Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SITO MOBILE, LTD. | |
Entity Central Index Key | 0001157817 | |
Trading Symbol | SITO | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 25,641,812 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,759,927 | $ 2,597,246 |
Accounts receivable, net | 8,515,888 | 10,206,664 |
Other receivable | 58,410 | |
Other prepaid expenses | 343,917 | 469,041 |
Total current assets | 10,678,142 | 13,272,951 |
Property and equipment, net | 311,000 | 331,635 |
Other assets | ||
Capitalized software development costs, net | 1,382,839 | 861,699 |
Intangible assets: | ||
Patents | 606,366 | 630,857 |
Other intangible assets, net | 829,257 | 897,007 |
Operating Lease ROU Assets, net | 243,010 | 311,717 |
Goodwill | 6,444,225 | 6,444,225 |
Other assets | 124,633 | 125,543 |
Total other assets | 9,630,330 | 9,271,048 |
Total assets | 20,619,472 | 22,875,634 |
Current liabilities | ||
Accounts payable | 6,126,305 | 4,377,805 |
Accrued expenses | 4,362,357 | 4,610,146 |
Other current liabilities | 376,859 | 3,571 |
Deferred revenue | 175,000 | 264,493 |
Operating lease liabilities | 260,610 | 307,536 |
Warrant liability | 494,445 | 174,684 |
Total current liabilities | 11,795,576 | 9,738,235 |
Long-term liabilities | ||
Operating lease liabilities | 27,062 | |
Other liabilities | 6,744 | 7,644 |
Total long-term liabilities | 6,744 | 34,706 |
Total liabilities | 11,802,320 | 9,772,941 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock, $.001 par value; 100,000,000 shares authorized, 25,641,812 shares issued and outstanding as of March 31, 2019; and 25,529.078 December 31, 2018 respectively | 25,642 | 25,529 |
Additional paid-in capital | 186,747,725 | 185,983,896 |
Accumulated deficit | (177,956,215) | (172,906,732) |
Total stockholders' equity | 8,817,152 | 13,102,693 |
Total liabilities and stockholders' equity | $ 20,619,472 | $ 22,875,634 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 25,641,812 | 25,529,078 |
Common stock, shares outstanding | 25,641,812 | 25,529,078 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Media placement | $ 8,430,376 | $ 11,144,652 |
Total revenue | 8,430,376 | 11,144,652 |
Cost of Revenue | ||
Cost of revenue | 5,572,737 | 6,697,876 |
Gross profit | 2,857,639 | 4,446,776 |
Operating Expenses | ||
Sales and marketing | 4,038,116 | 5,260,251 |
General and administrative | 3,401,172 | 4,949,383 |
Depreciation and amortization | 148,826 | 185,805 |
Total operating expenses | 7,588,114 | 10,395,439 |
Loss from operations | (4,730,475) | (5,948,663) |
Other Income (Expense) | ||
(Loss) gain on revaluation of warrant liability | (319,761) | 641,216 |
Other income | 388 | 86,079 |
Interest (expense) income, net | (155) | 3,974 |
Net loss before income taxes | (5,050,003) | (5,217,394) |
Income tax benefit (expense) | 520 | (31,385) |
Net loss from operations | $ (5,049,483) | $ (5,248,779) |
Basic and diluted net (loss) per share | $ (0.20) | $ (0.22) |
Basic and diluted weighted average shares outstanding | 25,545,362 | 23,724,307 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2017 | $ 22,039 | $ 165,008,927 | $ (155,841,125) | $ 9,189,841 |
Beginning balance, shares at Dec. 31, 2017 | 22,039,529 | |||
Issuance of common stock, net of stock issuance costs | $ 2,990 | 13,781,511 | 13,784,501 | |
Issuance of common stock, net of stock issuance costs, shares | 2,990,000 | |||
Shares issued on exercise of stock options | $ 77 | 116,174 | 116,251 | |
Shares issued on exercise of stock options, shares | 77,420 | |||
Shares issued on exercise of restricted stock units | $ 9 | (9) | 0 | |
Shares issued on exercise of restricted stock units, shares | 8,621 | |||
Compensation recognized on option grants | 1,137,246 | 1,137,246 | ||
Compensation recognized on restricted stock units | 952,082 | 952,082 | ||
Net loss for the period | (5,248,779) | (5,248,779) | ||
Ending balance at Mar. 31, 2018 | $ 25,115 | 180,995,931 | (161,089,904) | 19,931,142 |
Ending balance, shares at Mar. 31, 2018 | 25,115,570 | |||
Beginning balance at Dec. 31, 2017 | $ 22,039 | 165,008,927 | (155,841,125) | 9,189,841 |
Beginning balance, shares at Dec. 31, 2017 | 22,039,529 | |||
Ending balance at Dec. 31, 2018 | $ 25,529 | 185,983,896 | (172,906,732) | 13,102,693 |
Ending balance, shares at Dec. 31, 2018 | 25,529,078 | |||
Beginning balance at Mar. 31, 2018 | $ 25,115 | 180,995,931 | (161,089,904) | 19,931,142 |
Beginning balance, shares at Mar. 31, 2018 | 25,115,570 | |||
Shares issued related to 2017 annual bonus for executives | $ 223 | 893,927 | 894,150 | |
Shares issued related to 2017 annual bonus for executives, shares | 222,425 | |||
Shares issued on exercise of restricted stock units | $ 191 | (191) | 0 | |
Shares issued on exercise of restricted stock units, shares | 191,083 | |||
Compensation recognized on option grants | 2,793,275 | 2,793,275 | ||
Compensation recognized on restricted stock units | 1,300,954 | 1,300,954 | ||
Net loss for the period | (11,816,828) | (11,816,828) | ||
Ending balance at Dec. 31, 2018 | $ 25,529 | 185,983,896 | (172,906,732) | 13,102,693 |
Ending balance, shares at Dec. 31, 2018 | 25,529,078 | |||
Shares issued as part of settlement | $ 113 | 223,100 | 223,213 | |
Shares issued as part of settlement, shares | 112,734 | |||
Compensation recognized on option grants | 395,800 | 395,800 | ||
Compensation recognized on restricted stock units | 144,929 | 144,929 | ||
Net loss for the period | (5,049,483) | (5,049,483) | ||
Ending balance at Mar. 31, 2019 | $ 25,642 | $ 186,747,725 | $ (177,956,215) | $ 8,817,152 |
Ending balance, shares at Mar. 31, 2019 | 25,641,812 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (5,049,483) | $ (5,248,779) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 40,239 | 40,544 |
Amortization expense - software development costs | 161,596 | 208,554 |
Amortization expense - patents | 39,927 | 76,463 |
Amortization expense - intangible assets | 67,750 | 67,750 |
Amortization expense - other assets | 910 | 1,048 |
Operating leases rent expense | 76,595 | 76,595 |
Loss on disposition of assets | 5,871 | |
Loss (gain) on revaluation of warrant liability | 319,761 | (641,216) |
Stock option compensation expense | 395,800 | 1,137,246 |
Restricted stock compensation expense | 368,142 | 952,082 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable, net | 1,690,776 | 4,048,259 |
Decrease (increase) in prepaid expenses | 125,124 | (152,390) |
(Increase) in other receivable | (58,410) | |
Decrease (increase) in other assets | (10,680) | |
Increase (decrease) in accounts payable | 1,748,500 | (2,663,396) |
(Decrease) in accrued expenses | (247,789) | (3,309,912) |
Increase in other payable | 373,288 | |
Decrease in operating lease liabilities | (81,888) | (81,346) |
(Decrease) in deferred revenue | (89,493) | (1,839) |
Net cash used in operating activities | (118,655) | (5,495,146) |
Cash Flows from Investing Activities | ||
Patents and patent applications costs | (15,436) | (12,647) |
Purchase of property and equipment | (19,604) | (21,999) |
Capitalized software development costs | (682,736) | (43,906) |
Net cash used in investing activities | (717,776) | (78,552) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 13,784,501 | |
Proceeds from exercise of stock options | 116,251 | |
Principal reduction on finance lease liabilities | (888) | (1,483) |
Net cash (used in) provided by financing activities | (888) | 13,899,269 |
Net (decrease) increase in cash and cash equivalents | (837,319) | 8,325,571 |
Cash and cash equivalents - beginning of period | 2,597,246 | 3,611,438 |
Cash and cash equivalents - ending of period | 1,759,927 | 11,937,009 |
Supplemental Information: | ||
Interest expense paid | 172 | 68 |
Income taxes paid | 1,667 | |
Investing Activities | ||
Finance lease ROU assets acquired | 14,173 | |
Operating lease liability accretion | $ 7,900 | $ 14,987 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization SITO Mobile, Ltd. ("SITO", the "Company", "our", "we", and "us") 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. SITO develops customized, data-driven solutions for brands that span all forms of media and provides strategic insights. Our platform is designed to provide in-depth understanding of customer interests, actions, and experiences that assist brands in maximizing their targeted market penetration. The platform provides real-time, location-based data to its customers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of SITO Mobile, Ltd. and its wholly owned subsidiaries, SITO Mobile Solutions Inc., SITO Mobile R&D IP, LLC, SITO Mobile Media Inc. and DoubleVision Networks Inc. ("DoubleVision"). All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States of America ("US GAAP") requires us 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 may differ from those estimates. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with US GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the unaudited consolidated financial information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year-ended December 31, 2018 filed on April 1, 2019. The consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained net losses since inception and has experienced negative cash flows from operations. As of March 31, 2019, the Company has an accumulated deficit of approximately $178 million. As shown in the unaudited consolidated statement of operations, the Company incurred an approximate net loss of $5.0 million for the three-months ended March 31, 2019. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of these unaudited consolidated financial statements. Management's plans, as they relate to these conditions, include monitoring and/or reducing expenditures in non-critical areas, continuing to execute the Company's plan to seek longer and more profitable customer agreements and seeking additional capital, as needed. The Company's existence is dependent upon management's ability to identify additional sources from which to obtain funding and/or to enter into significant (e.g., large-scale, multi-year), contracts. There can be no assurance that the Company's efforts will result in the resolution of the Company's liquidity needs. These unaudited consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern. Revenue Recognition and Deferred Revenue Adoption of Accounting Standards Codification ("ASC") - Topic 606 ("Topic 606"), "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted Topic 606 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with US GAAP preceding Topic 606 and the methodologies adopted by the Company thereunder. There was no adjustment to accumulated deficit at January 1, 2018 attributable to the impact of adopting Topic 606. Topic 606 requires that revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration that an entity expects to receive in exchange for those services. To achieve this core principal, Topic 606 follows a five-step approach: 1) Identify the contract, or contracts, with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. 2) Identify of the performance obligations in the contract At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer such goods or deliver such services to the customer. To be separately recognized, performance obligations must be distinct. For a performance obligation to be distinct, both the following criteria must exist: (i) the customer can benefit from the service either on its own or together with other resources that are readily available from the Company or third parties and (ii) the goods or services are separately identifiable from other promises in the contract. If these criteria are not met, the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is the amount of total contract consideration the Company expects to receive for carrying out its contractual obligations. 4) Allocation of the transaction price to the performance obligations in the contract Once a contract and associated performance obligations have been identified and the transaction price has been determined, Topic 606 requires an entity to allocate the transaction price to each performance obligation. To allocate the transaction price to each identified performance obligation, the Company must accurately estimate the stand-alone selling price of each performance obligation. As a practical expedient, Topic 606 allows the Company to recognize revenue when it invoices a customer, if the right to payment from such customer corresponds directly with the value of the Company's performance completed to date. 5) Recognize revenue when, or as, performance obligations are satisfied Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Media placement services constitute our core business from which we derive substantially all our revenue from contracts with customers. Our media placement contracts with customers predominantly contain a single performance obligation for which the related revenues are recognized over time, using an output measure to reflect progress. The Company invoices its customers as it performs its contractual obligations and therefore has adopted the aforementioned Topic 606 revenue recognition "right to invoice" practical expedient. Media Placement The Company's media placement contracts with customers generally provide for the measurement of services based on the activity of mobile users viewing ads through developer applications and mobile websites. Mobile user activity consists of views, clicks, or actions on mobile advertisements placed by the Company. Based on the specific terms of the media placement contracts with customers, revenues are recognized as the Company's advertising services are delivered, that is, when the Company has a right to invoice for its services. Most of the Company's media placement services contracts have a performance term of less than twelve months and, generally, customer payments are received in a timely manner from the invoice date. Revenue defined as media placement for the three-months ended March 31, 2019 and 2018 was $8,430,376 and $11,144,652, respectively. Deferred Revenue In certain situations, the Company will receive advances of its media placement services, which advances are recognized as deferred revenue in the unaudited consolidated balance sheets. As the Company delivers the contracted media placement services, deferred revenues are recognized in the unaudited consolidated statement of operations. Sales commissions are generally expensed as incurred because the amortization period would be one year or less and the Company's revenues are not given to significant cyclical fluctuation. Sales commissions are recognized in sales and marketing expenses in the accompanying unaudited consolidated statement of operations. Cash and Cash Equivalents The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2019 and December 31, 2018, the Company does not have any cash equivalents. 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 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 the historical write-off of receivables as a percentage of accounts receivable, as well as revenue and information collected from individual customers. Accounts receivable are charged off against the allowance when such amounts are not deemed collectable. Property and Equipment, net Property and equipment are stated at cost. Major renewals and improvements are capitalized 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 sold or disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses on sales or disposals of property and equipment are recognized in earnings. Depreciation is computed on the straight-line and accelerated methods for both financial reporting and income tax reporting purposes based upon the following estimated useful lives: Asset Class Useful Lives Software development 3 years Equipment and computer hardware 5 years Office furniture 5 years Leasehold improvements 5 years, or lease expiration if sooner Long-Lived Assets The Company accounts for long-lived assets in accordance with ASC 360-10, "Impairment or Disposal of Long-Lived Assets." ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or exceeds its fair value. We assess recoverability of the carrying value of an asset by estimating the future undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the future undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recognized equal to the amount by which the asset's carrying value exceeds its fair value. Goodwill Goodwill represents the future economic benefits to be derived from non-individually identified or separately recognized assets acquired in a business combination. Goodwill generally may be computationally defined as the excess of the fair value of the consideration transferred over the acquisition-date fair values of the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquired assets. ASC 350-20 requires that goodwill be tested at least annually for impairment. Application of the goodwill impairment test requires judgment, including determining the fair value. Significant judgments are 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. The Company has evaluated qualitative and quantitative factors (e.g., events, conditions) as of March 31, 2019 and December 31, 2018 and determined that there has been no impairment. Capitalized Software Development Costs The Company accounts for costs incurred to develop or purchase computer software 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 direct costs, including payroll and related payroll taxes and benefits. 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 with respect to certain external factors, including, but not limited to, estimated economic life of three years. Amortization expense associated with capitalized software is recorded with cost of revenue. Patent and Patent Application Costs Intangible assets are recorded at cost and include patents developed and purchased. The cost of patents is amortized over their useful lives. Leases The Company reviews and evaluates its contracts to determine if any contain leases. As of March 31, 2019, and December 31, 2018, the Company has agreements with two providers that have been determined to contain leases. One of the agreements is for the Company's primary office space and the other is for office equipment. In accordance with ASC Topic 842, which the Company adopted as of January 1, 2018, a contract contains a lease if it conveys a right to direct the use of an identified asset and derive substantially all the economic benefits from the use thereof. If a contract is determined to contain a lease, it is further evaluated for purposes of classifying arrangement as a finance lease. Any arrangement that does not meet the criteria to be accounted for as a finance lease is an operating lease Income Taxes The Company accounts for its income taxes under the provisions of ASC Topic 740, "Income Taxes." The accounting for income taxes under ASC Topic 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 three-months ended March 31, 2019, and year-ended December 31, 2018, respectively. When incurred the Company recognizes income tax interest and penalties as a separately identified component of general and administrative expense. 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 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 option-pricing model. The Binomial option-pricing model determines compensation cost as the excess of the fair value of the award 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 a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. Earnings (Loss) per Share The Company reports earnings (loss) per share in accordance with ASC 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. 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. Since the effect of the assumed conversion of warrants to common shares would have an anti-dilutive effect, diluted earnings (loss) per share is the same as basic earnings (loss) per share for the three-months ended March 31, 2019 and 2018. Concentrations of Credit Risk The Company's primary banking relationship is with Wells Fargo Bank. The amount on deposit with Wells Fargo Bank may from time to time exceed federally insured limits. The Company also has a factoring arrangement, secured by its accounts receivable, with Fast Pay Partners, LLC. For the three-months ended March 31, 2019 and 2018, the Company derived approximately 51.4% and 13% of total revenue from three customers and one customer, respectively. The Company's accounts receivable is typically unsecured and 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 of 3% of accounts receivable and 1% of revenue. 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 consideration transferred to acquire a business 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 acquired and liabilities assumed are 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 to the assets acquired and liabilities assumed subsequent to the measurement period are recorded in income. Results of operations of acquired entities are included in the Company's results from operations as of the date of acquisition. The Company expenses all acquisition related costs as incurred, which costs are classified as general and administrative expenses in the unaudited consolidated statements of operations. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements or financing activities with special purpose entities. Recent Accounting Pronouncements Recently Adopted Pronouncements Revenue Recognition In May 2014, the FASB released " ASC 606 - Revenue from Contracts with Customers" Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2016, the FASB issued "ASU 2016–10- Revenue from Contract with Customers (Topic 606): Identifying Performance Obligations and Licensing", "ASU 2014-09- Revenue from Contracts with Customers (Topic 606) The Company adopted ASC Topic 606 using the modified retrospective approach. There were no material changes to the Company's unaudited consolidated financial statements resulting from adoption of this standard. Leases In February 2016, the FASB issued "ASU 2016-02 Leases ASU 2018-11 Leases: Targeted Improvements Adoption of ASC Topic 842 resulted in the Company recognizing a $311,717 operating lease Right-of-Use ("ROU") asset and current and non-current operating lease liabilities of $334,598 on the consolidated balance sheet at December 31, 2018, which resulted in a $22,881 increase to the accumulated deficit as of that date. Other than first-time recognition of operating leases on its consolidated balance sheet, the implementation of ASC Topic 842 did not have a material impact on the Company's consolidated financial statements. See Note 8 for additional disclosures. Comprehensive Income In February 2018, the FASB issued " ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," Stock Compensation In June 2018, the FASB issued "ASU 2018-07 - Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting". ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, "Revenue from Contracts with Customers". The Company adopted ASU 2018-07 effective January 1, 2019 and notes that the standard did not have a material effect on its unaudited consolidated financial statements. Pronouncements Not Yet Adopted Intangibles In January 2017, the FASB issued " ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment" In August of 2018, the FASB issued " ASU 2018-15 Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, net | 3. Accounts Receivable, net Accounts receivable consist of the following: March 31, December 31, 2019 2018 Accounts receivable $ 8,935,888 $ 10,626,664 Less: allowance for bad debts (420,000 ) (420,000 ) Accounts receivable, net $ 8,515,888 $ 10,206,664 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 4. Property and Equipment, net The following is a summary of property and equipment: March 31, December 31, 2019 2018 Equipment and computer hardware $ 285,634 $ 268,662 Office furniture 259,452 256,820 Leasehold improvements 344,026 344,026 889,112 869,508 Less: accumulated depreciation (578,112 ) (537,873 ) $ 311,000 $ 331,635 Depreciation expense for the three-months ended March 31, 2019 and March 2018 was $40,329 and $40,544, respectively. |
Capitalized Software Developmen
Capitalized Software Development Costs, Net | 3 Months Ended |
Mar. 31, 2019 | |
Research and Development [Abstract] | |
Capitalized Software Development Costs, net | 5. Capitalized Software Development Costs, net The following is a summary of capitalized software development costs: March 31, December 31, 2019 2018 Capitalized software development costs $ 3,835,625 $ 3,152,889 Less: accumulated amortization (2,452,786 ) (2,291,190 ) $ 1,382,839 $ 861,699 Amortization expense for the three-months ended March 31, 2019 and 2018 was $161,596 and $208,554, respectively. As of March 31, 2019, amortization expense for the remaining estimated lives of these costs is as follows: Year Amortization expense 2019 $ 354,220 2020 449,432 2021 351,609 2022 227,578 $ 1,382,839 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Patents The following is a summary of capitalized patent costs: March 31, December 31, 2019 2018 Patent costs $ 2,690,380 $ 2,674,944 Less: accumulated amortization (2,084,014 ) (2,044,087 ) $ 606,366 $ 630,857 Amortization expense for the three-months ended March 31, 2019 and March 31, 2018 was $39,927 and $76,463, respectively. The Company generally amortizes patent cost over a seven-year useful life. As of March 31, a schedule of amortization expense over the estimated remaining lives of the patents for the next five fiscal years and thereafter is as follows: Year Amortization expense 2019 $ 120,900 2020 161,201 2021 73,204 2022 65,205 2023 63,096 Thereafter 122,760 $ 606,366 Other Intangible Assets, net The following is a summary of other intangible assets: March 31, December 31, 2019 2018 Technology $ 970,000 $ 970,000 Customer relationships 870,000 870,000 Less: accumulated amortization (1,010,743 ) (942,993 ) $ 829,257 $ 897,007 Amortization expenses for the three-months ended March 31, 2019 and 2018 was $67,750 and $67,750, respectively. The Company generally amortizes its technology and customer relationship other intangible assets over a 10- and 5-year useful life, respectively. A schedule of amortization expense over the estimated remaining lives of the other intangible assets for the next five fiscal years and thereafter is as follows: Year Amortization expense 2019 $ 203,250 2020 187,536 2021 97,000 2022 97,000 2023 97,000 Thereafter 147,471 $ 829,257 Goodwill There were no changes to the carrying values of goodwill for the three-months ended March 31, 2019. DoubleVision Hipcricket, Inc. Goodwill Balance as of January 1, 2019 $ 4,549,928 $ 1,894,297 $ 6,444,225 No activity - - - Balance as of March 31, 2019 $ 4,549,928 $ 1,894,297 $ 6,444,225 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 7. Accrued Expenses The following is a summary of accrued expenses: March 31, December 31, 2019 2018 Accrued payroll and related expenses $ 2,786,702 $ 3,452,303 Accrued cost of revenues 1,269,705 1,065,027 Accrued professional fees 305,950 92,816 $ 4,362,357 $ 4,610,146 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases Operating Leases The Company reviews and evaluates its contracts to determine if any contain leases. As of March 31, 2019, and December 31, 2018, the Company has agreements with two providers that have been determined to contain leases. One of the agreements is for the Company’s primary office space and the other is for office equipment. In accordance with ASC Topic 842, which the Company adopted as of and for the year beginning January 1, 2018, a contract contains a lease if it conveys a right to direct the use of an identified asset and derive substantially all the economic benefits from the use thereof. If a contract is determined to contain a lease, it is further evaluated for purposes of classifying the arrangement as a finance lease. Any arrangement that does not meet the criteria to be accounted for as a finance lease is an operating lease. Right-of-Use (“ROU”) assets represent the quantification of the Company’s rights to use the identified leased assets. Effective with the Company’s adoption of ASU 2016-02, ROU assets are recognized for the present value of future lease payments increased by any lease payments occurring prior to the lease commencement date, less any lease incentives received, and increased for any initial direct costs incurred. The present value of future operating lease payments is recognized as liabilities and presented according to its classification as current or noncurrent, separately distinguishing between finance and operating lease liabilities and ROU assets. The present value of future lease payments is determined using the discount rate implicit in the lease. However, if the discount rate implicit in the lease is not readily determinable, which is often the case, the Company expects to use its collateralized incremental borrowing rate for similar amounts and terms to determine the present value of future lease payments. For adoption of ASU 2016-02, the operating future lease payments were discounted using a 10.1% weighted average effective rate. Leases with an initial term of twelve months or less are classified as short-term leases and are not recognized on the consolidated balance sheet. As of March 31, 2019, and December 31, 2018, the Company does not have any short-term leases. The following table summarizes the Company’s operating lease ROU assets: March 31, December 31, Lease 2019 2018 Newport Office Center VIII - Suite 204 $ 650,259 $ 650,259 Newport Office Center VIII - Suite 203 543,558 543,558 Newport Office Center VIII - Suite 202 130,068 130,068 Operating lease ROU assets , gross 1,323,885 1,323,885 Less: Accumulated amortization (1,080,875 ) (1,012,168 ) Operating lease ROU assets, net $ 243,010 $ 311,717 The Company maintains office space at 100 Town Square Place, Jersey City, New Jersey. The lease of offices at this location was first entered into in August 2011 and, as the Company grew, in November 2014 and April 2017 the lease was amended to extend the term and include additional leased space. The Company has a single lease with the lessor for three spaces (described above) that under ASC 2016-02 are accounted for separately. The lease has a current expiration date in 2020. For the three-months ended March 31, 2019 and 2018, operating lease expense of $76,595 and $76,595 was recognized in the consolidated statement of operations, respectively. Operating lease expense is recognized on a straight-line basis, based on the term of the lease including any extension options the Company is reasonably certain to exercise. The total straight-line monthly rent expense is $25,532. The following table provides a summary of the Company’s finance lease ROU assets: March 31, December 31, Lease 2019 2018 Savin MP C6004EX $ 14,563 $ 14,563 Savin C4305sp - - Finance lease ROU as sets, gross 14,563 14,563 Less: Accumulated amortization (4,031 ) (3,121 ) Operating lease ROU assets, net $ 10,532 $ 11,442 The Company maintains an office equipment lease with a single vendor that is classified as a finance lease and bears interest at 1.75% per annum. The lease provides the Company an option to purchase the leased equipment at expiration at the then-fair market value. If not exercised, the Company has the right to return the leased equipment. The Company intends to return the equipment. The lease expires in 2022. The Company had a finance lease ROU asset for another piece of office equipment, which lease expired on October 20, 2018. The Company had an option to purchase the leased equipment at $1, which it exercised effective the day after the lease expired. As of March 31, 2019, and December 31, 2018, the finance lease ROU asset has been reclassified to property, plant and equipment Prior to adoption of ASU 2016-02, the Company’s finance leases (previously, capital leases) were included in property, plant and equipment in the consolidated balance sheets and the associated liabilities for the minimum future payments under these leases were classified as either current or long-term liabilities. Finance lease ROU assets net are included in Other assets on the consolidated balance sheet of the Company at March 31, 2019 and December 31, 2018. For the three-months ended March 31, 2019 and 2018, finance lease expense consisted of $910 and $1,048 of amortization of ROU assets and an insignificant amount of interest expense of less than $100 in each period, respectively. The following table summarizes future commitments under operating and finance leases as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Year Operating Finance Operating Finance 2019 $ 245,627 $ 2,804 $ 327,503 $ 3,739 2020 27,292 3,739 27,292 3,739 2021 - 3,739 - 3,739 2022 - 312 - 312 2023 - - - - Thereafter - - - - $ 272,919 $ 10,594 $ 354,794 $ 11,528 The future commitments under operating and finance leases represent the Company’s undiscounted cash flow future obligations as of March 31, 2019 and December 31, 2018. The discounted operating and finance lease liabilities presented on the consolidated balance sheets of the Company as of March 31, 2019 and December 31, 2018 are less the interest component of $12,309 and $266 and $20,196 and $313, resulting in lease liabilities of $260,610 and $10,328 and $334,598 and $11,215, respectively. Finance lease liabilities of $3,584 and $3,571 and $6,744 and $7,644 are included in Other current and long-term liabilities on the consolidated balance sheet of the Company at March 31, 2019 and December 31, 2018, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes As of March 31, 2019, the Company had a federal net operating loss carryover of approximately $67.5 million, comprised of $47.1 million of losses generated prior to January 1, 2018 and expiring in various years through 2037, and $20.4 million of losses generated that can be carried forward indefinitely. The Company has state net operating loss carryover of approximately $51.6 million available to offset future income for income tax reporting purposes, which will expire in various years through 2037, if not previously utilized. The Company's ability to use the carryover net operating losses may be substantially limited or eliminated pursuant to Internal Revenue Code Section 382. A limitation may apply to the use of the net operating 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 asset. 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 three-months ended March 31, 2019 and 2018, there was no federal income tax expense required in the income statement, or liability on the balance sheet. However, there is an IRS penalty of $26,000 and $125 in related interest that was recorded for a civil penalty due to an error in payroll reporting by our payroll processing company. We are not currently involved in any income tax examinations. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 10. 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, compensation expense is determined at the “measurement date” for share-based payments to consultants and other third parties. 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 option-pricing model, 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 a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. During the three-months ended March 31, 2019, the Company recognized stock-based compensation expense totaling $395,800, through the vesting of 495,250 common stock options. Of the $395,800 in stock compensation expense, $209,628 is included in general and administrative expense, and $186,172 is included in sales and marketing expense. During the three-months ended March 31, 2018, the Company recognized stock-based compensation expense totaling $1,137,246, through the vesting of 188,685 common stock options. Of the $1,137,246 in stock compensation expense, $574,714 is included in general and administrative expense, and $562,532 is included in sales and marketing expense. During the three-months ended March 31, 2019, the Company recognized $144,929 in restricted stock-based compensation expense. Of the $144,929, $137,255 is included in general and administrative expense, and $7,674 is included in sales and marketing expense. During the three-months ended March 31, 2018, the Company recognized restricted stock-based compensation expense totaling $952,082, of which $933,081 is included in general and administrative expense and $19,001 is included in sales and marketing expense. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 11. Fair Value The Company's balance sheet 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. 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. Unadjusted quoted prices in active markets for identical assets or liabilities that an entity can access at the measurement date. ● Level 2. Valuations based on quoted prices, other than included in Level 1, that are observable for the asset or liability, either directly or indirectly. ● Level 3. Valuations based on unobservable inputs for the asset or liability. Unobservable inputs may include our own data, adjusted for other reasonably available information, such as internally-generated financial forecasts, prices contained in quotes from suppliers, or other subjectively determined factors. The Company has identified the July 2017 warrants issued as liabilities required to be presented at fair value on the consolidated balance sheets. The warrant liability is measured within Level 2 of the fair value hierarchy because its value is determined based on inputs that are observable or can be corroborated by observable data, but which financial instruments are not listed on a public exchange. The Company measures the fair value of the warrant liability each reporting period. For the three-months ended March 31, 2019 and 2018, a net loss of $319,761 and a net gain of $641,216 were recorded, respectively, on the revaluation of the warrant liability. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 12. 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 three-months ended March 31, 2019, the Company issued 112,734 shares of its common stock attributable to the vesting of restricted stock units ("RSUs") granted to satisfy the settlement of an officer's separation agreement signed on February 7, 2019. The granted RSUs were valued at the Company's common stock closing price on February 7, 2019 of $1.98 per share, as quoted on the NASDQ stock exchange. During the three-months ended March 31, 2018, the Company issued 3,076,041 shares of common stock. Of the total shares issued, 77,420 shares were issued upon the exercise of stock options for which the Company received $116,251 in gross proceeds, and 2,990,000 shares of common stock were issued in a registered offering resulting in $14,842,750 in gross proceeds, and legal and accounting fees of $1,058,249. Warrants During the three-months ended March 31, 2019 and 2018, no warrants were granted, exercised, or expired. Warrants currently outstanding are remeasured at fair market value each reporting period in accordance with ASC 718. Stock Incentive Plans The Company established the 2017 Stock Incentive Plan while closing the 2008, 2009, and 2010 plans (collectively, the "Plans") under which 2,500,000 shares have been reserved for the issuance of stock options, stock appreciation rights, restricted stock, stock grants and other equity awards. The Plans are administered by the Compensation Committee of the Board of Directors which determines the individuals to whom awards shall be granted as well as the type, terms, conditions, option price and the duration of each award. As of March 31, 2019, there were 566,266 shares available to grant under the 2017 Stock Incentive Plan. A stock option grant allows the holder of the option to purchase a share of the Company's common stock in the future at a stated price. Options, restricted stock and RSUs granted under the Plans vest as determined by the Company's Compensation Committee. Options granted under the Plans expire over varying terms, but not more than ten years from the date of grant. Certain RSUs granted to executives of the Company vest contingently on the price of our common stock consistently remaining above certain thresholds for 65 consecutive trading days. These RSUs do not have an expiration date. Stock option activity for the three-months ended March 31, 2019 and the year-ended December 31, 2018 are as follows: Stock Option Activity Under the Plans Stock Options Exercise Price per Share Weighted Average Exercise Price Weighted Average Remaining Life (Years) Balance - 12/31/17 2,293,214 $2.50 - $6.76 $ 5.20 7.93 Granted 310,000 $1.51 - $6.01 1.13 Exercised (77,420 ) $2.50 - $4.00 2.90 Forfeitures (1,408,094 ) $2.76 - $6.66 4.33 Balance - 12/31/18 1,117,700 $1.51 - $6.76 $ 5.33 7.74 Granted 480,000 $1.16 - $2.05 1.62 Exercised - $0.00 - $0.00 - Forfeitures (8,200 ) $2.50 - $2.50 2.50 Balance - 3/31/19 1,589,500 $1.16 - $6.66 $ 4.22 7.33 For the three-months ended March 31, 2019 and 2018, the Company recognized compensation expense related to stock option grants of $395,800 and $1,137,246, respectively. The estimated fair value of each option award granted was determined on the date of grant using a Binomial option-pricing model with the following assumptions for option granted during the three-months ended March 31, 2019 and 2018, respectively. For the Three-months ended March 31, 2019 2018 Weighted average risk-free interest rate 2.58 % - Weighted average expected volatility 95.35 % - Dividend yield - - Weighted average expected option term (years) 9.82 - Weighted average grant date fair value 1.24 - The risk-free interest rate was developed using the U.S. Treasury yield for periods equal to the expected life of stock options on the grant date. Volatility was developed using the Company's historical stock price volatility. No dividend yield was assumed because the Company has never paid a cash dividend on its common stock and does not expect to pay dividends in the foreseeable future. The expected option term for grants made during 2019 and 2018 is based on the average expiration date of all stock options granted during each respective period. A summary of the Company's non-vested stock options activity for the three-months ended March 31, 2019 and the year-ended December 31, 2018 is presented below: Number of Options Weighted Average Exercise Price Non-Vested Balance - 12/31/17 2,049,000 $ 6.07 Granted 310,000 Vested (253,450 ) Forfeited (1,241,300 ) Non-Vested Balance - 12/31/18 864,250 $ 6.13 Granted 480,000 Vested (495,250 ) Cancellations 245,250 Non-Vested Balance - 3/31/19 1,094,250 $ 5.21 A summary of the Company's restricted stock activity for the three-months ended March 31, 2019 and the year-ended December 31, 2018 is presented below: Restricted Stock Activity Number of Shares Weighted Average Grant Date Fair Value Non-Vested Balance - 12/31/17 114,713 $ 4.25 Grants 2,002,983 5.46 Vested (214,447 ) 2.27 Forfeited (585,088 ) 5.11 Non-Vested Balance - 12/31/18 1,318,161 $ 6.03 Grants 112,734 1.98 Vested - - Forfeited (25,000 ) 6.66 Non-Vested Balance - 3/31/19 1,405,895 $ 5.69 During the three-months ended March 31, 2018, the Company identified an error in the accounting for certain awards granted to employees in 2017. This non-cash error of approximately $500,000 was determined to be immaterial and recorded as an out-of-period adjustment primarily to general and administrative expenses in the accompanying consolidated statement of operations for the three-months ended March 31, 2018. The Company utilized the Monte Carlo valuation model to estimate the fair value of these awards which requires us to make judgments on assumptions regarding the risk-free interest rate, expected dividend yield, expected term and expected volatility over the expected term of the award. The assumptions used in calculating the fair value of share-based payment awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of expense could be materially different in the future. For the three months ended March 31, 2019 and 2018, the Company recognized compensation expense related to RSU grants of $144,928 and $952,082, respectively. Additional compensation expense of approximately $781,145 relating to the unvested portion of restricted stock granted is expected to be recognized over a remaining average period of 1.5 years. Warrants A summary of warrant activity for the three-months ended March 31, 2019 and the year-ended December 31, 2018 is as follows: Warrants Exercise Price per Share Weighted Average Exercise Price Weighted Average Remaining Life (Years) Balance - 12/31/17 320,000 $ 6.25 $ 6.25 4.49 Grants - - - - Exercised - - - - Cancellations - - - Balance - 12/31/18 320,000 $ 6.25 $ 6.25 3.58 Grants - - - Exercised - - - Cancellations - - - Balance - 03/31/19 320,000 $ 6.25 $ 6.25 3.33 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Legal In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. As of March 31, 2019, the Company is not aware of any asserted or un-asserted claims, negotiations and legal actions for which a loss is considered reasonably possible of occurring and would require recognition in the accompanying unaudited consolidated financial statements. SEC Lawsuit On February 17, 2017, plaintiff Sandi Roper commenced a purported securities class action against us and certain of our current and former officers and directors in the United States District Court for the District of New Jersey captioned Roper v. SITO Mobile, Ltd., Case No. 17-cv-1106-ES-MAH (D.N.J. filed Feb. 17, 2017). On May 8, 2017, Red Oak Fund, LP, Red Oak Long Fund LP, Red Oak Institutional Founders Long Fund, and Pinnacle Opportunities Fund, LP (collectively, "Red Oak") were appointed lead plaintiffs in this action. On June 22, 2017, Red Oak filed an amended complaint, purporting to represent a class of stockholders who purchased our common stock between August 15, 2016 and January 2, 2017 ("Class Period"). On January 30, 2019, the United States District Court for the District of New Jersey dismissed without prejudice all causes of action with the exception of claims against a former officer, a former officer/director, and the Company, arising out of statements made from November 2016 to January 2017 regarding media placement revenues. The remaining claims are brought under section 10(b) of the Securities Exchange Act and SEC Rule 10b-5 promulgated thereunder, and seek to hold the executives responsible as controlling persons. The amended complaint seeks unspecified damages After an unsuccessful mediation, the parties have commenced discovery. No trial date has been set for this action. Fort Ashford In November 2017, we received a complaint filed by Fort Ashford Funds, LLC ("Ashford"), in the Superior Court of the State of California, Orange County (the "Ashford Complaint"). The Ashford Complaint claims that we issued certain warrants to Panzarella Consulting, LLC and Patrick Panzarella (together "Panzarella") representing the option to purchase, in the aggregate, five million (5,000,000) shares of our common stock at a price of fifty cents ($.50) per share. Through a series of purported transfers, the warrants were allegedly transferred to Ashford, which is now seeking to exercise such purported warrants or to obtain damages. However, we have made a thorough inquiry into these matters and, while it appears that certain warrants may have been issued in 2005, such warrants expired in 2015. Further, as of this time, Ashford has failed to provide any evidence of the right of Ashford (and its assignor Anthony Macaluso) to exercise such warrants. We believe the claims are baseless and plan to defend this action accordingly. We have asserted a number of affirmative defenses to the claim in our answer. The parties are currently engaged in the discovery process, which includes production of documents, exchanges of interrogatory answers, and depositions of numerous witnesses. Discovery started in June 2018 and is expected to be completed by the end of May 2019. We are in the process of filing a motion for summary judgment, which the court will hear on August 8, 2019 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of SITO Mobile, Ltd. and its wholly owned subsidiaries, SITO Mobile Solutions Inc., SITO Mobile R&D IP, LLC, SITO Mobile Media Inc. and DoubleVision Networks Inc. ("DoubleVision"). All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States of America ("US GAAP") requires us 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 may differ from those estimates. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with US GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the unaudited consolidated financial information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year-ended December 31, 2018 filed on April 1, 2019. The consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. |
Going Concern | Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained net losses since inception and has experienced negative cash flows from operations. As of March 31, 2019, the Company has an accumulated deficit of approximately $178 million. As shown in the unaudited consolidated statement of operations, the Company incurred an approximate net loss of $5.0 million for the three-months ended March 31, 2019. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these unaudited consolidated financial statements. Management’s plans, as they relate to these conditions, include monitoring and/or reducing expenditures in non-critical areas, continuing to execute the Company’s plan to seek longer and more profitable customer agreements and seeking additional capital, as needed. The Company’s existence is dependent upon management’s ability to identify additional sources from which to obtain funding and/or to enter into significant (e.g., large-scale, multi-year), contracts. There can be no assurance that the Company’s efforts will result in the resolution of the Company’s liquidity needs. These unaudited consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Adoption of Accounting Standards Codification (“ASC”) - Topic 606 (“Topic 606”), “Revenue from Contracts with Customers” On January 1, 2018, the Company adopted Topic 606 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with US GAAP preceding Topic 606 and the methodologies adopted by the Company thereunder. There was no adjustment to accumulated deficit at January 1, 2018 attributable to the impact of adopting Topic 606. Topic 606 requires that revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration that an entity expects to receive in exchange for those services. To achieve this core principal, Topic 606 follows a five-step approach: 1) Identify the contract, or contracts, with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2) Identify of the performance obligations in the contract At contract inception, an entity shall assess the goods or services promised in a contract with a customer and shall identify as a performance obligation each promise to transfer such goods or deliver such services to the customer. To be separately recognized, performance obligations must be distinct. For a performance obligation to be distinct, both the following criteria must exist: (i) the customer can benefit from the service either on its own or together with other resources that are readily available from the Company or third parties and (ii) the goods or services are separately identifiable from other promises in the contract. If these criteria are not met, the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is the amount of total contract consideration the Company expects to receive for carrying out its contractual obligations. 4) Allocation of the transaction price to the performance obligations in the contract Once a contract and associated performance obligations have been identified and the transaction price has been determined, Topic 606 requires an entity to allocate the transaction price to each performance obligation. To allocate the transaction price to each identified performance obligation, the Company must accurately estimate the stand-alone selling price of each performance obligation. As a practical expedient, Topic 606 allows the Company to recognize revenue when it invoices a customer, if the right to payment from such customer corresponds directly with the value of the Company’s performance completed to date. 5) Recognize revenue when, or as, performance obligations are satisfied Revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control transfers either over time or at a point in time. Media placement services constitute our core business from which we derive substantially all our revenue from contracts with customers. Our media placement contracts with customers predominantly contain a single performance obligation for which the related revenues are recognized over time, using an output measure to reflect progress. The Company invoices its customers as it performs its contractual obligations and therefore has adopted the aforementioned Topic 606 revenue recognition “right to invoice” practical expedient. Media Placement The Company’s media placement contracts with customers generally provide for the measurement of services based on the activity of mobile users viewing ads through developer applications and mobile websites. Mobile user activity consists of views, clicks, or actions on mobile advertisements placed by the Company. Based on the specific terms of the media placement contracts with customers, revenues are recognized as the Company’s advertising services are delivered, that is, when the Company has a right to invoice for its services. Most of the Company’s media placement services contracts have a performance term of less than twelve months and, generally, customer payments are received in a timely manner from the invoice date. Revenue defined as media placement for the three-months ended March 31, 2019 and 2018 was $8,430,376 and $11,144,652, respectively. Deferred Revenue In certain situations, the Company will receive advances of its media placement services, which advances are recognized as deferred revenue in the unaudited consolidated balance sheets. As the Company delivers the contracted media placement services, deferred revenues are recognized in the unaudited consolidated statement of operations. Sales commissions are generally expensed as incurred because the amortization period would be one year or less and the Company’s revenues are not given to significant cyclical fluctuation. Sales commissions are recognized in sales and marketing expenses in the accompanying unaudited consolidated statement of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2019 and December 31, 2018, the Company does not have any cash equivalents. |
Accounts Receivable | 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 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 the historical write-off of receivables as a percentage of accounts receivable, as well as revenue and information collected from individual customers. Accounts receivable are charged off against the allowance when such amounts are not deemed collectable. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost. Major renewals and improvements are capitalized 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 sold or disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses on sales or disposals of property and equipment are recognized in earnings. Depreciation is computed on the straight-line and accelerated methods for both financial reporting and income tax reporting purposes based upon the following estimated useful lives: Asset Class Useful Lives Software development 3 years Equipment and computer hardware 5 years Office furniture 5 years Leasehold improvements 5 years, or lease expiration if sooner |
Long-Lived Assets | Long-Lived Assets The Company accounts for long-lived assets in accordance with ASC 360-10, "Impairment or Disposal of Long-Lived Assets." ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or exceeds its fair value. We assess recoverability of the carrying value of an asset by estimating the future undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the future undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recognized equal to the amount by which the asset's carrying value exceeds its fair value. |
Goodwill | Goodwill Goodwill represents the future economic benefits to be derived from non-individually identified or separately recognized assets acquired in a business combination. Goodwill generally may be computationally defined as the excess of the fair value of the consideration transferred over the acquisition-date fair values of the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquired assets. ASC 350-20 requires that goodwill be tested at least annually for impairment. Application of the goodwill impairment test requires judgment, including determining the fair value. Significant judgments are 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. The Company has evaluated qualitative and quantitative factors (e.g., events, conditions) as of March 31, 2019 and December 31, 2018 and determined that there has been no impairment. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company accounts for costs incurred to develop or purchase computer software 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 direct costs, including payroll and related payroll taxes and benefits. 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 with respect to certain external factors, including, but not limited to, estimated economic life of three years. Amortization expense associated with capitalized software is recorded with cost of revenue. |
Patent and Patent Application Costs | Patent and Patent Application Costs Intangible assets are recorded at cost and include patents developed and purchased. The cost of patents is amortized over their useful lives. |
Leases | Leases The Company reviews and evaluates its contracts to determine if any contain leases. As of March 31, 2019, and December 31, 2018, the Company has agreements with two providers that have been determined to contain leases. One of the agreements is for the Company’s primary office space and the other is for office equipment. In accordance with ASC Topic 842, which the Company adopted as of January 1, 2018, a contract contains a lease if it conveys a right to direct the use of an identified asset and derive substantially all the economic benefits from the use thereof. If a contract is determined to contain a lease, it is further evaluated for purposes of classifying arrangement as a finance lease. Any arrangement that does not meet the criteria to be accounted for as a finance lease is an operating lease |
Income Taxes | Income Taxes The Company accounts for its income taxes under the provisions of ASC Topic 740, “Income Taxes.” The accounting for income taxes under ASC Topic 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 three-months ended March 31, 2019, and year-ended December 31, 2018, respectively. When incurred the Company recognizes income tax interest and penalties as a separately identified component of general and administrative expense. |
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 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 option-pricing model. The Binomial option-pricing model determines compensation cost as the excess of the fair value of the award 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 a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company reports earnings (loss) per share in accordance with ASC 260-10, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. 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. Since the effect of the assumed conversion of warrants to common shares would have an anti-dilutive effect, diluted earnings (loss) per share is the same as basic earnings (loss) per share for the three-months ended March 31, 2019 and 2018. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s primary banking relationship is with Wells Fargo Bank. The amount on deposit with Wells Fargo Bank may from time to time exceed federally insured limits. The Company also has a factoring arrangement, secured by its accounts receivable, with Fast Pay Partners, LLC. For the three-months ended March 31, 2019 and 2018, the Company derived approximately 51.4% and 13% of total revenue from three customers and one customer, respectively. The Company’s accounts receivable is typically unsecured and 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 of 3% of accounts receivable and 1% of revenue. |
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 consideration transferred to acquire a business 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 acquired and liabilities assumed are 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 to the assets acquired and liabilities assumed subsequent to the measurement period are recorded in income. Results of operations of acquired entities are included in the Company’s results from operations as of the date of acquisition. The Company expenses all acquisition related costs as incurred, which costs are classified as general and administrative expenses in the unaudited 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements Revenue Recognition In May 2014, the FASB released " ASC 606 - Revenue from Contracts with Customers" Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2016, the FASB issued "ASU 2016–10- Revenue from Contract with Customers (Topic 606): Identifying Performance Obligations and Licensing", "ASU 2014-09- Revenue from Contracts with Customers (Topic 606) The Company adopted ASC Topic 606 using the modified retrospective approach. There were no material changes to the Company's unaudited consolidated financial statements resulting from adoption of this standard. Leases In February 2016, the FASB issued "ASU 2016-02 Leases ASU 2018-11 Leases: Targeted Improvements Adoption of ASC Topic 842 resulted in the Company recognizing a $311,717 operating lease Right-of-Use ("ROU") asset and current and non-current operating lease liabilities of $334,598 on the consolidated balance sheet at December 31, 2018, which resulted in a $22,881 increase to the accumulated deficit as of that date. Other than first-time recognition of operating leases on its consolidated balance sheet, the implementation of ASC Topic 842 did not have a material impact on the Company's consolidated financial statements. See Note 8 for additional disclosures. Comprehensive Income In February 2018, the FASB issued " ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," Stock Compensation In June 2018, the FASB issued "ASU 2018-07 - Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting". ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, "Revenue from Contracts with Customers". The Company adopted ASU 2018-07 effective January 1, 2019 and notes that the standard did not have a material effect on its unaudited consolidated financial statements. Pronouncements Not Yet Adopted Intangibles In January 2017, the FASB issued " ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment" In August of 2018, the FASB issued " ASU 2018-15 Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment, net estimated useful lives | Asset Class Useful Lives Software development 3 years Equipment and computer hardware 5 years Office furniture 5 years Leasehold improvements 5 years, or lease expiration if sooner |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of accounts receivable | March 31, December 31, 2019 2018 Accounts receivable $ 8,935,888 $ 10,626,664 Less: allowance for bad debts (420,000 ) (420,000 ) Accounts receivable, net $ 8,515,888 $ 10,206,664 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, December 31, 2019 2018 Equipment and computer hardware $ 285,634 $ 268,662 Office furniture 259,452 256,820 Leasehold improvements 344,026 344,026 889,112 869,508 Less: accumulated depreciation (578,112 ) (537,873 ) $ 311,000 $ 331,635 |
Capitalized Software Developm_2
Capitalized Software Development Costs, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Research and Development [Abstract] | |
Schedule of capitalized software development costs | March 31, December 31, 2019 2018 Capitalized software development costs $ 3,835,625 $ 3,152,889 Less: accumulated amortization (2,452,786 ) (2,291,190 ) $ 1,382,839 $ 861,699 |
Schedule of amortization expense for the estimated lives | Year Amortization expense 2019 $ 354,220 2020 449,432 2021 351,609 2022 227,578 $ 1,382,839 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Summary of capitalized patent costs | March 31, December 31, 2019 2018 Patent costs $ 2,690,380 $ 2,674,944 Less: accumulated amortization (2,084,014 ) (2,044,087 ) $ 606,366 $ 630,857 |
Summary of amortization expense over the estimated remaining lives of the patents and other intangible assets | Year Amortization expense 2019 $ 120,900 2020 161,201 2021 73,204 2022 65,205 2023 63,096 Thereafter 122,760 $ 606,366 |
Other Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Summary of other intangible asset | March 31, December 31, 2019 2018 Technology $ 970,000 $ 970,000 Customer relationships 870,000 870,000 Less: accumulated amortization (1,010,743 ) (942,993 ) $ 829,257 $ 897,007 |
Summary of amortization expense over the estimated remaining lives of the patents and other intangible assets | Year Amortization expense 2019 $ 203,250 2020 187,536 2021 97,000 2022 97,000 2023 97,000 Thereafter 147,471 $ 829,257 |
Schedule of carrying values of goodwill | DoubleVision Hipcricket, Inc. Goodwill Total Balance as of January 1, 2019 $ 4,549,928 $ 1,894,297 $ 6,444,225 No activity - - - Balance as of March 31, 2019 $ 4,549,928 $ 1,894,297 $ 6,444,225 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | March 31, December 31, 2019 2018 Accrued payroll and related expenses $ 2,786,702 $ 3,452,303 Accrued cost of revenues 1,269,705 1,065,027 Accrued professional fees 305,950 92,816 $ 4,362,357 $ 4,610,146 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of operating lease ROU assets | March 31, December 31, Lease 2019 2018 Newport Office Center VIII - Suite 204 $ 650,259 $ 650,259 Newport Office Center VIII - Suite 203 543,558 543,558 Newport Office Center VIII - Suite 202 130,068 130,068 Operating lease ROU assets , gross 1,323,885 1,323,885 Less: Accumulated amortization (1,080,875 ) (1,012,168 ) Operating lease ROU assets, net $ 243,010 $ 311,717 |
Schedule of finance lease liabilities | March 31, December 31, Lease 2019 2018 Savin MP C6004EX $ 14,563 $ 14,563 Savin C4305sp - - Finance lease ROU as sets, gross 14,563 14,563 Less: Accumulated amortization (4,031 ) (3,121 ) Operating lease ROU assets, net $ 10,532 $ 11,442 |
Schedule of future commitments under operating and finance leases | March 31, 2019 December 31, 2018 Year Operating Finance Operating Finance 2019 $ 245,627 $ 2,804 $ 327,503 $ 3,739 2020 27,292 3,739 27,292 3,739 2021 - 3,739 - 3,739 2022 - 312 - 312 2023 - - - - Thereafter - - - - $ 272,919 $ 10,594 $ 354,794 $ 11,528 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock activity | Restricted Stock Activity Number of Shares Weighted Average Grant Date Fair Value Non-Vested Balance - 12/31/17 114,713 $ 4.25 Grants 2,002,983 5.46 Vested (214,447 ) 2.27 Forfeited (585,088 ) 5.11 Non-Vested Balance - 12/31/18 1,318,161 $ 6.03 Grants 112,734 1.98 Vested - - Forfeited (25,000 ) 6.66 Non-Vested Balance - 3/31/19 1,405,895 $ 5.69 |
Stock Incentive Plans [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | Stock Option Activity Under the Plans Stock Options Exercise Price per Share Weighted Average Exercise Price Weighted Average Remaining Life (Years) Balance - 12/31/17 2,293,214 $2.50 - $6.76 $ 5.20 7.93 Granted 310,000 $1.51 - $6.01 1.13 Exercised (77,420 ) $2.50 - $4.00 2.90 Forfeitures (1,408,094 ) $2.76 - $6.66 4.33 Balance - 12/31/18 1,117,700 $1.51 - $6.76 $ 5.33 7.74 Granted 480,000 $1.16 - $2.05 1.62 Exercised - $0.00 - $0.00 - Forfeitures (8,200 ) $2.50 - $2.50 2.50 Balance - 3/31/19 1,589,500 $1.16 - $6.66 $ 4.22 7.33 |
Schedule of estimated fair value of each option award granted | For the Three-months ended March 31, 2019 2018 Weighted average risk-free interest rate 2.58 % - Weighted average expected volatility 95.35 % - Dividend yield - - Weighted average expected option term (years) 9.82 - Weighted average grant date fair value 1.24 - |
Schedule of non-vested options to purchase shares | Number of Options Weighted Average Exercise Price Non-Vested Balance - 12/31/17 2,049,000 $ 6.07 Granted 310,000 Vested (253,450 ) Forfeited (1,241,300 ) Non-Vested Balance - 12/31/18 864,250 $ 6.13 Granted 480,000 Vested (495,250 ) Cancellations 245,250 Non-Vested Balance - 3/31/19 1,094,250 $ 5.21 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of company issued warrants | Warrants Exercise Price per Share Weighted Average Exercise Price Weighted Average Remaining Life (Years) Balance - 12/31/17 320,000 $ 6.25 $ 6.25 4.49 Grants - - - - Exercised - - - - Cancellations - - - Balance - 12/31/18 320,000 $ 6.25 $ 6.25 3.58 Grants - - - Exercised - - - Cancellations - - - Balance - 03/31/19 320,000 $ 6.25 $ 6.25 3.33 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2019 | |
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 | 5 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net estimated useful lives description | 5 years, or lease expiration if sooner |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2019USD ($)Advertisingagency | Mar. 31, 2018USD ($)Advertisingagency | Dec. 31, 2018USD ($) | |
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, description | 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 of 3% of accounts receivable and 1% of revenue. | ||
Accumulated deficit | $ (177,956,215) | $ (172,906,732) | |
Net loss | (5,049,483) | $ (5,248,779) | (11,816,828) |
Net cash used in operating activities | (118,655) | (5,495,146) | |
Media placement | 8,430,376 | $ 11,144,652 | |
Operating lease ROU assets, net | 243,010 | 311,717 | |
Current and non-current operating lease liabilities | 260,610 | $ 307,536 | |
Increase to the accumulated deficit amount | $ 22,881 | ||
Sales Revenue, Net [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 51.40% | 13.00% | |
Number of advertising agency | Advertisingagency | 2 | 1 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Accounts receivable | $ 8,935,888 | $ 10,626,664 |
Less: allowance for bad debts | (420,000) | (420,000) |
Accounts receivable, net | $ 8,515,888 | $ 10,206,664 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Equipment and computer hardware | $ 285,634 | $ 268,662 |
Office furniture | 259,452 | 256,820 |
Leasehold improvements | 344,026 | 344,026 |
Property and equipment, gross | 889,112 | 869,508 |
Less: accumulated depreciation | (578,112) | (537,873) |
Property and equipment, net | $ 311,000 | $ 331,635 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense | $ 40,239 | $ 40,544 |
Capitalized Software Developm_3
Capitalized Software Development Costs, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 3,835,625 | $ 3,152,889 |
Less: accumulated amortization | (2,452,786) | (2,291,190) |
Capitalized software development costs, net | $ 1,382,839 | $ 861,699 |
Capitalized Software Developm_4
Capitalized Software Development Costs, Net (Details 1) | Mar. 31, 2019USD ($) |
Research and Development [Abstract] | |
2019 | $ 354,220 |
2020 | 449,432 |
2021 | 351,609 |
2022 | 227,578 |
Total | $ 1,382,839 |
Capitalized Software Developm_5
Capitalized Software Development Costs, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Software and Software Development Costs [Member] | ||
Capitalized Software Development Costs, net (Textual) | ||
Amortization expense | $ 161,596 | $ 208,554 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patent costs | $ 2,690,380 | $ 2,674,944 |
Less: accumulated amortization | (2,084,014) | (2,044,087) |
Patent, net | $ 606,366 | $ 630,857 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
2019 | $ 354,220 | |
2020 | 449,432 | |
2021 | 351,609 | |
2022 | 227,578 | |
Total | 606,366 | $ 630,857 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 120,900 | |
2020 | 161,201 | |
2021 | 73,204 | |
2022 | 65,205 | |
2023 | 63,096 | |
Thereafter | 122,760 | |
Total | 606,366 | |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 203,250 | |
2020 | 187,536 | |
2021 | 97,000 | |
2022 | 97,000 | |
2023 | 97,000 | |
Thereafter | 147,471 | |
Total | $ 829,257 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ 829,257 | $ 897,007 |
Less: accumulated amortization | (1,010,743) | (942,993) |
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 |
Intangible Assets (Details 3)
Intangible Assets (Details 3) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning Balance | $ 6,444,225 |
No activity | |
Ending Balance | 6,444,225 |
Double Vision [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning Balance | 4,549,928 |
No activity | |
Ending Balance | 4,549,928 |
Hipcricket [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Beginning Balance | 1,894,297 |
No activity | |
Ending Balance | $ 1,894,297 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Intangible Assets (Textual) | ||
Amortization expense - patents | $ 39,927 | $ 76,463 |
Amortization expense - intangible assets | $ 67,750 | $ 67,750 |
Technology [Member] | ||
Intangible Assets (Textual) | ||
Other intangible assets useful life | 10 years | |
Customer Relationship[Member] | ||
Intangible Assets (Textual) | ||
Other intangible assets useful life | 5 years |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 2,786,702 | $ 3,452,303 |
Accrued cost of revenues | 1,269,705 | 1,065,027 |
Accrued professional fees | 305,950 | 92,816 |
Accrued expenses | $ 4,362,357 | $ 4,610,146 |
Leases (Details)
Leases (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Operating lease ROU assets, gross | $ 1,323,885 | $ 1,323,885 |
Less: Accumulated amortization | (1,080,875) | (1,012,168) |
Operating lease ROU assets, net | 243,010 | 311,717 |
Newport Office Center VIII - Suite 204 [Member] | ||
Operating lease ROU assets, gross | 650,259 | 650,259 |
Newport Office Center VIII - Suite 203 [Member] | ||
Operating lease ROU assets, gross | 543,558 | 543,558 |
Newport Office Center VIII - Suite 202 [Member] | ||
Operating lease ROU assets, gross | $ 130,068 | $ 130,068 |
Leases (Details 1)
Leases (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Finance lease ROU assets, gross | $ 14,563 | $ 14,563 |
Less: Accumulated amortization | (4,031) | (3,121) |
Operating lease ROU assets, net | 10,532 | 11,442 |
Savin MP C6004EX [Member] | ||
Finance lease ROU assets, gross | 14,563 | 14,563 |
Savin C4305sp [Member] | ||
Finance lease ROU assets, gross |
Leases (Details 2)
Leases (Details 2) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Operating [Member] | ||
2019 | $ 245,627 | $ 327,503 |
2020 | 27,292 | 27,292 |
2021 | ||
2022 | ||
2023 | ||
Thereafter | ||
Total | 272,919 | 354,794 |
Finance [Member] | ||
2019 | 2,804 | 3,739 |
2020 | 3,739 | 3,739 |
2021 | 3,739 | 3,739 |
2022 | 312 | 312 |
2023 | ||
Thereafter | ||
Total | $ 10,594 | $ 11,528 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Capital Leases (Textual) | |||
Operating lease expense | $ 76,595 | $ 76,595 | |
Rent expense | $ 25,532 | ||
Lease expiration, date | Dec. 31, 2022 | ||
Depreciation charged to operations | $ 40,239 | 40,544 | |
Lessee operating, Description | For adoption of ASU 2016-02, the operating future lease payments were discounted using a 10.1% weighted average effective rate. | ||
Lease liabilities, description | The discounted operating and finance lease liabilities presented on the consolidated balance sheets of the Company as of March 31, 2019 and December 31, 2018 are less the interest component of $12,309 and $266 and $20,196 and $313, resulting in lease liabilities of $260,610 and $10,328 and $334,598 and $11,215, respectively. | ||
Amortization of ROU assets | $ 910 | $ 1,048 | |
Amortization interest expense | $ 100 | ||
Finance lease interest | 1.75% | ||
Other Current [Member] | |||
Capital Leases (Textual) | |||
Finance lease liabilites | $ 3,584 | $ 3,571 | |
Long Term Liabilities [Member] | |||
Capital Leases (Textual) | |||
Finance lease liabilites | $ 6,744 | $ 7,644 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Jan. 31, 2018 | |
Income Taxes (Textual) | ||
Operating loss carryover, expiration date | Dec. 31, 2037 | |
Income tax, description | The Company had a federal net operating loss carryover of approximately $67.5 million, comprised of $47.1 million of losses generated prior to January 1, 2018 and expiring in various years through 2037, and $20.4 million of losses generated that can be carried forward indefinitely. | |
IRS penalty expense | $ 26,000 | |
Penalty interest | 125 | |
Federal [Member] | ||
Income Taxes (Textual) | ||
Operating loss carryover | 67,500,000 | $ 47,100,000 |
State [Member] | ||
Income Taxes (Textual) | ||
Operating loss carryover | $ 51,600,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | $ 395,800 | $ 1,137,246 |
Share based compensation, number of shares vested | 495,250 | 188,685 |
Restricted stock compensation expense | 368,142 | 952,082 |
Employee Stock Option [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | 395,800 | 1,137,246 |
General and Administrative Expense [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | 209,628 | 574,714 |
General and administrative | 137,255 | |
Selling and Marketing Expense [Member] | ||
Stock Based Compensation (Textual) | ||
Recognized stock-based compensation expense | 186,172 | 562,532 |
Sales and marketing | $ 7,674 | |
Restricted stock compensation expense | $ 19,001 |
Fair Value (Details)
Fair Value (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value (Textual) | ||
Loss on revaluation of warrant liability | $ (319,761) | $ 641,216 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Stock Options | |||
Balance | 1,117,700 | 2,293,214 | 2,293,214 |
Granted | 480,000 | 310,000 | |
Exercised | (77,420) | (77,420) | |
Forfeitures | (8,200) | (1,408,094) | |
Balance | 1,589,500 | 1,117,700 | |
Weighted Average Exercise Price | |||
Balance | $ 5.33 | $ 5.20 | $ 5.20 |
Grants | 1.62 | 1.13 | |
Exercised | 2.90 | ||
Forfeitures | 2.50 | 4.33 | |
Balance | $ 4.22 | $ 5.33 | |
Weighted Average Remaining Life (Years) | 7 years 3 months 29 days | 7 years 11 months 4 days | |
$2.50 - $6.76 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | $ 2.50 | ||
Exercise Price per Share, maximum | 6.76 | ||
$1.51 - $6.01 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 1.51 | ||
Exercise Price per Share, maximum | 6.01 | ||
$2.50 - $4.00 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 2.50 | ||
Exercise Price per Share, maximum | 4 | ||
$2.76 - $6.66 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 2.76 | ||
Exercise Price per Share, maximum | 6.66 | ||
$1.51 - $6.76 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 1.51 | ||
Exercise Price per Share, maximum | $ 6.76 | ||
$1.16 - $2.05 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | $ 1.16 | ||
Exercise Price per Share, maximum | 2.05 | ||
$0.00 - $0.00 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 0 | ||
Exercise Price per Share, maximum | 0 | ||
$2.50 - $2.50 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 2.50 | ||
Exercise Price per Share, maximum | 2.50 | ||
$1.16 - $6.66 [Member] | |||
Exercise Price per Share | |||
Exercise Price per Share, minimum | 1.16 | ||
Exercise Price per Share, maximum | $ 6.66 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock Incentive Plans [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average risk-free interest rate | 2.58% | 0.00% |
Weighted average expected volatility | 95.35% | 0.00% |
Dividend yield | ||
Weighted average expected option term (years) | 9 years 9 months 25 days | |
Weighted average grant date fair value | $ 1.24 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - Equity Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Options | ||
Beginning balance | 864,250 | 2,049,000 |
Granted | 480,000 | 310,000 |
Vested | (495,250) | (253,450) |
Cancellations | 245,250 | (1,241,300) |
Ending balance | 1,094,250 | 864,250 |
Weighted Average Exercise Price | ||
Beginning balance | $ 6.13 | $ 6.07 |
Grants | ||
Vested | ||
Cancellations | ||
Ending balance | $ 5.21 | $ 6.13 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of shares | ||
Beginning balance | 1,318,161 | 114,713 |
Grants | 112,734 | 2,002,983 |
Vested | (214,447) | |
Forfeited | (25,000) | (585,088) |
Ending balance | 1,405,895 | 1,318,161 |
Weighted Average Grant Date Fair Value | ||
Beginning balance | $ 6.03 | $ 4.25 |
Grants | 1.98 | 5.46 |
Vested | 2.27 | |
Forfeited | 6.66 | 5.11 |
Ending balance | $ 5.69 | $ 6.03 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants, Beginning balance | 320,000 | 320,000 |
Warrants, Grants | ||
Warrants, Exercised | ||
Warrants, Cancellations | ||
Warrants, Ending balance | 320,000 | 320,000 |
Exercise Price per Share, Beginning Balance | $ 6.25 | $ 6.25 |
Exercise Price per Share, Grants | ||
Exercise Price per Share, Exercised | ||
Exercise Price per Share, Cancellations | ||
Exercise Price per Share, Ending Balance | 6.25 | |
Weighted Average Exercise Price, Beginning Balance | 6.25 | 6.25 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Cancelled | ||
Weighted Average Exercise Price, Ending Balance | $ 6.25 | $ 6.25 |
Weighted Average Remaining Life (Years), Beginning Balance | 3 years 6 months 29 days | 4 years 5 months 27 days |
Weighted Average Remaining Life (Years), Ending Balance | 3 years 3 months 29 days | 3 years 6 months 29 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Feb. 07, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 |
Stockholders' Equity (Textual) | |||||
Issuance number of common stock, value | $ 13,784,501 | ||||
Gross proceeds from exercise of stock options | 116,251 | ||||
Recognized compensation expense | $ 495,250 | 188,685 | |||
Recognized compensation related to restricted stock unit grants | $ 0 | $ 0 | |||
Shares issued to executive officers related to accrued bonuses, value | 894,150 | ||||
Employee Stock Option [Member] | |||||
Stockholders' Equity (Textual) | |||||
Shares issued on exercise of stock options, shares | 77,420 | 77,420 | |||
Restricted Stock [Member] | |||||
Stockholders' Equity (Textual) | |||||
Issuance of common stock shares | 112,734 | ||||
Recognized compensation related to restricted stock unit grants | $ 2,300,000 | ||||
Restricted stock granted expected to recognized over remaining average period | 1 year 6 months | ||||
Additional compensation expense | $ 1,000,000 | ||||
Stock Compensation Plan [Member] | |||||
Stockholders' Equity (Textual) | |||||
Shares reserved for issuance of stock options | 2,500,000 | ||||
Shares available for grant | 566,266 | ||||
Recognized compensation expense | $ 395,800 | $ 1,137,246 | |||
Immaterial and recorded as an out-of-period adjustment | 500,000 | ||||
Additional compensation expense | $ 144,928 | $ 952,082 | |||
Common Stock [Member] | |||||
Stockholders' Equity (Textual) | |||||
Issuance of common stock shares | 2,990,000 | ||||
Issuance number of common stock, value | $ 2,990 | ||||
Shares issued on exercise of stock options, shares | 77,420 | ||||
Recognized compensation related to restricted stock unit grants | $ 9 | 191 | |||
Shares issued to executive officers related to accrued bonuses, value | $ 223 | ||||
Shares issued to executive officers related to accrued bonuses, shares | 222,425 | ||||
Common stock closing price per share | $ 1.98 | ||||
Common Stock [Member] | Annual Bonus Plan [Member] | |||||
Stockholders' Equity (Textual) | |||||
Shares issued for legal and accounting services, value | 14,842,750 | ||||
Legal and accounting service fees | $ 1,058,249 | ||||
Shares issued of common stock | 2,990,000 | ||||
Common Stock [Member] | Employee Stock Option [Member] | |||||
Stockholders' Equity (Textual) | |||||
Issuance of common stock shares | 3,076,041 | ||||
Shares issued on exercise of stock options, shares | 77,420 | ||||
Gross proceeds from exercise of stock options | $ 116,251 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Fort Ashford Funds Llc [Member] | |
Commitments and Contingencies (Textual) | |
Ashford complaint, description | The Ashford Complaint claims that we issued certain warrants to Panzarella Consulting, LLC and Patrick Panzarella (together "Panzarella") representing the option to purchase, in the aggregate, five million (5,000,000) shares of our common stock at a price of fifty cents ($.50) per share. Through a series of purported transfers, the warrants were allegedly transferred to Ashford, which is now seeking to exercise such purported warrants or to obtain damages. However, we have made a thorough inquiry into these matters and, while it appears that certain warrants may have been issued in 2005, such warrants expired in 2015. |