Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Entity Registrant Name | Cornerworld Corp | |
Entity Central Index Key | 1338242 | |
Current Fiscal Year End Date | -19 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | FY | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Public Float | $3,258,742 | |
Entity Common Stock, Shares Outstanding | 162,937,110 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash | $70,746 | $857,954 |
Accounts receivable, net | 42,101 | 119,904 |
Prepaid expenses and other current assets | 65,132 | 152,317 |
Total current assets | 177,979 | 1,130,175 |
Property and equipment, net | 2,677 | 19,486 |
Other assets | 7 | 28,000 |
TOTAL ASSETS | 180,663 | 1,177,661 |
Current liabilities: | ||
Accounts payable | 230,134 | 225,064 |
Accrued expenses | 329,103 | 347,967 |
Notes payable related parties, current portion | 152,952 | 101,968 |
Lease payable, current portion | 2,662 | 10,704 |
Deferred revenue | 75,687 | 70,322 |
Other current liabilities | 9,266 | |
Total current liabilities | 799,804 | 756,025 |
Long-term liabilities: | ||
Notes payable related parties, net of current portion | 186,006 | 236,990 |
Lease payable, net of current portion | 2,383 | |
Total liabilities | 985,810 | 995,398 |
Commitments and Contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value, 250,000,000 shares authorized; 162,937,110 and 156,813,704 shares issued and outstanding, at December 31, 2014 and 2013, respectively | 162,937 | 156,813 |
Additional paid-in capital | 11,806,865 | 11,801,224 |
Accumulated deficit | -12,774,949 | -11,775,774 |
Total stockholders' equity (deficit) | -805,147 | 182,263 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $180,663 | $1,177,661 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets [Abstract] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 162,937,110 | 156,813,704 |
Common stock, shares outstanding | 162,937,110 | 156,813,704 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Consolidated Statements of Operations [Abstract] | |||
Sales, net | $673,954 | $988,221 | $1,925,734 |
Costs of goods sold | 271,356 | 528,854 | 722,398 |
Gross profit | 402,598 | 459,367 | 1,203,336 |
Expenses: | |||
Selling, general and administrative expenses | 826,388 | 1,411,576 | 3,102,555 |
Depreciation and amortization | 33,755 | 16,808 | 71,608 |
Total operating expenses | 860,143 | 1,428,384 | 3,174,163 |
Operating loss | -457,545 | -969,017 | -1,970,827 |
Other income (expense), net: | |||
Interest expense | -37,171 | -26,845 | -237,371 |
Other income (expense), net | -248,161 | -3,313 | -555,086 |
Total other expense, net | -285,332 | -30,158 | -792,457 |
Loss before income taxes | -742,877 | -999,175 | -2,763,284 |
Income taxes | |||
Loss from continuing operations | -742,877 | -999,175 | -2,763,284 |
Income from discontinued operations, net of tax | 538,568 | 1,401,050 | |
Gain from disposal of discontinued operations, net of tax | 2,788,543 | ||
Net income (loss) | $2,584,234 | ($999,175) | ($1,362,234) |
Basic earnings (loss) per share from continuing operations | $0 | ($0.01) | ($0.02) |
Basic earnings per share from discontinued operations | $0.02 | $0 | $0.01 |
Basic earnings (loss) per share | $0.02 | ($0.01) | ($0.01) |
Diluted earnings (loss) per share from continuing operations | $0 | ($0.01) | ($0.02) |
Diluted earnings per share from discontinued operations | $0.02 | $0 | $0.01 |
Diluted earnings (loss) per share | $0.02 | ($0.01) | ($0.01) |
Basic weighted average number shares outstanding | 157,070,847 | 161,880,193 | 152,390,521 |
Diluted weighted average number shares outstanding | 163,204,253 | 161,880,193 | 152,390,521 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Total | Common Shares [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Apr. 30, 2012 | ($2,685,503) | $147,547 | $10,164,724 | ($12,997,774) |
Balance, shares at Apr. 30, 2012 | 147,547,607 | |||
Stock-based compensation expense | 164,071 | 164,071 | ||
Conversion of debt to common stock | 1,464,916 | 9,766 | 1,455,150 | |
Conversion of debt to common stock, shares | 9,766,097 | |||
Net income (loss) | -1,362,234 | -1,362,234 | ||
Balance at Apr. 30, 2013 | -2,418,750 | 157,313 | 11,783,945 | -14,360,008 |
Balance, shares at Apr. 30, 2013 | 157,313,704 | |||
Return of shares to treasury | -500 | 500 | ||
Return of shares to treasury, shares | -500,000 | |||
Stock-based compensation expense | 16,779 | 16,779 | ||
Net income (loss) | 2,584,234 | 2,584,234 | ||
Balance at Dec. 31, 2013 | 182,263 | 156,813 | 11,801,224 | -11,775,774 |
Balance, shares at Dec. 31, 2013 | 156,813,704 | |||
Exercise of warrants | 6,124 | -6,124 | ||
Exercise of warrants, shares | 6,123,406 | |||
Stock-based compensation expense | 11,765 | 11,765 | ||
Net income (loss) | -999,175 | -999,175 | ||
Balance at Dec. 31, 2014 | ($805,147) | $162,937 | $11,806,865 | ($12,774,949) |
Balance, shares at Dec. 31, 2014 | 162,937,110 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $2,584,234 | ($999,175) | ($1,362,234) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||
Depreciation and amortization | 33,755 | 16,808 | 71,608 |
Amortization of loan discounts | 7,045 | 501,987 | |
Provision for doubtful accounts | 41,538 | 87,253 | 162,560 |
Stock-based compensation | 16,779 | 11,765 | 164,071 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||
Accounts receivable | -44,002 | -9,450 | 183,764 |
Prepaid expenses and other current assets | -72,556 | 87,185 | 4,209 |
Other assets | 32 | 27,993 | 697 |
Impairment of goodwill | 554,986 | ||
Accounts payable | -724,668 | 5,070 | -339,413 |
Accrued expenses | -481,455 | -18,864 | 284,577 |
Deferred revenue | 9,587 | 5,365 | -51,099 |
Other liabilities | 9,266 | ||
Changes in assets and liabilities of discontinued operations | -1,949,521 | 1,537,215 | |
Net cash provided by (used in) operating activities | -579,232 | -776,784 | 1,712,928 |
Cash Flows from Investing Activities | |||
Proceeds from the sale of subsidiary | 8,300,000 | ||
Fixed assets acquired pursuant to capital lease | -6,062 | -2,639 | -2,463 |
Net cash provided by (used in) investing activities | 8,293,938 | -2,639 | -2,463 |
Cash Flows from Financing Activities | |||
Financing fees | -249,000 | ||
Principal payments on debt | -4,791,316 | -1,160,000 | |
Principal payments on related party notes payable | -2,037,915 | -290,000 | |
Settlement of warrant | -929,017 | ||
Payments on capital lease | -384 | -7,785 | |
Net cash used in financing activities | -8,007,632 | -7,785 | -1,450,000 |
Net increase (decrease) in cash | -292,926 | -787,208 | 260,465 |
Cash at beginning of period | 1,150,880 | 857,954 | 890,415 |
Cash at end of period | 857,954 | 70,746 | 1,150,880 |
Cash paid for: | |||
Interest | 431,642 | 855,626 | |
Income taxes | |||
Non-Cash Financing Activities: | |||
Conversion of debt to common stock | 1,464,916 | ||
Acquisition of fixed assets pursuant to capital lease |
Basis_of_Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2014 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation |
Organization | |
CornerWorld Corporation (“the Company”, “CornerWorld”, “we”, “our” or “us”) was incorporated in the State of Nevada, on November 9, 2004. | |
The Company is a marketing and telecommunications services company creating opportunities from the increased accessibility of content across mobile, television and internet platforms. | |
The Company provides marketing services through its subsidiaries Enversa Companies LLC (“Enversa”) and Leadstream LLC, (“Leadstream”) both of which are a Texas limited liability companies. Enversa, the parent company of Leadstream, offers a full menu of services for brand and direct response customer acquisition campaigns, including media buying and planning. It provides customer relationship marketing and interactive services, as well as customer data collection and analysis tools used for planning and targeting client marketing efforts across a network of partner, representative and owned content sites. Enversa identifies qualified leads for advertisers thereby connecting them with potential consumers. Enversa also utilizes a pay-for-performance pricing model which is very appealing to clients because it insures that they are billed solely for campaign performance. Finally, Enversa provides search engine optimization services (“SEO”), domain leasing and website management services on a recurring monthly basis. | |
The Company provides telecommunications services through its Woodland Holdings Corporation (“Woodland”) subsidiary. Woodland is the parent company of Woodland Wireless Solutions, Ltd. (“Woodland Wireless”), West Michigan Co-Location Services, L.L.C. (“WMCLS”), T2 TV, L.L.C. (“T2 TV”), Phone Services & More, L.L.C., doing business as Visitatel (“PSM”) and T2 Communications, L.L.C. (“T2”). As a provider of Internet and VoIP services, T² is a Competitive Local Exchange Carrier (CLEC) which delivers leading-edge technology to residential and business customers. Offerings include: phone lines, internet connections, colocation and both long distance and toll-free services. PSM is also a CLEC which holds an FCC 214 License as a wholesale long distance service provider to the carrier community and large commercial users of transport minutes. | |
On September 30, 2013 Woodland sold its S Squared, LLC doing business as Ranger Wireless Solutions, LLC (“Ranger”) whose key asset was the patented 611 Roaming ServiceTM from RANGER Wireless Solutions®, which generates revenue by processing approximately 10.2 million calls from roaming wireless customers per year and seamlessly connecting them to their service provider. See Note 3, Discontinued Operations, for more information with respect to the sale of Ranger. | |
Spinoff | |
On November 5, 2014, the Company announced that it had signed a non-binding letter of intent (the “LOI”) to merge its interests with another entity. As discussions surrounding the LOI progressed, the Company determined that the most efficient way to effectuate the merger would be to spin-off all of the Company's operations into Woodland. Accordingly, on March 17, 2015, Woodland filed a Registration Statement on Form 10 with the SEC. In addition, on March 17, 2015, the Company's Board of Directors unanimously approved the spin-off to become effective immediately preceding the merger proposed pursuant to the LOI. | |
Change in Fiscal Year | |
The Company's year-end is December 31. On April 29, 2014, the Company announced that it was changing its fiscal year end from April 30 to December 31. Accordingly, this transitional report on form 10-K details the Company's accounts as of December 31, 2013 and its results of operations, cash flow and stockholders' equity (deficit) for the eight-month period then ended as well as its accounts as of April 30, 2013, the last date the Company was audited, and its results of operations, cash flow and stockholders' equity (deficit) for the two years then ended. Moving forward, the Company will report its accounts on a more standard calendar reporting basis filing quarterly reports as of March 31, June 30 and September 30 each year and an annual report as of December 31 of each future year. See Note 13, Transition Period Comparative Data (unaudited), for more information with respect to our change in fiscal year end. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Summary of Significant Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | |
This summary of significant accounting policies is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles (“GAAP”) in the United States of America and have been consistently applied in the preparation of the consolidated financial statements. The consolidated financial statements are stated in United States of America dollars. | ||
Receivables | ||
Accounts receivable include uncollateralized customer obligations due under normal trade terms requiring payment within 30-60 days from invoice date. Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. | ||
The carrying amount of accounts receivable is reduced by a valuation allowance for doubtful accounts that reflects management's best estimate of the amounts that will not be collected based on historical collection trends. The allowance for doubtful accounts was $80,790 and $44,574 as of December 31, 2014 and 2013, respectively. | ||
Fair Value of Financial Instruments | ||
ASC No. 850 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company's cash and cash equivalents, accounts receivable, accounts receivable-related party, accounts payable, accounts payable-related party and accrued liabilities approximate their estimated fair values due to their short-term maturities. Notes payable are carried at their face value net of their issuance costs which management believes is a reasonable approximation for their fair value. Warrants with put features are carried at their minimum cash put value discounted for the time value of money. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these consolidated financial statements. | ||
Income Taxes | ||
The Company accounts for income taxes in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | ||
Basic and Diluted Earnings (Loss) Per Share | ||
In accordance with ASC 260, basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share, if any, is computed similar to basic earnings (loss) per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. | ||
Revenue Recognition | ||
The Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable and collectability is probable. Sales are recorded net of sales discounts. | ||
At Enversa, revenue is recognized along with the related cost of revenue as leads are delivered. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Amounts billed to clients in advance of delivery of leads are classified under current liabilities as deferred revenue. In addition, revenue is recognized monthly as SEO services are provided or in the form of revenues from domain leases. | ||
For Woodland, the majority of revenue is derived from month-to-month, bundled service contracts for the phone and internet services used by each customer. Revenue is recognized as the services are provided. | ||
Use of Estimates | ||
The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||
Cash and Cash Equivalents | ||
The Company considers all highly liquid debt instruments with an original maturity of three (3) months or less to be cash equivalents. | ||
Property and Equipment | ||
Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method as follows: | ||
Computer equipment | 3 years | |
Office furniture | 5 years | |
Computer software packages | 3 years | |
Capitalized software development | 3 years | |
Leasehold improvements | 3 years | |
Expenditures for maintenance and repairs which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. The property and equipment had not incurred any impairment loss at December 31, 2014. | ||
Long-Lived Assets | ||
The Company accounts for its long-lived assets in accordance with ASC 360. The Company's primary long-lived assets are property and equipment. ASC 360 requires a company to assess the recoverability of its long-lived assets whenever events and circumstances indicate the carrying value of an asset or asset group may not be recoverable from estimated future cash flows expected to result from its use and eventual disposition. Management reviews its long-lived assets annually and concluded that, as of April 30, 2013, due to negative cash flows and the continuing deterioration of market conditions in the for-profit education space, the goodwill associated with Enversa had become permanently impaired. Accordingly, the Company recorded a charge to earnings totaling $554,986 to impair Enversa's goodwill for the year ended April 30, 2013. | ||
Stock-Based Compensation | ||
The Company accounts for awards made under its two stock-based compensation plans pursuant to the fair value provisions of ASC No. 718. ASC No. 718 requires the recognition of stock-based compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC No. 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company accounts for stock-based compensation in accordance with ASC No. 718 and estimates its fair value based on using the Black-Scholes option pricing model. | ||
The Company's determination of fair value of share-based payment awards is made as of their respective dates of grant using that option pricing model and is affected by the Company's stock price as well as a number of subjective assumptions. These variables include, but are not limited to, the Company's expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behavior. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the pricing term of the grant effective as of the date of the grant. The expected volatility is based on comparable companies. These factors could change in the future, affecting the determination of stock based compensation expense in future periods. The Black-Scholes option pricing model was developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because the Company's options have certain characteristics that are significantly different from traded options, the existing valuation models may not provide an accurate measure of the fair value of the Company's options. Although the fair value of the Company's options is determined in accordance with ASC No. 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. The calculated compensation cost is recognized on a straight-line basis over the vesting period of the options. See also Note 8 Stock Based Compensation, for more details. | ||
Principles of Consolidation | ||
The accompanying consolidated financial statements include the accounts of CornerWorld Corporation, its wholly owned subsidiaries and entities determined to meet the definition of Variable Interest Entities. All significant intercompany transactions and balances have been eliminated in consolidation. | ||
Concentrations of Cash and Cash Equivalents | ||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Federal Deposit Insurance Corporation (FDIC) currently insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000. At December 31, 2014 and 2013 the Company had $0 and $476,000, respectively, in excess of that which is insured by the FDIC. | ||
Recent Accounting Pronouncements | ||
There were various accounting standards and interpretations issued during the year ended December 31, 2014, none of which are expected to have a material impact on the Company's consolidated financial position, operations, or cash flows. | ||
Issuance of Stock for Non-Cash Consideration | ||
All issuances of the Company's stock for non-cash consideration have been assigned a dollar amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. | ||
Reclassifications | ||
Certain prior year accounts have been reclassified to conform to the current year's presentation. | ||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Discontinued Operations [Abstract] | ||||||||||||||
Discontinued Operations | 3. Discontinued Operations | |||||||||||||
We completed the sale of our Ranger business on September 30, 2013 for $7.5 million in cash plus a contingent receivable for $800,000 which we collected in November 2013; we recognized a gain of $2,788,543 on the sale, net of tax. The decision to sell Ranger allowed us to retire substantially all of our secured debt, including debt with loan covenants for which we were previously not in compliance. Our Ranger operations, previously reported within the Communications Services segment, have been reclassified as discontinued operations in our unaudited Condensed Consolidated Financial Statements for the operations up to the date of sale for the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013. In addition, all secured debt retired as a result of the divestiture have been reclassified as discontinued operations and interest plus loan discounts from all secured debt, including the Company's put warrants, directly paid off as a result of the divestiture of Ranger, was allocated to discontinued operations for all periods presented. Finally, the Company's patent and all of its goodwill, as of April 30, 2013 were part of the assets divested while all revenues related to the Company's customer concentrations as of December 31, 2013 and April 30, 2013 were also part of the discontinued operations. | ||||||||||||||
The following is a summary of the operating results of our discontinued operations: | ||||||||||||||
For the Year Ended | For the Eight-month | For the Year Ended | ||||||||||||
31-Dec-14 | Period Ended | 30-Apr-13 | ||||||||||||
31-Dec-13 | ||||||||||||||
Sales, net | $ | — | $ | 2,014,095 | $ | 5,256,108 | ||||||||
Income from discontinued operations before income taxes | — | 538,568 | 1,401,050 | |||||||||||
Income taxes | — | — | — | |||||||||||
Net income from discontinued operations | $ | — | $ | 538,568 | $ | 1,401,050 | ||||||||
There were no assets and liabilities held for sale as of December 31, 2014 and 2013. | ||||||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Property and Equipment | 4. Property and Equipment | ||||||||||
Property and equipment is summarized as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Computer equipment | $ | 236,583 | $ | 236,583 | |||||||
Furniture | 86,499 | 86,499 | |||||||||
Software | 79,061 | 79,061 | |||||||||
Leasehold improvements | 9,977 | 9,977 | |||||||||
Total | 412,120 | 412,120 | |||||||||
Less: accumulated depreciation and amortization | (409,443 | ) | (392,634 | ) | |||||||
Property and equipment, net | $ | 2,677 | $ | 19,486 | |||||||
Depreciation expense for property and equipment for the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013 was $16,808, $33,755 and $71,608, respectively. | |||||||||||
Debt
Debt | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Debt [Abstract] | |||||||||||
Debt | 5. Debt | ||||||||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
Long-term Debt | |||||||||||
Note payable to CEO; the note matures July 31, 2016. At December 31, 2014, the interest rate was 6.25%. This note is collateralized by all assets of the Company save for the Ranger patent. See also Note 8, Related Party Transactions. | 338,958 | 338,958 | |||||||||
Total debt | 338,958 | 338,958 | |||||||||
Less current portion of long-term debt | (152,952 | ) | (101,968 | ) | |||||||
Non-current portion of long-term debt | $ | 186,006 | $ | 236,990 | |||||||
As previously noted, on September 30, 2013, the Company sold 100% of the outstanding membership interests of Ranger. By executing the sale of Ranger, the Company was able to payoff substantially all of its secured creditors including reacquiring the common stock purchase warrants originally issued to the Senior Lender (the “Warrants”), pursuant to which the Senior Lender could have purchased up to 8,762,008 shares of the Company's common stock for an aggregate price of $100. The Warrants were not exercisable prior to March 30, 2014 but were being carried as a liability due to the fact that they could be put to the Company for $1,000,000 on March 30, 2014. In addition to retiring the Warrants and the notes payable to the Senior Lender, unamortized loan fees of $396,913 were written off as a result of the sale of Ranger and the subsequent retirement of substantially all secured payables. | |||||||||||
Substantially all of the Company's secured notes payable were also paid off as a result of the sale of Ranger. The remaining collateralized note payable, due to the Company's CEO, contains no restrictive covenants or events of default other than non-payment. | |||||||||||
On December 31, 2014, the Company did not make its regularly scheduled payment totaling $12,746 to Scott N. Beck, the Company's Chief Executive Officer, which constituted an event of default under the Company's lone senior secured note. Mr. Beck did not call default but there can be no assurance that, as the Company's senior secured lender, he will not do so. It is anticipated that the Company will amend the note with Mr. Beck at some future point but there can be no assurance that we will be successful in amending the terms of Mr. Beck's senior secured note. Should we be unsuccessful in executing an amendment or an extension, Mr. Beck, as the senior secured lender, could move to seize the underlying collateral which would have a material adverse effect on the Company's ability to continue as a going concern. | |||||||||||
Future minimum principal payments pursuant to the above long term debt agreements are as follows: | |||||||||||
As of December 31, 2014 | |||||||||||
2015 | $ | 152,952 | |||||||||
2016 | 152,952 | ||||||||||
2017 | 33,054 | ||||||||||
Total | $ | 338,958 | |||||||||
Leases
Leases | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Leases [Abstract] | ||||||
Leases | 6. Leases | |||||
The Company leases its facilities under non-cancelable operating lease agreements. The leases expire on various dates through 2016 and provide for minimum monthly rents of approximately $3,500. Rent expense for the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013 was approximately $24,137, $138,982 and $283,649, respectively. See also Note 11, Related Party Transactions, for more details. | ||||||
The Company also has a capital lease on telecom equipment. The lease expires on March 1, 2015 and the Company makes monthly payments of $892 pursuant to the terms of this lease. | ||||||
Future minimum lease payments under non-cancelable leases are as follows: | ||||||
As of December 31, 2014 | ||||||
2015 | $ | 33,685 | ||||
2016 | 13,500 | |||||
Total lease payments | $ | 47,185 | ||||
Equity
Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Equity | 7. Equity | ||||||||||||
Preferred Stock | |||||||||||||
The Company's authorized preferred stock consists of 10,000,000 shares with a par value of $0.001 per share. There were no issued and outstanding preferred shares as of December 31, 2014. | |||||||||||||
Common Stock | |||||||||||||
The Company's authorized common stock consists of 250,000,000 shares with a par value of $0.001 per share. As of December 31, 2014, 162,937,110 shares of common stock were issued and outstanding. | |||||||||||||
Warrants | |||||||||||||
The following summarizes the Company's warrant transactions for the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013: | |||||||||||||
Number of | Weighted Average | ||||||||||||
Warrants | |||||||||||||
Exercise Price | |||||||||||||
Per Share | |||||||||||||
Outstanding and exercisable, May 1, 2012 | 24,566,415 | $ | 0.11 | ||||||||||
Granted | — | — | |||||||||||
Cancelled or Expired | (420,000 | ) | 1.46 | ||||||||||
Outstanding, April 30, 2013 | 24,146,415 | $ | 0.08 | ||||||||||
Granted | — | — | |||||||||||
Cancelled or Expired | (14,942,009 | ) | 0.09 | ||||||||||
31-Dec-13 | 9,204,406 | $ | 0.07 | ||||||||||
Granted | — | — | |||||||||||
Exercised | (6,123,406 | ) | — | ||||||||||
Cancelled or Expired | (3,081,000 | ) | 0.07 | ||||||||||
31-Dec-14 | — | $ | — |
Stock_Based_Compensation_Plans
Stock Based Compensation Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Based Compensation Plans [Abstract] | |||||||||||||||||
Stock Based Compensation Plans | 8. Stock Based Compensation Plans | ||||||||||||||||
Incentive Stock Plan | |||||||||||||||||
On August 17, 2007, the Company's Board of Directors adopted and implemented the Company's 2007 Incentive Stock Plan. Under the Incentive Stock Plan, the Company is authorized to issue 4,000,000 shares of its common stock to the Company's directors, officers, employees, advisors or consultants. | |||||||||||||||||
Any Incentive Stock Option granted to an employee of the Company shall become exercisable over a period of no longer than five years, and no less than 20% of the shares covered thereby shall become exercisable annually. 25% of shares vest on the six month anniversary of the date of grant, the Initial Vesting Date, while the remaining options vest annually in 25% increments beginning on the first anniversary of the Initial Vesting Date. The options expire five years from the grant date. | |||||||||||||||||
There were 1,925,000 shares outstanding under the Company's 2007 Incentive Stock Plan as of December 31, 2014. | |||||||||||||||||
Stock Compensation Plan | |||||||||||||||||
On August 17, 2007, the Company's Board of Directors adopted and implemented the Company's 2007 Stock Compensation Plan. The total number of shares of the Company's common stock which may be purchased or granted directly by Options, Stock Awards or Warrants under the Compensation Plan shall not exceed 4,000,000 shares of the Company's common stock. | |||||||||||||||||
Awards granted to a participant of the Company shall become exercisable over a period of no longer than five years, and may vest as determined at the Company's discretion at the time of grant. | |||||||||||||||||
There were 1,625,000 shares outstanding under the Company's 2007 Stock Compensation Plan as of December 31, 2014. | |||||||||||||||||
A summary of the shares reserved for grant and awards available for grant under each Stock Plan is as follows: | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Shares Reserved | Awards Available | ||||||||||||||||
for Grant | for Grant | ||||||||||||||||
Incentive Stock Plan | 4,000,000 | 2,075,000 | |||||||||||||||
Stock Compensation Plan | 4,000,000 | 2,375,000 | |||||||||||||||
8,000,000 | 4,450,000 | ||||||||||||||||
The Company issues awards to employees, qualified consultants and directors that generally vest over time based solely on continued employment or service during the related vesting period and are exercisable over a five to ten year service period. Options are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant. | |||||||||||||||||
The fair value of each stock-based award is estimated on the grant date using the Black-Scholes option-pricing model. Expected volatilities are based on comparable companies. The expected term of options granted subsequent to the adoption ASC 718 is derived using the simplified method as defined in the SEC's SAB No. 107. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury interest rates in effect at the time of grant. The fair value of options granted was estimated using the following weighted-average assumptions: | |||||||||||||||||
For the | For the | For the Year Ended April 30, | |||||||||||||||
Year | Eight-month | ||||||||||||||||
Ended | Period Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2013 | |||||||||||||||
Expected term (in years) | 5.0 | — | 5 | ||||||||||||||
Expected volatility | 125.0% | — | % | 100 | % | ||||||||||||
Risk-free interest rate | 1.55% | — | % | 0.2 | % | ||||||||||||
Dividend yield | —% | — | % | 0 | % | ||||||||||||
A summary of activity under the Stock Plans and changes during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013 is presented below: | |||||||||||||||||
Weighted-Average | |||||||||||||||||
Shares | Exercise Price | Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding at May 1, 2012 | 2,910,000 | $ | 0.35 | 3.12 | $ | 44,600 | |||||||||||
Granted | 30,000 | 0.29 | |||||||||||||||
Cancelled/forfeited | (695,000 | ) | 0.2 | ||||||||||||||
Outstanding at April 30, 2013 | 2,245,000 | $ | 0.38 | 1.49 | $ | — | |||||||||||
Granted | — | — | |||||||||||||||
Cancelled/forfeited | (1,605,000 | ) | 0.44 | ||||||||||||||
Outstanding at December 31, 2013 | 640,000 | $ | 0.22 | 1.63 | $ | — | |||||||||||
Granted | 3,200,000 | 0.11 | |||||||||||||||
Cancelled/forfeited | (290,000 | ) | 0.21 | ||||||||||||||
Outstanding at December 31, 2014 | 3,550,000 | $ | 0.13 | 3.94 | $ | 20,000 | |||||||||||
Options vested and expected to vest | 1,905,000 | $ | 0.12 | 3.76 | $ | 5,000 | |||||||||||
Options exercisable at end of period | 1,130,000 | $ | 0.15 | 3.32 | $ | 5,000 | |||||||||||
During the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013, the Company recognized $11,765, $16,779 and $164,071 of stock-based compensation expense, respectively. As of December 31, 2014 and 2013 there was $26,835 and $18,646, respectively, of total unrecognized compensation cost, net of forfeitures, related to unvested employee and director stock option compensation arrangements. That cost is expected to be recognized on a straight-line basis over the next 3.94 weighted average years. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies |
Litigation | |
On October 10, 2013, the Company's former President, Marc A. Pickren (“Pickren”) filed a lawsuit in Dallas County District Court alleging, among other things, that the Company had wrongfully terminated his employment; Pickren's suit sought claims approximating $265,000. Pickren's employment agreement expired on September 15, 2013 and was not renewed. Pickren was removed as President of CornerWorld Corporation on October 4, 2013 though he remained employed as the President of Enversa until October 8, 2013 when he was terminated for cause. The Company settled the lawsuit out of court for an undisclosed amount in August 2014. | |
From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company's management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations, financial condition or cash flows. | |
Employment Agreements | |
On July 28, 2011, the Company's CornerWorld, Inc. subsidiary entered into an employment agreement with Mr. Beck, its Chairman and Chief Executive Officer. Mr. Beck's employment agreement has been modified multiple times, most recently as of November 1, 2013. Pursuant to his employment agreement, Mr. Beck is paid an annual base salary of $18,000 which adjusted to a base salary of $23,000 effective January 1, 2014. In addition, Mr. Beck is entitled to an annual performance-based cash bonus subject to the discretion of the Board of Directors, a bonus fee of 2% of all equity and debt raised during the time of his contract payable out of proceeds at closing of such equity and/or debt capital transaction, a 3.50% fee for the transaction value of all acquisitions as defined in his employment agreement payable at closing, warrants equal to 3.25% of the equity issued pursuant to any debt and equity raised during the time of his employment agreement, a warrant equal to 3.25% of the transaction value of any equity issued in association with all acquisitions and the greater of 5% of fair market value or $5.0 million buyout fee in the case of a change in control. Mr. Beck's employment agreement also provides that, if he is terminated without cause prior to the end of the employment agreement, he will be paid the full amount of his base salary for any days remaining in the full ten year term, the Company will purchase all equity instruments held by Mr. Beck and the Company will pay Mr. Beck $5.0 million within six months of his termination. Finally, Mr. Beck will receive 10% of amounts payable to the Company as a result of any patent infringement litigation. Mr. Beck's employment agreement continues through July 27, 2021. | |
The Company's Chief Financial Officer, V. Chase McCrea III, was employed subject to his employment agreement which expired on July 31, 2014 at which time it was not renewed. Mr. McCrea remains an at-will employee of the Company. | |
Segment_Reporting
Segment Reporting | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment Reporting | 10. Segment Reporting | |||||||||||
The Company operates in three integrated business segments: (i) marketing services, (ii) communications services and (iii) Corporate, formerly, on-line media networks: | ||||||||||||
For the | For the | For the | ||||||||||
Year Ended | Eight-month | Year Ended | ||||||||||
December 31, | Period Ended | April 30, | ||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2013 | ||||||||||
Net sales: | ||||||||||||
Marketing Services | $ | 706,566 | $ | 592,756 | $ | 1,749,491 | ||||||
Communications Services | 244,155 | 81,198 | 176,243 | |||||||||
Corporate | 37,500 | — | — | |||||||||
Total net sales | $ | 988,221 | $ | 673,954 | $ | 1,925,734 | ||||||
Income (loss) from continuing operations before income taxes: | ||||||||||||
Marketing Services | $ | 42,321 | $ | 1,770 | $ | 554,997 | ||||||
Communications Services | (46,723 | ) | (162,887 | ) | (410,939 | ) | ||||||
Corporate | (994,773 | ) | (581,760 | ) | (2,907,342 | ) | ||||||
Total loss from continuing operations before income taxes | $ | (999,175 | ) | $ | (742,877 | ) | $ | (2,763,284 | ) | |||
Net Income (loss): | ||||||||||||
Marketing Services | $ | 42,321 | $ | 1,770 | $ | 554,997 | ||||||
Communications Services | (46,723 | ) | 2,979,960 | 1,350,649 | ||||||||
Corporate | (994,773 | ) | (397,496 | ) | (3,267,880 | ) | ||||||
Net income (loss) | $ | (999,175 | ) | $ | 2,584,234 | $ | (1,362,234 | ) | ||||
Depreciation and amortization: | ||||||||||||
Marketing Services | $ | — | $ | 3,368 | $ | 6,183 | ||||||
Communications Services | 10,709 | 10,474 | 18,398 | |||||||||
Corporate | 6,099 | 19,913 | 47,027 | |||||||||
Total depreciation and amortization | $ | 16,808 | $ | 33,755 | $ | 71,608 | ||||||
Total assets: | ||||||||||||
Marketing Services | $ | 90,729 | $ | 172,617 | $ | 179,722 | ||||||
Communications Services | 24,414 | 133,978 | 7,709,598 | |||||||||
Corporate | 65,520 | 871,066 | 76,713 | |||||||||
Total segment identifiable assets | $ | 180,663 | $ | 1,177,661 | $ | 7,966,033 | ||||||
There were no material intersegment sales. Operating income is defined as third party sales less operating expenses. All of the Company's business activities are conducted within the United States geographic boundaries. | ||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions |
As part of the Company's 2008 acquisition of Enversa, the Company borrowed $1,500,000 from Internet University, Inc., Marc Blumberg and Marc Pickren (collectively, the “Enversa Sellers”). Mr. Blumberg is a member of the Company's Board of Directors as well as the former president of Internet University, Inc. and Mr. Pickren was the President of the Company. On October 31, 2012, the Company settled the notes to the Enversa Sellers in their entirety via the conversion to shares of the Company's common stock. The outstanding principal balances on the notes themselves, as well as any outstanding accrued interest, were converted at the rate of $0.15/share. Accordingly, the notes to the Enversa Sellers had no outstanding balances at December 31, 2014. The Company recorded interest of $0, $0 and $69,726 on these notes during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. | |
As part of the February 23, 2009 Woodland Acquisition, the Company borrowed $1,900,000 from IU Investments LLC (the “Tier 3 Junior Note”). IU Investments, LLC is an entity owned by the immediate family members of the Company's Chief Executive Officer. The outstanding portion of the Tier 3 Junior Note along with its accrued interest was settled in its entirety on September 30, 2013. Accordingly, the Tier 3 Junior Note had no outstanding balance at December 31, 2014. The Company recorded interest of $0, $26,105 and $57,992 on the Tier 3 Junior Note during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. | |
On March 30, 2011, the Company entered into a subordinated $1,500,000 promissory note with IU Holdings, LP (“IUH”) (the “Tier 2 Junior Note”). IUH is a partnership whose limited partners include the immediate family members of the Company's Chief Executive Officer. Steve Toback, the uncle of the Company's Chief Executive Officer, served as the manager of IU Holdings, GP, LLC, which is the general partner of IUH. The outstanding portion of this note along with its accrued interest was settled in its entirety on September 30, 2013. Accordingly, the Tier 2 Junior Note had no outstanding balance at December 31, 2014. The Company recorded interest expenses of $0, $73,006 and $162,314 on the Tier 2 Junior Note during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. | |
On March 30, 2011, the Company entered into a subordinated $400,000 promissory note (the “Tier 5 Junior Note”) with Internet University (the “Tier 5 Junior Lender”). The outstanding portion of this note along with its accrued interest was settled in its entirety on September 30, 2013. Accordingly, the Tier 5 Junior Note had no outstanding balance at December 31, 2014. The Company recorded interest expenses of $0, $1,342 and $19,639 on the Tier 5 Junior Note during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. | |
On March 30, 2011, the Company entered into a subordinated $389,942 promissory note (the “Senior Note”) with Scott N. Beck, the Company's Chief Executive Officer. Principal under the Tier 7 Junior Note is payable in monthly installments of $12,746 until such point as the Tier 7 Junior Note matures on July 31, 2016. The Company amended this note on September 30, 2014 such that principal payments were deferred until December 31, 2014 and the interest rate was reduced to 6.25%; interest on the outstanding principal amount under the Tier 7 Junior Note is payable at the Company's choosing. The Company recorded interest of $26,845, $24,186 and $36,685 on the Senior Note during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. On December 31, 2014, the Company did not make its regularly scheduled payment totaling $12,746 to Scott N. Beck, the Company's Chief Executive Officer and the holder of the Senior Note, which constituted an event of default under the Senior Note. Mr. Beck did not call default but there can be no assurance that, as the Company's Senior Lender, he will not do so. It is anticipated that the Company will amend the Senior Note at some future point but there can be no assurance that we will be successful in amending the terms of the Senior Note. Should we be unsuccessful in executing an amendment or an extension, Mr. Beck, as the senior lender, could move to seize the underlying collateral which would have a material adverse effect on the Company's ability to continue as a going concern. The balance of this note totaled $338,958 at December 31, 2014. | |
The Company is party to a lease agreement with 13101 Preston Road, LP pursuant to which it leases office space for its corporate headquarters. The limited partners of 13101 Preston Road, LP are trusts created by the father of the Company's Chief Executive Officer. The lease was originally for five years with minimum future rentals of $31,900 in the next fiscal year, followed by $13,500 in the final year. The Company paid $30,000, $20,000 and $106,692 in rent during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. The Company also has a $17,500 deposit on the space for this lease. | |
The Company provides accounting, human resources and certain IT services to an entity controlled by the family of the Company's Chief Executive Officer for $5,000 per month. The Company received $60,000, $40,000 and $60,000 from this entity during the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes [Abstract] | |||||||||||
Income Taxes | 12. Income Taxes | ||||||||||
The Company accounts for income taxes in accordance with ASC 740. Due to continued losses from operations, since the inception of the Company, no provision for income taxes has been made in these consolidated financial statements. The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consists of the following: | |||||||||||
Year Ended December 31, 2014 | Eight-month | ||||||||||
Period Ended | |||||||||||
December 31, | |||||||||||
2013 | |||||||||||
Federal statutory rate | 34 | % | 34 | % | |||||||
Effect of: | |||||||||||
Valuation allowance | (34.00 | %) | (34.00 | %) | |||||||
Effective income tax rate | — | % | — | % | |||||||
The Company is in the process of completing its federal income tax return and does not expense to have an income tax liability due to continued losses from operations. The Company's estimated income tax provision is summarized below: | |||||||||||
Year Ended December 31, 2014 | Eight-month | ||||||||||
Period Ended | |||||||||||
December 31, | |||||||||||
2013 | |||||||||||
Income tax expense (benefit): | |||||||||||
Federal - current | $ | (686,784 | ) | $ | (534,014 | ) | |||||
Federal - deferred | 349,653 | 1,415,119 | |||||||||
Total | (337,131 | ) | 881,105 | ||||||||
Less: valuation allowance | 337,131 | 881,105 | |||||||||
Total | $ | — | $ | — | |||||||
We will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred. At December 31, 2014 we had no unrecognized tax benefits in income tax expense, and do not expect any for the year ended December 31, 2015. Our income tax returns are no longer subject to Federal tax examinations by tax authorities for years before April 30, 2012. | |||||||||||
The estimated components of the deferred tax asset are as follows: | |||||||||||
Eight-month | |||||||||||
Period Ended | |||||||||||
Year Ended December 31, 2014 | December 31, | ||||||||||
2013 | |||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 2,145,327 | $ | 1,458,542 | |||||||
Depreciation and amortization | 741,298 | 423,733 | |||||||||
Stock compensation expense | 1,956,714 | 1,952,714 | |||||||||
Other deferred tax assets | 155,735 | 155,736 | |||||||||
Other deferred tax liabilities | (10,645 | ) | (10,645 | ) | |||||||
Total deferred tax assets | 4,988,429 | 3,980,080 | |||||||||
Valuation allowance | (4,988,429 | ) | (3,980,080 | ) | |||||||
Net deferred tax assets | $ | — | $ | — | |||||||
For the year ended December 31, 2014 and the eight-month period ended December 31, 2013 the cumulative deferred tax assets of $4,988,429 and $3,980,080 and respectively, are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carryforwards. The cumulative income tax loss carryforward, of $6,309,785, if not used, will expire in various years through 2035, and is severely restricted as per the Internal Revenue Code if there is a change in ownership. | |||||||||||
Transition_Period_Comparative_
Transition Period Comparative Data | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Transition Period Comparative Data [Abstract] | ||||||||||||||
Transition Period Comparative Data | 13. Transition Period Comparative Data | |||||||||||||
The following tables present certain financial information as of and for the eight-month periods ended December 31, 2013 and 2012: | ||||||||||||||
Eight-month Period Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(unaudited) | ||||||||||||||
Sales, net | $ | 673,954 | $ | 1,508,517 | ||||||||||
Costs of goods sold | 271,356 | 541,808 | ||||||||||||
Gross profit | 402,598 | 966,709 | ||||||||||||
Operating expenses | 860,143 | 2,142,644 | ||||||||||||
Operating loss | (457,545 | ) | (1,175,935 | ) | ||||||||||
Other income (expense), net | (285,332 | ) | (143,021 | ) | ||||||||||
Income taxes | — | — | ||||||||||||
Loss from continuing operations | (742,877 | ) | (1,318,956 | ) | ||||||||||
Income from discontinued operations, net of tax | 538,568 | 1,058,424 | ||||||||||||
Gain from disposal of discontinued operations, net of tax | 2,788,543 | — | ||||||||||||
Net income (loss) | $ | 2,584,234 | $ | (260,532 | ) | |||||||||
Basic earnings (loss) per share from continuing operations | $ | 0 | $ | (0.01 | ) | |||||||||
Basic earnings per share from discontinued operations | $ | 0.02 | $ | 0.01 | ||||||||||
Basic earnings (loss) per share | $ | 0.02 | $ | 0 | ||||||||||
Diluted earnings (loss) per share from continuing operations | $ | 0 | $ | (0.01 | ) | |||||||||
Diluted earnings per share from discontinued operations | $ | 0.02 | $ | 0.01 | ||||||||||
Diluted earnings (loss) per share | $ | 0.02 | $ | 0 | ||||||||||
Basic weighted average number shares outstanding | 157,070,847 | 150,802,973 | ||||||||||||
Diluted weighted average number shares outstanding | 163,204,253 | 150,802,973 |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events |
On March 17, 2015 the Company's Board of Directors unanimously approved the spin-off of all of the Company's operating subsidiaries into the Company's wholly owned Woodland subsidiary to become effective immediately preceding the merger proposed pursuant to the LOI. All CornerWorld shareholders will be entitled to receive their pro-rata ownership percentage of Woodland. The Company filed a Registration Statement on Form 10 for the purposes of spinning off all of the Company's operating subsidiaries. The Registration Statement was filed under the name of the Company's Woodland Holdings Corporation subsidiary. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policy) | 12 Months Ended | |
Dec. 31, 2014 | ||
Summary of Significant Accounting Policies [Abstract] | ||
Receivables | Receivables | |
Accounts receivable include uncollateralized customer obligations due under normal trade terms requiring payment within 30-60 days from invoice date. Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. | ||
The carrying amount of accounts receivable is reduced by a valuation allowance for doubtful accounts that reflects management's best estimate of the amounts that will not be collected based on historical collection trends. The allowance for doubtful accounts was $80,790 and $44,574 as of December 31, 2014 and 2013, respectively. | ||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |
ASC No. 850 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company's cash and cash equivalents, accounts receivable, accounts receivable-related party, accounts payable, accounts payable-related party and accrued liabilities approximate their estimated fair values due to their short-term maturities. Notes payable are carried at their face value net of their issuance costs which management believes is a reasonable approximation for their fair value. Warrants with put features are carried at their minimum cash put value discounted for the time value of money. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these consolidated financial statements. | ||
Income Taxes | Income Taxes | |
The Company accounts for income taxes in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | ||
Basic and Diluted Earnings (Loss) Per Share | Basic and Diluted Earnings (Loss) Per Share | |
In accordance with ASC 260, basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share, if any, is computed similar to basic earnings (loss) per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. | ||
Revenue Recognition | Revenue Recognition | |
The Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable and collectability is probable. Sales are recorded net of sales discounts. | ||
At Enversa, revenue is recognized along with the related cost of revenue as leads are delivered. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Amounts billed to clients in advance of delivery of leads are classified under current liabilities as deferred revenue. In addition, revenue is recognized monthly as SEO services are provided or in the form of revenues from domain leases. | ||
For Woodland, the majority of revenue is derived from month-to-month, bundled service contracts for the phone and internet services used by each customer. Revenue is recognized as the services are provided. | ||
Use of Estimates | Use of Estimates | |
The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
The Company considers all highly liquid debt instruments with an original maturity of three (3) months or less to be cash equivalents. | ||
Property and Equipment | Property and Equipment | |
Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method as follows: | ||
Computer equipment | 3 years | |
Office furniture | 5 years | |
Computer software packages | 3 years | |
Capitalized software development | 3 years | |
Leasehold improvements | 3 years | |
Expenditures for maintenance and repairs which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. The property and equipment had not incurred any impairment loss at December 31, 2014. | ||
Long-Lived Assets | Long-Lived Assets | |
The Company accounts for its long-lived assets in accordance with ASC 360. The Company's primary long-lived assets are property and equipment. ASC 360 requires a company to assess the recoverability of its long-lived assets whenever events and circumstances indicate the carrying value of an asset or asset group may not be recoverable from estimated future cash flows expected to result from its use and eventual disposition. Management reviews its long-lived assets annually and concluded that, as of April 30, 2013, due to negative cash flows and the continuing deterioration of market conditions in the for-profit education space, the goodwill associated with Enversa had become permanently impaired. Accordingly, the Company recorded a charge to earnings totaling $554,986 to impair Enversa's goodwill for the year ended April 30, 2013. | ||
Stock-Based Compensation | Stock-Based Compensation | |
The Company accounts for awards made under its two stock-based compensation plans pursuant to the fair value provisions of ASC No. 718. ASC No. 718 requires the recognition of stock-based compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC No. 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company accounts for stock-based compensation in accordance with ASC No. 718 and estimates its fair value based on using the Black-Scholes option pricing model. | ||
The Company's determination of fair value of share-based payment awards is made as of their respective dates of grant using that option pricing model and is affected by the Company's stock price as well as a number of subjective assumptions. These variables include, but are not limited to, the Company's expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behavior. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the pricing term of the grant effective as of the date of the grant. The expected volatility is based on comparable companies. These factors could change in the future, affecting the determination of stock based compensation expense in future periods. The Black-Scholes option pricing model was developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because the Company's options have certain characteristics that are significantly different from traded options, the existing valuation models may not provide an accurate measure of the fair value of the Company's options. Although the fair value of the Company's options is determined in accordance with ASC No. 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. The calculated compensation cost is recognized on a straight-line basis over the vesting period of the options. See also Note 8 Stock Based Compensation, for more details. | ||
Principles of Consolidation | Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of CornerWorld Corporation, its wholly owned subsidiaries and entities determined to meet the definition of Variable Interest Entities. All significant intercompany transactions and balances have been eliminated in consolidation. | ||
Concentrations of Cash and Cash Equivalents | Concentrations of Cash and Cash Equivalents | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Federal Deposit Insurance Corporation (FDIC) currently insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000. At December 31, 2014 and 2013 the Company had $0 and $476,000, respectively, in excess of that which is insured by the FDIC. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
There were various accounting standards and interpretations issued during the year ended December 31, 2014, none of which are expected to have a material impact on the Company's consolidated financial position, operations, or cash flows. | ||
Issuance of Stock for Non-Cash Consideration | Issuance of Stock for Non-Cash Consideration | |
All issuances of the Company's stock for non-cash consideration have been assigned a dollar amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. | ||
Reclassifications | Reclassifications | |
Certain prior year accounts have been reclassified to conform to the current year's presentation. | ||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
Summary of Significant Accounting Policies [Abstract] | ||
Schedule of Property and Equipment Useful Lives | Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method as follows: | |
Computer equipment | 3 years | |
Office furniture | 5 years | |
Computer software packages | 3 years | |
Capitalized software development | 3 years | |
Leasehold improvements | 3 years |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Discontinued Operations [Abstract] | ||||||||||||||
Summary of the operating results of our discontinued operations | ||||||||||||||
For the Year Ended | For the Eight-month | For the Year Ended | ||||||||||||
31-Dec-14 | Period Ended | 30-Apr-13 | ||||||||||||
31-Dec-13 | ||||||||||||||
Sales, net | $ | — | $ | 2,014,095 | $ | 5,256,108 | ||||||||
Income from discontinued operations before income taxes | — | 538,568 | 1,401,050 | |||||||||||
Income taxes | — | — | — | |||||||||||
Net income from discontinued operations | $ | — | $ | 538,568 | $ | 1,401,050 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Schedule of Property and Equipment | December 31, | ||||||||||
2014 | 2013 | ||||||||||
Computer equipment | $ | 236,583 | $ | 236,583 | |||||||
Furniture | 86,499 | 86,499 | |||||||||
Software | 79,061 | 79,061 | |||||||||
Leasehold improvements | 9,977 | 9,977 | |||||||||
Total | 412,120 | 412,120 | |||||||||
Less: accumulated depreciation and amortization | (409,443 | ) | (392,634 | ) | |||||||
Property and equipment, net | $ | 2,677 | $ | 19,486 | |||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Debt [Abstract] | |||||||||||
Schedule of Long-term Debt | |||||||||||
As of December 31, | |||||||||||
2014 | 2013 | ||||||||||
Long-term Debt | |||||||||||
Note payable to CEO; the note matures July 31, 2016. At December 31, 2014, the interest rate was 6.25%. This note is collateralized by all assets of the Company save for the Ranger patent. See also Note 8, Related Party Transactions. | 338,958 | 338,958 | |||||||||
Total debt | 338,958 | 338,958 | |||||||||
Less current portion of long-term debt | (152,952 | ) | (101,968 | ) | |||||||
Non-current portion of long-term debt | $ | 186,006 | $ | 236,990 | |||||||
Schedule of Future Minimum Principal Payments | |||||||||||
As of December 31, 2014 | |||||||||||
2015 | $ | 152,952 | |||||||||
2016 | 152,952 | ||||||||||
2017 | 33,054 | ||||||||||
Total | $ | 338,958 | |||||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Leases [Abstract] | ||||||
Schedule Of Future Minimum Lease Payments | ||||||
As of December 31, 2014 | ||||||
2015 | $ | 33,685 | ||||
2016 | 13,500 | |||||
Total lease payments | $ | 47,185 | ||||
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Schedule of Warrants Outstanding | |||||||||||||
Number of | Weighted Average | ||||||||||||
Warrants | |||||||||||||
Exercise Price | |||||||||||||
Per Share | |||||||||||||
Outstanding and exercisable, May 1, 2012 | 24,566,415 | $ | 0.11 | ||||||||||
Granted | — | — | |||||||||||
Cancelled or Expired | (420,000 | ) | 1.46 | ||||||||||
Outstanding, April 30, 2013 | 24,146,415 | $ | 0.08 | ||||||||||
Granted | — | — | |||||||||||
Cancelled or Expired | (14,942,009 | ) | 0.09 | ||||||||||
31-Dec-13 | 9,204,406 | $ | 0.07 | ||||||||||
Granted | — | — | |||||||||||
Exercised | (6,123,406 | ) | — | ||||||||||
Cancelled or Expired | (3,081,000 | ) | 0.07 | ||||||||||
31-Dec-14 | — | $ | — |
Stock_Based_Compensation_Plans1
Stock Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Based Compensation Plans [Abstract] | |||||||||||||||||
Schedule of Shares Reserved | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Shares Reserved | Awards Available | ||||||||||||||||
for Grant | for Grant | ||||||||||||||||
Incentive Stock Plan | 4,000,000 | 2,075,000 | |||||||||||||||
Stock Compensation Plan | 4,000,000 | 2,375,000 | |||||||||||||||
8,000,000 | 4,450,000 | ||||||||||||||||
Schedule of Assumptions | |||||||||||||||||
For the | For the | For the Year Ended April 30, | |||||||||||||||
Year | Eight-month | ||||||||||||||||
Ended | Period Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2013 | |||||||||||||||
Expected term (in years) | 5.0 | — | 5 | ||||||||||||||
Expected volatility | 125.0% | — | % | 100 | % | ||||||||||||
Risk-free interest rate | 1.55% | — | % | 0.2 | % | ||||||||||||
Dividend yield | —% | — | % | 0 | % | ||||||||||||
Schedule of Stock Plan Activity | |||||||||||||||||
Weighted-Average | |||||||||||||||||
Shares | Exercise Price | Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding at May 1, 2012 | 2,910,000 | $ | 0.35 | 3.12 | $ | 44,600 | |||||||||||
Granted | 30,000 | 0.29 | |||||||||||||||
Cancelled/forfeited | (695,000 | ) | 0.2 | ||||||||||||||
Outstanding at April 30, 2013 | 2,245,000 | $ | 0.38 | 1.49 | $ | — | |||||||||||
Granted | — | — | |||||||||||||||
Cancelled/forfeited | (1,605,000 | ) | 0.44 | ||||||||||||||
Outstanding at December 31, 2013 | 640,000 | $ | 0.22 | 1.63 | $ | — | |||||||||||
Granted | 3,200,000 | 0.11 | |||||||||||||||
Cancelled/forfeited | (290,000 | ) | 0.21 | ||||||||||||||
Outstanding at December 31, 2014 | 3,550,000 | $ | 0.13 | 3.94 | $ | 20,000 | |||||||||||
Options vested and expected to vest | 1,905,000 | $ | 0.12 | 3.76 | $ | 5,000 | |||||||||||
Options exercisable at end of period | 1,130,000 | $ | 0.15 | 3.32 | $ | 5,000 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Schedule of Financial Data by Reporting Segment | ||||||||||||
For the | For the | For the | ||||||||||
Year Ended | Eight-month | Year Ended | ||||||||||
December 31, | Period Ended | April 30, | ||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2013 | ||||||||||
Net sales: | ||||||||||||
Marketing Services | $ | 706,566 | $ | 592,756 | $ | 1,749,491 | ||||||
Communications Services | 244,155 | 81,198 | 176,243 | |||||||||
Corporate | 37,500 | — | — | |||||||||
Total net sales | $ | 988,221 | $ | 673,954 | $ | 1,925,734 | ||||||
Income (loss) from continuing operations before income taxes: | ||||||||||||
Marketing Services | $ | 42,321 | $ | 1,770 | $ | 554,997 | ||||||
Communications Services | (46,723 | ) | (162,887 | ) | (410,939 | ) | ||||||
Corporate | (994,773 | ) | (581,760 | ) | (2,907,342 | ) | ||||||
Total loss from continuing operations before income taxes | $ | (999,175 | ) | $ | (742,877 | ) | $ | (2,763,284 | ) | |||
Net Income (loss): | ||||||||||||
Marketing Services | $ | 42,321 | $ | 1,770 | $ | 554,997 | ||||||
Communications Services | (46,723 | ) | 2,979,960 | 1,350,649 | ||||||||
Corporate | (994,773 | ) | (397,496 | ) | (3,267,880 | ) | ||||||
Net income (loss) | $ | (999,175 | ) | $ | 2,584,234 | $ | (1,362,234 | ) | ||||
Depreciation and amortization: | ||||||||||||
Marketing Services | $ | — | $ | 3,368 | $ | 6,183 | ||||||
Communications Services | 10,709 | 10,474 | 18,398 | |||||||||
Corporate | 6,099 | 19,913 | 47,027 | |||||||||
Total depreciation and amortization | $ | 16,808 | $ | 33,755 | $ | 71,608 | ||||||
Total assets: | ||||||||||||
Marketing Services | $ | 90,729 | $ | 172,617 | $ | 179,722 | ||||||
Communications Services | 24,414 | 133,978 | 7,709,598 | |||||||||
Corporate | 65,520 | 871,066 | 76,713 | |||||||||
Total segment identifiable assets | $ | 180,663 | $ | 1,177,661 | $ | 7,966,033 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes [Abstract] | |||||||||||
Schedule of Income Tax Rate Reconciliation | |||||||||||
Year Ended December 31, 2014 | Eight-month | ||||||||||
Period Ended | |||||||||||
December 31, | |||||||||||
2013 | |||||||||||
Federal statutory rate | 34 | % | 34 | % | |||||||
Effect of: | |||||||||||
Valuation allowance | (34.00 | %) | (34.00 | %) | |||||||
Effective income tax rate | — | % | — | % | |||||||
Schedule of Income Tax Provision | |||||||||||
Year Ended December 31, 2014 | Eight-month | ||||||||||
Period Ended | |||||||||||
December 31, | |||||||||||
2013 | |||||||||||
Income tax expense (benefit): | |||||||||||
Federal - current | $ | (686,784 | ) | $ | (534,014 | ) | |||||
Federal - deferred | 349,653 | 1,415,119 | |||||||||
Total | (337,131 | ) | 881,105 | ||||||||
Less: valuation allowance | 337,131 | 881,105 | |||||||||
Total | $ | — | $ | — | |||||||
Schedule of Components of the Deferred Tax Asset | |||||||||||
Eight-month | |||||||||||
Period Ended | |||||||||||
Year Ended December 31, 2014 | December 31, | ||||||||||
2013 | |||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 2,145,327 | $ | 1,458,542 | |||||||
Depreciation and amortization | 741,298 | 423,733 | |||||||||
Stock compensation expense | 1,956,714 | 1,952,714 | |||||||||
Other deferred tax assets | 155,735 | 155,736 | |||||||||
Other deferred tax liabilities | (10,645 | ) | (10,645 | ) | |||||||
Total deferred tax assets | 4,988,429 | 3,980,080 | |||||||||
Valuation allowance | (4,988,429 | ) | (3,980,080 | ) | |||||||
Net deferred tax assets | $ | — | $ | — |
Transition_Period_Comparative_1
Transition Period Comparative Data (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Transition Period Comparative Data [Abstract] | ||||||||||||||
Schedule of Transition Period Comparative Data | ||||||||||||||
Eight-month Period Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(unaudited) | ||||||||||||||
Sales, net | $ | 673,954 | $ | 1,508,517 | ||||||||||
Costs of goods sold | 271,356 | 541,808 | ||||||||||||
Gross profit | 402,598 | 966,709 | ||||||||||||
Operating expenses | 860,143 | 2,142,644 | ||||||||||||
Operating loss | (457,545 | ) | (1,175,935 | ) | ||||||||||
Other income (expense), net | (285,332 | ) | (143,021 | ) | ||||||||||
Income taxes | — | — | ||||||||||||
Loss from continuing operations | (742,877 | ) | (1,318,956 | ) | ||||||||||
Income from discontinued operations, net of tax | 538,568 | 1,058,424 | ||||||||||||
Gain from disposal of discontinued operations, net of tax | 2,788,543 | — | ||||||||||||
Net income (loss) | $ | 2,584,234 | $ | (260,532 | ) | |||||||||
Basic earnings (loss) per share from continuing operations | $ | 0 | $ | (0.01 | ) | |||||||||
Basic earnings per share from discontinued operations | $ | 0.02 | $ | 0.01 | ||||||||||
Basic earnings (loss) per share | $ | 0.02 | $ | 0 | ||||||||||
Diluted earnings (loss) per share from continuing operations | $ | 0 | $ | (0.01 | ) | |||||||||
Diluted earnings per share from discontinued operations | $ | 0.02 | $ | 0.01 | ||||||||||
Diluted earnings (loss) per share | $ | 0.02 | $ | 0 | ||||||||||
Basic weighted average number shares outstanding | 157,070,847 | 150,802,973 | ||||||||||||
Diluted weighted average number shares outstanding | 163,204,253 | 150,802,973 |
Basis_of_Presentation_Details
Basis of Presentation (Details) | Sep. 30, 2013 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Approximate number of calls processed | 10,200,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Summary of Significant Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $44,574 | $80,790 | |
Impairment of goodwill | 554,986 | ||
Cash balance insured by FDIC per financial institution | 250,000 | ||
Cash balance uninsured | $476,000 | $0 | |
Computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Office furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Computer software packages [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Capitalized software development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 1 Months Ended | 8 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2013 | Apr. 30, 2013 | |
Discontinued Operations [Abstract] | |||
Gain from discontinued operations, net of tax | $2,788,543 | ||
Proceeds from sale of business | 7,500,000 | ||
Proceeds from contingent receivable related to sale | $800,000 |
Discontinued_Operations_Summar
Discontinued Operations (Summary of Operating Results of Our Discontinued Operations) (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2013 | |
Discontinued Operations [Abstract] | ||||
Sales, net | $2,014,095 | $5,256,108 | ||
Income from discontinued operations before income taxes | 538,568 | 1,401,050 | ||
Income taxes | ||||
Net income from discontinued operations | $538,568 | $1,058,424 | $1,401,050 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Property and equipment | |||
Property and equipment, gross | $412,120 | $412,120 | |
Less: accumulated depreciation and amortization | -392,634 | -409,443 | |
Property and equipment, net | 19,486 | 2,677 | |
Depreciation expense for property and equipment | 33,755 | 16,808 | 71,608 |
Computer equipment [Member] | |||
Property and equipment | |||
Property and equipment, gross | 236,583 | 236,583 | |
Furniture [Member] | |||
Property and equipment | |||
Property and equipment, gross | 86,499 | 86,499 | |
Software [Member] | |||
Property and equipment | |||
Property and equipment, gross | 79,061 | 79,061 | |
Leasehold improvements [Member] | |||
Property and equipment | |||
Property and equipment, gross | $9,977 | $9,977 |
Debt_Schedule_of_Longterm_Debt
Debt (Schedule of Long-term Debt) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||
Total debt | $338,958 | $338,958 |
Less current portion of long-term debt | -152,952 | -101,968 |
Non-current portion of long-term debt | 186,006 | 236,990 |
CEO [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 338,958 | 338,958 |
Maturity date | 31-Jul-16 | |
Interest rate | 6.25% | |
Debt Instrument, Periodic Payment | $12,746 |
Debt_Narrative_Details
Debt (Narrative) (Details) (USD $) | 1 Months Ended |
Sep. 30, 2013 | |
Debt Instrument [Line Items] | |
Percentage of membership interests sold | 100.00% |
Senior Lender [Member] | |
Debt Instrument [Line Items] | |
Common stock purchase warrant, shares authorized | 8,762,008 |
Common stock purchase warrant, exercise price | 100 |
Common stock purchase warrant, exercise date | 30-Mar-14 |
Put value of warrants granted | 1,000,000 |
Unamortized loan fees written off | 396,913 |
Debt_Schedule_of_Future_Minimu
Debt (Schedule of Future Minimum Principal Payments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
As of December 31, 2014 | ||
2015 | $152,952 | |
2016 | 152,952 | |
2017 | 33,054 | |
Total debt | $338,958 | $338,958 |
Leases_Details
Leases (Details) (USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Leases [Abstract] | |||
Minimum monthly rents | $3,500 | ||
Rental expense | 138,982 | 24,137 | 283,649 |
Lease expiration date | 1-Mar-15 | ||
Monthly lease payment | 892 | ||
Future minimum lease payments | |||
2015 | 33,685 | ||
2016 | 13,500 | ||
Total | $47,185 |
Equity_Prerferred_and_Common_S
Equity (Prerferred and Common Stock Narrative) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Equity [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares issued | 162,937,110 | 156,813,704 |
Common stock, shares outstanding | 162,937,110 | 156,813,704 |
Equity_Summary_of_Warrant_Acti
Equity (Summary of Warrant Activity) (Details) (Warrants [Member], USD $) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Warrants [Member] | |||
Number of Warrants | |||
Outstanding | 24,146,415 | 9,204,406 | 24,566,415 |
Granted | |||
Exercised | -6,123,406 | ||
Cancelled or Expired | -14,942,009 | -3,081,000 | -420,000 |
Outstanding | 9,204,406 | 24,146,415 | |
Weighted Average Exercise Price Per Share | |||
Outstanding | $0.08 | $0.07 | $0.11 |
Granted | |||
Exercised | |||
Cancelled or Expired | $0.09 | $0.07 | $1.46 |
Outstanding | $0.07 | $0.08 |
Stock_Based_Compensation_Plans2
Stock Based Compensation Plans (Narrative) (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | Apr. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total outstanding options | 640,000 | 3,550,000 | 2,245,000 | 2,910,000 |
Stock-based compensation | $16,779 | $11,765 | $164,071 | |
Unrecognized compensation cost, net of forfeitures | $18,646 | $26,835 | ||
Unrecognized compensation cost, weighted-average recognition period, years | 3 years 11 months 8 days | |||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award term length | 5 years | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award term length | 10 years | |||
Incentive Stock Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 4,000,000 | |||
Award term length | 5 years | |||
Total outstanding options | 1,925,000 | |||
Incentive Stock Plan [Member] | Share-based Compensation Award, Tranche One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate | 25.00% | |||
Incentive Stock Plan [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate | 25.00% | |||
Incentive Stock Plan [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rate | 20.00% | |||
Incentive Stock Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Stock Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 4,000,000 | |||
Total outstanding options | 1,625,000 | |||
Stock Compensation Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years |
Stock_Based_Compensation_Plans3
Stock Based Compensation Plans (Schedule of Shares Reserved) (Details) | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Reserved for Grant | 8,000,000 |
Awards Available for Grant | 4,450,000 |
Incentive Stock Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Reserved for Grant | 4,000,000 |
Awards Available for Grant | 2,075,000 |
Stock Compensation Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Reserved for Grant | 4,000,000 |
Awards Available for Grant | 2,375,000 |
Stock_Based_Compensation_Plans4
Stock Based Compensation Plans (Schedule of Assumptions) (Details) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | |
Stock Based Compensation Plans [Abstract] | |||
Expected term | 5 years | 5 years | |
Expected volatility | 125.00% | 100.00% | |
Risk-free interest rate | 1.55% | 0.20% | |
Dividend yield | 0.00% |
Stock_Based_Compensation_Plans5
Stock Based Compensation Plans (Schedule of Stock Plan Activity) (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | Apr. 30, 2012 | |
Shares | ||||
Outstanding, beginning | 2,245,000 | 640,000 | 2,910,000 | |
Granted | 3,200,000 | 30,000 | ||
Cancelled/forfeited | -1,605,000 | -290,000 | -695,000 | |
Outstanding, ending | 640,000 | 3,550,000 | 2,245,000 | 2,910,000 |
Options vested and expected to vest | 1,905,000 | |||
Options exercisable at end of period | 1,130,000 | |||
Exercise Price | ||||
Outstanding, beginning | $0.38 | $0.22 | $0.35 | |
Granted | $0.11 | $0.29 | ||
Cancelled/forfeited | $0.44 | $0.21 | $0.20 | |
Outstanding, ending | $0.22 | $0.13 | $0.38 | $0.35 |
Options vested and expected to vest | $0.12 | |||
Options exercisable at end of period | $0.15 | |||
Remaining Contractual Term | ||||
Remaining contractual term, options outstanding | 1 year 7 months 17 days | 3 years 11 months 8 days | 1 year 5 months 26 days | 3 years 1 month 13 days |
Remaining contractual term, options vested and expected to vest | 3 years 9 months 4 days | |||
Remaining contractual term, options exercisable | 3 years 3 months 25 days | |||
Aggregate Intrinsic Value | ||||
Outstanding, beginning | $44,600 | |||
Outstanding, ending | 20,000 | 44,600 | ||
Options vested and expected to vest | 5,000 | |||
Options exercisable at end of period | $5,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Oct. 04, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Marc Pickren, Former President [Member] | |||
Commitments And Contingencies [Line Items] | |||
Damages sought in lawsuit with former president | $265,000 | ||
Scott Beck, Chairman and Chief Executive Officer [Member] | |||
Commitments And Contingencies [Line Items] | |||
Annual base salary | 23,000 | 18,000 | |
Equity and debt bonus fee, percentage | 2.00% | ||
Percentage of equity and debt raised issued as warrants | 3.25% | ||
Percentage of acquisition transaction fees issued as warrant | 3.25% | ||
Acquisition transaction fee, percentage | 3.50% | ||
Fair market value, percentage | 5.00% | ||
Buyout fee | 5,000,000 | ||
Employment agreement term | 10 years | ||
Employment agreement expiration date | 27-Jul-21 | ||
Wrongful termination fee | $5,000,000 | ||
Patent infringment litigation amounts payable to company, percentage | 10.00% |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2013 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $673,954 | $1,508,517 | $988,221 | $1,925,734 |
Income (loss) from continuing operations before income taxes | -742,877 | -999,175 | -2,763,284 | |
Net income (loss) | 2,584,234 | -260,532 | -999,175 | -1,362,234 |
Depreciation and amortization | 33,755 | 16,808 | 71,608 | |
Total assets | 1,177,661 | 180,663 | 7,966,033 | |
Marketing Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 592,756 | 706,566 | 1,749,491 | |
Income (loss) from continuing operations before income taxes | 1,770 | 42,321 | 554,997 | |
Net income (loss) | 1,770 | 42,321 | 554,997 | |
Depreciation and amortization | 3,368 | 6,183 | ||
Total assets | 172,617 | 90,729 | 179,722 | |
Communications Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 81,198 | 244,155 | 176,243 | |
Income (loss) from continuing operations before income taxes | -162,887 | -46,723 | -410,939 | |
Net income (loss) | 2,979,960 | -46,723 | 1,350,649 | |
Depreciation and amortization | 10,474 | 10,709 | 18,398 | |
Total assets | 133,978 | 24,414 | 7,709,598 | |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 37,500 | |||
Income (loss) from continuing operations before income taxes | -581,760 | -994,773 | -2,907,342 | |
Net income (loss) | -397,496 | -994,773 | -3,267,880 | |
Depreciation and amortization | 19,913 | 6,099 | 47,027 | |
Total assets | $871,066 | $65,520 | $76,713 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 8 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2013 | Oct. 31, 2012 | Aug. 27, 2008 | Feb. 23, 2009 | Mar. 30, 2011 | |
Related Party Transaction [Line Items] | |||||||
Rental expense | $138,982 | $24,137 | $283,649 | ||||
Lease due in next fiscal year | 33,685 | ||||||
Lease due the following year | 13,500 | ||||||
Internet University and Other Selling Members of Enversa [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issued | 1,500,000 | ||||||
Interest expense | 0 | 0 | 69,726 | ||||
Debt conversion, price per share | $0.15 | ||||||
Notes payable, related parties | |||||||
IU Investments, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issued | 1,900,000 | ||||||
Interest expense | 26,105 | 0 | 57,992 | ||||
Notes payable, related parties | |||||||
IU Holdings, LP [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issued | 1,500,000 | ||||||
Interest expense | 73,006 | 0 | 162,314 | ||||
Notes payable, related parties | |||||||
Internet University [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issued | 400,000 | ||||||
Interest expense | 1,342 | 0 | 19,639 | ||||
Notes payable, related parties | |||||||
Scott Beck, Chairman and Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issued | 389,942 | ||||||
Interest expense | 24,186 | 26,845 | 36,685 | ||||
Periodic installments amount | 12,746 | ||||||
Periodic payments, frequency | monthly | ||||||
Debt instrument monthly payments start date | 31-Dec-14 | ||||||
Interest rate | 6.25% | ||||||
Maturity date | 31-Jul-16 | ||||||
Notes payable, related parties | 338,958 | ||||||
13101 Preston Road, LP [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Rental expense | 20,000 | 30,000 | 106,692 | ||||
Lease due in next fiscal year | 31,900 | ||||||
Lease due the following year | 13,500 | ||||||
Lease deposit | 17,500 | ||||||
Entity Controlled by CEO's Family [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Service revenue, monthly amount | 5,000 | ||||||
Revenue from accounting, human resources, and IT services | $40,000 | $60,000 | $60,000 |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Effective Income Tax Rate) (Details) | 8 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Income Taxes [Abstract] | ||
Federal statutory rate | 34.00% | 34.00% |
Effect of: | ||
Valuation allowance | -34.00% | -34.00% |
Effective income tax rate |
Income_Taxes_Summary_of_Income
Income Taxes (Summary of Income Tax Provision) (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2013 | |
Income tax expense (benefit): | ||||
Federal - current | ($534,014) | ($686,784) | ||
Federal - deferred | 1,415,119 | 349,653 | ||
Federal - Total | 881,105 | -337,131 | ||
Less: valuation allowance | 881,105 | 337,131 | ||
Total |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carryforwards | $2,145,327 | $1,458,542 |
Depreciation and amortization | 741,298 | 423,733 |
Stock compensation expense | 1,956,714 | 1,952,714 |
Other deferred tax assets | 155,735 | 155,736 |
Other deferred tax liabilities | -10,645 | -10,645 |
Total deferred tax assets | 4,988,429 | 3,980,080 |
Valuation allowance | -4,988,429 | -3,980,080 |
Net deferred tax assets |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Taxes [Abstract] | ||
Cumulative deferred tax asset | $4,988,429 | $3,980,080 |
Operating Loss Carryforwards [Line Items] | ||
Cumulative income tax loss carryforward | $6,309,785 |
Transition_Period_Comparative_2
Transition Period Comparative Data (Consolidated Statements of Operations) (Details) (USD $) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2013 | |
Transition Period Comparative Data [Abstract] | ||||
Sales, net | $673,954 | $1,508,517 | $988,221 | $1,925,734 |
Costs of goods sold | 271,356 | 541,808 | 528,854 | 722,398 |
Gross profit | 402,598 | 966,709 | 459,367 | 1,203,336 |
Operating expenses | 860,143 | 2,142,644 | 1,428,384 | 3,174,163 |
Operating loss | -457,545 | -1,175,935 | -969,017 | -1,970,827 |
Other income (expense), net | -285,332 | -143,021 | -30,158 | -792,457 |
Income taxes | ||||
Loss from continuing operations | -742,877 | -1,318,956 | -999,175 | -2,763,284 |
Income from discontinued operations, net of tax | 538,568 | 1,058,424 | 1,401,050 | |
Gain from discontinued operations, net of tax | 2,788,543 | |||
Net income (loss) | $2,584,234 | ($260,532) | ($999,175) | ($1,362,234) |
Basic earnings (loss) per share from continuing operations | $0 | ($0.01) | ($0.01) | ($0.02) |
Basic earnings per share from discontinued operations | $0.02 | $0.01 | $0 | $0.01 |
Basic earnings (loss) per share | $0.02 | $0 | ($0.01) | ($0.01) |
Diluted earnings (loss) per share from continuing operations | $0 | ($0.01) | ($0.01) | ($0.02) |
Diluted earnings per share from discontinued operations | $0.02 | $0.01 | $0 | $0.01 |
Diluted earnings (loss) per share | $0.02 | $0 | ($0.01) | ($0.01) |
Basic weighted average number shares outstanding | 157,070,847 | 150,802,973 | 161,880,193 | 152,390,521 |
Diluted weighted average number shares outstanding | 163,204,253 | 150,802,973 | 161,880,193 | 152,390,521 |