Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 14, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SITO MOBILE, LTD. | ||
Entity Central Index Key | 1,157,817 | ||
Trading Symbol | SITO | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 53,800,000 | ||
Entity Common Stock, Shares Outstanding | 20,681,047 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 8,744,545 | $ 2,615,184 |
Accounts receivable, net | 8,842,256 | 4,938,250 |
Other prepaid expenses | 229,039 | 111,435 |
Asset held for sale - net | 870,716 | 1,810,242 |
Total current assets | 18,686,556 | 9,475,111 |
Property and equipment, net | 410,688 | 506,001 |
Other assets | ||
Capitalized software development costs, net | 1,698,992 | 1,117,480 |
Intangible assets: | ||
Patents | 461,730 | 445,473 |
Patent applications cost | 854,088 | 897,087 |
Other intangible assets, net | 1,439,007 | 1,714,477 |
Goodwill | 6,444,225 | 6,444,225 |
Deferred loan costs, net | 37,676 | 78,116 |
Other assets including security deposits | 112,362 | 79,098 |
Total other assets | 11,048,080 | 10,775,956 |
Total assets | 30,145,324 | 20,757,068 |
Current liabilities | ||
Accounts payable | 3,184,237 | 4,083,160 |
Accrued expenses | 2,180,944 | 1,167,122 |
Deferred revenue | 245,407 | 468,213 |
Current obligations under capital lease | 3,446 | 3,199 |
Note payable, net - current portion | 2,896,893 | 3,984,219 |
Liabilities held for sale | 607,236 | 929,410 |
Total current liabilities | 9,118,163 | 10,635,323 |
Long-term liabilities | ||
Obligations under capital lease | 2,756 | 6,201 |
Note payable, net | 3,952,827 | 4,934,966 |
Total long-term liabilities | 3,955,583 | 4,941,167 |
Total liabilities | 13,073,746 | 15,576,490 |
Commitments and contingencies - See notes 16 | ||
Stockholders' Equity | ||
Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding | ||
Common stock, $.001 par value; 100,000,000 shares authorized, 20,681,047 shares issued and outstanding as of December 31, 2016 and $.001 par value; 300,000,000 shares authorized, 17,157,520 shares issued and outstanding as of December 31, 2015 | 20,680 | 17,156 |
Additional paid-in capital | 157,829,709 | 144,538,247 |
Accumulated deficit | (140,778,811) | (139,374,825) |
Total stockholders' equity | 17,071,578 | 5,180,578 |
Total liabilities and stockholders' equity | $ 30,145,324 | $ 20,757,068 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 300,000,000 |
Common stock, shares issued | 20,681,047 | 17,157,520 |
Common stock, shares outstanding | 20,681,047 | 17,157,520 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | ||
Media placement | $ 28,911,717 | $ 12,140,854 |
Licensing and royalties | 515,238 | 664,336 |
Total revenue | 29,426,955 | 12,805,190 |
Costs and Expenses | ||
Cost of revenue | 13,292,244 | 6,113,211 |
Sales and marketing | 10,057,328 | 4,557,798 |
General and administrative | 6,900,431 | 6,101,116 |
Depreciation and amortization | 608,649 | 508,180 |
Total costs and expenses | 30,858,652 | 17,280,305 |
(Loss) from continuing operations | (1,431,697) | (4,475,115) |
Other Income (Expense) | ||
Interest expense | (1,738,231) | (1,781,386) |
Net (loss) before income taxes | (3,169,928) | (6,256,501) |
Provision for income taxes | (114,278) | |
Net (loss) from continuing operations | (3,284,206) | (6,256,501) |
Discontinued Operations | ||
Income from operations of discontinued component | 1,880,220 | 1,827,458 |
Income tax benefit | ||
Net income from discontinued operations | 1,880,220 | 1,827,458 |
Net loss | $ (1,403,986) | $ (4,429,043) |
Basic net income (loss) per share | ||
Continuing operations | $ (0.18) | $ (0.39) |
Discontinued operations | 0.10 | 0.11 |
Basic net loss per share | $ (0.08) | $ (0.28) |
Basic weighted average shares outstanding | 18,247,364 | 16,093,722 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2014 | $ 3,214,235 | $ 15,335 | $ 138,144,682 | $ (134,945,782) |
Beginning balance, shares at Dec. 31, 2014 | 15,336,859 | |||
Compensation recognized on option grants | 539,990 | 539,990 | ||
Shares issued on exercise of stock warrants | 2,109,055 | $ 834 | 2,108,221 | |
Shares issued on exercise of stock warrants, shares | 833,700 | |||
Shares issued for payment of services | 210,000 | $ 70 | 209,930 | |
Shares issued for payment of services, shares | 70,000 | |||
Additional shares issued in acquisition of DoubleVision | 1,067,044 | $ 296 | 1,066,748 | |
Additional shares issued in acquisition of DoubleVision, shares | 296,401 | |||
Additional shares issued in acquisition of intangible assets | 2,544,297 | $ 621 | 2,543,676 | |
Additional shares issued in acquisition of intangible assets, shares | 620,560 | |||
Stock issuance costs | (75,000) | (75,000) | ||
Net (loss) | (4,429,043) | (4,429,043) | ||
Ending balance at Dec. 31, 2015 | 5,180,578 | $ 17,156 | 144,538,247 | (139,374,825) |
Ending balance, shares at Dec. 31, 2015 | 17,157,520 | |||
Shares issued on exercise of stock options | 1,069,073 | $ 257 | 1,068,816 | |
Shares issued on exercise of stock options, shares | 256,860 | |||
Compensation recognized on option grants | 1,337,912 | 1,337,912 | ||
Issuance of stock for restructuring of debt | 568,000 | $ 200 | 567,800 | |
Issuance of stock for restructuring of debt, shares | 200,000 | |||
Issuance of common stock | 10,320,001 | $ 3,067 | 10,316,934 | |
Issuance of common stock, Shares | 3,066,667 | |||
Net (loss) | (1,403,986) | (1,403,986) | ||
Ending balance at Dec. 31, 2016 | $ 17,071,578 | $ 20,680 | $ 157,829,709 | $ (140,778,811) |
Ending balance, shares at Dec. 31, 2016 | 20,681,047 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities | ||
Net (loss) | $ (1,403,986) | $ (4,429,043) |
Less: income from discontinued operations, net of tax | 1,880,220 | 1,827,458 |
Loss from continuing operations | (3,284,206) | (6,256,501) |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||
Depreciation expense | 129,718 | 90,284 |
Amortization expense - software development costs | 662,003 | 311,574 |
Amortization expense - patents | 203,459 | 182,373 |
Amortization expense - discount of debt | 767,393 | 627,162 |
Amortization expense - deferred costs | 40,440 | 54,804 |
Amortization expense - intangible assets | 275,470 | 235,523 |
Provision for bad debt | 536,204 | 331,460 |
Stock based compensation | 1,332,946 | 774,204 |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable, net | (4,440,287) | (3,660,200) |
(increase) in prepaid expenses | (117,602) | (15,779) |
(Increase) decrease in other assets | (19,118) | 49,117 |
(Decrease) increase in accounts payable | (898,919) | 2,808,293 |
Increase in accrued expenses | 1,013,817 | 291,290 |
(Decrease) in deferred revenue | (222,806) | (224,415) |
Increase in accrued interest | 247,810 | 402,927 |
Net cash (used in) provided by operating activities - continuing operations | (3,773,678) | (3,997,884) |
Net cash provided by operating activities - discontinued operations | 2,884,196 | 3,574,545 |
Net cash (used in) operating activities | (889,482) | (423,339) |
Cash Flows from Investing Activities | ||
Patents and patent applications costs | (176,717) | (390,454) |
Purchase of property and equipment | (52,264) | (496,434) |
Capitalized software development costs | (1,243,506) | (1,222,279) |
Purchase of intangible assets | (1,300,000) | |
Net cash (used in) investing activities - continuing operations | (1,472,487) | (3,409,167) |
Net cash (used in) investing activities - discontinued operations | (370,867) | (388,654) |
Net cash (used in) investing activities | (1,843,354) | (3,797,821) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 12,569,074 | 2,109,055 |
Stock issuance costs | (1,180,000) | (75,000) |
Restructuring of debt | (100,000) | |
Principal reduction on obligation under capital lease | (1,709) | (2,970) |
Principal reduction on repayment of debt | (2,416,668) | (666,668) |
Net cash provided by financing activities - continuing operations | 8,870,697 | 1,364,417 |
Net cash (used in) by financing activities - discontinued operations | (8,500) | (16,745) |
Net cash (used in) provided by financing activities | 8,862,197 | 1,347,672 |
Net increase (decrease) in cash and cash equivalents | 6,129,361 | (2,873,488) |
Cash and cash equivalents - beginning of year | 2,615,184 | 5,488,672 |
Cash and cash equivalents - ending of year | 8,744,545 | 2,615,184 |
Supplemental Information: | ||
Interest expense paid | 529,895 | 751,053 |
Income taxes paid | $ 34,629 | $ 9,632 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Non-cash investing and financing activities: | ||
Recognized stock-based compensation expense | $ 1,337,912 | |
Share based compensation, number of common stock option vested | 630,361 | |
Fortress Credit Co LLC | ||
Non-cash investing and financing activities: | ||
Issued number of common stock, shares | 200,000 | |
Common stock price per share | $ 2.84 | |
Aggregate amount of common stock issued | $ 568,000 | |
Double Vision Networks Inc. | ||
Non-cash investing and financing activities: | ||
Issued number of common stock, shares | 296,402 | |
Common stock price per share | $ 3.60 | |
Noncash acquisition, description | Issue additional shares of the Company's common stock to the former DoubleVision shareholders if the Company's media placement revenues for the twelve-month period from August 1, 2014 to July 31, 2015 are at least $3,000,000, subject to certain conditions such as receipt of customer payments and achievement of a gross margin threshold. | |
Aggregate amount of common stock issued for acquisitions | $ 1,067,044 | |
Placement revenues | $ 3,000,000 | |
Hipcricket, Inc. | ||
Non-cash investing and financing activities: | ||
Issued number of common stock, shares | 620,560 | |
Common stock price per share | $ 4.10 | |
Aggregate amount of common stock issued for acquisitions | $ 2,544,297 |
Organization, History and Busin
Organization, History and Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, History and Business [Abstract] | |
Organization, History and Business | 1. Organization, History and Business SITO Mobile, Ltd. (“the Company”) was incorporated in Delaware on May 31, 2000, under its original name, Hosting Site Network, Inc. On May 12, 2008, the Company changed its name to Single Touch Systems, Inc. and on September 26, 2014, it changed its name to SITO Mobile, Ltd. The Company provides a mobile engagement platform that enables brands to increase awareness, loyalty, and ultimately sales. Reverse Stock Split On July 29, 2015, the Company filed an amendment to its Restated Certificate of Incorporation to effect a 1-for-10 reverse split of its issued and outstanding common stock. The reverse split became effective in the market on July 30, 2015. Unless otherwise noted, all references herein to the number of common shares, price per common share or weighted average number of common shares outstanding have been adjusted to reflect this reverse stock split on a retroactive basis. Amendments to Articles of Incorporation or Bylaws On March 1, 2016, the Company amended its Certificate of Incorporation to reduce the number of authorized shares of common stock from 300,000,000 to 100,000,000 shares. Change in Fiscal Year On May 5, 2016, the Company elected to transition from a September 30 year-end to a December 31 year-end effective immediately. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Reclassification Certain reclassifications have been made to conform the 2015 amounts to the 2016 classifications for comparative purposes. Principles of Consolidation The accompanying consolidated financial statements include the accounts of SITO Mobile, Ltd. and it’s wholly-owned subsidiaries, SITO Mobile Solutions Inc., SITO Mobile R&D IP, LLC, SITO Mobile Media Inc. and DoubleVision Networks Inc. (“DoubleVision”). Intercompany transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of twelve months or less. Accounts Receivable, net Accounts receivable are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. Allowance for Doubtful Accounts An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. Property and Equipment, net Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: Software development 3 years Equipment and computer hardware 5 years Office furniture 7 years Leasehold Improvements 5 years Capital Leases Assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the leased assets. The assets are depreciated over the lower of their related lease terms or their estimated productive lives. Depreciation of the assets under capital leases is included in depreciation expense. Debt Issuance Costs Deferred debt issuance costs are amortized using the effective interest method over the related term of the debt and are presented on the balance sheet as a direct deduction from the debt liability. The amortization of deferred debt issuance costs is included in interest expense. Income Taxes The Company accounts for its income taxes under the provisions of ASC Topic 740, “Income Taxes.” The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. The Company had no material unrecognized income tax assets or liabilities for the year ended December 31, 2016 or for the year ended December 31, 2015. The Company recognizes income tax interest and penalties as a separately identified component of general and administrative expense. Issuances Involving Non-cash Consideration All issuances of the Company’s stock for non-cash consideration have been assigned a dollar amount equaling the market value of the shares issued on the date the shares were issued for such services and property. The non-cash consideration paid pertains to consulting services, the acquisition of a software license, the acquisition of DoubleVision Networks Inc. and assets purchased from Hipcricket, Inc. Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. The Company records compensation expense based on the fair value of the award at the reporting date. The value of the stock-based award is determined using the Binomial or Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. Loss per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. On July 29, 2015, the Company filed an amendment to the Certificate of Incorporation to effect a 1-for-10 reverse split of its issued and outstanding common stock the reverse split became effective in the market on July 30, 2015. Following the reverse split, every ten shares of the Company's issued and outstanding common stock were automatically combined and converted into one issued and outstanding share of common stock with a par value of $0.001 per share. No fractional shares are to be issued. As a result, all prior per share calculations reflect the effects of this reverse stock split. Concentrations of Credit Risk The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. Of the Company’s revenue earned during the year ended December 31, 2016, approximately 19% was generated from contracts with an advertising agency. The Company’s accounts receivable is typically unsecured and are derived from U.S. customers in different industries. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Historically, such losses have been within management’s expectations Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Business Combinations The Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets. The Company expenses all costs as incurred related to an acquisition under general and administrative in the consolidated statements of operations. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements or financing activities with special purpose entities. The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified the following accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management’s most difficult, subjective judgments. Revenue Recognition and Deferred Revenue The Company recognizes media placement revenue based on the activity of mobile users viewing ads through developer applications and mobile websites. Media placement revenues are recognized when the Company’s advertising services are delivered based on the specific terms of the advertising contract, which are commonly based on the number of ads delivered, or views, clicks or actions by users on mobile advertisements. At such time, the Company’s services have been provided, the fees charged are fixed or determinable, persuasive evidence of an arrangement exists, and collectability is reasonably assured. The Company evaluates whether it is appropriate to recognize media placement revenue based on the gross amount billed to the customers or the net amount earned as revenue. When the Company is primarily obligated in a transaction, has latitude in establishing prices, is responsible for fulfillment of the transaction, has credit risk, or has several but not all of these indicators, revenue is recorded on a gross basis. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement. The Company records the net amounts as media placement revenue earned if it is not primarily obligated or does not have latitude in establishing prices or credit risk. In general, licensing and royalty revenue arrangements provide for the payment of contractually determined fees in consideration for the patented technologies owned by or controlled by the Company’s operating subsidiary. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, the Company’s operating subsidiary may have no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company’s operating subsidiary’s part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of licenses, covenants-not-to-sue, releases, and other significant deliverables upon the execution of the agreement, or upon the receipt of the minimum upfront payment for term agreement renewals. As such, when the Company has no further obligation under the agreement, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all the other revenue recognition criteria have been met, otherwise the Company recognizes revenue on a straight-line basis over the life of the agreement based on the contractually determined fees. Deferred revenue arises from timing differences between the delivery of services and satisfaction of all revenue recognition criteria consistent with the Company’s revenue recognition policy. Deferred revenue results from the advance payment for services to be delivered over a period of time, usually less than one-year increments. Software Development Costs The Company accounts for costs incurred to develop or purchase computer for internal use in accordance with ASC Topic 350-40 “Internal-Use Software.” As required by ASC 350-40, the Company capitalizes the costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized over a period of three years. Costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. Long-Lived Assets We account for our long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. We assess recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. During the year ended December 31, 2015, we recognized an impairment loss of $0.8M on our “ Anywhere” Software License which pertains to the discontinued business. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350, requires that goodwill be tested for impairment on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including determining the fair value. Significant judgments required to estimate the fair value including estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. There were no impairments recorded to Goodwill for the periods presented. The Company performed its annual goodwill impairment testing as of September 30, 2016, and going forward, due to the change in its fiscal year end will be performed annually on December 31 st Recent Accounting Pronouncements In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for the Company beginning on October 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In January 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) “ASU 2016 – 01 Recognition and Measurement of Financial Assets and Financial Liabilities” which changes requirements for the presentation and measurement of equity investments at fair value. The updated standard is effective for the Company beginning after December 15, 2017, including interim periods within that fiscal year. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In February 2016, the FASB issued “ASU 2016 – 01 Leases” which requires the Company to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The updated standard is effective for the Company on December 15, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In March 2016, the FASB issued “ASU 2016 – 09 Improvements to Employee Share-Based Payment Accounting” which simplifies the accounting for share-based payment award transactions, including; the income tax consequences, classification of awards as either equity of liabilities, and the classification on the statement of cash flows. The updated standard is effective beginning after December 15, 2016 and interim periods within this annual period. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In April 2016, the FASB issued “ASU 2016 – 10 Revenue from Contract with Customers (Topic 606): Identifying Performance Obligations and Licensing” which clarifies the topics of identifying performance obligations and licensing implementation guidance, while including implementation guidance. This updated standard affects “ASU 2014-09 Revenue from Contracts with Customers (Topic 606)” which is not yet effective. The Company does not expect that this standard will have a material effect on its consolidated financial statements. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment”. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The guidance is effective for annual periods fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, net [Abstract] | |
Accounts Receivable, net | 3. Accounts Receivable, net Accounts receivable consist of the following: December 31, 2016 2015 Accounts receivable $ 9,302,208 $ 4,983,034 Less allowance for bad debts (459,952 ) (44,784 ) Accounts receivable, net $ 8,842,256 $ 4,938,250 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | 4. Property and Equipment, net The following is a summary of property and equipment: December 31, 2016 2015 Equipment and computer hardware $ 277,292 $ 253,610 Office furniture 198,735 172,153 Leasehold improvements 206,902 186,902 Equipment held under capital lease 13,160 13,160 696,089 625,825 Less: accumulated depreciation (285,401 ) (119,824 ) $ 410,688 $ 506,001 Depreciation expense for the years ended December 31, 2016 and 2015 was $129,718 and $90,284, respectively. |
Capitalized Software Developmen
Capitalized Software Development Costs, net | 12 Months Ended |
Dec. 31, 2016 | |
Capitalized Software Development Costs, net [Abstract] | |
Capitalized Software Development Costs, net | 5. Capitalized Software Development Costs, net The following is a summary of capitalized software development costs: December 31, 2016 2015 Beginning balance $ 1,117,480 $ 456,938 Additions 1,243,506 972,116 Less: accumulated amortization (661,994 ) (311,573 ) Ending balance $ 1,698,992 $ 1,117,480 Amortization expense for the years ended December 31, 2016 and 2015 was $661,994 and $311,573, respectively. As of December 31, 2016, amortization expense for the remaining estimated lives of these costs is as follows: Year Ending December 31, 2017 $ 839,064 2018 606,159 2019 253,769 $ 1,698,992 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets [Abstract] | |
Intangible Assets | 6. Intangible Assets Patents The following is a summary of capitalized patent costs: December 31, 2016 2015 Patent costs $ 1,577,122 $ 1,357,407 Less: accumulated amortization (1,115,392 ) (911,934 ) $ 461,730 $ 445,473 Amortization expenses for the years ended December 31, 2016 and 2015 was $203,459 and $182,373, respectively. A schedule of amortization expense over the estimated remaining lives of the patents is as follows: Year Ending December 31, 2017 $ 112,224 2018 76,812 2019 73,268 2020 73,268 Thereafter 126,158 $ 461,730 Other Intangible Assets, net The following is a summary of other intangible asset costs: December 31, 2016 2015 Technology $ 970,000 $ 970,000 Customer relationships 870,000 870,000 Backlog - 110,000 Less: accumulated amortization (400,993 ) (235,523 ) $ 1,439,007 $ 1,714,477 Amortization expenses for the years ended December 31, 2016 and 2015 $275,470 and $235,523, respectively. The intangible asset for backlog was fully amortized as of February 2016. A schedule of amortization expense over the estimated remaining lives of the other intangible assets is as follows: Year Ending December 31, 2017 $ 271,000 2018 271,000 2019 271,000 2020 187,536 2021 97,000 Thereafter 341,471 $ 1,439,007 Goodwill On July 24, 2014, the Company and DoubleVision and the shareholders of the DoubleVision entered into a Share Purchase Agreement pursuant to which the Company acquired all of the shares of DoubleVision. The Company paid $3,600,000 for DoubleVision by issuing 800,000 shares of the Company’s common stock to DoubleVision’s shareholders and paid $400,000 to one of DoubleVision’s creditors that resulted in the Company recognizing $3,482,884 in goodwill. The Share Purchase Agreement has an earn-out provision that could cause the Company to issue additional shares of the Company’s common stock equal to $1,000,000 (valued at the average closing price for the ninety days ending July 31, 2015) as additional purchase price consideration if the Company’s media placement revenues for the twelve-month period from August 1, 2014 to July 31, 2015 are at least $3,000,000, subject to certain conditions such as receipt of customer payments and achievement of a gross margin threshold. In anticipation if achieving the earn-out provision, the Company accrued $1,000,000 in purchase price payable and increased goodwill to $4,482,884 as of March 31, 2015. During the quarter ended June 30, 2015, the Company issued 296,402 shares of its common stock at $3.60 per share for an aggregate amount of $1,067,044 in satisfaction of the purchase price payable and an increase to goodwill of $67,044. On July 8, 2015, the Company and Hipcricket, Inc. entered into an Asset Purchase Agreement pursuant to which the Company acquired assets of Hipcricket’s mobile advertising platform. The Company paid $3,844,297 for the Purchased Assets by issuing to Hipcricket 620,560 shares of the Company’s common stock at an agreed-upon valuation of $2,544,297, and $1,300,000 in cash. The Company expensed additional legal and professional fees in conjunction with the asset acquisition totaling $95,000. The acquisition resulted in the Company recognizing $1,894,297 in goodwill. The Company does not amortize goodwill, but reduces the carrying amount of goodwill if management determines that its implied fair value has been impaired. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 7. Accrued Expenses The following is a summary of accrued expenses: December 31, 2016 2015 Accrued cost of revenues $ 1,085,585 $ 118,108 Accrued payroll and related expenses 879,300 321,044 Accrued professional fees 26,038 627,124 Other accrued expenses 190,021 100,846 $ 2,180,944 $ 1,167,122 |
Capital Leases
Capital Leases | 12 Months Ended |
Dec. 31, 2016 | |
Capital Leases [Abstract] | |
Capital Leases | 8. Capital Leases The Company leases an office equipment under a capital lease that expires in 2018. The equipment has a cost of $13,160 and $66,272 as of December 31, 2016 and 2015, respectively. Minimum future lease payments under the capital lease at December 31, 2016 for each of the next four years and in the aggregate, are as follows: Year Ending December 31, 2017 $ 3,791 2018 2,842 2019 - 2020 - Total minimum lease payments 6,633 Less amount representing interest (431 ) Present value of net minimum lease payments $ 6,202 The effective interest rate charged on the capital lease is approximately 7.428% per annum. The lease provides for a $1 purchase option. Interest charged to operations for the years ended December 31, 2016 and 2015 was $591 and $819, respectively. Depreciation charged to operations for the years ended December 31, 2016 and 2015 was $13,254 and $13,254, respectively. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 9. Discontinued Operations A discontinued operation is a component of the Company’s business that represents a separate major line of business that had been disposed of or is held for sale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative Consolidated Statement of Operations, Consolidated Statement of Cash Flows, and Consolidated Balance Sheets are re-presented as if the operation had been discontinued from the start of the comparative year. On February 7, 2017, the Company executed an Asset Purchase Agreement to sell the Wireless Application business for $400,000, of which $310,000 was received on the closing date and the remaining $90,000 will be paid upon the satisfaction of certain post-closing covenants. The Company has reported the Wireless Application segment as Discontinued Operations in the Consolidated Statement of Operations and Consolidated Statements of Cash Flows with related assets and liabilities as of December 31, 2016, included as Assets of business held for sale and Liabilities of business held for sale. The following table presents the assets and liabilities of the Wireless Applications business, as Assets classified as held for sale and Liabilities classified as held for sale in the Consolidated Balance Sheets: December 31, 2016 2015 Accounts receivable, net $ 430,151 $ 1,229,566 Other prepaid expenses 9,455 12,257 Property, plant and equipment, net 35,516 79,355 Capitalized software development costs, net 389,863 483,333 Other assets 5,731 5,731 Assets classified as held for sale 870,716 1,810,242 Accounts payable 298,757 745,440 Accrued expenses 248,783 110,774 Deferred revenue 59,696 64,696 Current obligations under capital lease - 8,500 Liabilities classified as held for sale $ 607,236 $ 929.410 The following table presents the Discontinued Operations of the Wireless Applications business in the Consolidated Statement of Operations: December 31, 2016 2015 Revenue Wireless applications revenue $ 5,362,819 $ 6,360,596 Costs and Expenses Cost of revenue 2,693,599 2,950,881 Sales and marketing 168,953 273,990 General and administrative 581,516 411,889 Loss on impairment of long-lived assets - 831,000 Depreciation and amortization 38,531 65,378 Total costs and expenses 3,482,599 4,533,138 Net income from discontinued operations $ 1,880,220 $ 1,827,458 The following table presents the Wireless Applications business in the Consolidated Statement of Cash Flows: December 31, 2016 2015 Net cash provided by discontinued operating activities $ 2,884,196 $ 3,574,545 Net cash (used in) discontinued investing activities (370,867 ) (388,654 ) Net cash (used in) discontinued financing activities (8,500 ) (16,745 ) Net increase in cash and cash equivalents $ 2,504,829 $ 3,169,146 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 10. Income Taxes Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. We are subject to taxation in the United States and various state jurisdictions. We are not currently under examination by the Internal Revenue Service (IRS) or any state taxing authority. With a few exceptions, the company is no longer subject to income tax examination by the IRS for the tax years ended on or before September 30, 2013. To the extent net operating losses are utilized, the tax years in which the losses were generated remain open to examination by the IRS. Our accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of our net deferred tax assets. We primarily considered such factors as our history of operating losses, the nature of our deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, we do not believe that it is more likely than not that the deferred tax assets will be realized; accordingly, a full valuation allowance has been established and no deferred tax asset is shown in the accompanying consolidated balance sheets. December 31, 2016 2015 U.S. statutory rate 34.00 % 34.00 % State, net of federal benefit (4.61 )% - % Permanent differences (3.81 )% (0.79 )% Less: valuation allowance (34.50 )% (10.73 )% Effective tax rate (8.92 )% 22.48 % For 2016 and 2015, our effective tax rate differs from the amount computed by applying the statutory federal and state income tax rates to net loss before income tax, primarily as the result of changes in valuation allowance. The significant components of deferred tax assets and liabilities are as follows: December 31, 2016 2015 Deferred tax assets Net operating losses $ 14,020,558 $ 14,957,128 Stock based compensation 1,772,228 1,259,047 Allowance for doubtful accounts 181,175 17,424 Intangible assets 544,333 367,247 Deferred revenue 5,166 60,372 Accrued expenses 422,133 271,107 Charitable contributions 10,116 - AMT 24,965 - 16,980,674 16,932,325 Deferred tax liability Property and equipment (216,473 ) (222,753 ) Intangible assets - - Net deferred tax assets 16,764,201 16,709,572 Less: valuation allowance (16,764,201 ) (16,709,572 ) Deferred tax asset - net valuation allowance $ - $ - The net change in the valuation allowance for the year ended December 31, 2016 was $(54,629). As of December 31, 2016, the Company has a federal net operating loss carryover of approximately $39,670,211 available to offset future income for income tax reporting purposes, which will expire in various years through 2036, if not previously utilized. The Company’s ability to use the carryover net operating loss may be substantially limited or eliminated pursuant to Internal Revenue Code Section 382. A limitation may apply to the use of the net operation loss and credit carryforwards, under provisions of the Internal Revenue Code that are applicable if we experience an “ownership change”. That may occur, for example, as a result of trading in our stock by significant investors as well as issuance of new equity. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a substantial reduction in the gross deferred tax. We adopted the provisions of ASC 740-10. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of uncertain tax provisions that have been taken or expected to be taken on a tax return. We evaluated our tax positions and state filings and have determined we had no material unrecognized income tax assets or liabilities for the years ended December 31, 2016 and 2015. Our policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the years ended December 31, 2016 and 2015, there were no federal income tax, or related interest and penalty items in the income statement, or liability on the balance sheet. Income tax expense for 2016, and 2015, which was composed of the following, relates to state income and minimum tax and alternative minimum tax. December 31, 2016 2015 Federal $ 24,572 $ - State 90,099 - Total current income taxes $ 114,671 $ - We are not currently involved in any income tax examinations. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2016 | |
Note Payable [Abstract] | |
Note Payable | 11. Note Payable December 31, 2016 2015 Notes Payable: Principal outstanding $ 6,916,664 $ 9,333,332 Accrued Interest 469,060 319,418 Accrued Termination Fee 258,543 160,376 7,644,267 9,813,126 Less: discount on note payable (794,547 ) (893,941 ) 6,849,720 8,919,185 Less: current portion, net (2,896,893 ) (3,984,219 ) Long-term portion, net $ 3,952,827 $ 4,934,966 Scheduled maturities on long-term debt are as follows: Years ending December 31, Principal Discount Amortization Accrued Interest Accrued Termination Fee Total 2017 $ 3,525,000 $ (676,937 ) $ 48,830 $ - $ 2,896,893 2018 3,391,664 (117,610 ) 420,230 258,543 3,952,827 $ 6,916,664 $ (794,547 ) $ 469,060 $ 258,543 $ 6,849,720 On October 3, 2014, the Company and its wholly owned subsidiaries, SITO Mobile Solutions, Inc. and SITO Mobile R&D IP, LLC, entered into a Revenue Sharing and Note Purchase Agreement (the “Agreement”) with Fortress Credit Co LLC, as collateral agent (the “Collateral Agent”), and CF DB EZ LLC (the “Revenue Participant”) and Fortress Credit Co LLC (the “Note Purchaser” and together with the Revenue Participant, the “Investors”). At the closing of the Agreement, the Company issued and sold a senior secured note (the “Note”) with an aggregate original principal amount of $10,000,000 (the “Original Principal Amount”) and issued, pursuant to a Subscription Agreement, 261,954 new shares of common stock to Fortress at $3.817 per share (which represents the trailing 30-day average closing price) for an aggregate amount of $1,000,000. After deducting original issue discount of 10% on the Notes and a structuring fee to the Investors, the Company received $8,850,000 before paying legal and due diligence expenses. The principal amount of the Note bears interest at a rate equal to LIBOR plus 9% per annum. Such interest is payable in cash except that 2% per annum of the interest shall be paid-in-kind, by increasing the principal amount of the Note by the amount of such interest. The term of the Note is 42 months and the Company must make, beginning in October 2015, monthly amortization payments on the Note, each in a principal amount equal to $333,334 until the Note is paid in full. The Company shall also apply 85% of Monetization Revenues (as defined in the Agreement) from the Company’s patents to the payment of accrued and unpaid interest on, and then to repay outstanding principal (at par) of, the Note until all amounts due with respect to the Note have been paid in full. After the repayment of the Note, in addition to the interest, the Company shall pay the Revenue Participants up to 50% of Monetization Revenues totaling (i) $5,000,000, if paid in full prior to March 31, 2018 and (ii) $7,500,000 thereafter (the “Revenue Stream”). The Company must also pay $350,000 to the Note Purchaser upon repayment of the Note. The Company may prepay the Note in whole or in part, without penalty or premium, except that any optional prepayments of the Note prior to the first anniversary of the Effective Date shall be accompanied by a prepayment premium equal to 5% of the principal amount prepaid. The Agreement contains certain standard Events of Default. The Company granted to the Collateral Agent, for the benefit of the Secured Parties, a non-exclusive, royalty free, license (including the right to grant sublicenses) with respect to the Patents, which shall be evidenced by, and reflected in, the Patent License Agreement. The Collateral Agent and the Investors agree that the Collateral Agent shall only use such license following an Event of Default. Pursuant to a Security Agreement among the parties, the Company granted the Investors a first priority senior security interest in all of the Company’s assets. The Company and the Investors assigned a value of $500,000 to the revenue sharing terms of the Agreement and in accordance with ASC 470-10-25 “Debt Recognition”, the Company recognized $500,000 as deferred revenue and a discount on the Note that is amortized over the 42-month term of the Note using the effective interest method. For the years ended December 31, 2016 and 2015, the Company recognized $140,238 and $190,049, respectively, in licensing revenue and interest expense from amortization of the deferred revenue. On March 1, 2016, SITO Mobile, Ltd. (the “Company”) entered into Amendment No.1 (the “Amendment”) to that certain Revenue Sharing and Note Purchase Agreement, by and among the Company, SITO Mobile Solutions, Inc., SITO Mobile R&D IP, LLC, Fortress Credit Co LLC, and the Purchasers signatory thereto, dated as of October 3, 2014 (the “Agreement”). Pursuant to the terms of the Amendment, principal payment on the Notes issued pursuant to the Agreement shall be reduced from $333,333 to $175,000 for the period commencing on the last business day of February 2016 through the last business day of February 2017 and from $333,333 to $300,000 for the period commencing on the last business day of March 2017 to the last day of business on February 2018, with the final payment on the last business day on March 2018 increased to repay the remaining principal in full. In consideration for the Amendment, the Company agreed to pay a restructuring fee of $100,000 and issue 200,000 shares of its common stock with an aggregate value of $568,000 to the Purchasers. Interest expense on the Note for the years ended December 31, 2016 and 2015 was $833,704 and $1,019,816, respectively. Amortization of the discounts for the years ended December 31, 2016 and 2015 totaled $767,392 and $627,162, respectively, which was charged to interest expense. Accrual of termination fees for the years ended December 31, 2016 and 2015 was $98,166 and $133,034, respectively, which was charged to interest expense. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 12. Stock Based Compensation During the year ended December 31, 2016, the Company recognized stock-based compensation expense totaling $1,337,912, through the vesting of 630,361 common stock options. Of the $1,337,912 in stock compensation expense, $1,044,032 is included in general and administrative expense, of which $3,378 is included in discontinued operations, and $293,880 is included in sales and marketing expense, of which $1,588 is included in discontinued operations. During the year ended December 31, 2015, the Company recognized stock-based compensation expense totaling $788,028, which $210,000 was for payment of consulting services through the issuance of 70,000 common shares, and $539,989 was recognized through the vesting of 1,990,231 common stock options. Of the $539,989 in stock compensation expense, $406,181 is included in general and administrative expense, of which $8,084 is included in discontinued operations, and $133,808 is included in sales and marketing expense, of which $5,740 is included in discontinued operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions On April 21, 2014 (the “Effective Date”), SITO Mobile R&D IP, LLC, the Company’s wholly-owned subsidiary, through a joint venture arrangement organized as a limited liability company (the “JV”) with Personalized Media Communications, LLC (“PMC”), entered into a Joint Licensing Program Agreement (the “Agreement”) with a national broadcasting entity (“Licensee”) pursuant to which the JV granted the Licensee a term-limited license ( the “License”) to all patents licensable by the JV (“Patents”), including an exclusive license to assert the Patents against certain infringing parties in the media distribution industry. In exchange for the License, the Licensee will pay an annual fee of $1,250,000 for a minimum of three years (“Annual Fee”). Commencing three years from the Effective Date, the Licensee may each year, at its sole option, pay a $1,250,000 license fee to renew the License for every year for four additional years. Once the Licensee has paid a total of $8,750,000 in license fees, either in one lump sum or after paying $1,250,000 annually for seven years, the License is deemed to be perpetual. For Patents infringement actions provided for under the License, the Licensee will pay 20% of the gross proceeds from settlements received less any Annual Fee amounts paid and litigation costs incurred (“Share of Proceeds”). SITO Mobile R&D IP, LLC and its joint venture partner will serve as co-plaintiffs with the Licensee in infringement actions under the License and the Licensee will be responsible for any out-of-pocket costs of the JV associated with being a co-plaintiff in supporting Licensee in such litigation, including attorneys’ fees. The Licensee will pay the Annual Fee and any Share of Proceeds to the JV. Proceeds received by the JV are shared by SITO Mobile R&D IP, LLC and PMC on a 30% and 70% basis, respectively. In the event that the Licensee does not assert any infringement actions under its rights in the License within five years of the Effective Date, the JV may, at its sole option, choose to terminate Licensee’s exclusive right to assert infringement claims with no reduction or adjustment to the Annual Fee. For the years ended December 31, 2016 and 2015, the Company amortized $375,000 and $374,287, respectively, in revenue. As of December 31, 2016, the Company has $114,754 in deferred revenue under the Licensing Agreement. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value [Abstract] | |
Fair Value | 14. Fair Value The Company’s balance sheets includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization. The Company determines the fair value of obligations under capital lease, notes payable and convertible debentures based on the effective yields of similar obligations (Level 2). ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, which are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below: Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company did not identify any assets and liabilities that are required to be presented on the consolidated balance sheets at fair value. The Company does not have any assets or liabilities measured at fair value on a recurring basis at December 31, 2016. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2016. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 15. Stockholders’ Equity Common Stock The holders of the Company's common stock are entitled to one vote per share of common stock held. During the year ended December 31, 2016, the Company issued 3,523,527 shares of its common stock of which 200,000 shares were issued to Fortress Credit Co LLC at $2.84 per share for an aggregate amount $568,000, in consideration for the amendment of the Note Purchase Agreement, 256,860 shares were issued for options exercised for which the Company received $1,069,073 in gross proceeds, and the Company received $10,320,001 in proceeds net of legal and accounting services in connection with the registration and issuance of 3,066,667 shares of common stock. During the year ended December 31, 2015, the Company issued 1,820,662 shares of common stock of which 833,700 shares were issued for warrants exercised for which the Company received $2,109,055 in gross proceeds, issued 70,000 shares for which the Company received consulting services valued at $210,000, issued 296,402 in connection with the purchase agreement with DoubleVision Networks, Inc. and issued 620,560 shares in connection with the asset purchase agreement with Hipcricket, Inc. Warrants During the year ended December 31, 2016, no warrants were granted or exercised. During the year ended December 30, 2015, no warrants were granted, 729,100 warrants exercised to purchase 729,100 shares of the Company’s common stock of which 684,000 at an exercise price of $2.50, and 45,100 warrants had an exercise price of $3.40 per share, and no warrants expired. Options During the year ended December 31, 2016, the Company granted options to its Directors and employees as follows: Grant Date Options Granted Exercise Price Expiration Vesting Total Value Risk Free Interest Rate Volatility February 18, 2016 30,000 $ 2.58 February 18, 2021 Immediately $ 52,560 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 Immediately $ 35,040 1.15 % 103.90 % February 18, 2016 25,000 $ 2.58 February 18, 2021 Immediately $ 43,800 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 3-years $ 35,040 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 Immediately $ 35,040 1.15 % 103.90 % February 18, 2016 25,000 $ 2.58 February 18, 2021 Immediately $ 43,800 1.15 % 103.90 % May 5, 2016 125,000 $ 2.95 May 5, 2019 3-years $ 283,500 1.26 % 91.52 % May 5, 2016 21,704 $ 2.95 May 5, 2019 3-years $ 49,225 1.26 % 91.52 % May 5, 2016 12,000 $ 2.95 May 5, 2019 3-years $ 27,216 1.26 % 91.52 % August 9, 2016 20,000 $ 4.00 August 9, 2023 Immediately $ 59,800 1.35 % 92.34 % August 9, 2016 300,000 $ 4.00 August 9, 2023 3-years $ 897,000 1.35 % 92.34 % August 9, 2016 75,000 $ 4.00 August 9, 2023 3-years $ 224,250 1.35 % 92.34 % November 9, 2016 27,500 $ 4.00 November 9, 2023 3-years $ 112,833 1.84 % 93.28 % November 9, 2016 12,500 $ 4.00 November 9, 2023 3-years $ 51,288 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 21,296 $ 4.74 November 9, 2023 3-years $ 85,738 1.84 % 93.28 % November 9, 2016 38,000 $ 4.74 November 9, 2023 3-years $ 152,988 1.84 % 93.28 % November 9, 2016 18,500 $ 4.74 November 9, 2023 3-years $ 74,481 1.84 % 93.28 % November 9, 2016 7,500 $ 4.74 November 9, 2023 3-years $ 30,195 1.84 % 93.28 % 844,000 The Company values options under the Binomial Option Model. The full value of option grants is charged to operations over the vesting period with option grants that vest immediately being fully charged on the date of grant. A summary of outstanding stock warrants and common stock options is as follows: Number of Weighted Average Outstanding – December 31, 2014 3,448,726 $ 4.90 Granted 474,281 3.60 Exercised (833,700 ) 2.50 Cancelled (496,050 ) $ (8.10 ) Outstanding – December 31, 2015 2,593,257 4.80 Granted 844,000 3.60 Exercised (256,860 ) (4.20 ) Cancelled (1,268,010 ) (5.40 ) Outstanding – December 31, 2016 1,912,387 $ 3.90 Of the 1,912,387 common stock options outstanding, 630,361 options are fully vested and currently available for exercise with a weighted-average remaining contractual term of 2.20 years. Of the 1,282,026 common stock options outstanding, the weighted-average remaining contractual term is 4.95 years. There is no aggregate intrinsic value on the vested stock options available for exercise. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating Leases The Company leases office space in Rogers, Arkansas; Meridian, Idaho; Chicago, Illinois; Dallas, Texas; New York, New York; Atlanta, Georgia; and Boston, Massachusetts. The Rogers office is leased for a term of five years, effective January 1, 2012. The Company’s Boise office space is subject to a 38-month lease that commenced on May 1, 2014. The Jersey City office lease, amended on November 6, 2014, expires on November 30, 2018 and the Company has the option to extend the term for an additional five years. The other locations are month-to-month commitments. In addition to paying rent, under the terms of the Jersey City office lease the Company is also required to pay its pro rata share of the property’s operating expenses. Rent expense for the year ended December 31, 2016 and 2015 was $424,832 and $373,933, respectively. Minimum future rental payments under non-cancellable operating leases with terms in excess of one year as of December 31, 2016 for the next five years and in the aggregate are: 2017 $ 318,332 2018 245,074 2019 - 2020 - 2021 - $ 563,406 Incentive Compensation On November 18, 2015, the Company approved a compensation plan for the Executive Officers of the Company which provides for the payment of a cash bonus and an equity grant of performance options to the Company’s Chief Executive Officer and its Chief Financial Officer (the “Executives”). Each Executive was eligible for an annual cash bonus, based upon net revenue, gross margins, and individual key performance indicators, set annually by the Company’s Compensation Committee (the “Target Performance”). The target bonus for the Chief Executive Officer was 50% of his base salary and for the Chief Financial Officer, the target bonus was 40% of his base salary. The cash bonus was based upon the target net revenues and gross margins of the Company. 70% of the target cash bonus was payable if threshold performance of 70% of the Target Performance is achieved, 100% of the target cash bonus was payable if the Target Performance is reached, with 120% of the cash bonus paid if 120% of the Target Performance is achieved. As of December 31, 2016, the Company has paid $207,577 in compensation expense for the incentive cash bonuses. The equity grant component of the compensation plan provided for the grant of 110,000 performance options to purchase shares of common stock to the Chief Executive Officer and 50,000 performance options to purchase shares of common stock to the Chief Financial Officer, with the number of performance options to be received by each of the Executives based upon the achievement by the Company of certain net revenues and gross margins targets. The performance options vest in annual increments over three years commencing on the grant date and are exercisable at a price of $3.51. During the year ended December 31, 2016, the company recognized $206,032 in stock compensation expense for the performance options. On November 18, 2015, the Company approved a compensation plan for three Employees of the Company which provides for the payment of a cash bonus and an equity grant of performance options. Two of the Employees are eligible for an annual cash bonus, based upon net revenue, and gross margins, set annually by the Company’s Compensation Committee (the “Target Performance”). The target bonus ranges from 20-30% of their base salary. 70% of the cash bonus is based upon the target net revenues and 30% of the cash bonus is based upon gross margins of the Company. Seventy percent of the target cash bonus will be paid if threshold performance of 70% of the Target Performance is achieved, 100% of the target cash bonus will be paid if the Target Performance is reached, with 120% of the cash bonus paid if 120% of the Target Performance is achieved. As of December 31, 2016, the Company has paid $100,445 in compensation expense for the incentive cash bonuses. The equity grant component of the compensation plan provides for the grant of 28,000 performance options to purchase shares of Company common stock to each of the three Employees, with the number of performance options to be received by each of the Employees based upon the achievement by the Company of certain net revenues and gross margins targets. The performance options will vest in three year increments commencing on the grant date and are exercisable at a price of $3.51. During the year ended December 31, 2016, the Company recognized $105,187 in stock compensation expense for the performance options. On August 9, 2016, the Company approved a compensation plan for the quarter ending December 31, 2016 for the Executive Officers of the Company which provides for the payment of a cash bonus and an equity grant of performance options to the Company’s Chief Executive Officer and its Chief Financial Officer (the “Executives”). Each Executive was eligible for a quarterly cash bonus, based upon net revenue, gross margins, and individual key performance indicators, set by the Company’s Compensation Committee (the “Target Performance”). The target bonus for the Chief Executive Officer was 50% of his base salary and for the Chief Financial Officer, the target bonus was 40% of his base salary. The cash bonus was based upon the target net revenues and gross margins of the Company. 70% of the target cash bonus was payable if Threshold Performance of 70% of the Target Performance is achieved, 100% of the target cash bonus was payable if the Target Performance is reached, with 140% of the cash bonus paid if 140% of the Target Performance is achieved. As of December 31, 2016, the Company has accrued $17,333 in compensation expense for the potential incentive cash bonuses. The equity grant component of the compensation plan provided for the grant of 27,500 performance options to purchase shares of common stock to the Chief Executive Officer and 12,500 performance options to purchase shares of common stock to the Chief Financial Officer, with the number of performance options to be received by each of the Executives based upon the achievement by the Company of certain net revenues and gross margins targets. During the year ended December 31, 2016, the Company recognized $25,074 in stock compensation expense for the performance options. On August 9, 2016, the Company approved a compensation plan for the quarter ended December 31, 2016 for four Employees of the Company which provides for the payment of a cash bonus and an equity grant of performance options. Three of the Employees are eligible for a quarterly cash bonus, based upon net revenue, and gross margins, set by the Company’s Compensation Committee (the “Target Performance”). The target bonus ranges from 20-30% of their base salary. Seventy percent of the cash bonus is based upon the target net revenues and 30% of the cash bonus is based upon gross margins of the Company. 70% of the target cash bonus will be paid if threshold performance of 70% of the Target Performance is achieved, 100% of the target cash bonus will be paid if the Target Performance is reached, with 140% of the cash bonus paid if 140% of the Target Performance is achieved. As of December 31, 2016, the Company has accrued $9,230 in compensation expense for the potential incentive cash bonuses. The equity grant component of the compensation plan provides for the grant of 6,250 performance options to purchase shares of Company common stock to each of the four Employees, with the number of performance options to be received by each of the Employees based upon the achievement by the Company of certain net revenues and gross margins targets. During the year ended December 31, 2016, the Company recognized $15,671 in stock compensation expense for the performance options. |
DoubleVision Acquisition
DoubleVision Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
DoubleVision Acquisition/ Hipcricket Acquisition [Abstract] | |
Acquisitions | 17. Acquisitions Doublevision On July 24, 2014, the Company acquired all of the outstanding capital stock of DoubleVision, a provider of mobile media for clients looking to place advertisements in mobile devices based on real-time data. With this acquisition, the Company integrated DoubleVision’s ability to provide real-time advertising in its mobile media market with our product offerings. The contractual price for the acquisition was $3,680,000 by issuing 800,000 shares of the Company’s common stock to DoubleVision’s shareholders at an agreed-upon valuation of $4.10 per share, plus a cash payment of $400,000 to one of DoubleVision’s creditors. In addition to the initial purchase price, the agreement called for $1,000,000 in contingent consideration based on the Company achieving $3,000,000 in media placement revenue in the twelve months ended July 31, 2014. At March 31, 2015, the Company recorded the additional $1,000,000 purchase price payable in anticipation of achieving the revenue milestone and increased the goodwill to $4,482,884. During the year ended December 31, 2015 the Company has issued 296,402 of its common stock at $3.60 per share for an aggregate amount of $1,067,044 in satisfaction of the purchase price payable and increased by $67,044. As of December 31, 2016, the allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: Cash and cash equivalents $ 10,102 Accounts receivable 43,574 Note receivable 10,000 Machinery and equipment 21,764 Software development costs 260,524 Security deposit 6,150 Goodwill 3,482,884 Accounts payable (154,998 ) Total purchase price $ 3,680,000 The following table summarizes the fair value of identifiable intangible assets acquired: Software development costs $ 260,524 Total intangible assets acquired, excluding goodwill $ 260,524 The excess of the fair value of the total consideration over the estimated fair value of the net assets was recorded as goodwill, which was primarily attributable to the synergies expected from combining the technologies, including complementary products that will enhance the Company’s overall product portfolio, and the value of the workforce that became our employees following the closing of the acquisition. The goodwill recognized is not deductible for income tax purposes. Pro forma Information The following unaudited pro forma information presents the consolidated results of operation of the company as if the acquisition completed during the year ended December 31, 2015 had occurred at the beginning of the applicable annual reporting period, with pro forma adjustments to give effect to intercompany transactions to be eliminated, amortization of intangible assets, share-based compensation, and transaction costs directly associated with the acquisition: Net revenue $ 10,681,740 Net loss (4,046,089 ) Net loss per share (0.30 ) Net loss per share-diluted (0.30 ) These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of the future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. Hipcricket On July 8, 2015, the Company, Hipcricket, Inc. and, solely as a guarantor of Hipcricket’s indemnity obligations, ESW Capital LLC entered into an Asset Purchase Agreement pursuant to which the Company acquired assets of Hipcricket’s mobile advertising business. The Company paid a consideration of $1,300,000 in cash and issued to Hipcricket 620,560 shares of the Company’s common stock that the parties agreed to value at $2,544,297. The Company acquired all rights in, to contracts with Hipcricket’s mobile advertising customers, customer lists and records as well as certain intellectual assets and properties used in Hipcricket’s mobile advertising business. The Company hired certain employees of Hipcricket to service the Hipcricket customers. As of December 31, 2016, the allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Goodwill 1,894,297 Total purchase price $ 3,844,297 The following table summarizes the fair value of identifiable intangible assets acquired: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Total intangible assets acquired, excluding goodwill $ 1,950,000 The excess of the fair value of the total consideration over the estimated fair value of the net assets was recorded as goodwill, which was primarily attributable to the synergies expected from combining the technologies, including complementary products that will enhance the Company’s overall product portfolio, and the value of the workforce that became our employees following the closing of the acquisition. The goodwill recognized is deductible for income tax purposes. Pro forma Information The following unaudited pro forma information presents the consolidated results of operation of the company as if the acquisition completed during the year ended December 31, 2015 had occurred at the beginning of the applicable annual reporting period, with pro forma adjustments to give effect to intercompany transactions to be eliminated, amortization of intangible assets, share-based compensation, and transaction costs directly associated with the acquisition: Net revenue $ 21,373,171 Net loss (10,083,640 ) Net loss per share (0.65 ) Net loss per share-diluted (0.65 ) These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of the future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. |
Hipcricket Acquisition
Hipcricket Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Hipcricket Acquisition | 17. Acquisitions Doublevision On July 24, 2014, the Company acquired all of the outstanding capital stock of DoubleVision, a provider of mobile media for clients looking to place advertisements in mobile devices based on real-time data. With this acquisition, the Company integrated DoubleVision’s ability to provide real-time advertising in its mobile media market with our product offerings. The contractual price for the acquisition was $3,680,000 by issuing 800,000 shares of the Company’s common stock to DoubleVision’s shareholders at an agreed-upon valuation of $4.10 per share, plus a cash payment of $400,000 to one of DoubleVision’s creditors. In addition to the initial purchase price, the agreement called for $1,000,000 in contingent consideration based on the Company achieving $3,000,000 in media placement revenue in the twelve months ended July 31, 2014. At March 31, 2015, the Company recorded the additional $1,000,000 purchase price payable in anticipation of achieving the revenue milestone and increased the goodwill to $4,482,884. During the year ended December 31, 2015 the Company has issued 296,402 of its common stock at $3.60 per share for an aggregate amount of $1,067,044 in satisfaction of the purchase price payable and increased by $67,044. As of December 31, 2016, the allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: Cash and cash equivalents $ 10,102 Accounts receivable 43,574 Note receivable 10,000 Machinery and equipment 21,764 Software development costs 260,524 Security deposit 6,150 Goodwill 3,482,884 Accounts payable (154,998 ) Total purchase price $ 3,680,000 The following table summarizes the fair value of identifiable intangible assets acquired: Software development costs $ 260,524 Total intangible assets acquired, excluding goodwill $ 260,524 The excess of the fair value of the total consideration over the estimated fair value of the net assets was recorded as goodwill, which was primarily attributable to the synergies expected from combining the technologies, including complementary products that will enhance the Company’s overall product portfolio, and the value of the workforce that became our employees following the closing of the acquisition. The goodwill recognized is not deductible for income tax purposes. Pro forma Information The following unaudited pro forma information presents the consolidated results of operation of the company as if the acquisition completed during the year ended December 31, 2015 had occurred at the beginning of the applicable annual reporting period, with pro forma adjustments to give effect to intercompany transactions to be eliminated, amortization of intangible assets, share-based compensation, and transaction costs directly associated with the acquisition: Net revenue $ 10,681,740 Net loss (4,046,089 ) Net loss per share (0.30 ) Net loss per share-diluted (0.30 ) These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of the future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. Hipcricket On July 8, 2015, the Company, Hipcricket, Inc. and, solely as a guarantor of Hipcricket’s indemnity obligations, ESW Capital LLC entered into an Asset Purchase Agreement pursuant to which the Company acquired assets of Hipcricket’s mobile advertising business. The Company paid a consideration of $1,300,000 in cash and issued to Hipcricket 620,560 shares of the Company’s common stock that the parties agreed to value at $2,544,297. The Company acquired all rights in, to contracts with Hipcricket’s mobile advertising customers, customer lists and records as well as certain intellectual assets and properties used in Hipcricket’s mobile advertising business. The Company hired certain employees of Hipcricket to service the Hipcricket customers. As of December 31, 2016, the allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Goodwill 1,894,297 Total purchase price $ 3,844,297 The following table summarizes the fair value of identifiable intangible assets acquired: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Total intangible assets acquired, excluding goodwill $ 1,950,000 The excess of the fair value of the total consideration over the estimated fair value of the net assets was recorded as goodwill, which was primarily attributable to the synergies expected from combining the technologies, including complementary products that will enhance the Company’s overall product portfolio, and the value of the workforce that became our employees following the closing of the acquisition. The goodwill recognized is deductible for income tax purposes. Pro forma Information The following unaudited pro forma information presents the consolidated results of operation of the company as if the acquisition completed during the year ended December 31, 2015 had occurred at the beginning of the applicable annual reporting period, with pro forma adjustments to give effect to intercompany transactions to be eliminated, amortization of intangible assets, share-based compensation, and transaction costs directly associated with the acquisition: Net revenue $ 21,373,171 Net loss (10,083,640 ) Net loss per share (0.65 ) Net loss per share-diluted (0.65 ) These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of the future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. |
Hipcricket Acquisition [Member] | |
Business Acquisition [Line Items] | |
Hipcricket Acquisition | 18. Hipcricket Acquisition On July 8, 2015, the Company, Hipcricket, Inc. and, solely as a guarantor of Hipcricket’s indemnity obligations, ESW Capital LLC entered into an Asset Purchase Agreement pursuant to which the Company acquired assets of Hipcricket’s mobile advertising business. The Company paid a consideration of $1,300,000 in cash and issued to Hipcricket 620,560 shares of the Company’s common stock that the parties agreed to value at $2,544,297. The Company acquired all rights in, to contracts with Hipcricket’s mobile advertising customers, customer lists and records as well as certain intellectual assets and properties used in Hipcricket’s mobile advertising business. The Company hired certain employees of Hipcricket to service the Hipcricket customers. As of December 31, 2016, the allocation of the purchase price to the assets acquired and liabilities assumed on the acquisition date was as follows: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Goodwill 1,894,297 Total purchase price $ 3,844,297 The following table summarizes the fair value of identifiable intangible assets acquired: Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Total intangible assets acquired, excluding goodwill $ 1,950,000 The excess of the fair value of the total consideration over the estimated fair value of the net assets was recorded as goodwill, which was primarily attributable to the synergies expected from combining the technologies, including complementary products that will enhance the Company’s overall product portfolio, and the value of the workforce that became our employees following the closing of the acquisition. The goodwill recognized is deductible for income tax purposes. Pro forma Information The following unaudited pro forma information presents the consolidated results of operation of the company as if the acquisition completed during the year ended December 31, 2015 had occurred at the beginning of the applicable annual reporting period, with pro forma adjustments to give effect to intercompany transactions to be eliminated, amortization of intangible assets, share-based compensation, and transaction costs directly associated with the acquisition: Net revenue $ 21,373,171 Net loss (10,083,640 ) Net loss per share (0.65 ) Net loss per share-diluted (0.65 ) These unaudited pro forma condensed consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of the future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events On February 7, 2017, the Company executed an Asset Purchase Agreement to sell the Wireless Application business for $400,000, of which $310,000 was received on the closing date and the remaining $90,000 will be paid upon the satisfaction of certain post-closing covenants. As of the filing date, the Company has received $40,000 on the satisfaction of certain post-closing covenants. The Company has reported the Wireless Application segment as Discontinued Operations in the Consolidated Statement of Operations and Consolidated Statements of Cash Flows with related assets and liabilities as of December 31, 2016, included as Assets of business held for sale and Liabilities of business held for sale. Effective February 17, 2017, as the result of an internal investigation, Jerry Hug resigned as CEO and a director of the Company. On February 17, 2017, Richard O’Connell was appointed to serve as the interim CEO. On March 15, 2017 as the result of the same investigation, Kurt Streams resigned from the Company and on March 15, 2017, Lawrence Firestone joined as the interim CFO. The board of directors engaged a third party legal and forensic auditing firm to investigate the executive’s expenses. The forensic legal firm discovered that the two executives had failed to comply with the expense reporting and approval process for payroll and cash transactions and had misappropriated company funds. As a result, Management and The Board concluded that previous issued financial statements were not materially misstated. The Board’s internal investigation is now complete. On February 17, 2017, lawsuits have been issued by Levi & Korsinsky, LLP and others against SITO Mobile, Ltd., the Company, alleging materially false and/or misleading statements regarding Fourth Quarter 2016 Media Placement Revenues and revenue growth. We strongly believe there is no reasonable basis for the class action. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Reclassification | Reclassification Certain reclassifications have been made to conform the 2015 amounts to the 2016 classifications for comparative purposes. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of SITO Mobile, Ltd. and it’s wholly-owned subsidiaries, SITO Mobile Solutions Inc., SITO Mobile R&D IP, LLC, SITO Mobile Media Inc. and DoubleVision Networks Inc. (“DoubleVision”). Intercompany transactions and balances have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of twelve months or less. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: Software development 3 years Equipment and computer hardware 5 years Office furniture 7 years Leasehold Improvements 5 years |
Capital Leases | Capital Leases Assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the leased assets. The assets are depreciated over the lower of their related lease terms or their estimated productive lives. Depreciation of the assets under capital leases is included in depreciation expense. |
Debt issuance costs | Debt Issuance Costs Deferred debt issuance costs are amortized using the effective interest method over the related term of the debt and are presented on the balance sheet as a direct deduction from the debt liability. The amortization of deferred debt issuance costs is included in interest expense. |
Income Taxes | Income Taxes The Company accounts for its income taxes under the provisions of ASC Topic 740, “Income Taxes.” The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. The Company had no material unrecognized income tax assets or liabilities for the year ended December 31, 2016 or for the year ended December 31, 2015. The Company recognizes income tax interest and penalties as a separately identified component of general and administrative expense. |
Issuances Involving Non-cash Consideration | Issuances Involving Non-cash Consideration All issuances of the Company’s stock for non-cash consideration have been assigned a dollar amount equaling the market value of the shares issued on the date the shares were issued for such services and property. The non-cash consideration paid pertains to consulting services, the acquisition of a software license, the acquisition of DoubleVision Networks Inc. and assets purchased from Hipcricket, Inc. |
Stock Based Compensation | Stock Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC Topic 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. The Company records compensation expense based on the fair value of the award at the reporting date. The value of the stock-based award is determined using the Binomial or Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. |
Loss per Share | Loss per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. On July 29, 2015, the Company filed an amendment to the Certificate of Incorporation to effect a 1-for-10 reverse split of its issued and outstanding common stock the reverse split became effective in the market on July 30, 2015. Following the reverse split, every ten shares of the Company's issued and outstanding common stock were automatically combined and converted into one issued and outstanding share of common stock with a par value of $0.001 per share. No fractional shares are to be issued. As a result, all prior per share calculations reflect the effects of this reverse stock split. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. Of the Company’s revenue earned during the year ended December 31, 2016, approximately 19% was generated from contracts with an advertising agency. The Company’s accounts receivable is typically unsecured and are derived from U.S. customers in different industries. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Historically, such losses have been within management’s expectations |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Business Combinations | Business Combinations The Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets. The Company expenses all costs as incurred related to an acquisition under general and administrative in the consolidated statements of operations. |
Off-Balance Sheet Arrangements | Off-Balance Sheet Arrangements We have no off-balance sheet arrangements or financing activities with special purpose entities. The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified the following accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management’s most difficult, subjective judgments. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company recognizes media placement revenue based on the activity of mobile users viewing ads through developer applications and mobile websites. Media placement revenues are recognized when the Company’s advertising services are delivered based on the specific terms of the advertising contract, which are commonly based on the number of ads delivered, or views, clicks or actions by users on mobile advertisements. At such time, the Company’s services have been provided, the fees charged are fixed or determinable, persuasive evidence of an arrangement exists, and collectability is reasonably assured. The Company evaluates whether it is appropriate to recognize media placement revenue based on the gross amount billed to the customers or the net amount earned as revenue. When the Company is primarily obligated in a transaction, has latitude in establishing prices, is responsible for fulfillment of the transaction, has credit risk, or has several but not all of these indicators, revenue is recorded on a gross basis. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement. The Company records the net amounts as media placement revenue earned if it is not primarily obligated or does not have latitude in establishing prices or credit risk. In general, licensing and royalty revenue arrangements provide for the payment of contractually determined fees in consideration for the patented technologies owned by or controlled by the Company’s operating subsidiary. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, the Company’s operating subsidiary may have no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company’s operating subsidiary’s part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of licenses, covenants-not-to-sue, releases, and other significant deliverables upon the execution of the agreement, or upon the receipt of the minimum upfront payment for term agreement renewals. As such, when the Company has no further obligation under the agreement, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all the other revenue recognition criteria have been met, otherwise the Company recognizes revenue on a straight-line basis over the life of the agreement based on the contractually determined fees. Deferred revenue arises from timing differences between the delivery of services and satisfaction of all revenue recognition criteria consistent with the Company’s revenue recognition policy. Deferred revenue results from the advance payment for services to be delivered over a period of time, usually less than one-year increments. |
Software Development Costs | Software Development Costs The Company accounts for costs incurred to develop or purchase computer for internal use in accordance with ASC Topic 350-40 “Internal-Use Software.” As required by ASC 350-40, the Company capitalizes the costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation, and testing. Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs are amortized over a period of three years. Costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life. |
Long-Lived Assets | Long-Lived Assets We account for our long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. We assess recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. During the year ended December 31, 2015, we recognized an impairment loss of $0.8M on our “ Anywhere” Software License which pertains to the discontinued business. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350, requires that goodwill be tested for impairment on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including determining the fair value. Significant judgments required to estimate the fair value including estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. There were no impairments recorded to Goodwill for the periods presented. The Company performed its annual goodwill impairment testing as of September 30, 2016, and going forward, due to the change in its fiscal year end will be performed annually on December 31 st |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for the Company beginning on October 1, 2017 with early application permitted as of the beginning of any interim or annual reporting period. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In January 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) “ASU 2016 – 01 Recognition and Measurement of Financial Assets and Financial Liabilities” which changes requirements for the presentation and measurement of equity investments at fair value. The updated standard is effective for the Company beginning after December 15, 2017, including interim periods within that fiscal year. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In February 2016, the FASB issued “ASU 2016 – 01 Leases” which requires the Company to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The updated standard is effective for the Company on December 15, 2018. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In March 2016, the FASB issued “ASU 2016 – 09 Improvements to Employee Share-Based Payment Accounting” which simplifies the accounting for share-based payment award transactions, including; the income tax consequences, classification of awards as either equity of liabilities, and the classification on the statement of cash flows. The updated standard is effective beginning after December 15, 2016 and interim periods within this annual period. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. In April 2016, the FASB issued “ASU 2016 – 10 Revenue from Contract with Customers (Topic 606): Identifying Performance Obligations and Licensing” which clarifies the topics of identifying performance obligations and licensing implementation guidance, while including implementation guidance. This updated standard affects “ASU 2014-09 Revenue from Contracts with Customers (Topic 606)” which is not yet effective. The Company does not expect that this standard will have a material effect on its consolidated financial statements. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment”. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The guidance is effective for annual periods fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment, net estimated useful lives | Software development 3 years Equipment and computer hardware 5 years Office furniture 7 years Leasehold Improvements 5 years |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, net [Abstract] | |
Schedule of accounts receivable | December 31, 2016 2015 Accounts receivable $ 9,302,208 $ 4,983,034 Less allowance for bad debts (459,952 ) (44,784 ) Accounts receivable, net $ 8,842,256 $ 4,938,250 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment, net [Abstract] | |
Summary of property and equipment | December 31, 2016 2015 Equipment and computer hardware $ 277,292 $ 253,610 Office furniture 198,735 172,153 Leasehold improvements 206,902 186,902 Equipment held under capital lease 13,160 13,160 696,089 625,825 Less: accumulated depreciation (285,401 ) (119,824 ) $ 410,688 $ 506,001 |
Capitalized Software Developm31
Capitalized Software Development Costs, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Capitalized Software Development Costs, net [Abstract] | |
Summary of capitalized software development costs | December 31, 2016 2015 Beginning balance $ 1,117,480 $ 456,938 Additions 1,243,506 972,116 Less: accumulated amortization (661,994 ) (311,573 ) Ending balance $ 1,698,992 $ 1,117,480 |
Summary of amortization expense for the estimated lives | Year Ending December 31, 2017 $ 839,064 2018 606,159 2019 253,769 $ 1,698,992 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Summary of capitalized patent costs | December 31, 2016 2015 Patent costs $ 1,577,122 $ 1,357,407 Less: accumulated amortization (1,115,392 ) (911,934 ) $ 461,730 $ 445,473 |
Summary of amortization expense over the estimated remaining lives of the patents and other intangible assets | Year Ending December 31, 2017 $ 112,224 2018 76,812 2019 73,268 2020 73,268 Thereafter 126,158 $ 461,730 |
Other Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Summary of amortization expense over the estimated remaining lives of the patents and other intangible assets | December 31, 2016 2015 Technology $ 970,000 $ 970,000 Customer relationships 870,000 870,000 Backlog - 110,000 Less: accumulated amortization (400,993 ) (235,523 ) $ 1,439,007 $ 1,714,477 |
Summary of other intangible asset | Year Ending December 31, 2017 $ 271,000 2018 271,000 2019 271,000 2020 187,536 2021 97,000 Thereafter 341,471 $ 1,439,007 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses [Abstract] | |
Summary of accrued expenses | December 31, 2016 2015 Accrued cost of revenues $ 1,085,585 $ 118,108 Accrued payroll and related expenses 879,300 321,044 Accrued professional fees 26,038 627,124 Other accrued expenses 190,021 100,846 $ 2,180,944 $ 1,167,122 |
Capital Leases (Tables)
Capital Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Capital Leases [Abstract] | |
Schedule of minimum future lease payments under the capital lease | Year Ending December 31, 2017 $ 3,791 2018 2,842 2019 - 2020 - Total minimum lease payments 6,633 Less amount representing interest (431 ) Present value of net minimum lease payments $ 6,202 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations [Abstract] | |
Schedule of discontinued operations including balance sheets, statement of operations and statement of cash flows | December 31, 2016 2015 Accounts receivable, net $ 430,151 $ 1,229,566 Other prepaid expenses 9,455 12,257 Property, plant and equipment, net 35,516 79,355 Capitalized software development costs, net 389,863 483,333 Other assets 5,731 5,731 Assets classified as held for sale 870,716 1,810,242 Accounts payable 298,757 745,440 Accrued expenses 248,783 110,774 Deferred revenue 59,696 64,696 Current obligations under capital lease - 8,500 Liabilities classified as held for sale $ 607,236 $ 929.410 December 31, 2016 2015 Revenue Wireless applications revenue $ 5,362,819 $ 6,360,596 Costs and Expenses Cost of revenue 2,693,599 2,950,881 Sales and marketing 168,953 273,990 General and administrative 581,516 411,889 Loss on impairment of long-lived assets - 831,000 Depreciation and amortization 38,531 65,378 Total costs and expenses 3,482,599 4,533,138 Net income from discontinued operations $ 1,880,220 $ 1,827,458 December 31, 2016 2015 Net cash provided by discontinued operating activities $ 2,884,196 $ 3,574,545 Net cash (used in) discontinued investing activities (370,867 ) (388,654 ) Net cash (used in) discontinued financing activities (8,500 ) (16,745 ) Net increase in cash and cash equivalents $ 2,504,829 $ 3,169,146 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Schedule of effective income tax rate | December 31, 2016 2015 U.S. statutory rate 34.00 % 34.00 % State, net of federal benefit (4.61 )% - % Permanent differences (3.81 )% (0.79 )% Less: valuation allowance (34.50 )% (10.73 )% Effective tax rate (8.92 )% 22.48 % |
Summary of significant components of deferred tax assets and liabilities | December 31, 2016 2015 Deferred tax assets Net operating losses $ 14,020,558 $ 14,957,128 Stock based compensation 1,772,228 1,259,047 Allowance for doubtful accounts 181,175 17,424 Intangible assets 544,333 367,247 Deferred revenue 5,166 60,372 Accrued expenses 422,133 271,107 Charitable contributions 10,116 - AMT 24,965 - 16,980,674 16,932,325 Deferred tax liability Property and equipment (216,473 ) (222,753 ) Intangible assets - - Net deferred tax assets 16,764,201 16,709,572 Less: valuation allowance (16,764,201 ) (16,709,572 ) Deferred tax asset - net valuation allowance $ - $ - |
Schedule of income and minimum tax and alternative minimum tax | December 31, 2016 2015 Federal $ 24,572 $ - State 90,099 - Total current income taxes $ 114,671 $ - |
Note Payable (Tables)
Note Payable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Note Payable [Abstract] | |
Schedule of note payable | December 31, 2016 2015 Notes Payable: Principal outstanding $ 6,916,664 $ 9,333,332 Accrued Interest 469,060 319,418 Accrued Termination Fee 258,543 160,376 7,644,267 9,813,126 Less: discount on note payable (794,547 ) (893,941 ) 6,849,720 8,919,185 Less: current portion, net (2,896,893 ) (3,984,219 ) Long-term portion, net $ 3,952,827 $ 4,934,966 |
Scheduled maturities on long-term debt | Years ending December 31, Principal Discount Amortization Accrued Interest Accrued Termination Fee Total 2017 $ 3,525,000 $ (676,937 ) $ 48,830 $ - $ 2,896,893 2018 3,391,664 (117,610 ) 420,230 258,543 3,952,827 $ 6,916,664 $ (794,547 ) $ 469,060 $ 258,543 $ 6,849,720 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity [Abstract] | |
Schedule of company granted options to directors and employees | Grant Date Options Granted Exercise Price Expiration Vesting Total Value Risk Free Interest Rate Volatility February 18, 2016 30,000 $ 2.58 February 18, 2021 Immediately $ 52,560 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 Immediately $ 35,040 1.15 % 103.90 % February 18, 2016 25,000 $ 2.58 February 18, 2021 Immediately $ 43,800 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 3-years $ 35,040 1.15 % 103.90 % February 18, 2016 20,000 $ 2.58 February 18, 2021 Immediately $ 35,040 1.15 % 103.90 % February 18, 2016 25,000 $ 2.58 February 18, 2021 Immediately $ 43,800 1.15 % 103.90 % May 5, 2016 125,000 $ 2.95 May 5, 2019 3-years $ 283,500 1.26 % 91.52 % May 5, 2016 21,704 $ 2.95 May 5, 2019 3-years $ 49,225 1.26 % 91.52 % May 5, 2016 12,000 $ 2.95 May 5, 2019 3-years $ 27,216 1.26 % 91.52 % August 9, 2016 20,000 $ 4.00 August 9, 2023 Immediately $ 59,800 1.35 % 92.34 % August 9, 2016 300,000 $ 4.00 August 9, 2023 3-years $ 897,000 1.35 % 92.34 % August 9, 2016 75,000 $ 4.00 August 9, 2023 3-years $ 224,250 1.35 % 92.34 % November 9, 2016 27,500 $ 4.00 November 9, 2023 3-years $ 112,833 1.84 % 93.28 % November 9, 2016 12,500 $ 4.00 November 9, 2023 3-years $ 51,288 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 6,250 $ 4.00 November 9, 2023 3-years $ 25,644 1.84 % 93.28 % November 9, 2016 21,296 $ 4.74 November 9, 2023 3-years $ 85,738 1.84 % 93.28 % November 9, 2016 38,000 $ 4.74 November 9, 2023 3-years $ 152,988 1.84 % 93.28 % November 9, 2016 18,500 $ 4.74 November 9, 2023 3-years $ 74,481 1.84 % 93.28 % November 9, 2016 7,500 $ 4.74 November 9, 2023 3-years $ 30,195 1.84 % 93.28 % 844,000 |
Summary of outstanding stock warrants and options | Number of Weighted Average Outstanding – December 31, 2014 3,448,726 $ 4.90 Granted 474,281 3.60 Exercised (833,700 ) 2.50 Cancelled (496,050 ) $ (8.10 ) Outstanding – December 31, 2015 2,593,257 4.80 Granted 844,000 3.60 Exercised (256,860 ) (4.20 ) Cancelled (1,268,010 ) (5.40 ) Outstanding – December 31, 2016 1,912,387 $ 3.90 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Schedule of minimum future rental payments under non-cancellable operating leases | 2017 $ 313,332 2018 245,074 2019 - 2020 - 2021 - $ 563,406 |
DoubleVision Acquisition (Table
DoubleVision Acquisition (Tables) - DoubleVision Acquisition [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Schedule to the assets acquired and liabilities assumed on the acquisition date | Cash and cash equivalents $ 10,102 Accounts receivable 43,574 Note receivable 10,000 Machinery and equipment 21,764 Software development costs 260,524 Security deposit 6,150 Goodwill 3,482,884 Accounts payable (154,998 ) Total purchase price $ 3,680,000 |
Summary of the fair value of identifiable intangible assets acquired | Software development costs $ 260,524 Total intangible assets acquired, excluding goodwill $ 260,524 |
Summary of pro forma information | Net revenue $ 10,681,740 Net loss (4,046,089 ) Net loss per share (0.30 ) Net loss per share-diluted (0.30 ) |
Hipcricket Acquisition (Tables)
Hipcricket Acquisition (Tables) - Hipcricket Acquisition [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Schedule of assets acquired and liabilities assumed on the acquisition date | Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Goodwill 1,894,297 Total purchase price $ 3,844,297 |
Summary of the fair value of identifiable intangible assets acquired | Technology $ 970,000 Customer relationships 870,000 Backlog 110,000 Total intangible assets acquired, excluding goodwill $ 1,950,000 |
Summary of pro forma information | Net revenue $ 21,373,171 Net loss (10,083,640 ) Net loss per share (0.65 ) Net loss per share-diluted (0.65 ) |
Organization, History and Bus42
Organization, History and Business (Details) - shares | 1 Months Ended | ||
Jul. 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, History and Business (Textual) | |||
Common stock, shares authorized | 100,000,000 | 300,000,000 | |
Reverse stock split | 1-for-10 reverse split. |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Software development [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 3 years |
Equipment and computer hardware [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Office furniture [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives | 5 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Jul. 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies (Textual) | ||||
Company's revenue, percentage | 19.00% | |||
Reverse stock split | 1-for-10 reverse split. | |||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Impairment loss | $ 0.8 | |||
Assets and liabilities lease obligations term | More than 12 months. |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable, net [Abstract] | ||
Accounts receivable | $ 9,302,208 | $ 4,983,034 |
Less allowance for bad debts | (459,952) | (44,784) |
Accounts receivable, net | $ 8,842,256 | $ 4,938,250 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property and Equipment, net [Abstract] | ||
Equipment and computer hardware | $ 277,292 | $ 253,610 |
Office furniture | 198,735 | 172,153 |
Leasehold improvements | 206,902 | 186,902 |
Equipment held under capital lease | 13,160 | 13,160 |
Property and equipment, gross | 696,089 | 625,825 |
Less: accumulated depreciation | (285,401) | (119,824) |
Property and equipment, net | $ 410,688 | $ 506,001 |
Property and Equipment, net (47
Property and Equipment, net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment, net (Textual) | ||
Depreciation expense | $ 129,718 | $ 90,284 |
Capitalized Software Developm48
Capitalized Software Development Costs, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Capitalized Software Development Costs, net [Abstract] | ||
Beginning balance | $ 1,117,480 | $ 456,938 |
Additions | 1,243,506 | 972,116 |
Less: accumulated amortization | 662,003 | 311,574 |
Ending balance | $ 1,698,992 | $ 1,117,480 |
Capitalized Software Developm49
Capitalized Software Development Costs, net (Details 1) | Dec. 31, 2016USD ($) |
Capitalized Software Development Costs, net [Abstract] | |
2,017 | $ 839,064 |
2,018 | 606,159 |
2,019 | 253,769 |
Amortization expense remaining estimated lives, total | $ 1,698,992 |
Capitalized Software Developm50
Capitalized Software Development Costs, net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Capitalized Software Development Costs [Member] | ||
Capitalized Software Development Costs, Net (Textual) | ||
Amortization expense- capitalized software development costs, net | $ 661,994 | $ 311,573 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets [Abstract] | ||
Patent costs | $ 1,577,122 | $ 1,357,407 |
Less: accumulated amortization | (1,115,392) | (911,934) |
Patents, net | $ 461,730 | $ 445,473 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | $ 839,064 | |
2,018 | 606,159 | |
2,019 | 253,769 | |
Patents | 461,730 | $ 445,473 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | 112,224 | |
2,018 | 76,812 | |
2,019 | 73,268 | |
2,020 | 73,268 | |
Thereafter | 126,158 | |
Patents | 461,730 | |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | 271,000 | |
2,018 | 271,000 | |
2,019 | 271,000 | |
2,020 | 187,536 | |
2,021 | 97,000 | |
Thereafter | 341,471 | |
Patents | $ 1,439,007 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ 1,439,007 | $ 1,714,477 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | 970,000 | 970,000 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | 870,000 | 870,000 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | 110,000 | |
Amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ (400,993) | $ (235,523) |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | Jul. 08, 2015 | Jul. 31, 2015 | Jul. 24, 2014 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Intangible Assets (Textual) | |||||||
Amortization expense | $ (203,459) | $ (182,373) | |||||
Goodwill | 6,444,225 | 6,444,225 | |||||
Issued number of common stock, value | 10,320,001 | ||||||
Additional shares issued in acquisition of intangible assets | 2,544,297 | ||||||
Goodwill [Member] | |||||||
Intangible Assets (Textual) | |||||||
Goodwill | $ 4,482,884 | ||||||
Payment of earn-out amount accrued | $ 1,000,000 | ||||||
Purchase price consideration, description | As additional purchase price consideration if the Company's media placement revenues for the twelve-month period from August 1, 2014 to July 31, 2015 are at least $3,000,000, subject to certain conditions such as receipt of customer payments and achievement of a gross margin threshold. | ||||||
Issued number of common stock, value | $ 1,000,000 | $ 1,067,044 | |||||
Issuance of commom stock shares | 296,402 | ||||||
Price per share | $ 3.60 | ||||||
Increase in value of goodwill | $ 67,044 | ||||||
Goodwill [Member] | Doublevision Inc [Member] | |||||||
Intangible Assets (Textual) | |||||||
Payments made to acquire double vision | $ 3,600,000 | ||||||
Shares issued in acquisition of double vision, shares | 800,000 | ||||||
Shares issued in acquisition of double vision | $ 400,000 | ||||||
Goodwill | $ 3,482,884 | ||||||
Goodwill [Member] | Hipcricket Inc [Member] | |||||||
Intangible Assets (Textual) | |||||||
Goodwill | $ 1,894,297 | ||||||
Issuance of commom stock shares | 620,560 | ||||||
Toatl purchase price | $ 3,844,297 | ||||||
Additional shares issued in acquisition of intangible assets | 2,544,297 | ||||||
Acquisition related costs | 1,300,000 | ||||||
Assets acqusition total | $ 95,000 | ||||||
Patents [Member] | |||||||
Intangible Assets (Textual) | |||||||
Amortization expense | 203,459 | 182,373 | |||||
Other Intangible Assets [Member] | |||||||
Intangible Assets (Textual) | |||||||
Amortization expense | $ 275,470 | $ 235,523 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses [Abstract] | ||
Accrued cost of revenues | $ 1,085,585 | $ 118,108 |
Accrued payroll and related expenses | 879,300 | 321,044 |
Accrued professional fees | 26,038 | 627,124 |
Other accrued expenses | 190,021 | 100,846 |
Accrued expenses | $ 2,180,944 | $ 1,167,122 |
Capital Leases (Details)
Capital Leases (Details) | Dec. 31, 2016USD ($) |
Capital Leases [Abstract] | |
2,017 | $ 3,791 |
2,018 | 2,842 |
2,019 | |
2,020 | |
Total minimum lease payments | 6,633 |
Less amount representing interest | (431) |
Present value of net minimum lease payments | $ 6,202 |
Capital Leases (Details Textual
Capital Leases (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Capital Leases (Textual) | ||
Equipment cost | $ 13,160 | $ 13,160 |
Depreciation charged to operations | $ 129,718 | 90,284 |
Office equipment [Member] | ||
Capital Leases (Textual) | ||
Lease expiration, date | Dec. 31, 2018 | |
Equipment cost | $ 13,160 | 66,272 |
Minimum future lease payments, term | 4 years | |
Effective interest rate charged on capital leases | 7.428% | |
Purchase option on capital lease | $ 1 | |
Interest charged to operations | 591 | 819 |
Depreciation charged to operations | $ 13,254 | $ 13,254 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Discontinued Operations [Abstract] | ||
Accounts receivable, net | $ 430,151 | $ 1,229,566 |
Other prepaid expenses | 9,455 | 12,257 |
Property, plant and equipment, net | 35,516 | 79,355 |
Capitalized software development costs, net | 389,863 | 483,333 |
Other assets | 5,731 | 5,731 |
Assets classified as held for sale | 870,716 | 1,810,242 |
Accounts payable | 298,757 | 745,440 |
Accrued expenses | 248,783 | 110,774 |
Deferred revenue | 59,696 | 64,696 |
Current obligations under capital lease | 8,500 | |
Liabilities classified as held for sale | $ 607,236 | $ 929,410 |
Discontinued Operations (Deta59
Discontinued Operations (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | ||
Wireless applications revenue | $ 5,362,819 | $ 6,360,596 |
Costs and Expenses | ||
Cost of revenue | 2,693,599 | 2,950,881 |
Sales and marketing | 168,953 | 273,990 |
General and administrative | 581,516 | 411,889 |
Loss on impairment of long-lived assets | 831,000 | |
Depreciation and amortization | 38,531 | 65,378 |
Total costs and expenses | 3,482,599 | 4,533,138 |
Net income from discontinued operations | $ 1,880,220 | $ 1,827,458 |
Discontinued Operations (Deta60
Discontinued Operations (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued Operations [Abstract] | ||
Net cash provided by discontinued operating activities | $ 2,884,196 | $ 3,574,545 |
Net cash (used in) discontinued investing activities | (370,867) | (388,654) |
Net cash (used in) discontinued financing activities | (8,500) | (16,745) |
Net increase in cash and cash equivalents | $ 2,504,829 | $ 3,169,146 |
Discontinued Operations (Deta61
Discontinued Operations (Details Textual) - Subsequent Event [Member] | Feb. 07, 2017USD ($) |
Discontinued Operations (Textual) | |
Sale of business estimated price | $ 40,000 |
Asset Purchase Agreement [Member] | |
Discontinued Operations (Textual) | |
Sale of business estimated price | 400,000 |
Proceeds from sale of assets | $ 310,000 |
Payments for post-closing covenants, description | The remaining $90,000 will be paid upon the satisfaction of certain post-closing covenants. |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | ||
U.S. statutory rate | 34.00% | 34.00% |
State, net of federal benefit | (4.61%) | |
Permanent differences | (3.81%) | (0.79%) |
Less: valuation allowance | (34.50%) | (10.73%) |
Effective tax rate | (8.92%) | 22.48% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Net operating losses | $ 14,020,558 | $ 14,957,128 |
Stock based compensation | 1,772,228 | 1,259,047 |
Allowance for doubtful accounts | 181,175 | 17,424 |
Intangible assets | 544,333 | 367,247 |
Deferred revenue | 5,166 | 60,372 |
Accrued expenses | 422,133 | 271,107 |
Charitable contributions | 10,116 | |
AMT | 24,965 | |
Deferred tax assets, gross | 16,980,674 | 16,932,325 |
Deferred tax liability | ||
Property and equipment | (216,473) | (222,753) |
Intangible assets | ||
Net deferred tax assets | 16,764,201 | 16,709,572 |
Less: valuation allowance | (16,764,201) | (16,709,572) |
Deferred tax asset - net valuation allowance |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | ||
Federal | $ 24,572 | |
State | 90,099 | |
Total current income taxes | $ 114,671 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Taxes (Textual) | |
Net change in the valuation allowance | $ (54,629) |
Net operating loss carryover | $ 39,670,211 |
Operating loss carryover, expiration date | Dec. 31, 2036 |
Note Payable (Details)
Note Payable (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Notes Payable: | ||
Principal outstanding | $ 6,916,664 | $ 9,333,332 |
Accrued Interest | 469,060 | 319,418 |
Accrued Termination Fee | 258,543 | 160,376 |
Note Payable Gross | 7,644,267 | 9,813,126 |
Less: discount on note payable | (794,547) | (893,941) |
Note Payable | 6,849,720 | 8,919,185 |
Less: current portion,net | 2,896,893 | 3,984,219 |
Long-term portion, net | $ 3,952,827 | $ 4,934,966 |
Note Payable (Details 1)
Note Payable (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Scheduled maturities on long-term debt | ||
Principal | $ 6,916,664 | $ 9,333,332 |
Discount Amortization | (794,547) | |
Accrued Interest | 469,060 | 319,418 |
Accrued Termination Fee | 258,543 | 160,376 |
Total | 6,849,720 | $ 8,919,185 |
2017 [Member] | ||
Scheduled maturities on long-term debt | ||
Principal | 3,525,000 | |
Discount Amortization | (676,937) | |
Accrued Interest | 48,830 | |
Accrued Termination Fee | ||
Total | 2,896,893 | |
2018 [Member] | ||
Scheduled maturities on long-term debt | ||
Principal | 3,391,664 | |
Discount Amortization | (117,610) | |
Accrued Interest | 420,230 | |
Accrued Termination Fee | 258,543 | |
Total | $ 3,952,827 |
Note Payable (Details Textual)
Note Payable (Details Textual) - USD ($) | Mar. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Note Payable (Textual) | |||
Note payable original principal amount | $ 6,849,720 | $ 8,919,185 | |
Aggregate amount of shares issued | $ 10,320,001 | ||
Interest rate | 5.00% | ||
Debt instrument, Term | 42 months | ||
Deferred revenue | $ 500,000 | ||
Interest expense from amortization | 140,238 | 190,049 | |
Interest expense | 833,704 | 1,019,816 | |
Amortization of discount | 767,393 | 627,162 | |
Accrual of termination fees charged to interest expense | 98,166 | $ 133,034 | |
Revenue Sharing and Note Purchase Agreement [Member] | |||
Note Payable (Textual) | |||
Issuance of commom stock shares | 200,000 | ||
Aggregate amount of shares issued | $ 568,000 | ||
Debt instrument, Description | Pursuant to the terms of the Amendment, principal payment on the Notes issued pursuant to the Agreement shall be reduced from $333,333 to $175,000 for the period commencing on the last business day of February 2016 through the last business day of February 2017 and from $333,333 to $300,000 for the period commencing on the last business day of March 2017 to the last day of business on February 2018, with the final payment on the last business day on March 2018 increased to repay the remaining principal in full. | ||
Restructuring fee | $ 100,000 | ||
Senior Secured Note [Member] | |||
Note Payable (Textual) | |||
Note payable original principal amount | $ 10,000,000 | ||
Issuance of commom stock shares | 261,954 | ||
Stock price per share | $ 3.817 | ||
Aggregate amount of shares issued | $ 1,000,000 | ||
Percentage of discount | 10.00% | ||
Received paying legal and due diligence expenses | $ 8,850,000 | ||
Interest rate | 9.00% | ||
Description of LIBOR rate | The principal amount of the Note bears interest at a rate equal to LIBOR plus 9% per annum. Such interest is payable in cash except that 2% per annum of the interest shall be paid-in-kind, by increasing the principal amount of the Note by the amount of such interest. | ||
Debt instrument, Term | 42 months | ||
Amortization payments | $ 333,334 | ||
Percentage of monetization revenues | 85.00% | ||
Payment term monetization revenues description | The Company shall pay the Revenue Participants up to 50% of Monetization Revenues totaling (i) $5,000,000, if paid in full prior to March 31, 2018 and (ii) $7,500,000 thereafter (the "Revenue Stream"). The Company must also pay $350,000 to the Note Purchaser upon repayment of the Note. | ||
Purchasers upon repayment of the notes | $ 350,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | $ 1,332,946 | $ 774,204 |
General & Administration - discontinued operations | 581,516 | 411,889 |
Stock Option [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | $ 1,337,912 | $ 788,028 |
Share based compensation, number of shares vested | 630,361 | 1,990,231 |
Stock based compensation payment of consulting services | $ 210,000 | |
Stock based compensation payment of consulting services, Shares | 70,000 | |
Stock based compensation expense recognized vested | $ 539,989 | |
General and administrative expense [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | $ 1,044,032 | 406,181 |
General & Administration - discontinued operations | 3,378 | 8,084 |
Sales and marketing expense [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | 293,880 | 133,808 |
General & Administration - discontinued operations | $ 1,588 | $ 5,740 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 21, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions (Textual) | |||
Licensing agreement terms, Description | In exchange for the License, the Licensee will pay an annual fee of $1,250,000 for a minimum of three years ("Annual Fee"). Commencing three years from the Effective Date, the Licensee may each year, at its sole option, pay a $1,250,000 license fee to renew the License for every year for four additional years. Once the Licensee has paid a total of $8,750,000 in license fees, either in one lump sum or after paying $1,250,000 annually for seven years, the License is deemed to be perpetual. For Patents infringement actions provided for under the License, the Licensee will pay 20% of the gross proceeds from settlements received less any Annual Fee amounts paid and litigation costs incurred ("Share of Proceeds"). SITO Mobile R&D IP, LLC and its joint venture partner will serve as co-plaintiffs with the Licensee in infringement actions under the License and the Licensee will be responsible for any out-of-pocket costs of the JV associated with being a co-plaintiff in supporting Licensee in such litigation, including attorneys' fees. The Licensee will pay the Annual Fee and any Share of Proceeds to the JV. Proceeds received by the JV are shared by SITO Mobile R&D IP, LLC and PMC on a 30% and 70% basis, respectively. In the event that the Licensee does not assert any infringement actions under its rights in the License within five years of the Effective Date, the JV may, at its sole option, choose to terminate Licensee's exclusive right to assert infringement claims with no reduction or adjustment to the Annual Fee. | ||
Amortization of revenue | $ 375,000 | $ 374,287 | |
Deferred revenue | (5,166) | $ (60,372) | |
Licensing Agreement [Member] | |||
Related Party Transactions (Textual) | |||
Deferred revenue | $ 114,754 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of company granted options to directors and employees | ||
Options Granted | 844,000 | 474,281 |
February 18, 2016 [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 30,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | Immediately | |
Total Value | $ 52,560 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
February 18, 2016 One [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 20,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | Immediately | |
Total Value | $ 35,040 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
February 18, 2016 Two [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 25,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | Immediately | |
Total Value | $ 43,800 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
February 18, 2016 Three [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 20,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | 3-years | |
Total Value | $ 35,040 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
February 18, 2016 Four [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 20,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | Immediately | |
Total Value | $ 35,040 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
February 18, 2016 Five [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Feb. 18, 2016 | |
Options Granted | 25,000 | |
Exercise Price | $ 2.58 | |
Expiration | Feb. 18, 2021 | |
Vesting, description | Immediately | |
Total Value | $ 43,800 | |
Risk Free Interest Rate | 1.15% | |
Volatility | 103.90% | |
May 5, 2016 [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | May 5, 2016 | |
Options Granted | 125,000 | |
Exercise Price | $ 2.95 | |
Expiration | May 5, 2019 | |
Vesting, description | 3-years | |
Total Value | $ 283,500 | |
Risk Free Interest Rate | 1.26% | |
Volatility | 91.52% | |
May 5, 2016 One [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | May 5, 2016 | |
Options Granted | 21,704 | |
Exercise Price | $ 2.95 | |
Expiration | May 5, 2019 | |
Vesting, description | 3-years | |
Total Value | $ 49,225 | |
Risk Free Interest Rate | 1.26% | |
Volatility | 91.52% | |
May 5, 2016 Two [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | May 5, 2016 | |
Options Granted | 12,000 | |
Exercise Price | $ 2.95 | |
Expiration | May 5, 2019 | |
Vesting, description | 3-years | |
Total Value | $ 27,216 | |
Risk Free Interest Rate | 1.26% | |
Volatility | 91.52% | |
August 9, 2016 [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Aug. 9, 2016 | |
Options Granted | 20,000 | |
Exercise Price | $ 4 | |
Expiration | Aug. 9, 2023 | |
Vesting, description | Immediately | |
Total Value | $ 59,800 | |
Risk Free Interest Rate | 1.35% | |
Volatility | 92.34% | |
August 9, 2016 One [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Aug. 9, 2016 | |
Options Granted | 300,000 | |
Exercise Price | $ 4 | |
Expiration | Aug. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 897,000 | |
Risk Free Interest Rate | 1.35% | |
Volatility | 92.34% | |
August 9, 2016 Two [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Aug. 9, 2016 | |
Options Granted | 75,000 | |
Exercise Price | $ 4 | |
Expiration | Aug. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 224,250 | |
Risk Free Interest Rate | 1.35% | |
Volatility | 92.34% | |
November 9, 2016 [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 27,500 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 112,833 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 One [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 12,500 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 51,288 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Two [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 6,250 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 25,644 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Three [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 6,250 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 25,644 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Four [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 6,250 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 25,644 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Five [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 6,250 | |
Exercise Price | $ 4 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 25,644 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Six [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 21,296 | |
Exercise Price | $ 4.74 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 85,738 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Seven [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 38,000 | |
Exercise Price | $ 4.74 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 152,988 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Eight [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 18,500 | |
Exercise Price | $ 4.74 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 74,481 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% | |
November 9, 2016 Nine [Member] | ||
Schedule of company granted options to directors and employees | ||
Grant Date | Nov. 9, 2016 | |
Options Granted | 7,500 | |
Exercise Price | $ 4.74 | |
Expiration | Nov. 9, 2023 | |
Vesting, description | 3-years | |
Total Value | $ 30,195 | |
Risk Free Interest Rate | 1.84% | |
Volatility | 93.28% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of outstanding stock warrants and options | ||
Number of Shares, Outstanding, Beginning Balance | 2,593,257 | 3,448,726 |
Number of Shares, Granted | 844,000 | 474,281 |
Number of Shares, Exercised | (256,860) | (833,700) |
Number of Shares, Cancelled | (1,268,010) | (496,050) |
Number of Shares, Outstanding, Ending Balance | 1,912,387 | 2,593,257 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.80 | $ 4.90 |
Weighted Average Exercise Price, Granted | 3.60 | 3.60 |
Weighted Average Exercise Price, Exercised | (4.20) | 2.50 |
Weighted Average Exercise Price, Cancelled | (5.40) | (8.10) |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 3.90 | $ 4.80 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders' Equity (Textual) | |||
Gross proceeds from common stock issued | $ 12,569,074 | $ 2,109,055 | |
Aggregate amount of common stock issued | $ 10,320,001 | ||
Shares issued for consulting services, value | $ 210,000 | ||
Common stock options outstanding | 1,912,387 | 2,593,257 | 3,448,726 |
Weighted-average contractual term | 2 years 2 months 12 days | ||
Double Vision Networks Inc. [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 296,402 | ||
Aggregate amount of common stock issued | $ 1,067,044 | ||
Fortress Credit Co LLC [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 200,000 | ||
Gross proceeds from common stock issued | $ 568,000 | ||
Hipcricket, Inc. [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 620,560 | ||
Stock Option [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 1,282,026 | ||
Weighted-average contractual term | 4 years 11 months 12 days | ||
Warrant [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 833,700 | ||
Gross proceeds from common stock issued | $ 2,109,055 | ||
Shares issued for payment of services, shares | 70,000 | ||
Shares issued for consulting services, value | $ 210,000 | ||
Shares issued for warrants exercised | 729,100 | ||
Purchase shares of company's common stock | 729,100 | ||
Warrants exercise price | $ 2.50 | ||
Number of warrants exercised | 684,000 | ||
Number of warrants exercised one | 45,100 | ||
Warrants exercise price one | $ 3.40 | ||
Common Stock [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 3,066,667 | ||
Gross proceeds from common stock issued | $ 1,069,073 | ||
Shares issued on exercise of stock options, shares | 256,860 | ||
Aggregate amount of common stock issued | $ 3,067 | ||
Shares issued for payment of services, shares | 70,000 | ||
Shares issued for consulting services, value | $ 70 | ||
Options vested | 630,361 | ||
Common Stock [Member] | Fortress Credit Co LLC [Member] | |||
Stockholders' Equity (Textual) | |||
Issuance of commom stock shares | 3,523,527 | ||
Price per share | $ 2.84 | ||
Gross proceeds from common stock issued | $ 568,000 |
Commitments and Contingencies74
Commitments and Contingencies (Details) | Dec. 31, 2016USD ($) |
Schedule of minimum future rental payments under non-cancellable operating leases | |
2,017 | $ 313,332 |
2,018 | 245,074 |
2,019 | |
2,020 | |
2,021 | |
Total | $ 563,406 |
Commitments and Contingencies75
Commitments and Contingencies (Details Textual) - USD ($) | Aug. 09, 2016 | Nov. 18, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments and Contingencies (Textual) | ||||
Rent expense | $ 424,832 | $ 373,933 | ||
Options granted | 28,000 | |||
Chief Executive Officer [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Options granted | 110,000 | |||
Stock compensation expense | $ 268,926 | |||
Three Employees [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Stock compensation expense | 143,686 | |||
Director One (Member] | ||||
Commitments and Contingencies (Textual) | ||||
Stock compensation expense | 59,800 | |||
One Employee [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Stock compensation expense | 10,103 | |||
Four employees [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Accrued bonus | 9,230 | |||
Stock compensation expense | $ 15,671 | |||
Stock Compensation Plan [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Options expected to vest exercise price | $ 3.51 | |||
Compensation arrangement with individual description | The target bonus for the Chief Executive Officer was 50% of his base salary and for the Chief Financial Officer, the target bonus was 40% of his base salary. The cash bonus was based upon the target net revenues and gross margins of the Company. 70% of the target cash bonus was payable if Threshold Performance of 70% of the Target Performance is achieved, 100% of the target cash bonus was payable if the Target Performance is reached, with 140% of the cash bonus paid if 140% of the Target Performance is achieved. | The target bonus for the Chief Executive Officer was 50% of his base salary and for the Chief Financial Officer, the target bonus was 40% of his base salary. The cash bonus was based upon the target net revenues and gross margins of the Company. 70% of the target cash bonus was payable if threshold performance of 70% of the Target Performance is achieved, 100% of the target cash bonus was payable if the Target Performance is reached, with 120% of the cash bonus paid if 120% of the Target Performance is achieved. | ||
Options granted | 50,000 | |||
Cash bonus paid | $ 207,577 | |||
Stock compensation expense | $ 206,032 | |||
Stock Compensation Plan [Member] | Chief Executive Officer [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Options granted | 27,500 | |||
Stock Compensation Plan [Member] | Chief Financial Officer [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Options granted | 12,500 | |||
Stock Compensation Plan One [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Options expected to vest exercise price | $ 3.51 | |||
Compensation arrangement with individual description | The target bonus ranges from 20-30% of their base salary. 70% of the cash bonus is based upon the target net revenues and 30% of the cash bonus is based upon gross margins of the Company. Seventy percent of the target cash bonus will be paid if threshold performance of 70% of the Target Performance is achieved, 100% of the target cash bonus will be paid if the Target Performance is reached, with 120% of the cash bonus paid if 120% of the Target Performance is achieved. | |||
Options granted | 6,250 | |||
Cash bonus paid | $ 100,445 | |||
Stock compensation expense | 105,187 | |||
Stock Compensation Plan One [Member] | Executives [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Cash bonus paid | 17,333 | |||
Stock compensation expense | $ 25,074 | |||
Rogers [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Lease expiration period of stores provided on additional rentals | 5 years | |||
Jersey [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Lease expiration period of stores provided on additional rentals | 5 years | |||
Lease expiration, date | Nov. 30, 2018 | |||
Boise Office [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Lease term | 38 months |
DoubleVision Acquisition (Detai
DoubleVision Acquisition (Details) - DoubleVision Acquisition [Member] - USD ($) | Dec. 31, 2016 | Jul. 24, 2014 |
Assets acquired and liabilities assumed [Abstract] | ||
Cash and cash equivalents | $ 10,102 | |
Accounts receivable | 43,574 | |
Note receivable | 10,000 | |
Machinery and equipment | 21,764 | |
Software development costs | 260,524 | |
Security deposit | 6,150 | |
Goodwill | 3,482,884 | |
Accounts payable | (154,998) | |
Toatl purchase price | $ 3,680,000 | $ 3,680,000 |
DoubleVision Acquisition (Det77
DoubleVision Acquisition (Details 1) - DoubleVision Acquisition [Member] | Dec. 31, 2016USD ($) |
Fair Value of Identifiable Intangible Assets [Abstract] | |
Software development costs | $ 260,524 |
Total intangible assets acquired, excluding goodwill | $ 260,524 |
DoubleVision Acquisition (Det78
DoubleVision Acquisition (Details 2) - DoubleVision Acquisition [Member] | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Net revenue | $ | $ 10,681,740 |
Net loss | $ | $ (4,046,089) |
Net loss per share | $ / shares | $ (0.30) |
Net loss per share-diluted | $ / shares | $ (0.30) |
DoubleVision Acquisition (Det79
DoubleVision Acquisition (Details Textual) - USD ($) | Mar. 31, 2015 | Jun. 24, 2014 | Jul. 24, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2014 |
DoubleVision Acquisition (Textual) | ||||||
Goodwill | $ 6,444,225 | $ 6,444,225 | ||||
Issued number of common stock, value | 10,320,001 | |||||
DoubleVision Acquisition [Member] | ||||||
DoubleVision Acquisition (Textual) | ||||||
Contractual price of acquisition | $ 3,680,000 | $ 3,680,000 | ||||
Common stock shares issuance to DoubleVision shareholders | 800,000 | 296,402 | ||||
Common stock par value | $ 4.10 | $ 3.60 | ||||
Media placement revenue | $ 3,000,000 | |||||
Payment of debt | $ 400,000 | |||||
Additional purchase price payable | $ 1,000,000 | $ 1,000,000 | ||||
Goodwill | $ 4,482,884 | |||||
Increase in the value of aggregate amount | $ 67,044 | |||||
Issued number of common stock, value | $ 1,067,044 |
Hipcricket Acquisition (Details
Hipcricket Acquisition (Details) - Hipcricket Acquisition [Member] | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Technology | $ 970,000 |
Customer relationships | 870,000 |
Backlog | 110,000 |
Goodwill | 1,894,297 |
Total purchase price | $ 3,844,297 |
Hipcricket Acquisition (Detai81
Hipcricket Acquisition (Details 1) - Hipcricket Acquisition [Member] | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Technology | $ 970,000 |
Customer relationships | 870,000 |
Backlog | 110,000 |
Total intangible assets acquired, excluding goodwill | $ 1,950,000 |
Hipcricket Acquisition (Detai82
Hipcricket Acquisition (Details 2) - Hipcricket Acquisition [Member] | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Net revenue | $ | $ 21,373,171 |
Net loss | $ | $ (10,083,640) |
Net loss per share | $ / shares | $ (0.65) |
Net loss per share-diluted | $ / shares | $ (0.65) |
Hipcricket Acquisition (Detai83
Hipcricket Acquisition (Details Textual) - Hipcricket Acquisition [Member] | Jul. 08, 2015USD ($)shares |
Hipcricket Acquisition [Textual] | |
Cash consideration for acquisition | $ 1,300,000 |
Shares issued in acquisition of hipcricket, shares | shares | 620,560 |
Shares issued in acquisition of hipcricket | $ 2,544,297 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] | Feb. 07, 2017USD ($) |
Subsequent Events (Textual) | |
Sale of business estimated price | $ 40,000 |
Asset Purchase Agreement [Member] | |
Subsequent Events (Textual) | |
Sale of business estimated price | 400,000 |
Proceeds from sale of assets | $ 310,000 |
Payments for post-closing covenants, description | The remaining $90,000 will be paid upon the satisfaction of certain post-closing covenants. |