Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | TOWERSTREAM CORP | ||
Entity Central Index Key | 1,349,437 | ||
Trading Symbol | twer | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 66,810,149 | ||
Entity Public Float | $ 108,303,532 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 15,116,531 | $ 38,027,509 |
Accounts receivable, net | 308,551 | 587,078 |
Prepaid expenses and other current assets | 474,029 | 314,129 |
Current assets of discontinued operations | 1,248,569 | 1,336,139 |
Current assets held for sale | 5,315,107 | 7,875,241 |
Total Current Assets | 22,462,787 | 48,140,096 |
Property and equipment, net | 21,235,384 | 23,146,977 |
Intangible assets, net | 1,273,030 | 2,199,858 |
Goodwill | 1,674,281 | 1,674,281 |
Other assets | $ 2,075,778 | 2,989,208 |
Long-term assets of discontinued operations | 4,171,418 | |
Total Assets | $ 48,721,260 | 82,321,838 |
Current Liabilities | ||
Accounts payable | 877,134 | 757,208 |
Accrued expenses | 1,629,218 | 1,955,878 |
Deferred revenues | 1,486,754 | 1,384,846 |
Current | 992,690 | 845,668 |
Current liabilities of discontinued operations | 3,907,368 | 196,861 |
Other | 63,012 | 57,242 |
Total Current Liabilities | 8,956,176 | 5,197,703 |
Long-Term Liabilities | ||
Long-term debt, net of debt discount of $2,053,520 and $3,194,147, respectively | 34,695,383 | 32,101,409 |
Capital lease obligations, net of current maturities | 932,826 | 1,285,858 |
Other | 1,591,188 | 1,774,841 |
Total Long-Term Liabilities | 37,219,397 | 35,162,108 |
Total Liabilities | $ 46,175,573 | $ 40,359,811 |
Commitments (Note 16) | ||
Stockholders' Equity | ||
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued | ||
Common stock, par value $0.001; 200,000,000 and 95,000,000 shares authorized, respectively; 66,810,149 and 66,656,789 shares issued and outstanding, respectively | $ 66,810 | $ 66,657 |
Additional paid-in-capital | 158,697,608 | 157,631,299 |
Accumulated deficit | (156,218,731) | (115,735,929) |
Total Stockholders' Equity | 2,545,687 | 41,962,027 |
Total Liabilities and Stockholders' Equity | $ 48,721,260 | $ 82,321,838 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt discount | $ 2,053,520 | $ 3,194,147 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 95,000,000 |
Common stock, shares issued (in shares) | 66,810,149 | 66,656,789 |
Common stock, shares oustanding (in shares) | 66,810,149 | 66,656,789 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 27,905,023 | $ 29,936,181 | $ 31,892,584 |
Operating Expenses | |||
Cost of revenues (exclusive of depreciation) | 10,603,845 | 10,299,906 | 9,874,066 |
Depreciation and amortization | 9,643,583 | 9,681,631 | 11,842,794 |
Customer support services | 4,425,764 | 4,127,294 | 4,113,459 |
Sales and marketing | 5,864,267 | 5,341,178 | 5,477,922 |
General and administrative | 9,957,538 | 9,767,404 | 10,364,431 |
Total Operating Expenses | 40,494,997 | 39,217,413 | 41,672,672 |
Operating Loss | (12,589,974) | (9,281,232) | (9,780,088) |
Other Income/(Expense) | |||
Interest expense, net | $ (6,652,786) | $ (1,672,846) | (217,741) |
Gain on business acquisition | 1,004,099 | ||
Total Other Income/(Expense) | $ (6,652,786) | $ (1,672,846) | 786,358 |
Loss before income taxes | (19,242,760) | (10,954,078) | (8,993,730) |
(Provision) benefit for income taxes | 37,562 | (78,532) | (78,531) |
Loss from continuing operations | (19,205,198) | (11,032,610) | (9,072,261) |
Loss from discontinued operations | (21,277,604) | (16,559,140) | (15,703,028) |
Net Loss | $ (40,482,802) | $ (27,591,750) | $ (24,775,289) |
Loss per share – basic and diluted | |||
Continuing (in dollars per share) | $ (0.28) | $ (0.16) | $ (0.14) |
Discontinued (in dollars per share) | (0.32) | (0.25) | (0.24) |
Net loss per share – basic and diluted (in dollars per share) | $ (0.60) | $ (0.41) | $ (0.38) |
Weighted average common shares outstanding – basic and diluted (in shares) | 67,931,666 | 66,803,767 | 65,181,310 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance (in shares) at Dec. 31, 2012 | 54,670,712 | |||
Balance at Dec. 31, 2012 | $ 54,671 | $ 121,118,127 | $ (63,368,890) | $ 57,803,908 |
Cashless exercise of options (in shares) | 37,770 | |||
Cashless exercise of options | $ 38 | (38) | ||
Exercise of options (in shares) | 284,688 | 420,159 | ||
Exercise of options | $ 285 | 292,104 | $ 292,389 | |
Issuance of common stock under employee stock purchase plan (in shares) | 31,267 | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 31 | 80,687 | 80,718 | |
Issuance of common stock upon vesting of restricted stock awards (in shares) | 15,000 | |||
Issuance of common stock upon vesting of restricted stock awards | $ 15 | (15) | ||
Net proceeds from issuance of common stock (in shares) | 11,000,000 | |||
Net proceeds from issuance of common stock | $ 11,000 | 30,488,336 | 30,499,336 | |
Issuance of common stock for business acquisition (in shares) | 385,124 | |||
Fair value of common stock issued for an acquisition | $ 385 | 950,871 | 951,256 | |
Stock-based compensation for options (in shares) | ||||
Stock-based compensation for options | 1,182,523 | 1,182,523 | ||
Stock-based compensation for restricted stock (in shares) | ||||
Stock-based compensation for restricted stock | 59,100 | 59,100 | ||
Net Loss | (24,775,289) | (24,775,289) | ||
Balance (in shares) at Dec. 31, 2013 | 66,424,561 | |||
Balance at Dec. 31, 2013 | $ 66,425 | 154,171,695 | (88,144,179) | $ 66,093,941 |
Cashless exercise of options (in shares) | 37,770 | |||
Cashless exercise of options | $ 38 | (38) | ||
Cashless exercise of options (in shares) | 192,270 | |||
Cashless exercise of options | $ 192 | (192) | ||
Exercise of options (in shares) | 340,906 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 24,958 | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 25 | 46,903 | $ 46,928 | |
Issuance of common stock upon vesting of restricted stock awards (in shares) | 15,000 | |||
Issuance of common stock upon vesting of restricted stock awards | $ 15 | (15) | ||
Fair value of common stock issued for an acquisition | ||||
Stock-based compensation for options | 953,470 | $ 953,470 | ||
Net Loss | (27,591,750) | |||
Balance (in shares) at Dec. 31, 2014 | 66,656,789 | |||
Balance at Dec. 31, 2014 | $ 66,657 | 157,631,299 | (115,735,929) | 41,962,027 |
Cashless exercise of options (in shares) | 192,270 | |||
Cashless exercise of options | $ 192 | (192) | ||
Fair value of options repurchased | (3,793) | (3,793) | ||
Debt discount associated with warrants issued in connection with issuance of debt | 2,463,231 | $ 2,463,231 | ||
Cashless exercise of options (in shares) | 96,594 | |||
Cashless exercise of options | $ 96 | (96) | ||
Exercise of options (in shares) | 426,530 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 56,766 | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 57 | 49,700 | $ 49,757 | |
Fair value of common stock issued for an acquisition | ||||
Stock-based compensation for options | 1,016,705 | $ 1,016,705 | ||
Net Loss | (40,482,802) | (40,482,802) | ||
Balance (in shares) at Dec. 31, 2015 | 66,810,149 | |||
Balance at Dec. 31, 2015 | $ 66,810 | 158,697,608 | $ (156,218,731) | $ 2,545,687 |
Cashless exercise of options (in shares) | 96,594 | |||
Cashless exercise of options | $ 96 | $ (96) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net Loss | $ (40,482,802) | $ (27,591,750) | $ (24,775,289) |
Loss from discontinued operations | 21,277,604 | 16,559,140 | 15,703,028 |
Loss from continuing operations | (19,205,198) | (11,032,610) | (9,072,261) |
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | |||
Provision (benefit) for income taxes | (37,562) | 78,532 | 78,531 |
Provision for doubtful accounts | 132,000 | 322,000 | 85,000 |
Depreciation for property, plant and equipment | 9,251,311 | 8,792,662 | 8,748,977 |
Amortization of Intangible Assets | 392,272 | 888,969 | $ 3,093,817 |
Amortization of debt issuance costs | 939,498 | 262,820 | |
Amortization of debt discount | 1,140,627 | 319,084 | |
Accrued interest | 1,453,347 | 295,556 | |
Stock-based compensation | 1,024,246 | $ 960,490 | $ 1,253,661 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 534,555 | ||
Gain on business acquisition | $ (1,004,099) | ||
Loss on sale and disposition of property and equipment | 120,644 | ||
Deferred rent | $ (139,430) | $ 376,860 | 575,541 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 146,527 | (514,043) | 208,506 |
Prepaid expenses and other current assets | (159,901) | 80,377 | (513,247) |
Other assets | (70,841) | 4,144 | 1,935,801 |
Account payable | 119,925 | (278,408) | (157,359) |
Accrued expenses | 19,486 | (598,586) | (1,913,078) |
Deferred revenues | 101,908 | (11,934) | (120,659) |
Total Adjustments | 14,847,968 | 10,978,523 | 12,392,036 |
Net Cash (Used In) Provided By Continuing Operating Activities | (4,357,230) | (54,087) | 3,319,775 |
Net Cash Used In Discontinued Operating Activities | (10,896,524) | (13,359,041) | (12,804,213) |
Net Cash Used In Operating Activities | (15,253,754) | (13,413,128) | (9,484,438) |
Cash Flows From Investing Activities | |||
Acquisitions of property and equipment | (6,487,040) | (5,086,298) | $ (5,878,483) |
Lease incentive payment from landlord | $ 10,626 | $ 380,000 | |
Acquisition of a business, net of cash acquired | $ (222,942) | ||
Proceeds from sale of property and equipment | 18,365 | ||
(Payments) refund of security deposits | $ (7,950) | $ (44,618) | 359,358 |
Deferred acquisition payments | (11,517) | (67,246) | (162,987) |
Net Cash Used in Continuing Investing Activities | (6,495,881) | (4,818,162) | (5,886,689) |
Net Cash Used In Discontinued Investing Activities | (187,524) | (2,218,594) | (1,675,775) |
Net Cash Used In Investing Activities | (6,683,405) | (7,036,756) | (7,562,464) |
Cash Flows From Financing Activities | |||
Payments on capital leases | $ (1,016,035) | $ (796,513) | (784,198) |
Proceeds upon exercise of options | 292,389 | ||
Issuance of common stock under employee stock purchase plan | $ 42,216 | $ 39,908 | $ 68,680 |
Net proceeds from debt financing | 31,056,260 | ||
Fair value of options repurchased | $ (3,793) | ||
Proceeds from Issuance of Common Stock | $ 30,499,336 | ||
Net Cash (Used In) Provided By Continuing Financing Activities | $ (973,819) | $ 30,295,862 | $ 30,076,207 |
Net Cash (Used In) Provided By Discontinued Financing Activites | |||
Net Cash (Used In) Provided By Financing Activities | $ (973,819) | $ 30,295,862 | $ 30,076,207 |
Net (Decrease) Increase In Cash and Cash Equivalents | |||
Continuing Operations | (11,826,930) | 25,423,613 | 27,509,293 |
Discontinued Operations | (11,084,048) | (15,577,635) | (14,479,988) |
Net (Decrease) Increase In Cash and Cash Equivalents | (22,910,978) | 9,845,978 | 13,029,305 |
Cash and Cash Equivalents – Beginning of year | 38,027,509 | 28,181,531 | 15,152,226 |
Cash and Cash Equivalents – Ending of year | 15,116,531 | 38,027,509 | 28,181,531 |
Supplemental Disclosures of Cash Flow Information | |||
Interest | 3,163,976 | 833,364 | 220,634 |
Taxes | $ 24,028 | $ 24,609 | 21,619 |
Non-cash investing and financing activities: | |||
Fair value of common stock issued for an acquisition | 951,256 | ||
Under capital leases | $ 810,026 | $ 339,652 | 80,894 |
Included in accrued expenses | $ 178,134 | $ 524,280 | $ 867,311 |
Note 1 - Organization and Natur
Note 1 - Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | Note 1. Organization and Nature of Business Towerstream Corporation (referred to as “Towerstream” or the “Company”) was incorporated in Delaware in December 1999. During its first decade of operations, the Company’s business activities were focused on delivering fixed wireless broadband services to commercial customers over a wireless network transmitting over both licensed and unlicensed radio spectrum. The Company’s fixed wireless service supports bandwidth on demand, wireless redundancy, virtual private networks, disaster recovery, bundled data and video services. The Company provides services to business customers in New York City, Boston, Chicago, Los Angeles, San Francisco, Seattle, Miami, Dallas-Fort Worth, Houston, Philadelphia, Las Vegas-Reno and Providence-Newport. The Company’s “Fixed Wireless business” has historically grown both organically and through the acquisition of five other fixed wireless broadband providers in various markets. In January 2013, the Company incorporated a wholly-owned subsidiary, Hetnets Tower Corporation (“Hetnets”), to operate a new business designed to leverage its fixed wireless network in urban markets to provide other wireless technology solutions and services. Hetnets built a carrier-class network which offered a shared wireless infrastructure platform, primarily for (i) co-location of customer owned antenna and related equipment and (ii) Wi-Fi access and offloading. The Company referred to this as its “Shared Wireless Infrastructure” or “Shared Wireless” business. During the fourth quarter of 2015, the Company determined to exit this business and curtailed activities in its smaller markets. The remaining network, located in New York City (or “NYC”), was the largest and had a lease access contract with a major cable company. As a result, the Company explored opportunities during the fourth quarter of 2015 and continuing into the first quarter of 2016 to sell the New York City network. As further described in Note 18, on March 9, 2016, the Company completed a sale and transfer of certain assets to the major cable company (the “Buyer”). The Asset Purchase Agreement provided that the Buyer would assume certain rooftop leases in NYC and acquire ownership of the Wi-Fi access points and related equipment associated with operating the network. The Company retained ownership of all backhaul and related equipment and the parties entered into a backhaul services agreement under which the Company will provide bandwidth to the Buyer at the locations governed by the leases. The agreement is for a three year period with two, one year renewals and is cancellable by the Buyer on sixty days’ notice. The operating results and cash flows for Hetnets have been presented as discontinued operating results in these consolidated financial statements. Assets associated with the New York City network have been presented as Assets Held for Sale. |
Note 2 - Liquidity and Manageme
Note 2 - Liquidity and Management Plans | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Liquidity and Management Plans [Text Block] | Note 2. Liquidity and Management Plans At December 31, 2015, the Company had cash and cash equivalents of approximately $15.1 million and working capital of approximately $13.5 million. Based on (i) current projections for revenues for its continuing operations, (ii) operating costs to support its continuing operations including the effect of cost reduction measures that are being implemented, and (iii) capital expenditures to support the network infrastructure, the Company believes that its current cash balances are sufficient to maintain operations and fulfill working capital requirements for the next twelve months from the date of filing this annual report. The Company has historically financed operations through private and public placement of equity securities, as well as debt financings and capital leases. The Company's ability to fund its longer term cash requirements is subject to multiple risks, many of which are beyond its control. Should additional funding be required, the Company may need to raise additional capital through the sale of equity or debt securities. There can be no assurances that the Company would be successful in raising additional capital. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | Note 3. Summary of Significant Accounting Policies Basis of Presentation. Use of Estimates. Cash and Cash Equivalents. Concentration of Credit Risk. Accounts Receivable For the Years Ended December 31, 201 5 201 4 2013 Beginning $ 59,273 $ 81,009 $ 190,109 Additions 132,000 322,000 85,000 Deductions (98,410 ) (343,736 ) (194,100 ) Ending $ 92,863 $ 59,273 $ 81,009 Property and Equipment. Expenditures for maintenance and repairs which do not extend the useful life of the assets are charged to expense as incurred. Gains or losses on disposals of property and equipment are reflected in general and administrative expenses in the Company’s consolidated statements of operations. FCC Licenses. Long-Lived Assets The FASB’s guidance on asset retirement obligations addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated costs. This guidance requires the recognition of an asset retirement obligation and an associated asset retirement cost when there is a legal obligation associated with the retirement of tangible long-lived assets. The Company’s network equipment is installed on both buildings in which the Company has a lease agreement (“Company Locations”) and at customer locations. In both instances, the installation and removal of the Company’s equipment is not complicated and does not require structural changes to the building where the equipment is installed. Costs associated with the removal of the Company’s equipment at company or customer locations are not material, and accordingly, the Company has determined that it does not presently have asset retirement obligations under the FASB’s accounting guidance. Business Acquisitions The highest level of judgment and estimation involved in accounting for business acquisitions relates to determining the fair value of the customer relationships and network assets acquired. In each of the five acquisitions completed over the past four years, the highest asset value has been allocated to the customer relationships acquired. Determining the fair value of customer relationships involves judgments and estimates regarding how long the customers will continue to contract services with the Company. During the course of completing five acquisitions, the Company has developed a database of historical experience from prior acquisitions to assist in preparing future estimates of cash flows. Similarly, the Company has used its historical experience in building networks to prepare estimates regarding the fair value of the network assets that it acquires. Goodwill. Fair Value of Financial Instruments. Income Taxes. Revenue Recognition. Deferred Revenues. Advertising Costs. Stock-Based Compensation. Basic and Diluted Net Loss Per Share. The following common stock equivalents were excluded from the computation of diluted net loss per common share because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per shares if the Company becomes profitable in the future. Years Ended December 31, 2015 2014 2013 Stock options 4,340,042 3,997,695 4,055,016 Warrants 2,850,000 2,850,000 450,000 Total 7,190,042 6,847,695 4,505,016 Reclassifications. Segments Recent Accounting Pronouncements. In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” which requires an entity to recognize revenue representing the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is intended to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts with customers. ASU 2014-09 will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles (“GAAP”) when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is only permitted as of January 1, 2017. The Company is currently evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-12 (“ASU 2014-12”), “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which requires a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. ASU 2014-12 states that the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the periods for which the requisite service has already been rendered. The new standard is effective for the Company on January 1, 2016. The Company does not expect adoption of ASU 2014-12 to have a significant impact on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014–15 (“ASU 2014-15”), “Presentation of Financial Statements – Going Concern.” ASU 2014-15 provides GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for the Company on January 1, 2017. The Company does not expect the adoption of ASU 2014–15 to have a significant impact on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03 (“ASU 2015-03”), “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that ASU 2015-03 will have on its consolidated financial statements and related disclosures. In May 2015, the FASB issued ASU No. 2015-07 (“2015-07”), “Fair Value Measurement.” ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU 2015-07 is effective for the Company on January 1, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2015–07 to have a significant impact on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16 (“ASU 2015-16”), “Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined (not retrospectively as with prior guidance). Additionally, the acquirer must record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the time of acquisition. The acquiring entity is required to disclose, on the face of the financial statements or in the footnotes to the financial statements, the portion of the amount recorded in current period earnings, by financial statement line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for the Company on January 1, 2016. The adoption of this standard is not expected to have a material impact on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16 (“ASU 2015-16”), “Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined (not retrospectively as with prior guidance). Additionally, the acquirer must record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the time of acquisition. The acquiring entity is required to disclose, on the face of the financial statements or in the footnotes to the financial statements, the portion of the amount recorded in current period earnings, by financial statement line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for the Company on January 1, 2016. The adoption of this standard is not expected to have a material impact on its consolidated financial statements. In November 2015, the FASB has issued an update to ASU No. 2015-17 (“ASU 2015-17”) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The update requires a company to classify all deferred tax assets and liabilities as noncurrent. The update of ASU 2015-17 is effective for the Company on January 1, 2018. The Company does not expect the adoption of the update of ASU 2015–17 to have a significant impact on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”), “Financial Instruments – Overall (Subtopic 825-10)”. ASU 2016-01 updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The new guidance is effective for us on January 1, 2018. The Company does not expect the adoption of ASU 2016–01 to have a significant impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02), “Leases (Topic 842).” ASU 2016-02 requires a lessee to recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. ASU 2016-02 is effective for the Company on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the effect that ASU 2016-02 will have on its consolidated financial statements. |
Note 4 - Business Acquisitions
Note 4 - Business Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | Note 4. Business Acquisitions Delos Internet In February 2013, the Company completed the acquisition of Delos Internet (“Delos”). The Company obtained full control of Delos and determined that the acquisition was a business combination to be accounted for under the acquisition method. The following table summarizes the consideration transferred and the amounts of identified assets acquired and liabilities assumed at the acquisition date. The number of shares issued was determined based on the closing price of the Company’s common stock on the February 28, 2013 closing date which was $2.47. Original Adjustments Final Fair value of consideration transferred: Cash $ 225,000 $ - $ 225,000 Common stock 1,071,172 (119,916 ) 951,256 Other liabilities assumed - 36,733 36,733 Capital lease obligations assumed 128,929 - 128,929 Total consideration transferred 1,425,101 (83,183 ) 1,341,918 Fair value of identifiable assets acquired and liabilities assumed: Cash 2,058 - 2,058 Accounts receivable 80,524 1,286 79,238 Property and equipment 826,524 18,824 807,700 Security deposits 1,993 - 1,993 Accounts payable (26,970 ) 2,566 (29,536 ) Deferred revenue (62,110 ) (2,135 ) (59,975 ) Other liabilities (89,930 ) - (89,930 ) Total identifiable net tangible assets 732,089 20,541 711,548 Customer relationships 1,634,469 - 1,634,469 Total identifiable net assets 2,366,558 20,541 2,346,017 Gain on business acquisition $ 941,457 $ 62,642 $ 1,004,099 The Company recognized a gain on business acquisition of $1,004,099 which is included in other income (expense) in the Company’s consolidated statements of operations for the year ended December 31, 2013. The challenging economic environment during 2012 made it difficult for smaller companies like Delos to raise sufficient capital to sustain their growth. As a result, the Company was able to acquire the customer relationships and wireless network of Delos at a discounted price. In May 2013, the Company finalized the purchase price of Delos which resulted in a reduction of approximately $21,000 of identifiable net assets and an increase in the gain on business acquisition of approximately $63,000. The purchase price adjustment resulted in a decrease in the number of shares of common stock issued to Delos of 48,549 from 433,673 to 385,124 shares. The results of operations of Delos have been included in the Company’s consolidated statements of operations since the completion of the acquisition in February 2013. Revenues generated from customers acquired from Delos totaled approximately $517,000 for the year ended December 31, 2013. During the year ended December 31, 2013, the Company incurred approximately $99,000 of third-party costs in connection with the Delos acquisition. These expenses are included in the general and administrative expenses in the Company’s consolidated statements of operations. Pro Forma Information The following table reflects the unaudited pro forma results from continuing operations had the Delos acquisition taken place at the beginning of the 2013 period: Year Ended December 31, 2013 Revenues $ 32,005,154 Amortization expense 3,159,196 Total operating expenses 41,844,651 Net loss (9,131,670 ) Basic net loss per share $ (0.14 ) The pro forma information presented above does not purport to present what actual results would have been had the Delos acquisition actually occurred at the beginning of 2013 nor does the information project results for any future period. |
Note 5 - Discontinued Operation
Note 5 - Discontinued Operations and Assets Held for Sale | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 5. Discontinued Operations and Assets Held for Sale In January 2013, the Company incorporated a wholly-owned subsidiary, Hetnets Tower Corporation (“Hetnets”), to operate a new business designed to leverage its fixed wireless network in urban markets to provide other wireless technology solutions and services. Hetnets built a carrier-class network which offered a shared wireless infrastructure platform, primarily for (i) co-location of customer owned antenna and related equipment and (ii) Wi-Fi access and offloading. The Company referred to this as its “Shared Wireless Infrastructure” or “Shared Wireless” business. During the fourth quarter of 2015, the Company determined to exit this business and curtailed activities in its smaller markets, and recognized charges of $3,284,466 representing the estimated cost to settle lease obligations, $1,618,540 to write-off network assets which could not be redeployed into the fixed wireless network, $45,114 related to security deposits which are not expected to be recovered, and $410,991 related to the accelerated expensing of deferred acquisition costs. The remaining network, located in New York City (or “NYC”), was the largest and had a lease access contract with a major cable company. As a result, the Company explored opportunities during the fourth quarter of 2015 and continuing into the first quarter of 2016 to sell the New York City network. As further described in Note 18, on March 9, 2016, the Company completed a sale and transfer of certain assets to the major cable company (the “Buyer”). The Asset Purchase Agreement provided that the Buyer would assume certain rooftop leases in NYC and acquire ownership of the Wi-Fi access points and related equipment associated with operating the network. The Company retained ownership of all backhaul and related equipment and the parties entered into a backhaul services agreement under which the Company will provide internet bandwidth to the Buyer at the locations governed by the leases. The agreement is for a three year period with two, one year renewals and is cancellable by the Buyer on sixty days’ notice. The operating results and cash flows for Hetnets have been presented as discontinued operating results in these consolidated financial statements. Assets associated with the New York City network have been presented as Assets Held for Sale. Discontinued Operations A more detailed presentation of loss from discontinued operations is set forth below. There has been no allocation of consolidated interest expense to discontinued operations. General and administrative expenses for 2015 includes $1,618,540 to write-off network assets which could not be deployed. Year Ended December 31, 2015 2014 2013 Revenues $ 3,370,181 $ 3,099,972 $ 1,540,700 Operating expenses: Cost of revenues 17,751,033 14,220,122 11,980,097 Depreciation and amortization 4,032,219 3,957,784 3,508,647 Customer support services 710,368 683,208 784,780 Sales and marketing 145,954 229,013 301,578 General and administrative 2,008,211 568,985 668,626 Total operating expenses 24,647,785 19,659,112 17,243,728 Loss from discontinued operations $ (21,277,604 ) $ (16,559,140 ) $ (15,703,028 ) The components of the balance sheet accounts presented as discontinued operations were as follows: As of December 31, 2015 2014 Assets: Accounts receivable, net $ 715,993 $ 723,569 Prepaid expenses and other current assets 278,891 612,570 Deferred acquisitions costs 253,685 - Total Current Assets $ 1,248,569 $ 1,336,139 Long-Term Assets: Property and equipment - 3,233,486 Deferred acquisitions costs - 879,518 Security deposits - 58,414 Total Long Term Assets $ - $ 4,171,418 Liabilities: Accounts payable $ 556,800 $ 114,042 Accrued expenses 66,101 82,819 Accrued expenses - network 3,284,467 - Total urrent Liabilities $ 3,907,368 $ 196,861 Assets Held for Sale The components of the balance sheet accounts presented as Assets Held for Sale were as follows: As of December 31, 2015 2014 Security deposits $ 356,108 $ 350,418 Wi-Fi and back-end equipment, net 4,958,999 7,524,823 Current assets held for sale $ 5,315,107 $ 7,875,241 |
Note 6 - Property and Equipment
Note 6 - Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | Note 6. Property and Equipment Property and equipment is comprised of: As of December 31, 2015 2014 Network and base station equipment $ 38,351,119 $ 35,836,469 Customer premise equipment 30,910,874 26,511,691 Information technology 4,810,865 4,628,555 Furniture, fixtures and other 1,713,722 1,669,340 Leasehold improvements 1,623,559 1,599,393 77,410,139 70,245,448 Less: accumulated depreciation 56,174,755 47,098,471 Property and equipment, net $ 21,235,384 $ 23,146,977 Property acquired through capital leases included within the Company’s property and equipment consists of the following: As of December 31, 2015 2014 Network and base station equipment $ 2,620,898 $ 2,234,180 Customer premise equipment 669,792 246,484 Information technology 1,860,028 1,860,028 5,150,718 4,340,692 Less: accumulated depreciation 3,114,968 2,135,534 Property acquired through capital leases, net $ 2,035,750 $ 2,205,158 |
Note 7 - Intangible Assets
Note 7 - Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | Note 7. Intangible Assets Intangible assets consist of the following: As of December 31, 2015 2014 Goodwill $ 1,674,281 $ 1,674,281 Customer relationships $ 11,856,126 $ 11,856,127 Less: accumulated amortization of customer relationships 11,333,096 10,940,824 Customer relationships, net 523,030 915,303 FCC licenses 1,284,555 1,284,555 Impairment charge (534,555 ) - FCC licenses, net 750,000 1,284,555 Intangible assets, net $ 1,273,030 $ 2,199,858 Amortization expense for the years ended December 31, 2015, 2014 and 2013 was $392,272, $888,969 and $3,093,817, respectively. The customer contracts acquired in May 2011 for the One Velocity, Inc. acquisition were amortized over a 30 month period ending November 2013. The customer contracts acquired in the Color Broadband Communications acquisition were amortized over a 28 month period ending April 2014. The customer contracts acquired in the Delos acquisition are being amortized over a 50 month period ending April 2017. As of December 31, 2015, the remaining amortization period for the Delos acquisition was 16 months. Balances related to the Company’s other acquisitions have been fully amortized. Future amortization expense is as follows: Years Ending December 31, 2016 392,272 2017 130,758 $ 523,030 FCC licenses have an indefinite life but are subject to periodic renewal. The Company recognized an impairment charge of $534,555 in 2015 related to a spectrum license. The Company determined that changes being considered by the FCC would make commercial use of the spectrum uncertain and costly, and that the coverage area of the spectrum was not consistent with its focus on dense urban markets. The expense is included in general and administrative expenses in the statement of operations. Based on prices paid at recent spectrum auctions, the Company believes that the remaining spectrum has a fair value higher than the cost basis at which it is reported in these financial statements. |
Note 8 - Accrued Expenses
Note 8 - Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Accrued Liabilities Disclosure [Text Block] | Note 8. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2015 2014 Payroll and related $ 551,448 $ 661,496 Professional services 427,932 256,534 Other 339,680 280,413 Property and equipment 176,614 506,883 Network 133,544 187,440 Marketing - 63,112 Total $ 1,629,218 $ 1,955,878 Network represents costs incurred to provide services to the Company’s customers including tower rentals, bandwidth, troubleshooting and gear removal. |
Note 9 - Other Liabilities
Note 9 - Other Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Other Liabilities Disclosure [Text Block] | Note 9. Other Liabilities Other liabilities consist of the following: As of December 31, 2015 2014 Current Deferred rent $ 63,012 $ 46,058 Deferred acquisition payments - 11,184 Total $ 63,012 $ 57,242 Long-Term Deferred rent $ 1,227,414 $ 1,373,163 Deferred acquisition payments - 341 Deferred taxes 363,774 401,337 Total $ 1,591,188 $ 1,774,841 Deferred acquisition payments related to Delos totaled $11,525 at December 31, 2014 and bore interest at a rate of 7%. |
Note 10 - Long-Term Debt
Note 10 - Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 10. Long-Term Debt In October 2014, the Company entered into a loan agreement (the "Loan Agreement") with Melody Business Finance, LLC (the "Lender") which provided the Company with a five-year $35 million term loan (the "Financing" or "Note"). The Note was issued at a 3% discount totaling $1,050,000 which is being amortized over the term of the Note. The Company recognized interest expense of $340,899 and $95,365 in connection with the amortization of this discount for the years ended December 31, 2015 and 2014, respectively. The unamortized balance totaled $613,736 and $954,635 at December 31, 2015 and 2014 respectively. The loan bears interest payable in cash at a rate equal to the greater of (i) the sum of the one month Libor rate on each payment date plus 7% or (ii) 8% per annum, and additional paid in kind (“PIK”), or deferred, interest that accrues at 4% per annum. The Company paid $2,906,695 of interest and accrued $1,453,347 of PIK interest for the year ended December 31, 2015. The Company paid $591,111 of interest and accrued $295,556 of PIK interest for the year ended December 31, 2014. PIK interest is included in Interest expense, net in the accompanying consolidated statements of operations. In October 2019, the Company must repay the principal amount outstanding plus all accrued interest. The Company has the option of prepaying the loan (i) on or before October 16, 2016 (the “Second Anniversary”), but only in full, and (ii) at any time after the Second Anniversary, in the minimum principal amount of $5,000,000 or in full if the balance outstanding is less. All optional prepayments are subject to certain premiums. Mandatory prepayments are required upon the occurrence of certain events, including but not limited to the (i) sale, lease, conveyance or transfer of certain assets, (ii) issuance or incurrence of indebtedness other than certain permitted debt, (iii) issuance of capital stock redeemable for cash or convertible into debt securities and (iv) any change of control. As further set forth in a security agreement (the “Security Agreement”), repayment of the loan is secured by a first priority lien and security interest in all of the assets of the Company and its subsidiaries, excluding capital stock of the Company, and certain capital leases, contracts and assets secured by purchase money security interests. The Loan Agreement also contains representations and warranties by the Company and the Lender, certain indemnification provisions in favor of the Lender and customary covenants (including limitations on other debt, liens, acquisitions, investments and dividends), and events of default (including payment defaults, breaches of covenants, a material impairment in the Lender’s security interest or in the collateral, and events relating to bankruptcy or insolvency). Upon the occurrence of an event of default, an additional 5% interest rate will be applied to the outstanding loan balances, and the Lender may terminate its lending commitment, declare all outstanding obligations immediately due and payable, and take such other actions as set forth in the Loan Agreement. As of December 31, 2015, the Company was in compliance with all of the debt covenants. In connection with the Loan Agreement and pursuant to a Warrant and Registration Rights Agreement, the Company issued warrants (the “Warrants”) to purchase 3,600,000 shares of common stock of which two-thirds have an exercise price of $1.26 and one-third have an exercise price of $0.01, subject to customary adjustments under certain circumstances. The Warrants have a term of seven and a half years. The fair value of the warrants granted to the Lender of $2,463,231 was calculated using the Black-Scholes option pricing model and recorded as a debt discount. The debt discount is being amortized over the term of the Note using the effective interest rate. The Company recognized interest expense of $799,727 and $223,719 in connection with the amortization of this discount for the years ended December 31, 2015 and 2014, respectively. The unamortized balance totaled $1,439,785 and $2,239,512 at December 31, 2015 and 2014, respectively. The warrant holders have piggyback registration rights requiring the inclusion of the shares of common stock issuable upon exercise of the Warrants (the “Warrant Shares”) in any registration statement filed by the Company. In addition, the Company has agreed to file a registration statement to register for resale all of the Warrant Shares and cause the registration statement to become effective by December 31, 2016 (the “Required Registration Statement”). If the Required Registration Statement is not declared effective by the required date, then the Company shall pay the holders liquidated damages in the aggregate amount of $5,000 per month, up to $50,000 in total, until both the Required Registration Statement has become effective and the Warrant Shares are listed. The Company incurred costs, primarily professional services, of approximately $2,900,000 related to the Loan Agreement. These costs were recorded as other assets in the Company’s consolidated balance sheet and are being amortized over the term of the Loan Agreement using the effective interest rate. Amortization expense totaled $939,498 and $262,820 for the years ended December 31, 2015 and 2014, respectively. The unamortized balance totaled $1,691,421 and $2,630,919 at December 31, 2015 and 2014, respectively. |
Note 11 - Capital Stock
Note 11 - Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 11. Capital Stock The Company is authorized to issue 200,000,000 shares of common stock at a par value of $0.001. The holders of common stock are entitled to one vote per share. The holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the board of directors out of legally available funds. Upon liquidation, dissolution or winding-up, the holders of the Company’s common stock are entitled to share ratably in all assets that are legally available for distribution. The holders of the Company’s common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of the Company’s common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action of the board of directors and issued in the future. At the Company’s annual meeting in August 2015, the shareholders approved an increase in the number of authorized shares of common stock from 95,000,000 to 200,000,000. In November 2010, the Company adopted a shareholder rights plan (the “Rights Plan”). Under the Rights Plan, the Company issued one preferred share purchase right for each share of the Company's common stock held by shareholders of record as of the close of business on November 24, 2010. In general, the rights will become exercisable if a person or group acquires 15% or more of the Company’s common stock or announces a tender offer or exchange offer for 15% or more of the Company’s common stock. Each holder of a right will be allowed to purchase one one-hundredth of a share of a newly created series of the Company’s preferred shares at an exercise price of $18.00. The rights will expire on November 8, 2020. The Company may redeem the rights for $0.001 each at any time until the tenth business day following public announcement that a person or group has acquired 15% or more of its outstanding common stock. Stock options were exercised by current or former employees as follows: For the Years Ended December 31, 2015 2014 2013 Cash basis: Total options exercised - - 284,688 Total proceeds received $ - $ - $ 292,389 Cashless basis: Total options exercised 426,530 340,906 135,471 Net issuance of common stock 96,594 192,270 37,770 Under a cashless exercise, the holder uses a portion of the shares that would otherwise be issuable upon exercise, rather than cash, as consideration for the exercise. The amount of net shares issuable in connection with a cashless exercise will vary based on the exercise price of the option or warrant compared to the current market price of the Company’s common stock on the date of exercise. In February and March 2013, the Company completed an underwritten offering at $3.00 per share which resulted in gross proceeds of $33,000,000 and the issuance of 11,000,000 shares. The Company incurred costs of approximately $2,501,000 related to the offering. In February 2013, the Company issued 433,673 shares of common stock to Delos as part of the consideration paid for the acquisition. The fair value of the common stock issued was $1,071,172. In May 2013, the Company reduced the number of shares of common stock issued to Delos by 48,549 as a result of an adjustment to the purchase price. The reduction of common stock had a fair value of $119,916. |
Note 12 - Stock Options and War
Note 12 - Stock Options and Warrants | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 12. Stock Option Plans and Warrants Stock Options Plans The 2007 Equity Compensation Plan (the “2007 Plan”) became effective in January 2007 and provides for the issuance of options, restricted stock and other stock-based instruments to officers and employees, consultants and directors of the Company. The total number of shares of common stock issuable under the 2007 Plan is 2,403,922. A total of 2,136,849 stock options or common stock have been issued under the 2007 Plan as of December 31, 2015. The 2007 Incentive Stock Plan became effective in May 2007 and provides for the issuance of up to 2,500,000 shares of common stock in the form of options or restricted stock (the “2007 Incentive Stock Plan”). Shareholders approved an increase in the number of authorized shares of common stock issuable under the 2007 Incentive Stock Plan from 2,500,000 to 5,000,000 in November 2012. A total of 2,949,423 stock options, common stock or restricted stock have been issued under the 2007 Incentive Stock Plan as of December 31, 2015. Options granted under both the 2007 Plan and the 2007 Incentive Plan have terms up to ten years and are exercisable at a price per share not less than the fair value of the underlying common stock on the date of grant. The total number of shares of common stock that remain available for issuance as of December 31, 2015 under the 2007 Plan and the 2007 Incentive Stock Plan combined is 2,317,650 shares. The 2008 Non-Employee Directors Compensation Plan (the “2008 Directors Plan”) became effective in August 2008 and provides for the issuance of up to 1,000,000 shares of common stock in the form of options or restricted stock. In November 2013, shareholders approved an increase in the number of shares of common stock issuable under the 2008 Directors Plan to 2,000,000. A total of 1,372,500 stock options or common stock have been issued under the 2008 Directors Plan as of December 31, 2015. Options granted under the 2008 Directors Plan have terms of up to ten years and are exercisable at a price per share equal to the fair value of the underlying common stock on the date of grant. The total number of shares of common stock that remain available for issuance as of December 31, 2015 under the 2008 Directors Plan is 627,500 shares. The Company uses the Black-Scholes model to value options granted to employees, directors and consultants. Compensation expense, including the effect of forfeitures, is recognized over the period of service, generally the vesting period. The Company bases its forfeiture rate on past experience with a higher forfeiture rate applied in the initial years of the vesting period and lower rates applied in the later years of the vesting period. Stock-based compensation for the amortization of stock options granted under the Company’s stock option plans totaled $1,016,705, $953,470, and $1,182,523 for the years ended December 31, 2015, 2014, and 2013, respectively. Stock-based compensation is included in general and administrative expenses in the accompanying consolidated statements of operations. The unamortized amount of stock options expense was $585,688 as of December 31, 2015 which will be recognized over a weighted-average period of 0.8 year. The fair values of stock option grants were calculated on the dates of grant using the Black-Scholes option pricing model and the following weighted average assumptions: Years Ended December 31, 2015 2014 2013 Risk-free interest rate 1.5% - 1.7% 1.1% - 1.8% 0.8% - 1.9% Expected volatility 58% - 77% 47% - 60% 65% - 68% Expected life (in years) 4.1 - 4.2 4.1 - 5.3 5.0 - 6.5 Expected dividend yield 0% 0% 0% The risk-free interest rate was based on rates established by the Federal Reserve. The Company’s expected volatility was based upon the historical volatility for its common stock. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity. Beginning in the fourth quarter of 2014, the Company began utilizing its historical data regarding the Company’s activity as it relates to the expected life of stock options. The dividend yield is based upon the fact that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. The Company reviews its forfeiture rate annually to update its assumption for recent experience. Forfeiture rates used in 2015 ranged from 3% to 10%. During the first quarter of 2011, the Company issued 90,000 shares of restricted stock to two executives. The fair value of $354,600 was based on the closing market price of the Company’s common stock on the date of grant. The restricted stock vested over a three year period, of which 60,000 shares were vested and 30,000 shares of restricted stock were forfeited due to the resignation of an executive in November 2012. Stock-based compensation for restricted stock totaled $59,100 for the year ended December 31, 2013 and was also the period in which the restricted stock was fully vested. Option transactions under the stock option plans during the years ended December 31, 2015, 2014 and 2013 were as follows: Number of Options Weighted Average Exercise Price Outstanding as of January 1, 2013 3,916,045 $ 2.85 Granted during 2013 950,000 2.40 Exercised (420,159 ) 1.23 Forfeited /expired (390,870 ) 5.07 Outstanding as of December 31, 2013 4,055,016 2.70 Granted during 2014 737,073 1.42 Exercised (340,906 ) 0.74 Forfeited /expired (453,488 ) 1.78 Outstanding as of December 31, 2014 3,997,695 2.73 Granted during 2015 878,751 1.46 Exercised (426,530 ) 1.58 Forfeited /expired (109,874 ) 1.94 Outstanding as of December 31, 2015 4,340,042 $ 2.61 Exercisable as of December 31, 2015 3,372,743 $ 2.68 Grants under the stock option plans were as follows: For the Years Ended December 31, 2015 2014 2013 Annual grants to outside directors 200,000 200,000 200,000 Executive grants 231,251 172,073 125,000 Employee grants 447,500 315,000 625,000 Non-employee grants - 50,000 - Total 878,751 737,073 950,000 All options granted during the reporting period had a ten year term and were issued at an exercise price equal to the fair value on the date of grant. Director grants vest over a one year period from the date of issuance. Executive grants vesting periods range from vesting immediately upon issuance to vesting monthly or quarterly over a one or two year period from the date of issuance. Employee grants range from vesting immediately upon issuance to vesting over a one to three year period from the date of issuance. Non-employee grants vesting periods range from vesting immediately upon issuance to vesting over one year from the date of issuance. Forfeited or expired options under the stock option plans were as follows: For the Years Ended December 31, 2015 2014 2013 Employee terminations 82,374 185,208 390,870 Expired 27,500 254,030 - Repurchased - 14,250 - Total 109,874 453,488 390,870 The weighted-average fair values of the options granted during 2015, 2014, and 2013 were $0.68, $0.67, and $1.44, respectively. Outstanding options of 4,340,042 as of December 31, 2015 had exercise prices that ranged from $0.46 to $5.25 and had a weighted-average remaining contractual life of 6.8 years. Exercisable options of 3,372,743 as of December 31, 2015 had exercise prices that ranged from $0.68 to $5.25 and had a weighted-average remaining contractual life of 6.3 years. As of December 31, 2015, there was no aggregate intrinsic value associated with the outstanding and exercisable options. The closing price of the Company’s common stock at December 31, 2015, was $0.38 per share. The Company calculates the intrinsic value of stock options and warrants as the difference between the closing price of the Company’s common stock at the end of the reporting period and the exercise price of the stock options and warrants. Stock Warrants Warrant transactions during the years ended December 31, 2015, 2014 and 2013 were as follows: Number of Warrants Weighted Average Exercise Price Outstanding as of December 31, 2013 450,000 $ 5.00 Granted during 2014 3,600,000 $ 0.84 Outstanding as of December 31, 2014 and 2015 4,050,000 $ 1.31 In October 2014, the Company issued 3,600,000 warrants to purchase shares of common stock under the Company’s Financing of which 1,200,000 warrants had an exercise price of $0.01 per share and 2,400,000 warrants had an exercise price of $1.26 per share. As of December 31, 2015, all warrants were exercisable and had a weighted average remaining contractual life of 5.7 years. The aggregate intrinsic value associated with the warrants outstanding and exercisable as of December 31, 2015 was $444,000. The closing price of the Company’s common stock at December 31, 2015 was $0.38 per share. |
Note 13 - Employee Stock Purcha
Note 13 - Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Employee Stock Purchase Plan Disclosure [Text Block] | Note 13. Employee Benefit Programs The Company has established a 401(k) retirement plan (“401(k) plan”) which covers all eligible employees who have attained the age of twenty-one and have completed 30 days of employment with the Company. The Company can elect to match up to a certain amount of employees’ contributions to the 401(k) plan. No employer contributions were made during the years ended December 31, 2015, 2014 and 2013. Under the Company’s 2010 Employee Stock Purchase Plan (“ESPP Plan”), participants can purchase shares of the Company’s stock at a 15% discount. A maximum of 200,000 shares of common stock can be issued under the ESPP Plan of which 168,346 shares have been issued to date and 31,654 shares are available for future issuance. During the years ended December 31, 2015, 2014, and 2013, a total of 56,766, 24,958, and 31,267 shares were issued under the ESPP Plan with a fair value of $49,757, $46,928 and $80,718 respectively. The Company recognized $7,541, $7,020, and $12,038 of stock-based compensation related to the 15% discount for the years ended December 31, 2015, 2014, and 2013 respectively. |
Note 14 - Income Taxes
Note 14 - Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 14. Income Taxes The provision for income taxes consists of the following: Years Ended December 31, 2015 2014 2013 Current Federal $ - $ - $ - State - - - Total current - - - Deferred Federal (6,521,134 ) (3,694,966 ) (2,994,771 ) State (1,150,789 ) (652,053 ) (528,489 ) Change in valuation allowance 7,634,360 4,425,551 3,601,792 Total deferred (37,562 ) 78,532 78,531 Provision for income taxes $ (37,562 ) $ 78,532 $ 78,531 The provision for income taxes using the U.S. Federal statutory tax rate as compared to the Company’s effective tax rate is summarized as follows: Years Ended December 31, 2015 2014 2013 U.S. Federal statutory rate (34.0 )% (34.0 )% (34.0 )% State taxes (6.0 )% (6.0 )% (6.0 )% Permanent differences 0.1 % 0.1 % 0.3 % Valuation allowance 39.8 % 40.2 % 40.0 % Effective tax rate (0.1 )% 0.3 % 0.3 % The Company files income tax returns for Towerstream Corporation and its subsidiaries in the U.S. federal and various state principle jurisdictions. As of December 31, 2015, the tax returns for Towerstream Corporation for the years 2012 through 2015 remain open to examination by the Internal Revenue Service and various state authorities. The Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: Years Ended December 31, 2015 2014 Deferred tax assets Net operating loss carryforwards $ 56,202,470 $ 43,362,260 Stock-based compensation 2,426,886 2,094,946 Intangible assets 2,481,960 2,583,348 Debt discount 695,259 252,788 Allowance for doubtful accounts 37,145 23,710 Other 1,388,166 32,716 Total deferred tax assets 63,231,886 48,349,768 Valuation allowance (61,340,847 ) (45,195,445 ) Deferred tax assets, net of valuation allowance 1,891,039 3,154,323 Deferred tax liabilities Depreciation (1,891,039 ) (3,154,323 ) Intangible assets (363,774 ) (401,337 ) Total deferred tax liabilities (2,254,813 ) (3,555,660 ) Net deferred tax liabilities $ (363,774 ) $ (401,337 ) Accounting for Uncertainty in Income Taxes ASC Topic 740 clarifies the accounting and reporting for uncertainties in income tax law. ASC Topic 740 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The guidance also provides direction on derecogntion, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of December 31, 2015 and 2014, the Company has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses. No interest and penalties were recorded during the years ended December 31, 2015, 2014, and 2013. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. NOL Limitations The Company’s utilization of net operating loss (“NOL”) carryforwards is subject to an annual limitation due to ownership changes that have occurred previously or that could occur in the future as provided in Section 382 of the Internal Revenue Code, as well as similar state provisions. Section 382 limits the utilization of NOLs when there is a greater than 50% change of ownership as determined under the regulations. Since its formation, the Company has raised capital through the issuance of capital stock and various convertible instruments which, combined with the purchasing shareholders’ subsequent disposition of these shares, has resulted in an ownership change as defined by Section 382, and also could result in an ownership change in the future upon subsequent disposition. As of December 31, 2015, 2014 and 2013, the Company had approximately $140,506,000, $108,398,000, and $84,417,000, respectively, of federal and state NOL carryovers. Federal NOLs will begin expiring in 2027. State NOLs began expiring in 2012. Valuation Allowance In assessing the realizability of deferred tax assets, the Company has considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial reporting standards, the Company has considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. Since both goodwill and the FCC licenses are considered to be assets with indefinite lives for financial reporting purposes, the related deferred tax liabilities cannot be used as a source of future taxable income for purposes of determining the need for a valuation allowance. Based upon this evaluation, a full valuation allowance has been recorded as of December 31, 2015 and 2014. The change in valuation allowance was $16,145,402 and $11,049,207, respectively, for the years ended December 31, 2015 and 2014 of which $8,511,042 and $6,623,656, respectively, pertains to discontinued operations. |
Note 15 - Fair Value Measuremen
Note 15 - Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | Note 15. Fair Value Measurement Valuation Hierarchy The FASB’s accounting standard for fair value measurements establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Cash and cash equivalents are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short maturities. The carrying value of the Company’s long-term debt is carried at cost as the related interest rate is at terms that approximate rates currently available to the Company. There were no changes in the valuation techniques during the year ended December 31, 2015. Total Carrying Value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) December 31, 2015 $ 15,116,531 $ 15,116,531 $ - $ - December 31, 2014 $ 38,027,509 $ 38,027,509 $ - $ - |
Note 16 - Commitments
Note 16 - Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Commitments Disclosure [Text Block] | Note 16. Commitments Operating Lease Obligations. The Company has entered into operating leases related to roof rights, cellular towers, office space, and equipment leases under various non-cancelable agreements expiring through April 2025. Certain of these operating leases include extensions, at the Company's option, for additional terms ranging from 1 to 25 years. Amounts associated with the extension periods have not been included in the table below as it is not presently determinable which options, if any, the Company will elect to exercise. As of December 31, 2015, total future operating lease obligations were as follows: Years Ending December 31, 2016 $ 19,885,917 2017 15,252,943 2018 8,286,819 2019 3,199,264 2020 741,907 Thereafter 368,486 $ 47,735,336 Rent expenses were as follows: Year Ended December 31 , 2015 2014 2013 Points of Presence $ 8,180,389 $ 7,746,573 $ 7,128,778 Street level rooftops 16,707,445 13,183,209 11,067,316 Corporate offices 382,234 336,437 518,245 Other 414,618 362,281 437,718 $ 25,684,686 $ 21,628,500 $ 19,152,057 Rent expenses related to Points of Presence, street level rooftops and other were included in cost of revenues in the Company’s consolidated statements of operations. Rent expense related to the Company’s corporate offices was included in general and administrative expenses in the Company’s consolidated statements of operations. The Company accrued $3,284,466 representing the estimated cost to settle lease obligations for street level rooftops in certain markets. In September 2013, the Company entered into a new lease agreement for its corporate offices and new warehouse space. The lease commenced on January 1, 2014 and expires on December 31, 2019 with an option to renew for an additional five year term through December 31, 2024. The Company spent approximately $600,000 in leasehold improvements in connection with consolidating its corporate based employees from two buildings into one building. The Landlord agreed to contribute $380,000 in funding towards qualified leasehold improvements and made such payment to the Company in February 2014. Total annual rent payments begin at $359,750 for 2014 and escalate by 3% annually reaching $416,970 for 2019. In December 2014, the Company entered into a new lease agreement in Florida, primarily for a second sales center. The lease commenced in February 2015 for 38 months with an option to renew for an additional 60 month period. Total annual rent payments begin at $53,130 and escalate by 3% annually. Capital Lease Obligations The Company has entered into capital leases to acquire property and equipment expiring through June 2018. As of December 31, 2015, total future capital lease obligations were as follows: Years Ending December 31, 2016 1,110,428 2017 837,811 2018 143,796 $ 2,092,035 Less: Interest expense 166,519 Total capital lease obligations $ 1,925,516 Current $ 992,690 Long-Term $ 932,826 |
Note 17 - Quarterly Financial I
Note 17 - Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Quarterly Financial Information [Text Block] | Note 17. Quarterly Financial Information (unaudited) Quarterly financial information for each quarter for the years ended December 31, 2015, 2014 and 2013 is set forth below. Additional information regarding the net loss from discontinued operations for the quarter ended December 31, 2015 is included in Note 5. Three Months Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Revenues $ 7,172,467 $ 7,030,908 $ 6,947,467 $ 6,754,181 Operating Expenses 10,168,913 10,014,564 9,837,277 10,474,243 Operating Loss (2,996,446 ) (2,983,656 ) (2,889,810 ) (3,720,062 ) Other income (expense), net (1,664,264 ) (1,670,428 ) (1,665,682 ) (1,652,412 ) Net Loss from continuing operations (4,660,710 ) (4,654,084 ) (4,555,493 ) (5,372,473 ) Net Loss from discontinued operations (4,262,356 ) (4,196,727 ) (3,953,933 ) (8,864,588 ) Net Loss per common share – basic and diluted Continuing Operations (0.07 ) (0.07 ) (0.07 ) (0.08 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.13 ) Weighted average number of shares outstanding - basic and diluted 67,856,789 67,924,379 67,966,261 67,977,529 Three Months Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Revenues $ 7,639,557 $ 7,526,478 $ 7,507,640 $ 7,262,506 Operating Expenses 10,097,304 9,709,394 9,539,442 9,871,273 Operating Loss (2,457,747 ) (2,182,916 ) (2,031,802 ) (2,608,767 ) Other income (expense), net (63,052 ) (59,488 ) (43,970 ) (1,506,336 ) Net Loss from continuing operations (2,520,799 ) (2,242,404 ) (2,075,772 ) (4,115,103 ) Net Loss from discontinued operations (3,989,008 ) (4,152,202 ) (4,178,301 ) (4,239,629 ) Net Loss per common share – basic and diluted Continuing Operations (0.04 ) (0.03 ) (0.03 ) (0.06 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.06 ) Weighted average number of shares outstanding - basic and diluted 66,439,061 66,478,686 66,643,804 67,642,056 Three Months Ended March 31, 2013 June 30, 2013 September 30, 2013 December 31, 2013 Revenues $ 8,140,747 $ 8,015,667 $ 7,864,728 $ 7,871,442 Operating Expenses 10,834,621 10,348,511 10,228,784 10,260,756 Operating Loss (2,693,874 ) (2,332,844 ) (2,364,056 ) (2,389,314 ) Other income (expense), net 905,843 3972 (59,613 ) (63,844 ) Net Loss from continuing operations (1,788,031 ) (2,328,872 ) (2,423,668 ) (2,453,160 ) Net Loss from discontinued operations (3,838,275 ) (3,902,278 ) (3,719,725 ) (4,242,750 ) Net Loss per common share – basic and diluted Continuing Operations (0.03 ) (0.04 ) (0.04 ) (0.04 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.06 ) Weighted average number of shares outstanding - basic and diluted 61,464,706 66,370,789 66,402,499 66,419,380 |
Note 18 - Subsequent Events
Note 18 - Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | Note 18 . Subsequent Events On March 9, 2016, the Company completed a sale and transfer of certain assets pursuant to an Asset Purchase Agreement (the "Agreement") with a large cable company (the "Buyer"). Under the terms of the Agreement, the Buyer assumed certain rooftop leases and acquired ownership of and the right to operate the WiFi access point and related equipment associated with such leases. The Company retained ownership of all backhaul and related equipment, and the parties entered into a three year agreement under which the Company will provide backhaul services to the Buyer. The previous access agreement between the parties was terminated. The net effect of the Buyer (i) assuming certain rooftop leases, (ii) entering into a backhaul services agreement, and (iii) terminating the access agreement is projected to result in a net reduction in cash requirements of approximately $6 million annually. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk. |
Receivables, Policy [Policy Text Block] | Accounts Receivable For the Years Ended December 31, 201 5 201 4 2013 Beginning $ 59,273 $ 81,009 $ 190,109 Additions 132,000 322,000 85,000 Deductions (98,410 ) (343,736 ) (194,100 ) Ending $ 92,863 $ 59,273 $ 81,009 |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment. Expenditures for maintenance and repairs which do not extend the useful life of the assets are charged to expense as incurred. Gains or losses on disposals of property and equipment are reflected in general and administrative expenses in the Company’s consolidated statements of operations. |
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy [Policy Text Block] | FCC Licenses. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The FASB’s guidance on asset retirement obligations addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated costs. This guidance requires the recognition of an asset retirement obligation and an associated asset retirement cost when there is a legal obligation associated with the retirement of tangible long-lived assets. The Company’s network equipment is installed on both buildings in which the Company has a lease agreement (“Company Locations”) and at customer locations. In both instances, the installation and removal of the Company’s equipment is not complicated and does not require structural changes to the building where the equipment is installed. Costs associated with the removal of the Company’s equipment at company or customer locations are not material, and accordingly, the Company has determined that it does not presently have asset retirement obligations under the FASB’s accounting guidance. |
Business Combinations Policy [Policy Text Block] | Business Acquisitions The highest level of judgment and estimation involved in accounting for business acquisitions relates to determining the fair value of the customer relationships and network assets acquired. In each of the five acquisitions completed over the past four years, the highest asset value has been allocated to the customer relationships acquired. Determining the fair value of customer relationships involves judgments and estimates regarding how long the customers will continue to contract services with the Company. During the course of completing five acquisitions, the Company has developed a database of historical experience from prior acquisitions to assist in preparing future estimates of cash flows. Similarly, the Company has used its historical experience in building networks to prepare estimates regarding the fair value of the network assets that it acquires. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments. |
Income Tax, Policy [Policy Text Block] | Income Taxes. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenues. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation. |
Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Net Loss Per Share. The following common stock equivalents were excluded from the computation of diluted net loss per common share because they were anti-dilutive. The exercise of these common stock equivalents would dilute earnings per shares if the Company becomes profitable in the future. Years Ended December 31, 2015 2014 2013 Stock options 4,340,042 3,997,695 4,055,016 Warrants 2,850,000 2,850,000 450,000 Total 7,190,042 6,847,695 4,505,016 |
Reclassification, Policy [Policy Text Block] | Reclassifications. |
Segment Reporting, Policy [Policy Text Block] | Segments |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements. In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers,” which requires an entity to recognize revenue representing the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is intended to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts with customers. ASU 2014-09 will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles (“GAAP”) when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is only permitted as of January 1, 2017. The Company is currently evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-12 (“ASU 2014-12”), “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which requires a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. ASU 2014-12 states that the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the periods for which the requisite service has already been rendered. The new standard is effective for the Company on January 1, 2016. The Company does not expect adoption of ASU 2014-12 to have a significant impact on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014–15 (“ASU 2014-15”), “Presentation of Financial Statements – Going Concern.” ASU 2014-15 provides GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for the Company on January 1, 2017. The Company does not expect the adoption of ASU 2014–15 to have a significant impact on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03 (“ASU 2015-03”), “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that ASU 2015-03 will have on its consolidated financial statements and related disclosures. In May 2015, the FASB issued ASU No. 2015-07 (“2015-07”), “Fair Value Measurement.” ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU 2015-07 is effective for the Company on January 1, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2015–07 to have a significant impact on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16 (“ASU 2015-16”), “Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined (not retrospectively as with prior guidance). Additionally, the acquirer must record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the time of acquisition. The acquiring entity is required to disclose, on the face of the financial statements or in the footnotes to the financial statements, the portion of the amount recorded in current period earnings, by financial statement line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for the Company on January 1, 2016. The adoption of this standard is not expected to have a material impact on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16 (“ASU 2015-16”), “Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments”. The update requires that the acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined (not retrospectively as with prior guidance). Additionally, the acquirer must record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the time of acquisition. The acquiring entity is required to disclose, on the face of the financial statements or in the footnotes to the financial statements, the portion of the amount recorded in current period earnings, by financial statement line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for the Company on January 1, 2016. The adoption of this standard is not expected to have a material impact on its consolidated financial statements. In November 2015, the FASB has issued an update to ASU No. 2015-17 (“ASU 2015-17”) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The update requires a company to classify all deferred tax assets and liabilities as noncurrent. The update of ASU 2015-17 is effective for the Company on January 1, 2018. The Company does not expect the adoption of the update of ASU 2015–17 to have a significant impact on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”), “Financial Instruments – Overall (Subtopic 825-10)”. ASU 2016-01 updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The new guidance is effective for us on January 1, 2018. The Company does not expect the adoption of ASU 2016–01 to have a significant impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02), “Leases (Topic 842).” ASU 2016-02 requires a lessee to recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. ASU 2016-02 is effective for the Company on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the effect that ASU 2016-02 will have on its consolidated financial statements. |
Note 3 - Summary of Significa26
Note 3 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule Of Allowance For Doubtful Accounts Receivable [Table Text Block] | For the Years Ended December 31, 201 5 201 4 2013 Beginning $ 59,273 $ 81,009 $ 190,109 Additions 132,000 322,000 85,000 Deductions (98,410 ) (343,736 ) (194,100 ) Ending $ 92,863 $ 59,273 $ 81,009 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Years Ended December 31, 2015 2014 2013 Stock options 4,340,042 3,997,695 4,055,016 Warrants 2,850,000 2,850,000 450,000 Total 7,190,042 6,847,695 4,505,016 |
Note 4 - Business Acquisitions
Note 4 - Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Original Adjustments Final Fair value of consideration transferred: Cash $ 225,000 $ - $ 225,000 Common stock 1,071,172 (119,916 ) 951,256 Other liabilities assumed - 36,733 36,733 Capital lease obligations assumed 128,929 - 128,929 Total consideration transferred 1,425,101 (83,183 ) 1,341,918 Fair value of identifiable assets acquired and liabilities assumed: Cash 2,058 - 2,058 Accounts receivable 80,524 1,286 79,238 Property and equipment 826,524 18,824 807,700 Security deposits 1,993 - 1,993 Accounts payable (26,970 ) 2,566 (29,536 ) Deferred revenue (62,110 ) (2,135 ) (59,975 ) Other liabilities (89,930 ) - (89,930 ) Total identifiable net tangible assets 732,089 20,541 711,548 Customer relationships 1,634,469 - 1,634,469 Total identifiable net assets 2,366,558 20,541 2,346,017 Gain on business acquisition $ 941,457 $ 62,642 $ 1,004,099 |
Business Acquisition, Pro Forma Information [Table Text Block] | Year Ended December 31, 2013 Revenues $ 32,005,154 Amortization expense 3,159,196 Total operating expenses 41,844,651 Net loss (9,131,670 ) Basic net loss per share $ (0.14 ) |
Note 5 - Discontinued Operati28
Note 5 - Discontinued Operations and Assets Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule Of Components Of Loss From Discontinued Operations [Table Text Block] | Year Ended December 31, 2015 2014 2013 Revenues $ 3,370,181 $ 3,099,972 $ 1,540,700 Operating expenses: Cost of revenues 17,751,033 14,220,122 11,980,097 Depreciation and amortization 4,032,219 3,957,784 3,508,647 Customer support services 710,368 683,208 784,780 Sales and marketing 145,954 229,013 301,578 General and administrative 2,008,211 568,985 668,626 Total operating expenses 24,647,785 19,659,112 17,243,728 Loss from discontinued operations $ (21,277,604 ) $ (16,559,140 ) $ (15,703,028 ) |
Discontinued Operation, Schedule of Amounts Recognized in Balance Sheet [Table Text Block] | As of December 31, 2015 2014 Assets: Accounts receivable, net $ 715,993 $ 723,569 Prepaid expenses and other current assets 278,891 612,570 Deferred acquisitions costs 253,685 - Total Current Assets $ 1,248,569 $ 1,336,139 Long-Term Assets: Property and equipment - 3,233,486 Deferred acquisitions costs - 879,518 Security deposits - 58,414 Total Long Term Assets $ - $ 4,171,418 Liabilities: Accounts payable $ 556,800 $ 114,042 Accrued expenses 66,101 82,819 Accrued expenses - network 3,284,467 - Total urrent Liabilities $ 3,907,368 $ 196,861 |
Disclosure of Assets Held-for-sale [Table Text Block] | As of December 31, 2015 2014 Security deposits $ 356,108 $ 350,418 Wi-Fi and back-end equipment, net 4,958,999 7,524,823 Current assets held for sale $ 5,315,107 $ 7,875,241 |
Note 6 - Property and Equipme29
Note 6 - Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | As of December 31, 2015 2014 Network and base station equipment $ 38,351,119 $ 35,836,469 Customer premise equipment 30,910,874 26,511,691 Information technology 4,810,865 4,628,555 Furniture, fixtures and other 1,713,722 1,669,340 Leasehold improvements 1,623,559 1,599,393 77,410,139 70,245,448 Less: accumulated depreciation 56,174,755 47,098,471 Property and equipment, net $ 21,235,384 $ 23,146,977 |
Schedule of Capital Leased Assets [Table Text Block] | As of December 31, 2015 2014 Network and base station equipment $ 2,620,898 $ 2,234,180 Customer premise equipment 669,792 246,484 Information technology 1,860,028 1,860,028 5,150,718 4,340,692 Less: accumulated depreciation 3,114,968 2,135,534 Property acquired through capital leases, net $ 2,035,750 $ 2,205,158 |
Note 7 - Intangible Assets (Tab
Note 7 - Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | As of December 31, 2015 2014 Goodwill $ 1,674,281 $ 1,674,281 Customer relationships $ 11,856,126 $ 11,856,127 Less: accumulated amortization of customer relationships 11,333,096 10,940,824 Customer relationships, net 523,030 915,303 FCC licenses 1,284,555 1,284,555 Impairment charge (534,555 ) - FCC licenses, net 750,000 1,284,555 Intangible assets, net $ 1,273,030 $ 2,199,858 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Years Ending December 31, 2016 392,272 2017 130,758 $ 523,030 |
Note 8 - Accrued Expenses (Tabl
Note 8 - Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued expenses consist of the following: As of December 31, 2015 2014 Payroll and related $ 551,448 $ 661,496 Professional services 427,932 256,534 Other 339,680 280,413 Property and equipment 176,614 506,883 Network 133,544 187,440 Marketing - 63,112 Total $ 1,629,218 $ 1,955,878 |
Note 9 - Other Liabilities (Tab
Note 9 - Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Other Liabilities [Table Text Block] | Other liabilities consist of the following: As of December 31, 2015 2014 Current Deferred rent $ 63,012 $ 46,058 Deferred acquisition payments - 11,184 Total $ 63,012 $ 57,242 Long-Term Deferred rent $ 1,227,414 $ 1,373,163 Deferred acquisition payments - 341 Deferred taxes 363,774 401,337 Total $ 1,591,188 $ 1,774,841 |
Note 11 - Capital Stock (Tables
Note 11 - Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule Of Stock Option Exercised [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 Cash basis: Total options exercised - - 284,688 Total proceeds received $ - $ - $ 292,389 Cashless basis: Total options exercised 426,530 340,906 135,471 Net issuance of common stock 96,594 192,270 37,770 |
Note 12 - Stock Options and W34
Note 12 - Stock Options and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Years Ended December 31, 2015 2014 2013 Risk-free interest rate 1.5% - 1.7% 1.1% - 1.8% 0.8% - 1.9% Expected volatility 58% - 77% 47% - 60% 65% - 68% Expected life (in years) 4.1 - 4.2 4.1 - 5.3 5.0 - 6.5 Expected dividend yield 0% 0% 0% |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Options Weighted Average Exercise Price Outstanding as of January 1, 2013 3,916,045 $ 2.85 Granted during 2013 950,000 2.40 Exercised (420,159 ) 1.23 Forfeited /expired (390,870 ) 5.07 Outstanding as of December 31, 2013 4,055,016 2.70 Granted during 2014 737,073 1.42 Exercised (340,906 ) 0.74 Forfeited /expired (453,488 ) 1.78 Outstanding as of December 31, 2014 3,997,695 2.73 Granted during 2015 878,751 1.46 Exercised (426,530 ) 1.58 Forfeited /expired (109,874 ) 1.94 Outstanding as of December 31, 2015 4,340,042 $ 2.61 Exercisable as of December 31, 2015 3,372,743 $ 2.68 |
Schedule Of Grants Under Stock Option Plan Details [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 Annual grants to outside directors 200,000 200,000 200,000 Executive grants 231,251 172,073 125,000 Employee grants 447,500 315,000 625,000 Non-employee grants - 50,000 - Total 878,751 737,073 950,000 |
Schedule Of Forfeited Or Expired Options Under Stock Option Plans [Table Text Block] | For the Years Ended December 31, 2015 2014 2013 Employee terminations 82,374 185,208 390,870 Expired 27,500 254,030 - Repurchased - 14,250 - Total 109,874 453,488 390,870 |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Number of Warrants Weighted Average Exercise Price Outstanding as of December 31, 2013 450,000 $ 5.00 Granted during 2014 3,600,000 $ 0.84 Outstanding as of December 31, 2014 and 2015 4,050,000 $ 1.31 |
Note 14 - Income Taxes (Tables)
Note 14 - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Years Ended December 31, 2015 2014 2013 Current Federal $ - $ - $ - State - - - Total current - - - Deferred Federal (6,521,134 ) (3,694,966 ) (2,994,771 ) State (1,150,789 ) (652,053 ) (528,489 ) Change in valuation allowance 7,634,360 4,425,551 3,601,792 Total deferred (37,562 ) 78,532 78,531 Provision for income taxes $ (37,562 ) $ 78,532 $ 78,531 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Years Ended December 31, 2015 2014 2013 U.S. Federal statutory rate (34.0 )% (34.0 )% (34.0 )% State taxes (6.0 )% (6.0 )% (6.0 )% Permanent differences 0.1 % 0.1 % 0.3 % Valuation allowance 39.8 % 40.2 % 40.0 % Effective tax rate (0.1 )% 0.3 % 0.3 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Years Ended December 31, 2015 2014 Deferred tax assets Net operating loss carryforwards $ 56,202,470 $ 43,362,260 Stock-based compensation 2,426,886 2,094,946 Intangible assets 2,481,960 2,583,348 Debt discount 695,259 252,788 Allowance for doubtful accounts 37,145 23,710 Other 1,388,166 32,716 Total deferred tax assets 63,231,886 48,349,768 Valuation allowance (61,340,847 ) (45,195,445 ) Deferred tax assets, net of valuation allowance 1,891,039 3,154,323 Deferred tax liabilities Depreciation (1,891,039 ) (3,154,323 ) Intangible assets (363,774 ) (401,337 ) Total deferred tax liabilities (2,254,813 ) (3,555,660 ) Net deferred tax liabilities $ (363,774 ) $ (401,337 ) |
Note 15 - Fair Value Measurem36
Note 15 - Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | Total Carrying Value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) December 31, 2015 $ 15,116,531 $ 15,116,531 $ - $ - December 31, 2014 $ 38,027,509 $ 38,027,509 $ - $ - |
Note 16 - Commitments (Tables)
Note 16 - Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Years Ending December 31, 2016 $ 19,885,917 2017 15,252,943 2018 8,286,819 2019 3,199,264 2020 741,907 Thereafter 368,486 $ 47,735,336 |
Schedule of Rent Expense [Table Text Block] | Year Ended December 31 , 2015 2014 2013 Points of Presence $ 8,180,389 $ 7,746,573 $ 7,128,778 Street level rooftops 16,707,445 13,183,209 11,067,316 Corporate offices 382,234 336,437 518,245 Other 414,618 362,281 437,718 $ 25,684,686 $ 21,628,500 $ 19,152,057 |
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | Years Ending December 31, 2016 1,110,428 2017 837,811 2018 143,796 $ 2,092,035 Less: Interest expense 166,519 Total capital lease obligations $ 1,925,516 Current $ 992,690 Long-Term $ 932,826 |
Note 17 - Quarterly Financial38
Note 17 - Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Quarterly Financial Information [Table Text Block] | Three Months Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Revenues $ 7,172,467 $ 7,030,908 $ 6,947,467 $ 6,754,181 Operating Expenses 10,168,913 10,014,564 9,837,277 10,474,243 Operating Loss (2,996,446 ) (2,983,656 ) (2,889,810 ) (3,720,062 ) Other income (expense), net (1,664,264 ) (1,670,428 ) (1,665,682 ) (1,652,412 ) Net Loss from continuing operations (4,660,710 ) (4,654,084 ) (4,555,493 ) (5,372,473 ) Net Loss from discontinued operations (4,262,356 ) (4,196,727 ) (3,953,933 ) (8,864,588 ) Net Loss per common share – basic and diluted Continuing Operations (0.07 ) (0.07 ) (0.07 ) (0.08 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.13 ) Weighted average number of shares outstanding - basic and diluted 67,856,789 67,924,379 67,966,261 67,977,529 Three Months Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Revenues $ 7,639,557 $ 7,526,478 $ 7,507,640 $ 7,262,506 Operating Expenses 10,097,304 9,709,394 9,539,442 9,871,273 Operating Loss (2,457,747 ) (2,182,916 ) (2,031,802 ) (2,608,767 ) Other income (expense), net (63,052 ) (59,488 ) (43,970 ) (1,506,336 ) Net Loss from continuing operations (2,520,799 ) (2,242,404 ) (2,075,772 ) (4,115,103 ) Net Loss from discontinued operations (3,989,008 ) (4,152,202 ) (4,178,301 ) (4,239,629 ) Net Loss per common share – basic and diluted Continuing Operations (0.04 ) (0.03 ) (0.03 ) (0.06 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.06 ) Weighted average number of shares outstanding - basic and diluted 66,439,061 66,478,686 66,643,804 67,642,056 Three Months Ended March 31, 2013 June 30, 2013 September 30, 2013 December 31, 2013 Revenues $ 8,140,747 $ 8,015,667 $ 7,864,728 $ 7,871,442 Operating Expenses 10,834,621 10,348,511 10,228,784 10,260,756 Operating Loss (2,693,874 ) (2,332,844 ) (2,364,056 ) (2,389,314 ) Other income (expense), net 905,843 3972 (59,613 ) (63,844 ) Net Loss from continuing operations (1,788,031 ) (2,328,872 ) (2,423,668 ) (2,453,160 ) Net Loss from discontinued operations (3,838,275 ) (3,902,278 ) (3,719,725 ) (4,242,750 ) Net Loss per common share – basic and diluted Continuing Operations (0.03 ) (0.04 ) (0.04 ) (0.04 ) Discontinued Operations (0.06 ) (0.06 ) (0.06 ) (0.06 ) Weighted average number of shares outstanding - basic and diluted 61,464,706 66,370,789 66,402,499 66,419,380 |
Note 2 - Liquidity and Manage39
Note 2 - Liquidity and Management Plans (Details Textual) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash and Cash Equivalents, at Carrying Value | $ 15,116,531 | $ 38,027,509 | $ 28,181,531 | $ 15,152,226 |
Working Capital | $ 13,500,000 |
Note 3 - Summary of Significa40
Note 3 - Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Furniture and Fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Information Technology [Member] | Minimum [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Information Technology [Member] | Maximum [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Goodwill, Impairment Loss | $ 0 | $ 0 | |
Cash, Uninsured Amount | 14,596,000 | ||
Cash, FDIC Insured Amount | $ 250,000 | ||
Carrying Value Of Goodwill Greater Than Fair Value Likelihood Maximum Percentage | 50.00% | ||
Advertising Expense | $ 1,058,000 | $ 1,133,000 | $ 1,100,000 |
Note 3 - Changes in Allowance f
Note 3 - Changes in Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Beginning | $ 59,273 | $ 81,009 | $ 190,109 |
Additions | 132,000 | 322,000 | 85,000 |
Deductions | (98,410) | (343,736) | (194,100) |
Ending | $ 92,863 | $ 59,273 | $ 81,009 |
Note 3 - Antidilutive Shares Ex
Note 3 - Antidilutive Shares Excluded from Computation of EPS (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity Option [Member] | |||
Antidilutive Securities Excluded From Computation of Earnings Per Share, Amount (in shares) | 4,340,042 | 3,997,695 | 4,055,016 |
Warrant [Member] | |||
Antidilutive Securities Excluded From Computation of Earnings Per Share, Amount (in shares) | 2,850,000 | 2,850,000 | 450,000 |
Antidilutive Securities Excluded From Computation of Earnings Per Share, Amount (in shares) | 7,190,042 | 6,847,695 | 4,505,016 |
Note 4 - Business Acquisition43
Note 4 - Business Acquisitions (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||
May. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2013 | |
Common Stock Adjustment [Member] | Delos Internet [Member] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 48,549 | ||||
Before Adjustment to Common Stock [Member] | Delos Internet [Member] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 433,673 | ||||
After Adjustment To Common Stock [Member] | Delos Internet [Member] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 385,124 | ||||
Delos Internet [Member] | |||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 517,000 | ||||
Business Combination, Acquisition Related Costs | 99,000 | ||||
Share Price | $ 0.38 | $ 2.47 | |||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 1,004,099 | ||||
Business Acquisition Purchase Price Allocation Change In Assets Acquired Liabilities Assumed Net | $ 21,000 | ||||
Business Combination Bargain Purchase Increase Of Gain Recognized | $ 63,000 |
Note 4 - Consideration Transfer
Note 4 - Consideration Transferred and the Amounts of Identified Assets Acquired and Liabilities Assumed (Details) | 1 Months Ended |
Feb. 28, 2013USD ($) | |
Scenario, Previously Reported [Member] | Delos Internet [Member] | Other Liabilities Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | |
Scenario, Previously Reported [Member] | Delos Internet [Member] | Capital Lease Obligations Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | $ 128,929 |
Scenario, Previously Reported [Member] | Delos Internet [Member] | |
Fair value of consideration transferred: | |
Cash | 225,000 |
Common stock | 1,071,172 |
Total consideration transferred | 1,425,101 |
Fair value of identifiable assets acquired and liabilities assumed: | |
Cash | 2,058 |
Accounts receivable | 80,524 |
Property and equipment | 826,524 |
Security deposits | 1,993 |
Accounts payable | (26,970) |
Deferred revenue | (62,110) |
Other liabilities | (89,930) |
Total identifiable net tangible assets | 732,089 |
Customer relationships | 1,634,469 |
Total identifiable net assets | 2,366,558 |
Business Combination, Bargain Purchase, Gain Recognized, Amount | 941,457 |
Scenario, Adjustment [Member] | Delos Internet [Member] | Other Liabilities Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | $ 36,733 |
Scenario, Adjustment [Member] | Delos Internet [Member] | Capital Lease Obligations Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | |
Scenario, Adjustment [Member] | Delos Internet [Member] | |
Fair value of consideration transferred: | |
Cash | |
Common stock | $ (119,916) |
Total consideration transferred | $ (83,183) |
Fair value of identifiable assets acquired and liabilities assumed: | |
Cash | |
Accounts receivable | $ 1,286 |
Property and equipment | $ 18,824 |
Security deposits | |
Accounts payable | $ 2,566 |
Deferred revenue | $ (2,135) |
Other liabilities | |
Total identifiable net tangible assets | $ 20,541 |
Customer relationships | |
Total identifiable net assets | $ 20,541 |
Business Combination, Bargain Purchase, Gain Recognized, Amount | 62,642 |
Scenario, Actual [Member] | Delos Internet [Member] | Other Liabilities Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | 36,733 |
Scenario, Actual [Member] | Delos Internet [Member] | Capital Lease Obligations Assumed [Member] | |
Fair value of consideration transferred: | |
Fair value of liabilities transferred | 128,929 |
Scenario, Actual [Member] | Delos Internet [Member] | |
Fair value of consideration transferred: | |
Cash | 225,000 |
Common stock | 951,256 |
Total consideration transferred | 1,341,918 |
Fair value of identifiable assets acquired and liabilities assumed: | |
Cash | 2,058 |
Accounts receivable | 79,238 |
Property and equipment | 807,700 |
Security deposits | 1,993 |
Accounts payable | (29,536) |
Deferred revenue | (59,975) |
Other liabilities | (89,930) |
Total identifiable net tangible assets | 711,548 |
Customer relationships | 1,634,469 |
Total identifiable net assets | 2,346,017 |
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 1,004,099 |
Note 4 - Unaudited Pro Forma Co
Note 4 - Unaudited Pro Forma Consolidated Results of Operations (Details) - Delos Internet [Member] | 12 Months Ended |
Dec. 31, 2013USD ($)$ / shares | |
Revenues | $ 32,005,154 |
Amortization expense | 3,159,196 |
Total operating expenses | 41,844,651 |
Net loss | $ (9,131,670) |
Basic net loss per share (in dollars per share) | $ / shares | $ (0.14) |
Note 5 - Discontinued Operati46
Note 5 - Discontinued Operations and Assets Held for Sale (Details Textual) - Shared Wireless Business [Member] | 3 Months Ended |
Dec. 31, 2015USD ($) | |
Estimated Costs to Settle Lease Obligations | $ 3,284,466 |
Impairment of Long-Lived Assets Held-for-use | 1,618,540 |
Write off of Security Deposits | 45,114 |
Accelerated Expensing of Deferred Acquistion Costs | $ 410,991 |
Note 5 - Loss from Discontinued
Note 5 - Loss from Discontinued Operations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 3,370,181 | $ 3,099,972 | $ 1,540,700 |
Operating expenses: | |||
Cost of revenues | 17,751,033 | 14,220,122 | 11,980,097 |
Depreciation and amortization | 4,032,219 | 3,957,784 | 3,508,647 |
Customer support services | 710,368 | 683,208 | 784,780 |
Sales and marketing | 145,954 | 229,013 | 301,578 |
General and administrative | 2,008,211 | 568,985 | 668,626 |
Total operating expenses | 24,647,785 | 19,659,112 | 17,243,728 |
Loss from discontinued operations | $ (21,277,604) | $ (16,559,140) | $ (15,703,028) |
Note 5 - Components of Balance
Note 5 - Components of Balance Sheet Accounts (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Network [Member] | ||
Liabilities: | ||
Accrued expenses | $ 3,284,467 | |
Accounts receivable, net | 715,993 | $ 723,569 |
Prepaid expenses and other current assets | 278,891 | $ 612,570 |
Deferred acquisitions costs | 253,685 | |
Total Current Assets | $ 1,248,569 | $ 1,336,139 |
Property and equipment | 3,233,486 | |
Deferred acquisitions costs | 879,518 | |
Security deposits | 58,414 | |
Total Long Term Assets | 4,171,418 | |
Accounts payable | $ 556,800 | 114,042 |
Accrued expenses | 66,101 | 82,819 |
Total Current Liabilities | $ 3,907,368 | $ 196,861 |
Note 5 - Assets Held for Sale (
Note 5 - Assets Held for Sale (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Security deposits | $ 356,108 | $ 350,418 |
Wi-Fi and back-end equipment, net | 4,958,999 | 7,524,823 |
Current assets held for sale | $ 5,315,107 | $ 7,875,241 |
Note 6 - Property and Equipme50
Note 6 - Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Network and Base Station Equipment [Member] | ||
Property, Plant, and Equipment Gross | $ 38,351,119 | $ 35,836,469 |
Customer Premise Equipment [Member] | ||
Property, Plant, and Equipment Gross | 30,910,874 | 26,511,691 |
Information Technology [Member] | ||
Property, Plant, and Equipment Gross | 4,810,865 | 4,628,555 |
Furniture and Fixtures [Member] | ||
Property, Plant, and Equipment Gross | 1,713,722 | 1,669,340 |
Leasehold Improvements [Member] | ||
Property, Plant, and Equipment Gross | 1,623,559 | 1,599,393 |
Property, Plant, and Equipment Gross | 77,410,139 | 70,245,448 |
Less: accumulated depreciation | 56,174,755 | 47,098,471 |
Property and equipment, net | $ 21,235,384 | $ 23,146,977 |
Note 6 - Property Acquired Thro
Note 6 - Property Acquired Through Capital Leases (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Network and Base Station Equipment [Member] | ||
Capital Leased Assets Gross | $ 2,620,898 | $ 2,234,180 |
Customer Premise Equipment [Member] | ||
Capital Leased Assets Gross | 669,792 | 246,484 |
Information Technology [Member] | ||
Capital Leased Assets Gross | 1,860,028 | 1,860,028 |
Capital Leased Assets Gross | 5,150,718 | 4,340,692 |
Less: accumulated depreciation | 3,114,968 | 2,135,534 |
Property acquired through capital leases, net | $ 2,035,750 | $ 2,205,158 |
Note 7 - Intangible Assets (Det
Note 7 - Intangible Assets (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May. 31, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
One Velocity Inc [Member] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 180 days | |||
Color Broadband Communications Inc [Member] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 120 days | |||
Delos Internet [Member] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 60 days | |||
Finite-Lived Intangible Assets, Remaining Amortization Period | 1 year 120 days | |||
Licensing Agreements [Member] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 534,555 | |||
Amortization of Intangible Assets | 392,272 | $ 888,969 | $ 3,093,817 | |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 534,555 |
Note 7 - Intangible Assets and
Note 7 - Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill | $ 1,674,281 | $ 1,674,281 |
Customer relationships | 11,856,126 | 11,856,127 |
Less: accumulated amortization of customer relationships | 11,333,096 | 10,940,824 |
523,030 | 915,303 | |
FCC licenses | 1,284,555 | $ 1,284,555 |
Impairment charge | (534,555) | |
FCC licenses, net | 750,000 | $ 1,284,555 |
Intangible assets, net | $ 1,273,030 | $ 2,199,858 |
Note 7 - Future Amortization Ex
Note 7 - Future Amortization Expense (Details) | Dec. 31, 2015USD ($) |
2,016 | $ 392,272 |
2,017 | 130,758 |
$ 523,030 |
Note 8 - Accrued Expenses (Deta
Note 8 - Accrued Expenses (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Payroll and Related [Member] | ||
Accrued Liabilities, Current | $ 551,448 | $ 661,496 |
Professional Services [Member] | ||
Accrued Liabilities, Current | 427,932 | 256,534 |
Other Accrued Liabilities [Member] | ||
Accrued Liabilities, Current | 339,680 | 280,413 |
Property and Equipment [Member] | ||
Accrued Liabilities, Current | 176,614 | 506,883 |
Network [Member] | ||
Accrued Liabilities, Current | $ 133,544 | 187,440 |
Marketing [Member] | ||
Accrued Liabilities, Current | 63,112 | |
Accrued Liabilities, Current | $ 1,629,218 | $ 1,955,878 |
Note 9 - Other Liabilities (Det
Note 9 - Other Liabilities (Details Textual) - Delos Internet [Member] | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Deferred Acquisition Payments Gross | $ 11,525 |
Delos Interest Rate | 7.00% |
Note 9 - Other Liabilities, Cur
Note 9 - Other Liabilities, Current and Noncurrent (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred rent | $ 63,012 | $ 46,058 |
Deferred acquisition payments | 11,184 | |
Total | $ 63,012 | 57,242 |
Deferred rent | $ 1,227,414 | 1,373,163 |
Deferred acquisition payments | 341 | |
Deferred taxes | $ 363,774 | 401,337 |
Total | $ 1,591,188 | $ 1,774,841 |
Note 10 - Long-Term Debt (Detai
Note 10 - Long-Term Debt (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Melody Business Finance LLC [Member] | Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument, Basis Spread on Variable Rate | 7.00% | |||
Melody Business Finance LLC [Member] | Secured Debt [Member] | If Rate Is Greater Than LIBOR Rate [Member] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||
Melody Business Finance LLC [Member] | Secured Debt [Member] | First Two Thirds Of Shares Under Warrants [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,400,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.26 | $ 1.26 | ||
Melody Business Finance LLC [Member] | Secured Debt [Member] | Remaining One Third Of Shares Under Warrants [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,200,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | $ 0.01 | ||
Melody Business Finance LLC [Member] | Secured Debt [Member] | Warrant [Member] | ||||
Debt Instrument, Unamortized Discount | $ 1,439,785 | $ 2,239,512 | ||
Interest Expense, Debt | 799,727 | 223,719 | ||
Melody Business Finance LLC [Member] | Secured Debt [Member] | Other Assets [Member] | ||||
Debt Issuance Cost | $ 2,900,000 | |||
Melody Business Finance LLC [Member] | Secured Debt [Member] | ||||
Debt Instrument, Term | 5 years | |||
Debt Instrument, Face Amount | $ 35,000,000 | |||
Debt Instrument Discount Rate | 3.00% | |||
Debt Instrument, Unamortized Discount | $ 1,050,000 | 613,736 | 954,635 | |
Interest Expense, Debt | $ 340,899 | 95,365 | ||
Paid In Kind Interest Stated Rate | 4.00% | |||
Interest Paid | $ 2,906,695 | 591,111 | ||
Increase (Decrease) in Interest Payable, Net | 1,453,347 | 295,556 | ||
Debt Instrument Prepayment Minimum Principal Amount | $ 5,000,000 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,600,000 | 3,600,000 | ||
Warrants and Rights Outstanding | $ 2,463,231 | |||
Class Of Warrant Or Right Monthly Liquidated Damages | 5,000 | |||
Class Of Warrant Or Right Maximum Liquidated Damages | 50,000 | |||
Amortization of Financing Costs | 939,498 | 262,820 | ||
Deferred Finance Costs, Net | 1,691,421 | 2,630,919 | ||
Debt Instrument, Unamortized Discount | 2,053,520 | 3,194,147 | ||
Increase (Decrease) in Interest Payable, Net | $ 1,453,347 | 295,556 | ||
Debt Instrument Additional Interes Rate In The Event Of Default | 5.00% | |||
Amortization of Financing Costs | $ 939,498 | $ 262,820 |
Note 11 - Capital Stock (Detail
Note 11 - Capital Stock (Details Textual) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||
May. 31, 2013 | Feb. 28, 2013 | Nov. 30, 2010 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 01, 2015 | Aug. 31, 2015 | |
Rights [Member] | Minimum [Member] | |||||||||
Common Stock, Stock Acquisition, Rate | 15.00% | ||||||||
Exchange Offer Of Common Stock | 15.00% | ||||||||
Rights [Member] | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 18 | ||||||||
Preferred Stock, Redemption Price Per Share | $ 0.001 | ||||||||
Delos Internet [Member] | |||||||||
Stock Issued During Period, Shares, Acquisitions | 433,673 | ||||||||
Stock Issued During Period, Value, Acquisitions | $ 1,071,172 | ||||||||
Stock Returned During Period, Shares, Adjustments, Acquisitions | 48,549 | ||||||||
Stock Returned During Period Value Adjustments Acquisitions | $ 119,916 | ||||||||
Common Stock, Shares Authorized | 200,000,000 | 95,000,000 | 200,000,000 | 95,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||
Common Stock, Stock Acquisition, Rate | 15.00% | ||||||||
Sale of Stock, Price Per Share | $ 3 | ||||||||
Proceeds from Issuance of Common Stock | $ 33,000,000 | $ 30,499,336 | |||||||
Stock Issued During Period, Shares, New Issues | 11,000,000 | ||||||||
Payments of Stock Issuance Costs | $ 2,501,000 | ||||||||
Stock Issued During Period, Value, Acquisitions | $ 951,256 |
Note 11 - Stock Options Exercis
Note 11 - Stock Options Exercised (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Basis [Member] | |||
Exercise of options (in shares) | 284,688 | ||
Total proceeds received | $ 292,389 | ||
Cashless Basis [Member] | |||
Exercise of options (in shares) | 426,530 | 340,906 | 135,471 |
Net issuance of common stock (in shares) | 96,594 | 192,270 | 37,770 |
Exercise of options (in shares) | 426,530 | 340,906 | 420,159 |
Total proceeds received | $ 292,389 |
Note 12 - Stock Options and W61
Note 12 - Stock Options and Warrants (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Mar. 31, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 31, 2014 | Nov. 30, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Nov. 30, 2012 | Aug. 31, 2008 | May. 31, 2007 | |
Employee Stock Option [Member] | The 2007 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,403,922 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 2,136,849 | |||||||||||
Employee Stock Option [Member] | The 2007 Incentive Stock Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | 2,500,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 2,949,423 | |||||||||||
Employee Stock Option [Member] | General and Administrative Expense [Member] | ||||||||||||
Allocated Share-based Compensation Expense | $ 1,016,705 | $ 953,470 | $ 1,182,523 | |||||||||
Employee Stock Option [Member] | Minimum [Member] | Executive Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||
Employee Stock Option [Member] | Minimum [Member] | Employee [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||
Employee Stock Option [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Forfeiture Rate | 3.00% | |||||||||||
Employee Stock Option [Member] | Maximum [Member] | Executive Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | |||||||||||
Employee Stock Option [Member] | Maximum [Member] | Non-employee [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||
Employee Stock Option [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Forfeiture Rate | 10.00% | |||||||||||
Employee Stock Option [Member] | Director [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||
Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,317,650 | |||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 585,688 | |||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 292 days | |||||||||||
The 2008 Directors Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000,000 | 1,000,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 1,372,500 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 627,500 | |||||||||||
Restricted Stock [Member] | ||||||||||||
Allocated Share-based Compensation Expense | $ 59,100 | |||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 90,000 | |||||||||||
Share Based Compensation Arrangement, By Share Based Payment Award, Equity Instruments Other Than Options, Total, Fair Value | $ 354,600 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 60,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 30,000 | |||||||||||
Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.46 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | 0.68 | |||||||||||
Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | 5.25 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | 5.25 | |||||||||||
Secured Debt [Member] | Melody Business Finance LLC [Member] | Remaining One Third Of Shares Under Warrants [Member] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,200,000 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 0.01 | $ 0.01 | ||||||||||
Secured Debt [Member] | Melody Business Finance LLC [Member] | First Two Thirds Of Shares Under Warrants [Member] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,400,000 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.26 | $ 1.26 | ||||||||||
Secured Debt [Member] | Melody Business Finance LLC [Member] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,600,000 | 3,600,000 | ||||||||||
Warrant [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | $ 444,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 0 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.68 | $ 0.67 | $ 1.44 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 4,340,042 | 3,997,695 | 4,055,016 | 3,916,045 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 2.61 | $ 2.73 | $ 2.70 | $ 2.85 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 292 days | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,372,743 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 2.68 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 109 days | |||||||||||
Share Price | $ 0.38 | $ 2.47 | ||||||||||
Class Of Warrant Or Right Weighted Warrants Exercisable, Average Remaining Contractual Life | 5 years 255 days |
Note 12 - Black-Scholes Option
Note 12 - Black-Scholes Option Pricing Model Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Minimum [Member] | |||
Risk-free interest rate | 1.50% | 1.70% | 1.50% |
Expected volatility | 57.80% | 47.00% | 57.80% |
Expected life (in years) | 4 years 36 days | 4 years 36 days | 5 years |
Maximum [Member] | |||
Risk-free interest rate | 1.60% | 1.80% | 1.60% |
Expected volatility | 59.30% | 60.00% | 59.30% |
Expected life (in years) | 4 years 73 days | 5 years 109 days | 6 years 182 days |
Expected volatility | 59.00% | ||
Expected life (in years) | 4 years 73 days | 5 years 109 days | 4 years 73 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Note 12 - Option Transactions U
Note 12 - Option Transactions Under the Stock Option Plans (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Outstanding (in shares) | 3,997,695 | 4,055,016 | 3,916,045 |
Outstanding (in dollars per share) | $ 2.73 | $ 2.70 | $ 2.85 |
Granted (in shares) | 878,751 | 737,073 | 950,000 |
Granted (in dollars per share) | $ 1.46 | $ 1.42 | $ 2.40 |
Exercised (in shares) | (426,530) | (340,906) | (420,159) |
Exercised (in dollars per share) | $ 1.58 | $ 0.74 | $ 1.23 |
Forfeited /expired (in shares) | (109,874) | (453,488) | (390,870) |
Forfeited /expired (in dollars per share) | $ 1.94 | $ 1.78 | $ 5.07 |
Outstanding (in shares) | 4,340,042 | 3,997,695 | 4,055,016 |
Outstanding (in dollars per share) | $ 2.61 | $ 2.73 | $ 2.70 |
Granted (in shares) | 878,751 | 737,073 | 950,000 |
Granted (in dollars per share) | $ 1.46 | $ 1.42 | $ 2.40 |
Exercised (in shares) | (426,530) | (340,906) | (420,159) |
Exercised (in dollars per share) | $ 1.58 | $ 0.74 | $ 1.23 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,372,743 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 2.68 |
Note 12 - Grants Under Stock Op
Note 12 - Grants Under Stock Options Plan (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Director [Member] | |||
Granted (in shares) | 200,000 | 200,000 | 200,000 |
Executive Officer [Member] | |||
Granted (in shares) | 231,251 | 172,073 | 125,000 |
Employee [Member] | |||
Granted (in shares) | 447,500 | 315,000 | 625,000 |
Non-employee [Member] | |||
Granted (in shares) | 50,000 | ||
Granted (in shares) | 878,751 | 737,073 | 950,000 |
Note 12 - Forfeited or Expired
Note 12 - Forfeited or Expired Options Under Stock Options Plans (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee terminations (in shares) | 82,374 | 185,208 | 390,870 |
Expired (in shares) | 27,500 | 254,030 | |
Repurchased (in shares) | 14,250 | ||
Total (in shares) | 109,874 | 453,488 | 390,870 |
Note 12 - Warrant Transactions
Note 12 - Warrant Transactions (Details) - $ / shares | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | |
Outstanding as of December 31, 2013 (in shares) | 450,000 | 4,050,000 | |
Outstanding as of December 31, 2013 (in dollars per share) | $ 5 | $ 1.31 | |
Granted during 2014 (in shares) | 3,600,000 | ||
Granted during 2014 (in dollars per share) | $ 0.84 |
Note 13 - Employee Stock Purc67
Note 13 - Employee Stock Purchase Plan (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
2010 Employee Stock Purchase Plan [Member] | |||
Percentage Of Discount Allowed For Shares Issued Under Employee Stock Purchase Plan | 15.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 | ||
Common Stock, Shares, Issued | 168,346 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 31,654 | ||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 56,766 | 24,958 | 31,267 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 49,757 | $ 46,928 | $ 80,718 |
Defined Contribution Plan, Cost Recognized | 7,541 | 7,020 | 12,038 |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 | 0 |
Common Stock, Shares, Issued | 66,810,149 | 66,656,789 | |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 49,757 | $ 46,928 | $ 80,718 |
Note 14 - Income Taxes (Details
Note 14 - Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earliest Tax Year [Member] | Domestic Tax Authority [Member] | |||
Open Tax Year | 2,012 | ||
Latest Tax Year [Member] | Domestic Tax Authority [Member] | |||
Open Tax Year | 2,015 | ||
Discontinued Operations [Member] | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 8,511,042 | $ 6,623,656 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0 | 0 | $ 0 |
Operating Loss Carryforwards | 140,506,000 | 108,398,000 | $ 84,417,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 16,145,402 | $ 11,049,207 |
Note 14 - Provision for Income
Note 14 - Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Continuing Operations [Member] | |||
Deferred | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 7,634,360 | $ 4,425,551 | $ 3,601,792 |
Federal | (6,521,134) | (3,694,966) | (2,994,771) |
State | (1,150,789) | (652,053) | (528,489) |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 16,145,402 | 11,049,207 | |
Total deferred | (37,562) | 78,532 | 78,531 |
Provision for income taxes | $ (37,562) | $ 78,532 | $ 78,531 |
Note 14 - Effective Tax Rate Re
Note 14 - Effective Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
U.S. Federal statutory rate | (34.00%) | (34.00%) | (34.00%) |
State taxes | (6.00%) | (6.00%) | (6.00%) |
Permanent differences | 0.10% | 0.10% | 0.30% |
Valuation allowance | 39.80% | 40.20% | 40.00% |
Effective tax rate | (0.10%) | 0.30% | 0.30% |
Note 14 - Deferred Tax Assets (
Note 14 - Deferred Tax Assets (Liabilities) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Net operating loss carryforwards | $ 56,202,470 | $ 43,362,260 |
Stock-based compensation | 2,426,886 | 2,094,946 |
Intangible assets | 2,481,960 | 2,583,348 |
Debt discount | 695,259 | 252,788 |
Allowance for doubtful accounts | 37,145 | 23,710 |
Other | 1,388,166 | 32,716 |
Total deferred tax assets | 63,231,886 | 48,349,768 |
Valuation allowance | (61,340,847) | (45,195,445) |
Deferred tax assets, net of valuation allowance | 1,891,039 | 3,154,323 |
Deferred tax liabilities | ||
Depreciation | (1,891,039) | (3,154,323) |
Intangible assets | (363,774) | (401,337) |
Total deferred tax liabilities | (2,254,813) | (3,555,660) |
Net deferred tax liabilities | $ (363,774) | $ (401,337) |
Note 15 - Fair Value of Assets
Note 15 - Fair Value of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Inputs, Level 1 [Member] | ||
Cash and cash equivalents | $ 15,116,531 | $ 38,027,509 |
Cash and cash equivalents | $ 15,116,531 | $ 38,027,509 |
Note 16 - Commitments (Details
Note 16 - Commitments (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2014 | |
Minimum [Member] | |||||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 1 year | ||||||
Maximum [Member] | |||||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 25 years | ||||||
Shared Wireless Business [Member] | |||||||
Estimated Costs to Settle Lease Obligations | $ 3,284,466 | ||||||
Corporate Offices [Member] | Due in 2014 [Member] | |||||||
Operating Leases, Rent Expense | $ 359,750 | ||||||
Corporate Offices [Member] | Due in 2019 [Member] | |||||||
Operating Leases, Rent Expense | $ 416,970 | ||||||
Corporate Offices [Member] | |||||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years | ||||||
Leasehold Improvements, Gross | $ 600,000 | ||||||
Operating Lease, Leasehold Improvements to be Made by Lessor | $ 380,000 | ||||||
Operating Leases, Rent Expense | 382,234 | $ 336,437 | $ 518,245 | ||||
Annual Increase in Operating Lease Rent Expense | 3.00% | ||||||
Sales Center [Member] | |||||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years | ||||||
Operating Leases, Rent Expense | $ 53,130 | ||||||
Annual Increase in Operating Lease Rent Expense | 3.00% | ||||||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 3 years 60 days | ||||||
Operating Leases, Rent Expense | $ 25,684,686 | $ 21,628,500 | $ 19,152,057 |
Note 16 - Total Future Operatin
Note 16 - Total Future Operating Lease Obligations (Details) | Dec. 31, 2015USD ($) |
2,016 | $ 19,885,917 |
2,017 | 15,252,943 |
2,018 | 8,286,819 |
2,019 | 3,199,264 |
2,020 | 741,907 |
Thereafter | 368,486 |
$ 47,735,336 |
Note 16 - Rent Expenses (Detail
Note 16 - Rent Expenses (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Points of Presence [Member] | |||
Operating Leases, Rent Expense | $ 8,180,389 | $ 7,746,573 | $ 7,128,778 |
Street Level Rooftops [Member] | |||
Operating Leases, Rent Expense | 16,707,445 | 13,183,209 | 11,067,316 |
Corporate Offices [Member] | |||
Operating Leases, Rent Expense | 382,234 | 336,437 | 518,245 |
Other Leased Property [Member] | |||
Operating Leases, Rent Expense | 414,618 | 362,281 | 437,718 |
Operating Leases, Rent Expense | $ 25,684,686 | $ 21,628,500 | $ 19,152,057 |
Note 16 - Total Future Capital
Note 16 - Total Future Capital Lease Obligations (Details) | Dec. 31, 2015USD ($) |
2,016 | $ 1,110,428 |
2,017 | 837,811 |
2,018 | 143,796 |
2,092,035 | |
Less: Interest expense | 166,519 |
Total capital lease obligations | 1,925,516 |
Current | 992,690 |
Long-Term | $ 932,826 |
Note 17 - Quarterly Financial R
Note 17 - Quarterly Financial Reports (Details) - USD ($) | 3 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | |
Revenues | $ 6,754,181 | $ 6,947,467 | $ 7,030,908 | $ 7,172,467 | $ 7,262,506 | $ 7,507,640 | $ 7,526,478 | $ 7,639,557 | $ 7,871,442 | $ 7,864,728 | $ 8,015,667 | $ 8,140,747 |
Operating Expenses | 10,474,243 | 9,837,277 | 10,014,564 | 10,168,913 | 9,871,273 | 9,539,442 | 9,709,394 | 10,097,304 | 10,260,756 | 10,228,784 | 10,348,511 | 10,834,621 |
Operating Loss | (3,720,062) | (2,889,810) | (2,983,656) | (2,996,446) | (2,608,767) | (2,031,802) | (2,182,916) | (2,457,747) | (2,389,314) | (2,364,056) | (2,332,844) | (2,693,874) |
Other income (expense), net | (1,652,412) | (1,665,682) | (1,670,428) | (1,664,264) | (1,506,336) | (43,970) | (59,488) | (63,052) | (63,844) | (59,613) | 3,972 | 905,843 |
Net Loss from continuing operations | (5,372,473) | (4,555,493) | (4,654,084) | (4,660,710) | (4,115,103) | (2,075,772) | (2,242,404) | (2,520,799) | (2,453,160) | (2,423,668) | (2,328,872) | (1,788,031) |
Net Loss from discontinued operations | $ (8,864,588) | $ (3,953,933) | $ (4,196,727) | $ (4,262,356) | $ (4,239,629) | $ (4,178,301) | $ (4,152,202) | $ (3,989,008) | $ (4,242,750) | $ (3,719,725) | $ (3,902,278) | $ (3,838,275) |
Continuing Operations (in dollars per share) | $ (0.08) | $ (0.07) | $ (0.07) | $ (0.07) | $ (0.06) | $ (0.03) | $ (0.03) | $ (0.04) | $ (0.04) | $ (0.04) | $ (0.04) | $ (0.03) |
Discontinued Operations (in dollars per share) | $ (0.13) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) | $ (0.06) |
Weighted average number of shares outstanding - basic and diluted (in shares) | 67,977,529 | 67,966,261 | 67,924,379 | 67,856,789 | 67,642,056 | 66,643,804 | 66,478,686 | 66,439,061 | 66,419,380 | 66,402,499 | 66,370,789 | 61,464,706 |
Note 18 - Subsequent Events (De
Note 18 - Subsequent Events (Details Textual) $ in Millions | Mar. 09, 2016USD ($) |
Subsequent Event [Member] | Shared Wireless Business [Member] | |
Projected Reduction in Cash Requirements Annually | $ 6 |