revenue | ' | -180,000 |
Noncash barter advertising expense | ' | 96,000 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -95,972 | -222,774 |
Prepaid expenses | 18,728 | 19,338 |
Other current assets | -33,078 | 201,561 |
Deposits | 688 | 2,273 |
Accounts payable and amounts due to related parties | 581,914 | 395,337 |
Deferred revenue | 79,740 | 26,144 |
Net cash provided by operating activities | 468,330 | 578,919 |
Investing activities: | ' | ' |
Purchase of fixed assets | -73,136 | -20,675 |
Purchase of intangible assets | -2,380 | ' |
Capitalized application software | -603,496 | -564,997 |
Net cash used in investing activities | -679,012 | -585,672 |
Net increase (decrease) in cash | -210,682 | -6,753 |
Cash and equivalents, beginning of period | 658,100 | 427,010 |
Cash and equivalents, end of period | $447,418 | $420,257 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
Note 1. BASIS OF PRESENTATION | ' |
The accompanying unaudited consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year. In connection with the preparation of the condensed financial statements, the Company evaluated subsequent events after the balance sheet date of September 30, 2013 through the filing of this report. | |
These financial statements should be read in conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 2012 contained in our Form 10-K filed with the Securities and Exchange Commission dated March 28, 2013. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 2. SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
a) Nature of operations | |||||||||||||||||
We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets. | |||||||||||||||||
b) Basis of consolidation | |||||||||||||||||
The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc. All intercompany transactions and balances have been eliminated. | |||||||||||||||||
c) Foreign currency translation and transactions | |||||||||||||||||
The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur. | |||||||||||||||||
d) Barter revenue | |||||||||||||||||
The Company licensed one of its portfolio management applications in exchange for advertising services of a customer, referred to as “barter revenue”, whereby advertising credits were received in exchange for subscription services. This revenue was recognized in the period in which the applications were licensed based on the fair market value of the services delivered. The Company determined the fair market value of the service delivered based upon amounts charged for similar services in nonbarter arrangements within the previous six-month period. The Company also ensured that the value of barter delivered did not exceed the value of cash-based revenue in any period. | |||||||||||||||||
The following table summarizes our barter revenue transactions for the three and nine month periods ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Barter revenue earned | - | - | - | $ | 180,000 | ||||||||||||
Advertising credits expensed | - | - | - | 96,000 | |||||||||||||
The Company’s barter licensing agreement expired on June 30, 2012, at which time we had unused advertising credits valued at $180,000 that were reflected as prepaid expenses. In June 2012 we agreed to accept a cash settlement of $264,000 to forfeit our unused advertising credits. In accordance with the terms of the settlement agreement, the $264,000 cash payment was received in full on July 31, 2012. The settlement receivable balance was applied against prepaid expenses at June 30, 2012, with the excess ($84,000) applied against advertising credits expensed during the three month period ended June 30, 2012. | |||||||||||||||||
e) Accounting Pronouncements | |||||||||||||||||
Recently Adopted Accounting Guidance | |||||||||||||||||
In July 2013, the Financial Accounting Standards Board issued an accounting standard update which will require us to present an unrecognized tax benefit, if applicable, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward in our financial statements, with certain exceptions. The update will be effective for fiscal years beginning after December 15, 2013. We do not expect the adoption of this guidance to have a material impact on our financial statements. | |||||||||||||||||
Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 3. FINANCIAL INSTRUMENTS | ' | ||||||||||||||||
a) Fair value of financial instruments | |||||||||||||||||
FASB ASC 820, Fair Value Measurements and Disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3). | |||||||||||||||||
From time to time we utilize forward contracts that are measured at fair market value on a recurring basis based on Level 2 inputs. At September 30, 2013, the fair market value for forward contracts was an asset of $136 and was included in other assets. We had no forward contracts outstanding at December 31, 2012. | |||||||||||||||||
b) Derivative instruments | |||||||||||||||||
A significant portion of our expenses are paid in Canadian dollars, therefore changes to the exchange rate between the U.S. and Canadian dollar affect our operating results. To manage this exchange rate risk, from time to time we utilize forward contracts to purchase Canadian dollars. Our Company policy limits contracts to maturities of one year or less from the date of issuance. We do not enter into foreign exchange forward contracts for trading purposes. | |||||||||||||||||
We account for derivatives and hedging activities in accordance with FASB ASC 815, Derivatives and Hedging, which requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. | |||||||||||||||||
We have chosen not to elect hedge accounting for these forward contracts; therefore, changes in fair value for these instruments are immediately recognized in earnings and included in our foreign exchange gain (loss). The fluctuations in the value of these forward contracts do, however, generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. | |||||||||||||||||
The following table provides gross notional value of foreign currency derivative financial instruments and the related net asset or liability. The table presents the notional amount (at contract exchange rates) and the fair value of the derivatives in U.S. dollars: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Notional Amount | Net Asset (Liability) | Notional Amount | Net Asset (Liability) | ||||||||||||||
Forward contracts | $ | 300,000 | $ | 136 | $ | - | $ | - | |||||||||
We are required to maintain a margin deposit with a foreign exchange corporation based on the value of the forward contracts outstanding. Margin deposits totaling $15,400 related to forward contracts outstanding are included in other current assets at September 30, 2013. There were no margin deposits at December 31, 2012. |
RELATED_PARTIES
RELATED PARTIES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 4. RELATED PARTIES | ' | ||||||||
The following table summarizes amounts due to related parties at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Purchase of business unit | $ | 206,789 | $ | 228,721 | |||||
Computer hosting services | - | 127,127 | |||||||
Office rent | 1,007,053 | 970,729 | |||||||
Other | 17,276 | 17,276 | |||||||
Loan | 780,713 | 732,670 | |||||||
Lead generation services | 1,024,893 | 951,133 | |||||||
Due to Management | 4,137,108 | 3,587,480 | |||||||
$ | 7,173,832 | $ | 6,615,136 | ||||||
As a matter of policy, all related party transactions are subject to review and approval by the Company’s Board of Directors. All repayments of amounts due to related parties must be approved by our Board of Directors. Repayments are subject to our company having sufficient cash on hand and are intended not to impair continuing business operations. All amounts due to related parties have been classified as non-current liabilities as we do not expect to make any repayments within a year of the September 30, 2013 balance sheet date. Our related party creditors have agreed to these repayment terms. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||
Note 5. STOCK-BASED COMPENSATION | ' | ||||||||||||||||||||||
FASB ASC 718, Stock Compensation requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized. | |||||||||||||||||||||||
Total estimated stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and nine months ended September 30, 2013 and 2012 was comprised as follows: | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Sales and marketing | $ | 426 | $ | 750 | $ | 1,278 | $ | 1,546 | |||||||||||||||
General and administrative | 2,001 | 2,001 | 6,003 | 6,003 | |||||||||||||||||||
Total stock-based compensation | $ | 2,427 | $ | 2,751 | $ | 7,281 | $ | 7,549 | |||||||||||||||
At September 30, 2013 there was $29,571 of unrecognized compensation cost related to non-vested share-based payments which is expected to be recognized over a weighted-average period of 3.23 years. | |||||||||||||||||||||||
We calculate the fair value of stock options and warrants granted under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions: | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Expected dividend yield | N/A | - | N/A | - | |||||||||||||||||||
Expected stock price volatility | N/A | 276% | N/A | 276% | |||||||||||||||||||
Risk-free interest rate | N/A | 4% | N/A | 4% | |||||||||||||||||||
Expected life of options | N/A | 6.5 years | N/A | 6.3 years | |||||||||||||||||||
Weighted average fair value of options and warrants granted | N/A | $ | 0.065 | N/A | $ | 0.062 | |||||||||||||||||
The following table represents stock option and warrant activity for the nine months ended September 30, 2013: | |||||||||||||||||||||||
Weighted- | |||||||||||||||||||||||
Options | Average | ||||||||||||||||||||||
and | Exercise | ||||||||||||||||||||||
Warrants | Price | ||||||||||||||||||||||
Outstanding at December 31, 2012 | 13,837,803 | $ | 0.05 | ||||||||||||||||||||
Stock options exercised | (1,700,000 | ) | $ | 0.04 | |||||||||||||||||||
Stock options forfeited/expired | (110,000 | ) | $ | 0.04 | |||||||||||||||||||
Outstanding at September 30, 2013 | 12,027,803 | $ | 0.05 | ||||||||||||||||||||
The following table summarizes our non-vested stock option and warrant activity for the nine months ended September 30, 2013: | |||||||||||||||||||||||
Weighted- | |||||||||||||||||||||||
Average | |||||||||||||||||||||||
Options | Grant | ||||||||||||||||||||||
and | Date Fair | ||||||||||||||||||||||
Warrants | Value | ||||||||||||||||||||||
Non-vested stock options and warrants at | |||||||||||||||||||||||
31-Dec-12 | 738,887 | $ | 0.04 | ||||||||||||||||||||
Vested during the period | (272,502 | ) | $ | 0.04 | |||||||||||||||||||
Non-vested stock options and warrants at | |||||||||||||||||||||||
30-Sep-13 | 466,385 | $ | 0.04 | ||||||||||||||||||||
Options and Warrants | Options and Warrants | ||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||
Number | Number | ||||||||||||||||||||||
Outstanding | Weighted | Exercisable | |||||||||||||||||||||
at | Average | Weighted | at | Weighted | |||||||||||||||||||
September | Remaining | Average | September | Average | |||||||||||||||||||
30, | Contractual | Exercise | 30, | Exercise | |||||||||||||||||||
2013 | Life | Price | 2013 | Price | |||||||||||||||||||
$ | 0.05-0.10 | 11,527,803 | 2.38 | $ | 0.04 | 11,061,418 | $ | 0.04 | |||||||||||||||
$ | 0.11-0.40 | 500,000 | 1.13 | $ | 0.4 | 500,000 | $ | 0.4 | |||||||||||||||
As at September 30, 2013 all stock options and warrants have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant. | |||||||||||||||||||||||
At September 30, 2013 the aggregate intrinsic value of options and warrants outstanding was $384,895. The aggregate intrinsic value of options and warrants exercisable was $372,741. The intrinsic value of stock options and warrants are calculated as the amount by which the market price of our common stock exceeds the exercise price of the option or warrant. |
LOSS_PER_SHARE
LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
Note 6. LOSS PER SHARE | ' |
The basic and diluted net loss per share was $(0.00) and $(0.00) per share for the three months ended September 30, 2013 and 2012, respectively. The basic and diluted net loss per share was $(0.01) and $(0.00) per share for the nine months ended September 30, 2013 and 2012, respectively. There were 12,027,803 and 13,937,803 stock options and warrants excluded from the calculation of dilutive loss per share for the three and nine months ended September 30, 2013 and 2012, respectively, because they were anti-dilutive. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Significant Accounting Policies Policies | ' | ||||||||||||||||
Nature of operations | ' | ||||||||||||||||
We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets. | |||||||||||||||||
Basis of consolidation | ' | ||||||||||||||||
The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc. All intercompany transactions and balances have been eliminated. | |||||||||||||||||
Foreign currency translation and transactions | ' | ||||||||||||||||
The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur. | |||||||||||||||||
Barter revenue | ' | ||||||||||||||||
The Company licensed one of its portfolio management applications in exchange for advertising services of a customer, referred to as “barter revenue”, whereby advertising credits were received in exchange for subscription services. This revenue was recognized in the period in which the applications were licensed based on the fair market value of the services delivered. The Company determined the fair market value of the service delivered based upon amounts charged for similar services in nonbarter arrangements within the previous six-month period. The Company also ensured that the value of barter delivered did not exceed the value of cash-based revenue in any period. | |||||||||||||||||
The following table summarizes our barter revenue transactions for the three and nine month periods ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Barter revenue earned | - | - | - | $ | 180,000 | ||||||||||||
Advertising credits expensed | - | - | - | 96,000 | |||||||||||||
The Company’s barter licensing agreement expired on June 30, 2012, at which time we had unused advertising credits valued at $180,000 that were reflected as prepaid expenses. In June 2012 we agreed to accept a cash settlement of $264,000 to forfeit our unused advertising credits. In accordance with the terms of the settlement agreement, the $264,000 cash payment was received in full on July 31, 2012. The settlement receivable balance was applied against prepaid expenses at June 30, 2012, with the excess ($84,000) applied against advertising credits expensed during the three month period ended June 30, 2012. | |||||||||||||||||
Accounting Pronouncements | ' | ||||||||||||||||
In July 2013, the Financial Accounting Standards Board issued an accounting standard update which will require us to present an unrecognized tax benefit, if applicable, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward in our financial statements, with certain exceptions. The update will be effective for fiscal years beginning after December 15, 2013. We do not expect the adoption of this guidance to have a material impact on our financial statements. | |||||||||||||||||
Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Significant Accounting Policies Tables | ' | ||||||||||||||||
Barter revenue transactions | ' | ||||||||||||||||
The following table summarizes our barter revenue transactions for the three and nine month periods ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Barter revenue earned | - | - | - | $ | 180,000 | ||||||||||||
Advertising credits expensed | - | - | - | 96,000 |
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Financial Instruments Tables | ' | ||||||||||||||||
Notional amount (at contract exchange rates) and the fair value of the derivatives | ' | ||||||||||||||||
The following table provides gross notional value of foreign currency derivative financial instruments and the related net asset or liability. The table presents the notional amount (at contract exchange rates) and the fair value of the derivatives in U.S. dollars: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Notional Amount | Net Asset (Liability) | Notional Amount | Net Asset (Liability) | ||||||||||||||
Forward contracts | $ | 300,000 | $ | 136 | $ | - | $ | - |
RELATED_PARTIES_Tables
RELATED PARTIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Related Parties Tables | ' | ||||||||
Amounts due to related parties | ' | ||||||||
The following table summarizes amounts due to related parties at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Purchase of business unit | $ | 206,789 | $ | 228,721 | |||||
Computer hosting services | - | 127,127 | |||||||
Office rent | 1,007,053 | 970,729 | |||||||
Other | 17,276 | 17,276 | |||||||
Loan | 780,713 | 732,670 | |||||||
Lead generation services | 1,024,893 | 951,133 | |||||||
Due to Management | 4,137,108 | 3,587,480 | |||||||
$ | 7,173,832 | $ | 6,615,136 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Stock-Based Compensation Tables | ' | ||||||||||||||||||||||
Estimated stock-based compensation expense, related to stock-based awards, recognized | ' | ||||||||||||||||||||||
Total estimated stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and nine months ended September 30, 2013 and 2012 was comprised as follows: | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Sales and marketing | $ | 426 | $ | 750 | $ | 1,278 | $ | 1,546 | |||||||||||||||
General and administrative | 2,001 | 2,001 | 6,003 | 6,003 | |||||||||||||||||||
Total stock-based compensation | $ | 2,427 | $ | 2,751 | $ | 7,281 | $ | 7,549 | |||||||||||||||
Fair value of stock options and warrants granted under the provisions using the Black-Scholes valuation model | ' | ||||||||||||||||||||||
We calculate the fair value of stock options and warrants granted under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions: | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
Expected dividend yield | N/A | - | N/A | - | |||||||||||||||||||
Expected stock price volatility | N/A | 276% | N/A | 276% | |||||||||||||||||||
Risk-free interest rate | N/A | 4% | N/A | 4% | |||||||||||||||||||
Expected life of options | N/A | 6.5 years | N/A | 6.3 years | |||||||||||||||||||
Weighted average fair value of options and warrants granted | N/A | $ | 0.065 | N/A | $ | 0.062 | |||||||||||||||||
Stock option and warrant | ' | ||||||||||||||||||||||
The following table represents stock option and warrant activity for the nine months ended September 30, 2013: | |||||||||||||||||||||||
Weighted- | |||||||||||||||||||||||
Options | Average | ||||||||||||||||||||||
and | Exercise | ||||||||||||||||||||||
Warrants | Price | ||||||||||||||||||||||
Outstanding at December 31, 2012 | 13,837,803 | $ | 0.05 | ||||||||||||||||||||
Stock options exercised | (1,700,000 | ) | $ | 0.04 | |||||||||||||||||||
Stock options forfeited/expired | (110,000 | ) | $ | 0.04 | |||||||||||||||||||
Outstanding at September 30, 2013 | 12,027,803 | $ | 0.05 | ||||||||||||||||||||
Nonvested stock option and warrant activity | ' | ||||||||||||||||||||||
The following table summarizes our non-vested stock option and warrant activity for the nine months ended September 30, 2013: | |||||||||||||||||||||||
Weighted- | |||||||||||||||||||||||
Average | |||||||||||||||||||||||
Options | Grant | ||||||||||||||||||||||
and | Date Fair | ||||||||||||||||||||||
Warrants | Value | ||||||||||||||||||||||
Non-vested stock options and warrants at | |||||||||||||||||||||||
31-Dec-12 | 738,887 | $ | 0.04 | ||||||||||||||||||||
Vested during the period | (272,502 | ) | $ | 0.04 | |||||||||||||||||||
Non-vested stock options and warrants at | |||||||||||||||||||||||
30-Sep-13 | 466,385 | $ | 0.04 | ||||||||||||||||||||
Option and Warrats | ' | ||||||||||||||||||||||
Options and Warrants | Options and Warrants | ||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||
Number | Number | ||||||||||||||||||||||
Outstanding | Weighted | Exercisable | |||||||||||||||||||||
at | Average | Weighted | at | Weighted | |||||||||||||||||||
September | Remaining | Average | September | Average | |||||||||||||||||||
30, | Contractual | Exercise | 30, | Exercise | |||||||||||||||||||
2013 | Life | Price | 2013 | Price | |||||||||||||||||||
$ | 0.05-0.10 | 11,527,803 | 2.38 | $ | 0.04 | 11,061,418 | $ | 0.04 | |||||||||||||||
$ | 0.11-0.40 | 500,000 | 1.13 | $ | 0.4 | 500,000 | $ | 0.4 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Notes to Financial Statements | ' | ' | ' | ' | ' |
Barter revenue earned | ' | ' | ' | ' | $180,000 |
Advertising credits expensed | ' | ' | $180,000 | ' | $96,000 |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Notes to Financial Statements | ' | ' | ' | ' | ' |
Advertising credits valued | ' | ' | $180,000 | ' | $96,000 |
Cash settlement to forfeit unused advertising credits | ' | ' | 264,000 | ' | ' |
Excess against advertising credits expensed | ' | ' | ($84,000) | ' | ' |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notional Amount | ' | ' |
Net Asset (Liability) | 136 | 0 |
Forward Contracts [Member] | ' | ' |
Notional Amount | 300,000 | ' |
Net Asset (Liability) | $136 | ' |
FINANCIAL_INSTRUMENTS_Details_
FINANCIAL INSTRUMENTS (Details Narrative) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Financial Instruments Details Narrative | ' | ' |
Fair market value | $136 | $0 |
Margin deposits totaling | $15,400 | $0 |
RELATED_PARTIES_Details
RELATED PARTIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Due to related parties | $7,173,832 | $6,615,136 |
Loan | ' | ' |
Due to related parties | 780,713 | 732,670 |
Purchase of Business Unit | ' | ' |
Due to related parties | 206,789 | 228,721 |
Due to Management | ' | ' |
Due to related parties | 4,137,108 | 3,587,480 |
Computer Hosting Services | ' | ' |
Due to related parties | ' | 127,127 |
Lead Generation Services | ' | ' |
Due to related parties | 1,024,893 | 951,133 |
Office Rent | ' | ' |
Due to related parties | 1,007,053 | 970,729 |
Other [Member] | ' | ' |
Due to related parties | $17,276 | $17,276 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-Based Compensation Details | ' | ' | ' | ' |
Sales and marketing | $426 | $750 | $1,278 | $1,546 |
General and administrative | 2,001 | 2,001 | 6,003 | 6,003 |
Total stock-based compensation | $2,427 | $2,751 | $7,281 | $7,549 |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-Based Compensation Details 1 | ' | ' | ' | ' |
Expected dividend yield | ' | 0.00% | ' | 0.00% |
Expected stock price volatility | ' | 276.00% | ' | 276.00% |
Risk-free interest rate | ' | 4.00% | ' | 4.00% |
Expected life of options | ' | '6 years 6 months | ' | '6 years 3 months 18 days |
Weighted average fair value of options granted | ' | $0.07 | ' | $0.06 |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 2) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Options and Warrants | ' |
Outstanding at December 31, 2012 | 13,837,803 |
Stock options exercised | -1,700,000 |
Stock options and warrants forfeited/expired | -110,000 |
Outstanding at June 30, 2013 | 12,027,803 |
Weighted- Average Exercise price | ' |
Outstanding at December 31, 2012 | $0.05 |
Stock options exercised | $0.04 |
Stock options and warrants forfeited/expired | $0.04 |
Outstanding at June 30, 2013 | $0.05 |
STOCKBASED_COMPENSATION_Detail3
STOCK-BASED COMPENSATION (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Options and Warrants | ' |
Non-vested stock options and warrants at December 31, 2012 | 738,887 |
Vested during the period | -272,502 |
Non-vested stock options and warrants at June 30, 2013 | 466,385 |
Weighted- Average Grant Date Fair Value | ' |
Non-vested stock options and warrants at December 31, 2012 | $0.04 |
Vested during the period | $0.04 |
Non-vested stock options and warrants at June 30, 2013 | $0.04 |
STOCKBASED_COMPENSATION_Detail4
STOCK-BASED COMPENSATION (Details 4) (USD $) | Sep. 30, 2013 |
0.11-0.40 [Member] | ' |
Options and Warrants | ' |
Number Outstanding | 500,000 |
Weighted Average Remaining Contractual Life | '1 year 1 month 17 days |
Weighted-Average Exercise Price | 0.4 |
Number Exercisable | 500,000 |
Exercisable Weighted-Average Exercise Price | $0.40 |
0.05-0.10 [Member] | ' |
Options and Warrants | ' |
Number Outstanding | 11,527,803 |
Weighted Average Remaining Contractual Life | '2 years 4 months 17 days |
Weighted-Average Exercise Price | 0.04 |
Number Exercisable | 11,061,418 |
Exercisable Weighted-Average Exercise Price | $0.04 |
STOCKBASED_COMPENSATION_Detail5
STOCK-BASED COMPENSATION (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Stock-Based Compensation Details Narrative | ' |
Unrecognized compensation cost related to non-vested share-based payments | $29,571 |
Share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | '3 years 2 months 23 days |
Aggregate intrinsic value of options and warrants outstanding | 384,895 |
Aggregate intrinsic value of options and warrants exercisable | $372,741 |
LOSS_PER_SHARE_Details_Narrati
LOSS PER SHARE (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Loss Per Share Details Narrative | ' | ' | ' | ' |
Loss per share - basic and diluted | $0 | $0 | ($0.01) | $0 |
Stock options and warrants excluded from the calculation of dilutive loss per share because they were anti-dilutive | 12,027,803 | 13,937,803 | 12,027,803 | 13,937,803 |