Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Jun. 30, 2013 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Snap Interactive, Inc |
Entity Central Index Key | 1355839 |
Amendment Flag | TRUE |
Amendment Description | The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine. |
Document Type | S-1 |
Document Period End Date | 30-Jun-13 |
Entity Filer Category | Smaller Reporting Company |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current assets: | |||
Cash and cash equivalents | $2,617,733 | $5,357,596 | $2,397,828 |
Restricted cash | 375,211 | 105,000 | |
Credit card holdback receivable | 256,924 | 287,293 | 441,840 |
Accounts receivable, net of allowances and reserves of $41,929 and $36,129 respectively | 333,182 | 320,019 | 480,190 |
Accrued interest receivable | 5,907 | ||
Investments | 6,481,205 | ||
Prepaid expense and other current assets | 170,136 | 204,824 | 96,815 |
Total current assets | 3,753,186 | 6,274,732 | 9,903,785 |
Fixed assets and intangible assets, net | 598,536 | 548,549 | 578,463 |
Notes receivable | 168,098 | 165,716 | 138,803 |
Security deposits | 19,520 | ||
Investments | 50,000 | ||
Total assets | 4,569,820 | 6,988,997 | 10,640,571 |
Current liabilities: | |||
Accounts payable | 989,893 | 799,183 | 1,027,841 |
Accrued expenses and other current liabilities | 394,479 | 240,049 | 864,983 |
Deferred revenue | 2,031,702 | 2,524,229 | 3,138,406 |
Total current liabilities | 3,416,074 | 3,563,461 | 5,031,230 |
Long term deferred rent | 30,214 | 48,340 | 61,640 |
Warrant liability | 445,075 | 1,616,325 | 937,000 |
Commitments | |||
Total liabilities | 3,891,363 | 5,228,126 | 6,029,870 |
Stockholders' equity: | |||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding | |||
Common Stock, $0.001 par value, 100,000,000 shares authorized, 49,737,826, 44,007,826 shares issued, respectively, and 38,932,826, 38,832,826 shares outstanding, respectively | 38,933 | 38,833 | 38,580 |
Additional paid-in capital | 9,982,391 | 9,437,422 | 8,256,864 |
Accumulated deficit | -9,342,867 | -7,715,384 | -3,684,743 |
Total stockholders' equity | 678,457 | 1,760,871 | 4,610,701 |
Total liabilities and stockholders' equity | $4,569,820 | $6,988,997 | $10,640,571 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Balance Sheets [Abstract] | |||
Allowances and reserves on Accounts receivables | $41,929 | $36,129 | $184,964 |
Preferred stock, par value | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 49,737,826 | 44,007,826 | 38,580,261 |
Common stock, shares outstanding | 38,932,826 | 38,832,826 | 38,580,261 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Revenues: | ||||||
Subscription revenue | $3,150,319 | $5,110,907 | $6,578,210 | $10,696,945 | $18,910,070 | $18,781,368 |
Advertising revenue | 1,670 | 101,730 | 43,339 | 261,143 | 336,666 | 374,175 |
Total revenues | 3,151,989 | 5,212,637 | 6,621,549 | 10,958,088 | 19,246,736 | 19,155,543 |
Costs and expenses: | ||||||
Programming, hosting and technology | 1,339,930 | 995,765 | 2,701,321 | 1,897,885 | 4,444,550 | 2,587,822 |
Compensation | 1,078,536 | 1,063,503 | 1,899,606 | 1,969,852 | 3,625,117 | 1,976,384 |
Professional fees | 206,703 | 183,909 | 473,807 | 332,226 | 703,125 | 558,136 |
Advertising and marketing | 952,248 | 3,023,656 | 2,083,929 | 7,543,897 | 9,876,097 | 14,626,963 |
General and administrative | 1,118,700 | 1,090,334 | 2,264,725 | 2,074,553 | 3,953,795 | 3,070,178 |
Total costs and expenses | 4,696,117 | 6,357,167 | 9,423,388 | 13,818,413 | 22,602,684 | 22,819,483 |
Loss from operations | -1,544,128 | -1,144,530 | -2,801,839 | -2,860,325 | -3,355,948 | -3,663,940 |
Interest income, net | 1,440 | 10,067 | 3,106 | 18,600 | 21,517 | 28,858 |
Mark-to-market adjustment on warrant liability | 70,275 | 117,125 | 1,171,250 | -1,171,250 | -679,325 | 2,038,000 |
Other expense | 16,885 | 16,885 | -16,885 | 3,909 | ||
Net loss before income taxes | -1,472,413 | -1,034,223 | -1,627,483 | -4,029,860 | -4,030,641 | -1,593,173 |
Provision for income taxes | ||||||
Net loss | ($1,472,413) | ($1,034,223) | ($1,627,483) | ($4,029,860) | ($4,030,641) | ($1,593,173) |
Net loss per common share: | ||||||
Basic and diluted | ($0.04) | ($0.03) | ($0.04) | ($0.10) | ($0.10) | ($0.04) |
Weighted average number of common shares used in calculating net loss per common share: | ||||||
Basic and diluted | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | 38,611,758 | 37,619,208 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Deferred Compensation |
Beginning balance at Dec. 31, 2010 | $664,697 | $33,211 | $2,730,659 | ($2,091,570) | ($7,603) |
Beginning balance, shares at Dec. 31, 2010 | 33,210,756 | ||||
Deferred compensation realized | 7,603 | 7,603 | |||
Stock issued for services to employees | 249 | -249 | |||
Shares issued for services to employees, shares | 248,848 | ||||
Stock issued for services to third parties | 20,800 | 10 | 20,790 | ||
Shares issued for services to third party, shares | 10,000 | ||||
Stock issued in exchange for convertible note payable | 71,959 | 823 | 71,136 | ||
Stock issued in exchange for convertible note payable, shares | 823,157 | ||||
Stock and warrants issued for cash ($2/sh, less stock offering costs) | 7,915,700 | 4,250 | 7,911,450 | ||
Stock and warrants issued for cash ($2/sh, less stock offering costs), shares | 4,250,000 | ||||
Stock issued in exchange for warrants ($2.50/sh, less stock offering costs) | 88,125 | 38 | 88,087 | ||
Stock issued in exchange for warrants ($2.50/sh, less stock offering costs), shares | 37,500 | ||||
Stock-based compensation expense for stock options | 321,281 | 321,281 | |||
Stock-based compensation expense for restricted stock awards | 88,710 | 88,710 | |||
Warrant liability | -2,975,000 | -2,975,000 | |||
Net loss | -1,593,173 | -1,593,173 | |||
Balance at Dec. 31, 2011 | 4,610,701 | 38,580 | 8,256,864 | -3,684,743 | |
Balance, shares at Dec. 31, 2011 | 38,580,261 | ||||
Exercise of stock options for common stock | 50,851 | 253 | 50,598 | ||
Exercise of stock options for common stock, shares | 252,565 | ||||
Stock-based compensation expense for stock options | 814,996 | 814,996 | |||
Stock-based compensation expense for restricted stock awards | 314,964 | 314,964 | |||
Net loss | -4,030,641 | -4,030,641 | |||
Balance at Dec. 31, 2012 | 1,760,871 | 38,833 | 9,437,422 | -7,715,384 | |
Balance, shares at Dec. 31, 2012 | 38,832,826 | ||||
Stock issued in exchange for domain name | 100,000 | 100 | 99,900 | ||
Stock issued in exchange for domain name, shares | 100,000 | 100,000 | |||
Stock-based compensation expense for stock options | 106,496 | 106,496 | |||
Stock-based compensation expense for restricted stock awards | 338,573 | 338,573 | |||
Net loss | -1,627,483 | -1,627,483 | |||
Balance at Jun. 30, 2013 | $678,457 | $38,933 | $9,982,391 | ($9,342,867) | |
Balance, shares at Jun. 30, 2013 | 38,932,826 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended |
Dec. 31, 2011 | |
Statements Of Changes In Shareholders' Equity [Abstract] | |
Per share fair market value of stock and warrants issued for cash | $2 |
Per share fair market value of stock issued in exchange for warrants | $2.50 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ||||
Net loss | ($1,627,483) | ($4,029,860) | ($4,030,641) | ($1,593,173) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 85,563 | 72,476 | 151,007 | 51,180 |
Amortization of investment premium | 5,348 | 6,205 | 8,734 | |
Stock-based compensation expense | 445,069 | 609,793 | 1,129,960 | 438,395 |
Mark-to-market adjustment on warrant liability | -1,171,250 | 1,171,250 | 679,325 | -2,038,000 |
Loss on disposal of fixed assets | 16,885 | 16,885 | 453 | |
Changes in operating assets and liabilities: | ||||
Restricted cash | -270,211 | -105,000 | -105,000 | |
Credit card holdback receivable | 30,369 | -31,954 | 154,547 | -202,388 |
Accounts receivable, net | -13,163 | -69,992 | 160,171 | -356,177 |
Accrued interest paid | 5,907 | -5,907 | ||
Prepaid expense and other current assets | 34,688 | -96,833 | -108,009 | -22,554 |
Security deposit | 19,520 | 19,520 | -1,335 | |
Accounts payable and accrued expenses and other current liabilities | 341,601 | 235,007 | -843,470 | 960,266 |
Deferred rent | -14,587 | -11,135 | -23,421 | 102,115 |
Deferred revenue | -492,527 | 516,537 | -614,177 | 1,200,491 |
Accrued interest payable - related party | 2,358 | |||
Net cash used in operating activities | -2,651,931 | -1,697,958 | -3,401,191 | -1,455,542 |
Cash flows from investing activities: | ||||
Purchase of fixed assets | -35,550 | -88,241 | -137,978 | -540,591 |
Purchase of non-marketable equity securities | -50,000 | 0 | ||
Redemption of short-term investments | 0 | 4,975,000 | 6,475,000 | -6,489,937 |
Repayment of notes receivable issued to employees | 11,320 | |||
Repayment (issuance) of notes receivable and accrued interest | -2,382 | 7,672 | -38,233 | -138,803 |
Net cash (used in) provided by investing activities | -87,932 | 4,894,431 | 6,310,109 | -7,169,331 |
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock and warrants | 7,915,700 | |||
Proceeds from exercise of common stock warrants | 88,125 | |||
Proceeds from exercise of stock options | 50,850 | |||
Net cash provided by financing activities | 50,850 | 8,003,825 | ||
Net (decrease) increase in cash and cash equivalents | -2,739,863 | 3,196,473 | 2,959,768 | -621,048 |
Cash and cash equivalents at beginning of year | 5,357,596 | 2,397,828 | 2,397,828 | 3,018,876 |
Cash and cash equivalents at end of period | 2,617,733 | 5,594,301 | 5,357,596 | 2,397,828 |
Supplemental disclosure of cash flow information: | ||||
Cash paid for taxes and related interest | 15,640 | 4,500 | ||
Supplemental disclosure of noncash activity: | ||||
Conversion of notes and accrued interest to common stock | 71,959 | |||
AYI.com domain purchase in exchange for 100,000 shares of common stock | $100,000 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 6 Months Ended |
Jun. 30, 2013 | |
Statement of Cash Flows [Abstract] | |
Shares of common stock issued in exchange of AYI.com domain | 100,000 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2013 | |
Basis 0f Presentation [Abstract] | |
Basis of Presentation | |
1. Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements include the accounts of Snap Interactive, Inc. and its wholly owned subsidiaries, eTwine, Inc. and Snap Mobile Limited. The condensed consolidated financial statements included in this report have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. We have not included certain information normally included in annual financial statements pursuant to those rules and regulations, although we believe that the disclosure included herein is adequate to make the information presented not misleading. | |
The financial statements contained herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 14, 2013. | |
In the opinion of management, the accompanying unaudited condensed consolidated financial information contains all normal and recurring adjustments necessary to fairly present the consolidated financial condition, results of operations, and changes in cash flows of the Company for the interim periods presented. The Company’s historical results are not necessarily indicative of future operating results and the results for the six months ended June 30, 2013 are not necessarily indicative of results for the year ending December 31, 2013, or for any other period. | |
Certain amounts from prior periods have been reclassified to conform to the current period presentation. |
Organization_and_Description_o
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2012 | |
Organization and Description Of Business [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business |
Snap Interactive, Inc. (together with its wholly owned subsidiaries, eTwine, Inc. and Snap Mobile Limited, the “Company”) was incorporated under the laws of the State of Delaware on July 19, 2005. eTwine, Inc. was incorporated under the laws of the State of New York on May 7, 2004. Snap Mobile Limited is a United Kingdom corporation, and was incorporated on September 10, 2009. | |
The Company was organized to operate a social dating application and stand-alone website. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2012 | ||
Summary Of Significant Accounting Policies [Abstract] | |||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | |
During the six months ended June 30, 2013, there were no material changes to the Company’s significant accounting policies from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, except for the following: | Principles of Consolidation | ||
The Company follows Accounting Standards Codification (“ASC”) 325-20, Cost Method Investments (“ASC 325-20”) to account for its ownership interest in noncontrolled entities. Under ASC 325-20, equity securities that do not have readily determinable fair values (i.e., non-marketable equity securities) and are not required to be accounted for under the equity method are typically carried at cost (i.e., cost method investments). Investments of this nature are initially recorded at cost. Income is recorded for dividends received that are distributed from net accumulated earnings of the noncontrolled entity subsequent to the date of investment. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions in the cost of the investment. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. | The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, were prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany balances and transactions have been eliminated upon consolidation. | ||
Significant Estimates and Judgments | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the provision for future credit card chargebacks and refunds on subscription revenue, estimates used to determine the fair value of our common stock, stock options, non-cash capital stock issuances, stock-based compensation and common stock warrants, collectability of our accounts receivable and the valuation allowance on deferred tax assets. Management evaluates these estimates on an ongoing basis. Changes in estimates are recorded in the period in which they become known. We base estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates. | |||
Comparative Data | |||
Certain amounts from prior periods have been reclassified to conform to the current period presentation, including: | |||
● | The reclassification of a $61,572 reserve for future credit card chargebacks from accrued expenses and other current liabilities to accounts receivable; | ||
● | The reclassification of noncurrent deferred rent of $61,640 from accrued expenses and other current liabilities to long-term deferred rent; and | ||
● | The reclassification of stock-based compensation of $342,714 relating to non-developers from a programming, hosting and technology expense to compensation expense. | ||
Revenue Recognition | |||
The Company recognizes revenue on arrangements in accordance with Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. | |||
The Company has revenue streams consisting of subscriptions and advertisements. The Company recognizes revenue from monthly premium subscription fees beginning in the month in which the services are provided. Revenues are presented net of refunds, credits, and known and estimated credit card chargebacks. During 2012, subscriptions were offered in durations of one-, three-, six- and twelve-month terms. Longer-term plans (those with durations longer than one month) are generally available at discounted monthly rates. All subscription fees, however, are collected at the time of purchase regardless of the length of the subscription term. Revenues from multi-month subscriptions are recognized over the length of the subscription term rather than when the subscription is purchased. The difference between the gross cash receipts collected and the revenue recognized from those sales during that reporting period will appear as deferred revenue. | |||
The Company recognizes advertising revenue as earned on a click-through, impression, registration or subscription basis. When a user clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), registers for an external website via an advertisement clicked on through the Company’s application (CPA basis), or clicks on an offer to subscribe to premium features on the Company’s applications, the contract amount is recognized as revenue. | |||
The Company’s payment processors have established routine reserve accounts to secure the performance of the Company’s obligations under its service agreements, which is standard practice within the payment processing industry. These reserve accounts withhold a small percentage of the Company’s sales in a segregated account in the form of a six-month rolling reserve. The funds that are withheld each month are returned to the Company on a monthly basis after six months of being held in the reserve account and any remaining funds will be returned to the Company 90 to 180 days following termination of such agreements. These funds are classified as credit card holdback receivable and totaled $287,293 and $441,840 at December 31, 2012 and December 31, 2011, respectively. | |||
The Company has an additional reserve for potential credit card chargebacks based on historical experience and knowledge of the industry. As of December 31, 2012, the Company reserved $36,129 for potential future credit card chargebacks and the amount was included in accounts receivable, net on the Consolidated Balance Sheet. | |||
Business Segments | |||
The Company operates in one reportable segment, and management assesses the Company’s financial performance and makes operating decisions based on one single operating unit. | |||
Stock-Based Compensation | |||
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company measures the compensation costs of stock-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in the financial statements over the period during which employees are required to provide services. Stock-based compensation arrangements include stock options and restricted stock awards. | |||
Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505. | |||
The fair value of each option granted under the Company's Amended and Restated 2011 Long-term Incentive Plan (the “Plan”) was estimated using the Black-Scholes option-pricing model (see Note 10 for further details). Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of the Company's common stock price, (ii) the expected life of the award, which for options is the period of time over which employees and non-employees are expected to hold their options prior to exercise, (iii) expected dividend yield on the Company's common stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Expected volatility is estimated based on the Company's historical volatilities. The expected life of options has been determined using the "simplified" method as prescribed by Staff Accounting Bulletin (“SAB”) No. 110, an amendment to SAB No. 107, which uses the midpoint between the vesting date and the end of the contractual term. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying dividends in the foreseeable future. | |||
Programming, Hosting and Technology Expense | |||
Programming, hosting and technology expense includes the expenses associated with the operation of data centers, including labor, consulting, hosting, server, web design and programming expenses. | |||
Advertising and Marketing | |||
Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $9,876,097 and $14,626,963 for the years ended December 31, 2012 and 2011, respectively. | |||
Research and Development | |||
The Company has adopted the provisions of ASC No. 350, Intangibles – Goodwill & Other. Costs incurred in the planning stage of a website are expensed as research and development expenses while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years. The Company did not capitalize any research and development expenses during the years ended December 31, 2012 and 2011. | |||
Income Taxes | |||
The Company accounts for income taxes using the asset and liability method prescribed by ASC No. 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry forwards. Deferred taxes are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in results of operations in the period that includes the enactment date. | |||
Each reporting period, the Company assesses whether its deferred tax assets are more-likely-than-not realizable, in determining whether it is necessary to record a valuation allowance. This includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of the Company's deferred tax assets. | |||
The Company recognizes the impact of an uncertain tax position in its financial statements if, in management's judgment, the position is more-likely-than-not sustainable upon audit based on the position's technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for uncertain tax positions is necessary. Different conclusions reached in this assessment can have a material impact on our consolidated financial statements. Currently, we have no uncertain tax positions. | |||
Net Income (Loss) Per Share | |||
Basic net income (loss) per common share is determined using the two-class method and is computed by dividing net income (loss) attributable to Snap Interactive Inc. common shareholders by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share. The two-class method is an earnings allocation formula that determines income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The two-class method treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. According to the contractual terms of participating securities, such securities do not participate in losses. | |||
Diluted net income (loss) per common share reflects the more dilutive earnings per share amount calculated using the treasury stock method or the two-class method, taking into account any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options and unvested shares of restricted common stock (using the treasury stock method). To the extent stock options, stock equivalents and warrants are antidilutive, they are excluded from the calculation of diluted income per share. | |||
Cash and Cash Equivalents | |||
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks, money market funds and certain investments in commercial paper. | |||
Investments | |||
The Company's investment portfolio may at any time contain investments in U.S. Treasury obligations, securities guaranteed by the U.S. government, certificates of deposit, corporate notes and bonds, medium-term notes, commercial paper, and money market mutual funds, with original maturities less than one year. | |||
The Company's investments with original maturity dates in excess of three months are classified as short-term investments on the Consolidated Balance Sheets. Short-term investments classified as held-to-maturity are recorded at amortized cost. Interest earned on short-term investments is recorded to "Interest income" which is presented net of Interest expense on the Consolidated Statements of Operations. | |||
Fair Value of Financial Instruments | |||
The carrying amounts of the Company's cash and cash equivalents, short-term investments classified as held-to-maturity, accounts receivable, credit card holdback receivable, prepaid expenses, accounts payable, accrued expenses and deferred revenue, approximate fair value due to the short-term nature of these instruments. | |||
Receivables | |||
At December 31, 2012, we had accounts receivable from payment processors and advertising networks that place advertisements on our application in the amount of $328,680 and $27,469, respectively. The settlement of credit card sales by payment processors typically occurs several days after the date of the charge, and we generally receive payments from mobile payment processors and advertising networks on a monthly basis. | |||
Concentration of Credit Risk | |||
At times the Company has cash in bank accounts in excess of FDIC insurance limits. The Company had approximately $4,995,958 and $1,561,947 in excess of FDIC insurance limits as of December 31, 2012 and December 31, 2011, respectively. The Company also had credit card holdback receivables of $287,293 and $441,840, which were held by payment processors, and of which $139,389 and $248,534 were not FDIC insured as of December 31, 2012 and December 31, 2011, respectively. | |||
Furniture, Fixtures and Equipment | |||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of those assets, as follows: | |||
Software and website costs | 3 years | ||
Computers and office equipment | 5 years | ||
Furniture and fixtures | 7 years | ||
Leasehold improvements | Shorter of estimated useful life or remaining lease term | ||
Repairs and maintenance costs are expensed as incurred. | |||
Other Intangible and Long-Lived Assets | |||
The Company's long-lived assets primarily consist of computer and office equipment and software, furniture and fixtures and leasehold improvements, which are subject to depreciation over the useful life of the asset. Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. No impairments were recorded on long-lived assets for the periods presented in these consolidated financial statements. | |||
Intangible Assets, net | |||
The Company’s intangible assets, net represents definite-lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: | |||
Domain name | 15 years | ||
No impairments were recorded on intangible assets and no impairment indicators were noted for the periods presented in these consolidated financial statements. | |||
Warrant Liability | |||
The Company issued common stock warrants in January 2011 in conjunction with an equity financing. In accordance with ASC 480, Distinguishing Liabilities from Equity, the fair value of these warrants is classified as a liability on the Company’s Consolidated Balance Sheets because, according to the warrants' terms, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Corresponding changes in the fair value of the warrants are recognized in earnings on the Company’s Consolidated Statements of Operations in each subsequent period. | |||
Recently Adopted Accounting Pronouncement | |||
On May 12, 2011, the Financial Accounting Standards Board (“FASB”) issued revised authoritative guidance (Accounting Standards Update (“ASU”) No. 2011-04) covering fair value measurements and disclosures. The amended guidance include provisions for (1) the application of concepts of "highest and best use" and "valuation premises", (2) an option to measure groups of offsetting assets and liabilities on a net basis, (3) incorporation of certain premiums and discounts in fair value measurements, and (4) measurement of the fair value of certain instruments classified in stockholders' equity. The revised guidance is effective for interim and annual periods beginning after December 15, 2011. The Company adopted this revised authoritative guidance prospectively for new or materially modified arrangements beginning January 1, 2012. The adoption of this revised authoritative guidance update did not have a significant impact on the Company’s consolidated financial statements. | |||
Restatement of Previously Issued Consolidated Financial Statements | |||
We have restated our consolidated financial statements as of and for the year ended December 31, 2011 as described in "Note 16. Restatement of Consolidated Financial Statements." |
Restricted_Cash
Restricted Cash | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Restricted Cash [Abstract] | ||
Restricted Cash | 3. Restricted Cash | 3. Restricted Cash |
During 2012, the Company established a line of credit with JP Morgan Chase Bank, N. A. (“JP Morgan”) related to the Company’s corporate credit cards and placed a cash collateral guarantee of 105% of the monthly credit line of $100,000 in a certificate of deposit for twelve months as collateral. Accordingly, the Company has recorded $105,211 as restricted cash on the balance sheet as of June 30, 2013. | During the year ended December 31, 2012, the Company established a line of credit with JPMorgan Chase Bank, National Association related to the Company’s corporate credit cards, which required the Company to place a cash collateral guarantee of 105% of the monthly credit line of $100,000 in a certificate of deposit for twelve months as collateral. Accordingly, the Company has reported $105,000 as restricted cash on the balance sheet as of December 31, 2012. | |
On January 11, 2013, the Company obtained a letter of credit from JP Morgan in the amount of $200,000, in favor of Hewlett Packard Financial Services Company (“HP”). This letter of credit expires on January 31, 2014 and has been increased to $270,000. |
Accounts_Receivable_Net
Accounts Receivable, Net | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accounts Receivable, Net and Notes Receivable [Abstract] | ||||||||||||||||||
Accounts Receivable, Net | 4. Accounts Receivable, Net | 4. Accounts Receivable, Net | ||||||||||||||||
Accounts receivable, net consisted of the following at June 30, 2013 and December 31, 2012: | Accounts receivable, net consisted of the following at December 31, 2012 and December 31, 2011: | |||||||||||||||||
June 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
(Unaudited) | Accounts receivable | $ | 356,148 | $ | 665,154 | |||||||||||||
Accounts receivable | $ | 375,111 | $ | 356,148 | Less: Allowance for doubtful accounts | - | (123,392 | ) | ||||||||||
Less: Reserve for future chargebacks | (41,929 | ) | (36,129 | ) | Less: Reserve for future chargebacks | (36,129 | ) | (61,572 | ) | |||||||||
Total accounts receivable, net | $ | 333,182 | $ | 320,019 | Total accounts receivable, net | $ | 320,019 | $ | 480,190 | |||||||||
Credit card payments for subscriptions and micro-transaction purchases typically settle several days after the date of purchase. As of June 30, 2013, the amount of unsettled transactions due from credit card payment processors amounted to $157,826, as compared to $112,885 at December 31, 2012. At June 30, 2013, the amount of accounts receivable due from Apple Inc. amounted to $201,096, as compared to $201,859 at December 31, 2012. These amounts are included in our accounts receivable. | Credit card payments for subscriptions and micro-transaction purchases typically settle several days after the date of purchase. As of December 31, 2012, the amount of unsettled transactions due from credit card payment processors amounted to $112,885, as compared to $220,272 at December 31, 2011. At December 31, 2012, the amount of receivable due from Apple Inc. amounted to $201,859, as compared to $176,118 at December 31, 2011. These amounts are included in our accounts receivable. | |||||||||||||||||
At December 31, 2012, we had accounts receivable from advertising networks that place advertisements on our application in the amount of $27,469, as compared to $64,330 at December 31, 2011, net of allowances. The allowance for doubtful accounts at December 31, 2011 related to one specific advertising network affiliate and was written off in 2012. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments and Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments and Fair Value Measurements | 5. Fair Value Measurements | 5. Investments and Fair Value Measurements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The fair value framework under the Financial Accounting Standards Board’s (“FASB”) guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, would generally require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows: | The fair value framework under the FASB’s guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities; | ● | Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and | ● | Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
● | Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability. | ● | Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes those liabilities as of June 30, 2013 and December 31, 2012: | The following table summarizes those assets and liabilities as of December 31, 2012 and December 31, 2011: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Jun-13 | December 31, 2012 | 31-Dec-12 | December 31, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ASSETS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES: | Cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liability | $ | — | $ | — | $ | 445,075 | $ | 445,075 | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | U.S. government securities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Total warrant liability | $ | — | $ | — | $ | 445,075 | $ | 445,075 | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | Certificates of deposit | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total cash equivalents | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest earned on debt securities is recorded to “Interest income, net” on the Consolidated Statements of Operations. | Short-term investments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government securities (1) | $ | — | $ | — | $ | — | $ | — | $ | 3,506,205 | $ | — | $ | — | $ | 3,506,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||
The Company issued common stock warrants in January 2011 in conjunction with an equity financing. In accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), the fair value of these warrants is classified as a liability on the Company’s Consolidated Balance Sheets because, according to the terms of the warrants, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Corresponding changes in the fair value of the warrants are recognized in earnings on the Company’s Consolidated Statements of Operations in each subsequent period. | Certificates of deposit | — | — | — | — | 2,975,000 | — | — | 2,975,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total short-term investments | $ | — | $ | — | $ | — | $ | — | $ | 6,481,205 | $ | — | $ | — | $ | 6,481,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s warrant liability is carried at fair value and was classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. In order to calculate fair value, the Company uses a custom model developed with the assistance of an independent third-party valuation expert. This model calculates the fair value of the warrant liability at each measurement date using a Monte-Carlo style simulation, as the value of certain features of the warrant liability would not be captured by the standard Black-Scholes model. | LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the values of certain assumptions used in our custom model to estimate the fair value of the warrant liability at June 30, 2013 and December 31, 2012: | Common stock warrants | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | $ | — | $ | — | $ | 937,000 | $ | 937,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total common stock warrants | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | $ | — | $ | — | $ | 937,000 | $ | 937,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | (1) Includes amortization premium paid of $8,733 as of December 31, 2011. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock price | $ | 0.51 | $ | 1.25 | Interest earned on debt securities is recorded to “Interest income, net” on the Consolidated Statement of Operations. The Company is classifying these short-term investments as held-to-maturity and has recorded them at amortized cost. The gross unrecognized holding gains and losses for the years ended December 31, 2012 and December 31, 2011 were not material. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strike price | $ | 2.5 | $ | 2.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining contractual term (years) | 2.6 | 3.1 | The Company issued common stock warrants in January 2011 in conjunction with an equity financing. In accordance with ASC 480, the fair value of these warrants is classified as a liability on the Company’s Consolidated Balance Sheets because, according to the warrants' terms, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Corresponding changes in the fair value of the warrants are recognized in earnings on the Company’s Consolidated Statements of Operations in each subsequent period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Volatility | 141.8 | % | 171.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted volatility | 123 | % | 121.1 | % | The Company’s warrant liability is carried at fair value and was classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. In order to calculate fair value, the Company uses a custom model developed with the assistance of an independent third-party valuation expert. This model, at each measurement date, calculates the fair value of the warrant liability using a Monte-Carlo style simulation, as the value of certain features of the warrant liability would not be captured by the standard Black-Scholes model. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free rate | 0.5 | % | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | The following table summarizes the values of certain assumptions used in the aforementioned custom model to estimate the fair value of the warrant liability at December 31, 2012 and December 31, 2011: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the purposes of determining fair value, the Company used “adjusted volatility” in favor of “historical volatility” in its Monte-Carlo style simulation. Historical volatility of the Company was calculated using weekly stock prices over a look back period corresponding to the remaining contractual term of the warrants as of each valuation date. Management considered the lack of marketability of these instruments by incorporating a 10% incremental discount rate premium through a reduction of the volatility estimate (“volatility haircut”) to calculate the adjusted historical volatility as of each valuation date. | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”) indicates that “in the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability.” In accordance with ASU 2011-04, management estimated fair value from the perspective of market participants. | Stock price | $ | 1.25 | $ | 0.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strike price | $ | 2.5 | $ | 2.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining contractual term (years) | 3.1 | 4.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Volatility | 171.90% | 215.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted volatility | 121.10% | 125.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free rate | 0.40% | 0.60% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the purposes of determining fair value, the Company used “adjusted volatility” in favor of “historical volatility” in its Monte-Carlo simulations. Historical realized volatility of the Company was calculated using weekly stock prices over a look back period corresponding to the remaining contractual term of the warrants as of each valuation date. Topic 820 requires fair value to be estimated from the perspective of market participants. Management considered the lack of marketability of these instruments by incorporating a 10% incremental discount rate premium through a reduction of the volatility estimate (“volatility haircut”) to calculate the adjusted historical volatility as of each valuation date. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASU 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs indicates that “in the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability”. |
CostMethod_Investment
Cost-Method Investment | 6 Months Ended |
Jun. 30, 2013 | |
Investments, All Other Investments [Abstract] | |
Cost-Method Investment | 6. Cost-Method Investment |
On January 31, 2013, the Company entered into a subscription agreement with Darrell Lerner and DCL Ventures, Inc. (“DCL”) in connection with Mr. Lerner’s separation from the Company. Pursuant to this agreement, the Company made an initial investment in DCL by purchasing 50,000 shares of DCL’s common stock, $0.001 par value per share, for an aggregate purchase price of $50,000 in April 2013. These nonmarketable securities have been included in the Company’s Consolidated Balance Sheet measured on a cost basis (See Note 16). | |
As of June 30, 2013, the aggregate carrying amount of the Company’s cost-method investment in a noncontrolled entity was $50,000, and was recorded in Investments on the Company’s Consolidated Balance Sheets. The Company assesses all cost-method investments for impairment quarterly. No impairment loss was recorded during the three and six months ended June 30, 2013. The Company does not reassess the fair value of cost-method investments if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investments (See Note 16). |
Fixed_Assets_and_Intangible_As
Fixed Assets and Intangible Assets, Net | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Fixed Assets and Intangible Assets, Net [Abstract] | ||||||||||||||||||
Fixed Assets and Intangible Assets, Net | 7. Fixed Assets and Intangible Assets, Net | 6. Fixed Assets and Intangible Assets, Net | ||||||||||||||||
Fixed assets and intangible assets, net consisted of the following at June 30, 2013 and December 31, 2012: | Fixed assets and intangible assets, net consisted of the following at December 31, 2012 and December 31, 2011: | |||||||||||||||||
June 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
(Unaudited) | Computer equipment | $ | 211,896 | $ | 143,461 | |||||||||||||
Computer equipment | $ | 239,875 | $ | 211,896 | Furniture and fixtures | 142,856 | 159,051 | |||||||||||
Furniture and fixtures | 142,856 | 142,856 | Leasehold improvements | 377,727 | 329,156 | |||||||||||||
Leasehold improvements | 382,376 | 377,727 | Software | 8,047 | 7,342 | |||||||||||||
Software | 10,968 | 8,047 | Website domain name | 24,938 | 24,938 | |||||||||||||
Website domain name | 124,938 | 24,938 | Website costs | 40,500 | 40,500 | |||||||||||||
Website costs | 40,500 | 40,500 | Total fixed assets | 805,964 | 704,448 | |||||||||||||
Total fixed assets | 941,513 | 805,964 | Less: Accumulated depreciation and amortization | (257,415 | ) | (125,985 | ) | |||||||||||
Less: Accumulated depreciation and amortization | (342,977 | ) | (257,415 | ) | Total fixed assets and intangible assets, net | $ | 548,549 | $ | 578,463 | |||||||||
Total fixed assets and intangible assets, net | $ | 598,536 | $ | 548,549 | ||||||||||||||
The Company only holds fixed assets in the United States. Depreciation and amortization expense was $151,007 and $51,180 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||||||
The Company only holds fixed assets in the United States. Depreciation and amortization expense for the six months ended June 30, 2013 was $85,563, as compared to $72,476 for the six months ended June 30, 2012. | ||||||||||||||||||
The estimated future amortization and depreciation of intangible and tangible assets is as follows: | ||||||||||||||||||
On January 23, 2013, the Company issued 100,000 shares of common stock with a fair value of $100,000 to an unrelated third party in exchange for the AYI.com domain name (See Note 13). | ||||||||||||||||||
Year | Amount | |||||||||||||||||
2013 | $ | 161,547 | ||||||||||||||||
2014 | 156,498 | |||||||||||||||||
2015 | 122,365 | |||||||||||||||||
2016 | 52,886 | |||||||||||||||||
2017 and thereafter | 55,253 | |||||||||||||||||
$ | 548,549 |
Notes_Receivable
Notes Receivable | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Accounts Receivable, Net and Notes Receivable [Abstract] | ||
Notes Receivable | 8. Notes Receivable | 7. Notes Receivable |
At June 30, 2013, the Company had notes receivable in the aggregate amount of $168,098 due from one current and two former employees. The employees issued the notes to the Company since the Company paid taxes for stock-based compensation on these employees’ behalf during 2011 and 2012. The outstanding amounts under the notes are secured by pledged stock certificates and are due at various times during 2021-2023. Interest accrues on these notes at rates from 2.31% and 3.57% per annum. | At December 31, 2012, the Company had notes receivable in the aggregate amount of $165,716 due from one current and two former employees in the amounts of $92,152 and $73,564, respectively. The Company paid taxes on stock-based compensation on these employees’ behalf during 2011 and 2012 in exchange for these notes, and the outstanding amounts on the notes are secured by pledged stock certificates. The notes are due at various times during 2021-2023 and bear interest rates between 2.31% and 3.57% per annum. |
Income_Taxes
Income Taxes | 6 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||
Income Taxes [Abstract] | ||||||||||
Income Taxes | 9. Income Taxes | |||||||||
8. Income Taxes | ||||||||||
We had no income tax benefit or provision for the three and six months ended June 30, 2013. Since the Company incurred a net loss for the three and six months ended June 30, 2013, there was no income tax expense for the period. Increases in deferred tax balances have been offset by a valuation allowance and have no impact on our deferred income tax provision. | ||||||||||
The Company has no income tax benefit or provision for the year ended December 31, 2012. As the Company has continued to incur a net tax loss, there is no income tax expense for the current period. Increases in deferred tax balances have been offset by a valuation allowance and therefore have no impact on our deferred income tax provision. | ||||||||||
In calculating the provision for income taxes on an interim basis, the Company estimates the annual effective income tax rate based upon the facts and circumstances known for the period and applies that rate to the earnings or losses for the most recent interim period. The Company’s effective income tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement income and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of a discrete item, such as changes in estimates, changes in enacted tax laws or rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes. | ||||||||||
Significant components of the Company's deferred tax assets and liabilities as of December 31, 2012 and December 31, 2011 are as follows: | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | |||||||||
Deferred Tax Liability: | ||||||||||
Furniture, fixtures, equipment and intangibles | $ | (64,437 | ) | $ | (37,072 | ) | ||||
Other | (10,162 | ) | - | |||||||
Warrants | (627,056 | ) | (842,260 | ) | ||||||
Deferred Tax Assets | ||||||||||
Stock options for services | 1,049,578 | 562,163 | ||||||||
Net operating loss carry-forward | 3,237,128 | 1,924,412 | ||||||||
Reserve for future charge backs | 16,674 | - | ||||||||
Valuation allowance | (3,601,725 | ) | (1,607,243 | ) | ||||||
Net deferred tax assets (liabilities) | $ | - | $ | - | ||||||
Due to uncertainties regarding benefits and utilization of the total deferred tax assets, a valuation allowance of $3,601,725 has been recorded. The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. The valuation allowance on our total deferred asset increased by $1,994,482 from 2011 to 2012. At December 31, 2012, the Company had U.S. federal tax net operating loss (“NOL”) carry-forwards of $7,088,700, which will expire in 2032. | ||||||||||
The deferred taxes do not account for NOL carry-forwards related to the windfall tax benefit of $26,128. This amount is being tracked separately and will be recorded in additional paid-in capital when realized. | ||||||||||
The deferred tax liability results primarily from the use of accelerated methods of depreciation of equipment for tax purposes and the fluctuation of the fair market value of warrants. | ||||||||||
A reconciliation from the federal income tax provision from continuing operations at the statutory rate to the effective rate for the years ended December 31, 2012 and 2011 is as follows: | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | |||||||||
Federal income tax benefit at statutory rate | $ | (1,410,724 | ) | $ | (557,891 | ) | ||||
Increase (decrease) in income taxes resulting from: | ||||||||||
State and local income taxes | (598,095 | ) | (153,636 | ) | ||||||
Change in deferred tax asset valuation allowance | 1,994,482 | 702,147 | ||||||||
Stock based compensation | - | - | ||||||||
Non-deductible expenses | 14,337 | 9,380 | ||||||||
Other | - | - | ||||||||
Income Tax Expense | $ | - | $ | - | ||||||
The Company files U.S. federal income tax returns, as well as income tax returns for New York State, and New York City. The following years remain open for possible examination: 2008, 2009, 2010 and 2011. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accrued Expenses and Other Current Liabilities [Abstract] | ||||||||||||||||||
Accrued expenses and other current liabilities | 10. Accrued Expenses and Other Current Liabilities | 9. Accrued Expenses and Other Current Liabilities | ||||||||||||||||
Accrued expenses and other current liabilities consisted of the following at June 30, 2013 and December 31, 2012: | Accrued expenses and other current liabilities consisted of the following at December 31, 2012 and December 31, 2011: | |||||||||||||||||
June 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
(Unaudited) | Compensation and benefits | $ | 39,344 | $ | 817,656 | |||||||||||||
Compensation and benefits | $ | 293,333 | $ | 39,344 | Deferred rent | 30,354 | 40,475 | |||||||||||
Deferred rent | 33,894 | 30,354 | Professional fees | 163,500 | - | |||||||||||||
Professional fees | 60,401 | 163,500 | Other accrued expenses | 6,851 | 6,852 | |||||||||||||
Other accrued expenses | 6,851 | 6,851 | Total accrued expenses and other current liabilities | $ | 240,049 | $ | 864,983 | |||||||||||
Total accrued expenses and other current liabilities | $ | 394,479 | $ | 240,049 |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Common Stock Purchase Warrants and Stock-Based Compensation [Abstract] | ||||||||||||||||||
Stock-Based Compensation | 11. Stock-Based Compensation | 10. Stock-Based Compensation | ||||||||||||||||
The Snap Interactive, Inc. Amended and Restated 2011 Long-Term Incentive Plan (the “Plan”) permits the Company to award stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted shares of common stock, restricted stock units, performance stock, dividend equivalent rights, and other stock-based awards and cash-based incentive awards to its employees (including an employee who is also a director or officer under certain circumstances), non-employee directors and consultants. The maximum number of shares of common stock that may be delivered pursuant to awards under the Plan is 7,500,000 shares, 100% of which may be pursuant to incentive stock options. As of June 30, 2013, there were 2,943,335 shares available for future issuance under the Plan. | The Plan was adopted effective May 24, 2011, and subsequently amended and restated in its entirety on October 21, 2011. The Plan permits the Company to award grants of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted shares of common stock, restricted stock units, performance stock, dividend equivalent rights, and other stock-based awards and cash-based incentive awards to its employees (including an employee who is also a director or officer), non-employee directors and consultants. The maximum number of shares of common stock that may be delivered pursuant to awards granted under the Plan is 7,500,000 shares, of which 100% may be delivered pursuant to incentive stock options. As of December 31, 2012, there were 3,134,795 shares available for future issuance under the Plan. | |||||||||||||||||
Stock Options | Stock Options | |||||||||||||||||
The following table summarizes the assumptions used in the Black-Scholes pricing model to estimate the fair value of the options granted during the six months ended June 30, 2013: | The following table summarizes the weighted average values of the assumptions used in the Black-Scholes pricing model to estimate the fair value of the options granted during the year ended December 31, 2012: | |||||||||||||||||
Year | ||||||||||||||||||
Six Months Ended | Ended | |||||||||||||||||
30-Jun-13 | 31-Dec-12 | |||||||||||||||||
Expected volatility | 259.31 | % | Expected volatility | 292.52% | ||||||||||||||
Expected life of option | 6.20 Years | Expected life of option | 5.96 Years | |||||||||||||||
Risk free interest rate | 1.11 | % | Risk free interest rate | 0.98% | ||||||||||||||
Expected dividend yield | 0 | % | Expected dividend yield | 0.00% | ||||||||||||||
The expected life of the options is the period of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has been determined using the "simplified" method as prescribed by Staff Accounting Bulletin (“SAB”) 110, which uses the midpoint between the vesting date and the end of the contractual term. The volatility of the Company’s common stock is calculated using the Company’s historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. | The expected life of the option awards is the period of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has been determined using the "simplified" method as prescribed by SAB 110, an amendment to SAB 107, which uses the midpoint between the vesting date and the end of the contractual term. The volatility of the Company’s common stock is calculated using the company’s historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. | |||||||||||||||||
The following table summarizes stock option activity for the six months ended June 30, 2013: | The following table summarizes stock option activity for the year ended December 31, 2012: | |||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||
Options | Average | Options | Average | |||||||||||||||
Exercise Price | Exercise Price | |||||||||||||||||
Stock Options: | Stock Options: | |||||||||||||||||
Outstanding at December 31, 2012 | 4,525,205 | $ | 0.97 | Outstanding at December 31, 2011 | 8,118,955 | $ | 0.41 | |||||||||||
Granted | 1,316,960 | 0.57 | Granted | 1,502,000 | 1.41 | |||||||||||||
Exercised | - | - | Exercised | (470,000 | ) | 0.64 | ||||||||||||
Expired or canceled, during the period | (750,000 | ) | 1.08 | Expired or canceled, during the period | (4,515,000 | ) | 0.13 | |||||||||||
Forfeited, during the period | (295,500 | ) | 1.04 | Forfeited, during the period | (110,750 | ) | 0.97 | |||||||||||
Outstanding at June 30, 2013 | 4,796,665 | 0.84 | Outstanding at December 31, 2012 | 4,525,205 | 0.97 | |||||||||||||
Exercisable at June 30, 2013 | 1,967,478 | $ | 0.78 | Exercisable at December 31, 2012 | 2,171,614 | $ | 0.73 | |||||||||||
At June 30, 2013, the aggregate intrinsic value of stock options that were outstanding and exercisable was $82,730 and $82,635, respectively. At June 30, 2012, the aggregate intrinsic value of stock options that were outstanding and exercisable was $2,813,293 and $1,571,783, respectively. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the fair value of such awards as of the period-end date. | At December 31, 2012, the aggregate intrinsic value of stock options that were outstanding and exercisable was $1,807,362 and $1,179,516, respectively. At December 31, 2011, the aggregate intrinsic value of stock options that were outstanding and exercisable was $2,561,209 and $2,469,865, respectively. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the fair value of such awards as of the period-end date. | |||||||||||||||||
Stock-based compensation expense was $445,069 and $609,793 during the six months ended June 30, 2013 and 2012, respectively. Stock-based compensation expense was $370,122 and $324,510 during the three months ended June 30, 2013 and 2012, respectively. We estimate potential forfeitures of stock awards and adjust recorded stock-based compensation expense accordingly. The estimate of forfeitures is adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock-based compensation expense that is recognized in future periods. | Stock-based compensation expense was $814,996 and $321,281 during the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||
Non-employee stock option activity is included in the table below, but is also included in the table for stock option activity above. The following table summarizes non-employee stock option activity for the six months ended June 30, 2013: | Non-employee stock option activity is broken out for disclosure purposes below, but is included in total stock option activity on the previous page. The following table summarizes non-employee stock option activity for the year ended December 31, 2012: | |||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||
Options | Average | Options | Average | |||||||||||||||
Exercise Price | Exercise Price | |||||||||||||||||
Non-employee Stock Options: | Non-employee Stock Options: | |||||||||||||||||
Outstanding at December 31, 2012 | 900,000 | $ | 1.08 | Outstanding at December 31, 2011 | 530,000 | $ | 0.94 | |||||||||||
Granted | 50,000 | 0.54 | Granted | 400,000 | ||||||||||||||
Exercised | - | Exercised | (30,000 | ) | 0.33 | |||||||||||||
Expired or canceled, during the period | (750,000 | ) | 1.08 | Expired or canceled, during the period | - | |||||||||||||
Forfeited, during the period | - | Forfeited, during the period | - | |||||||||||||||
Outstanding at June 30, 2013 | 200,000 | 0.93 | Outstanding at December 31, 2012 | 900,000 | 1.08 | |||||||||||||
Exercisable at June 30, 2013 | 150,000 | $ | 1.06 | Exercisable at December 31, 2012 | 525,000 | $ | 0.99 | |||||||||||
At June 30, 2013, the aggregate intrinsic value of non-employee stock options that were outstanding and exercisable was $0. At June 30, 2012, the aggregate intrinsic value of non-employee stock options that were outstanding and exercisable was $270,010 and $261,510, respectively. | At December 31, 2012, the aggregate intrinsic value of non-employee stock options that were outstanding and exercisable was $152,500 and $137,500, respectively. At December 31, 2011, the aggregate intrinsic value of non-employee stock options that were outstanding and exercisable was $9,510. | |||||||||||||||||
Stock-based compensation expense relating to non-employee stock options was $23,210 and $18,600 during the six months ended June 30, 2013 and 2012, respectively. The Company revalues non-employee stock options for each reporting period. For the six months ended June 30, 2013, the Company recorded an adjustment of $1,269 to reduce stock-based compensation expense related to one non-employee’s stock options. | Stock-based compensation expense relating to non-employee stock options was $115,178 and $11,692 during the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||
The following table summarizes unvested stock option activity for the six months ended June 30, 2013: | The following table summarizes unvested stock option activity for the year ended December 31, 2012: | |||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||
Options | Average | Options | Average | |||||||||||||||
Grant Date | Grant Date Fair Value | |||||||||||||||||
Fair Value | Unvested Stock Options: | |||||||||||||||||
Unvested Stock Options: | Unvested stock options outstanding at December 31, 2011 | 1,885,955 | $ | 0.54 | ||||||||||||||
Unvested stock options outstanding at December 31, 2012 | 2,353,591 | $ | 0.99 | Granted | 1,502,000 | 1.26 | ||||||||||||
Granted | 1,316,960 | 0.56 | Vested | (923,614 | ) | 0.55 | ||||||||||||
Vested | (265,864 | ) | 1 | Forfeited, during the period | (110,750 | ) | 0.68 | |||||||||||
Expired or canceled, during the period | (300,000 | ) | 1.21 | Unvested stock options outstanding at December 31, 2012 | 2,353,591 | $ | 0.99 | |||||||||||
Forfeited, during the period | (275,500 | ) | 0.7 | |||||||||||||||
Unvested stock options outstanding at June 30, 2013 | 2,829,187 | $ | 0.77 | There was $1,846,201 and $858,457 of total unrecognized compensation expense related to unvested stock options at December 31, 2012 and 2011, respectively, which is expected to be recognized over a weighted average remaining vesting period of 2.58 and 2.67 years, respectively. | ||||||||||||||
There was $1,481,725 and $1,498,460 of total unrecognized compensation expense related to unvested stock options at June 30, 2013 and 2012, respectively, which is expected to be recognized over a weighted average remaining vesting period of 2.88 and 2.81 years, respectively. | At December 31, 2012, there was $419,206 of total unrecognized compensation expense related to unvested non-employee stock options, which is expected to be recognized over a weighted average period of 1.57 years. At December 31, 2011, there was $26,023 of total unrecognized compensation expense related to unvested non-employee stock options, which is expected to be recognized over a weighted average period of 0.69 years. | |||||||||||||||||
At June 30, 2013, there was $106,200 of total unrecognized compensation expense related to unvested non-employee stock options, which is expected to be recognized over a weighted average period of 0.16 years. At June 30, 2012, there was $7,303 of total unrecognized compensation expense related to unvested non-employee stock options, which is expected to be recognized over a weighted average period of 0.19 years. | Restricted Stock Awards | |||||||||||||||||
Restricted Stock Awards (“RSAs”) | The following table summarizes restricted stock award activity for the year ended December 31, 2012: | |||||||||||||||||
The following table summarizes restricted stock award activity for the six months ended June 30, 2013: | Number of | Weighted | ||||||||||||||||
RSAs | Average | |||||||||||||||||
Number of | Weighted | Grant Date | ||||||||||||||||
RSAs | Average | Fair Value | ||||||||||||||||
Grant Date | Restricted Stock Awards: | |||||||||||||||||
Fair Value | Outstanding at December 31, 2011 | 5,150,000 | $ | 0.65 | ||||||||||||||
Restricted Stock Awards: | Granted | 325,000 | 1.12 | |||||||||||||||
Outstanding at December 31, 2012 | 5,175,000 | $ | 0.68 | Vested | - | |||||||||||||
Granted | 5,630,000 | 0.53 | Expired or canceled, during the period | (300,000 | ) | 0.45 | ||||||||||||
Vested | - | Forfeited, during the period | - | |||||||||||||||
Forfeited, during the period | - | Outstanding at December 31, 2012 | 5,175,000 | $ | 0.68 | |||||||||||||
Outstanding at June 30, 2013 | 10,805,000 | $ | 0.6 | |||||||||||||||
At December 31, 2012, there was $3,169,203 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 9.00 years. At December 31, 2011, there was $3,120,167 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 9.94 years. | ||||||||||||||||||
These restricted stock awards have voting rights, but are not transferable and are not considered outstanding as of June 30, 2013 since the awards had not vested. Accordingly, 10,805,000 shares were recorded as issued but not outstanding on the Company’s Consolidated Balance Sheet at June 30, 2013. | ||||||||||||||||||
Stock-based compensation expense relating to restricted stock awards was $314,964 and $88,710 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||||||
At June 30, 2013, there was $5,804,730 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 6.12 years. At June 30, 2012, there was $2,963,744 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 9.44 years. | ||||||||||||||||||
Stock-based compensation expense relating to restricted stock awards was $338,573 and $154,874 for the six months ended June 30, 2013 and 2012, respectively. Stock-based compensation expense relating to restricted stock awards was $250,208 and $77,437 for the three months ended June 30, 2013 and 2012, respectively. |
Common_Stock_Purchase_Warrants
Common Stock Purchase Warrants | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Common Stock Purchase Warrants and Stock-Based Compensation [Abstract] | ||||||||||||||||||
Common Stock Purchase Warrants | 12. Common Stock Purchase Warrants | 11. Common Stock Purchase Warrants | ||||||||||||||||
In January 2011, we completed an equity financing that raised gross proceeds of $8,500,000 from the issuance of 4,250,000 shares of common stock at a price of $2.00 per share and warrants to purchase an aggregate of 2,125,000 shares of common stock. The warrants are exercisable any time on or before January 19, 2016 and have an exercise price of $2.50 per share. We received $7,915,700 in net proceeds from the equity financing after deducting offering expenses of $584,300. The exercise price of the warrants and number of shares of common stock to be received upon the exercise of the warrants are subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions. | In January 2011, we completed an equity financing that raised gross proceeds of $8,500,000 from the issuance of 4,250,000 shares of common stock at a price of $2.00 per share and warrants to purchase an aggregate of 2,125,000 shares of common stock that are exercisable for five years from the date of issuance. The warrants are exercisable any time on or before January 19, 2016 and have an exercise price of $2.50 per share. We received $7,915,700 in net proceeds from the equity financing after deducting offering expenses of $584,300. The exercise price of the warrants and number of shares of common stock to be received upon the exercise of the warrants are subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions. | |||||||||||||||||
We also issued warrants to purchase 255,000 shares of our common stock to the placement agent and our advisors in January 2011 in connection with the equity financing as consideration for their services. These warrants have the same terms, including exercise price, registration rights and expiration, as the warrants issued to the investors in the equity financing. | We also issued warrants to purchase 255,000 shares of our common stock to the placement agent in January 2011 in connection with the equity financing as consideration for its services. These warrants have the same terms, including exercise price, registration rights and expiration, as the warrants issued to the investors in the equity financing. | |||||||||||||||||
Warrant Liability | Warrant Liability | |||||||||||||||||
In connection with the issuance of these warrants, the Company recorded a warrant liability on its Consolidated Balance Sheet based on the estimated fair value of the warrants at the issuance date. The warrants are valued at the end of each reporting period with changes recorded as mark-to-market adjustment on warrant liability on the Company’s Consolidated Statement of Operations. The fair value of these warrants was $445,075 and $1,616,325 at June 30, 2013 and December 31, 2012, respectively, based on a model developed with the assistance of an independent third-party valuation expert. | In connection with the issuance of these warrants, the Company recorded a warrant liability on its Consolidated Balance Sheet based on the estimated fair value of the common stock warrants at the issuance date. The warrants are valued at the end of each reporting period with changes recorded as mark-to-market adjustment on warrant liability on the Company’s Consolidated Statement of Operations. The fair value of these warrants was $1,616,325 and $937,000 at December 31, 2012 and December 31, 2011, respectively, based on a model developed with the assistance of an independent third-party valuation expert. | |||||||||||||||||
The mark-to-market income on these warrants was $70,275 and $117,125 for the three months ended June 30, 2013 and June 30, 2012, respectively, and $1,171,250 and ($1,171,250) for the six months ended June 30, 2013 and June 30, 2012, respectively, and was not presented within loss from operations. | The mark-to-market income (expense) on these warrants was ($679,325) and $2,038,000 for the years ended December 31, 2012 and December 31, 2011, respectively, and was not presented within loss from operations. | |||||||||||||||||
Common Stock Issued for Warrants Exercised | Common Stock Issued for Warrants Exercised | |||||||||||||||||
In April 2011, we issued 37,500 shares of our common stock and received net proceeds of $88,125 after an investor exercised warrants at an exercise price of $2.50 per share. | In April 2011, we issued 37,500 shares of our common stock and received net proceeds of $88,125 after an investor exercised warrants issued in our equity financing at an exercise price of $2.50 per share. | |||||||||||||||||
The following table summarizes warrant activity for the six months ended June 30, 2013: | The following table summarizes warrant activity for the year ended December 31, 2012: | |||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||
Warrants | Average | Warrants | Average | |||||||||||||||
Exercise Price | Exercise Price | |||||||||||||||||
Stock Warrants: | Stock Warrants: | |||||||||||||||||
Outstanding at December 31, 2012 | 2,342,500 | $ | 2.5 | Outstanding at December 31, 2011 | 2,342,500 | $ | 2.5 | |||||||||||
Granted | - | - | Granted | - | ||||||||||||||
Exercised | - | - | Exercised | - | ||||||||||||||
Forfeited | - | - | Forfeited | - | ||||||||||||||
Outstanding at June 30, 2013 | 2,342,500 | 2.5 | Outstanding at December 31, 2012 | 2,342,500 | 2.5 | |||||||||||||
Warrants exercisable at June 30, 2013 | 2,342,500 | $ | 2.5 | Warrants exercisable at December 31, 2012 | 2,342,500 | $ | 2.5 | |||||||||||
Common_Stock_Issued_for_Domain
Common Stock Issued for Domain Name | 6 Months Ended |
Jun. 30, 2013 | |
Common Stock Issued For Domain Name [Abstract] | |
Common Stock Issued for Domain Name | 13. Common Stock Issued for Domain Name |
On January 23, 2013, the Company issued 100,000 shares of its common stock with a fair value of $100,000 to an unrelated third party in exchange for the AYI.com domain name. For the six months ended June 30, 2013, $100,000 was recorded to fixed assets and intangible assets for the new domain name, and $100 and $99,900 were recorded to common stock and additional paid-in capital, respectively, on the Company’s Consolidated Balance Sheets. |
Net_Loss_Per_Common_Share
Net Loss Per Common Share | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||
Net Loss Per Common Share [Abstract] | ||||||||||||||||||||||||||
Net Loss Per Common Share | 14. Net Loss Per Common Share | 12. Net Loss Per Common Share | ||||||||||||||||||||||||
Basic net loss per common share is computed based upon the weighted average number of common shares outstanding as defined by ASC No. 260, Earnings Per Share . Diluted net loss per common share includes the dilutive effects of stock options, stock equivalents and warrants. To the extent stock options, stock equivalents and warrants are antidilutive, they are excluded from the calculation of diluted net loss per share. For the six months ended June 30, 2013, 7,139,165 shares issuable upon the exercise of stock options and warrants were not included in the computation of diluted net loss per share because their inclusion would have been antidilutive. For the six months ended June 30, 2012, 8,991,955 shares issuable upon the exercise of stock options and warrants were not included in the computation of net loss per share because their inclusion would have been antidilutive. | Basic net loss per common share is computed based upon the weighted average common shares outstanding as defined by ASC No. 260, Earnings Per Share. Diluted net loss per common share includes the dilutive effects of stock options, warrants and stock equivalents. To the extent stock options, stock equivalents and warrants are antidilutive, they are excluded from the calculation of diluted net loss per share. For the year ended December 31, 2012, 6,867,705 shares issuable upon the exercise of stock options and warrants were not included in the computation of diluted net loss per share because their inclusion would be antidilutive. For the year ended December 31, 2011, 10,461,455 shares issuable upon the exercise of stock options and warrants and 823,157 shares issuable upon the conversion of convertible debt, were not included in the computation of net loss per share because their inclusion would be antidilutive. | |||||||||||||||||||||||||
The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per common share for the three and six months ended June 30, 2013 and 2012: | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per common share for the years ended December 31, 2012 and 2011: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Year Ended | ||||||||||||||||||||||||
June 30, | June 30, | December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2012 | 2011 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Numerator: | Net loss | $ | (4,030,641 | ) | $ | (1,593,173 | ) | |||||||||||||||||||
Net loss | $ | (1,472,413 | ) | $ | (1,034,223 | ) | $ | (1,627,483 | ) | $ | (4,029,860 | ) | Denominator: | |||||||||||||
Denominator: | Basic shares: | |||||||||||||||||||||||||
Basic shares: | Weighted-average common shares outstanding | 38,611,758 | 37,619,208 | |||||||||||||||||||||||
Weighted-average common shares outstanding | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Diluted shares: | |||||||||||||||||||||
Diluted shares: | Weighted-average shares used to compute basic net loss per share | 38,611,758 | 37,619,208 | |||||||||||||||||||||||
Weighted-average common shares used to compute basic net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Add: Weighted average shares assumed to be issued upon conversion of convertible notes as of the date of issuance | - | - | |||||||||||||||||||
Weighted-average common shares used to compute diluted net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Warrants and options as of beginning of period | - | - | |||||||||||||||||||
Weighted-average shares used to compute diluted net loss per share | 38,611,758 | 37,619,208 | ||||||||||||||||||||||||
Net loss per common share: | ||||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.10 | ) | Net loss per share: | |||||||||||||
Diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.10 | ) | Basic | $ | (0.10 | ) | $ | (0.04 | ) | |||||||
Diluted | $ | (0.10 | ) | $ | (0.04 | ) |
Commitments
Commitments | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2013 | Dec. 31, 2012 | ||||||
Commitments [Abstract] | |||||||
Commitments | 15. Commitments | 13. Commitments | |||||
Operating Lease Agreements | On May 23, 2011, the Company executed a 46-month non-cancelable operating lease for its new corporate office space. The lease began on June 1, 2011 and expires on March 30, 2015. Total base rent due during the term of the lease is $973,595. Monthly rent escalates during the term, but is recorded on a straight-line basis over the term of the lease. The Company can terminate the final five months of the lease with eight months prior notice and the payment of unamortized costs. Rent expense under this lease for the years ended December 31, 2012 and 2011 was $253,982 and $84,661, respectively. | ||||||
On May 23, 2011, the Company executed a non-cancelable operating lease for corporate office space which began on June 1, 2011 and expires on March 30, 2015. Total base rent due during the term of the lease is $973,595. Monthly rent escalates during the term, but is recorded on a straight-line basis over the term of the lease. The Company can terminate the final five months of the lease with eight months prior notice and the payment of unamortized costs. Rent expense under this lease for the six months ended June 30, 2013 and 2012 was $126,991. | During 2012, the Company entered into three separate two-year lease agreements with the Hewlett Packard Financial Services Company (“HP”) for equipment and certain financed items. Monthly rent expense is $8,649 until January 2014, and then $6,584 per month until September 2014. Rent expense under the HP leases totaled $42,468 for the year ended December 31, 2012. | ||||||
During 2012, the Company entered into multiple two-year lease agreements with HP for equipment and certain other assets. Monthly rent expense for the leases is $8,649 until January 2014, and $6,584 per month from January 2014 until September 2014. Rent expense under the HP leases totaled $25,948 and $4,130 for the three months ended June 30, 2013 and 2012, respectively. On January 11, 2013, the Company obtained a letter of credit from JP Morgan in the amount of $200,000 in favor of HP. This letter of credit expires on January 31, 2014 and has been increased to $270,000 (See Note 3). | At December 31, 2012, future minimum payments under non-cancelable operating leases are as follows: | ||||||
The Company entered into a two-year service agreement with Equinix Operating Co., Inc. (“Equinix”) whereby Equinix will provide certain products and services to the Company from January 2013 to January 2015. Pursuant to the service agreement, the Company agreed to pay monthly recurring fees in the amount of $8,450 and certain nonrecurring fees in the amount of $9,700. The agreement automatically renews for additional twelve month terms unless earlier terminated by either party. Hosting expense under this lease for the six months ended June 30, 2013 totaled $63,907. | Year | Amount | |||||
2013 | $ | 388,128 | |||||
2014 | 352,769 | ||||||
2015 | 74,373 | ||||||
2016 | - | ||||||
2017 and thereafter | - | ||||||
Total | $ | 815,270 |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | 16. Related Party Transactions | 14. Related Party Transactions |
During the six months ended June 30, 2013, there were no material changes to the Company’s transactions with related parties from those disclosed in “Note 14. Related Party Transactions” in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 14, 2013 which disclosure is hereby incorporated by reference herein, except for the following: | At December 31, 2012, the Company had notes receivable in the aggregate amount of $165,716 due from current and former employees (see Note 7). | |
On January 31, 2013, the Company entered into a subscription agreement with Darrell Lerner and DCL in connection with Mr. Lerner’s separation from the Company. Pursuant to this agreement, the Company purchased 50,000 shares of DCL’s common stock, $0.001 par value per share, for an aggregate purchase price of $50,000 in April 2013. As a secondary investment, the Company agreed to purchase 150,000 additional shares of common stock for an aggregate purchase price of $150,000. The second investment is being paid in six quarterly installments of $25,000 with the first payment made in July 2013. | During the fourth quarter of 2011, an aggregate of 5,150,000 shares of restricted stock, having a fair value of $2,762,500, were granted to the Company’s chief executive officer and Darrell Lerner that vest upon the earlier of the tenth anniversary of the date of grant or a change in control. These shares have voting rights, but are not transferable and are not considered outstanding as of December 31, 2012 as they had not vested. On December 28, 2012, the 300,000 shares of restricted stock previously granted to Darrell Lerner were cancelled in exchange for a new award of 325,000 restricted shares, having a fair value of $364,000, which will vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; or (iii) on his termination of service without “cause”. Accordingly, 5,175,000 shares were recorded as issued on the Company’s Consolidated Balance Sheet at December 31, 2012. | |
On April 10, 2013, the Company awarded Mr. Lerner 5,000,000 restricted shares of common stock. Pursuant to the terms of the restricted stock award agreement, (i) fifty percent (50%) of the restricted shares will vest on the third anniversary of grant date, and (ii) the remaining fifty percent (50%) shares will vest on the fourth anniversary of grant date; provided, that any unvested shares will immediately vest on the effective date of a change in control. | On June 1, 2012, the Company entered into a two-year consulting agreement with Byron Lerner. Pursuant to the consulting agreement, Mr. Byron Lerner has agreed to provide consulting services related to (i) monitoring revenue and various traffic and engagement statistics for the purpose of proactively uncovering inconsistencies or bugs, as well as (ii) providing strategic advice along with business and financial introductions as requested. During the consulting period, the Company will pay Mr. Byron Lerner a monthly consulting fee of $8,000 as well as reimbursement for certain expenses incurred during the performance of the consulting services. | |
On April 10, 2013, the Company awarded Mr. Pedersen 480,000 restricted shares of common stock. Pursuant to the terms of the restricted stock award agreement, (i) fifty percent (50%) of the restricted shares will vest on the third anniversary of grant date, and (ii) the remaining fifty percent (50%) of the restricted shares will vest on the fourth anniversary of grant date; provided, that any unvested shares will immediately vest on the effective date of a change in control. | On January 31, 2013, the Company entered into a severance and general release agreement with Darrell Lerner pursuant to which his employment with the Company was terminated. Pursuant to this agreement, the Company granted 150,000 restricted shares of common stock to Mr. Darrell Lerner that will vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner’s termination of service without “cause”; or (iv) the date of Mr. Darrell Lerner’s termination of service due to the Company’s nonrenewal of the consulting agreement without “cause” (See Note 15). | |
On April 10, 2013, the Company also awarded Mr. Pedersen a stock option to purchase 700,000 shares of the Company’s common stock at an exercise price of $0.52 per share. The shares of common stock underlying Mr. Pedersen’s stock option will vest one-fourth on each of the first, second, third and fourth anniversaries of the date of grant; provided, that (i) upon the effective date of a “change in control,” 50% of all then unvested shares of common stock underlying the option will vest immediately and the remaining unvested shares of common stock underlying the option will vest on the earlier of (a) the original vesting date or (b) equally on the first and second anniversary of the effective date of the change in control (subject to early termination or forfeiture in accordance with the terms of the stock option agreement), (ii) any vested options will be forfeited immediately upon violation of any non-competition or non-solicitation agreement between the Company and Mr. Pedersen and (iii) upon termination of Mr. Pedersen’s employment without cause, the option will remain exercisable until the tenth anniversary of the date of grant to the extent the shares underlying the option are vested. | On January 31, 2013, the Company entered into a three-year consulting agreement with Darrell Lerner (See Note 15). | |
At June 30, 2013, the Company had notes receivable in the aggregate amount of $168,098 due from one current and two former employees (see Note 8). | On January 31, 2013, the Company entered into a subscription agreement with DCL Ventures, Inc. and Darrell Lerner (See Note 15). |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2012 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events |
The Company entered into a two-year service agreement with Equinix Operating Co., Inc. (“Equinix”) whereby Equinix will provide certain products and services to the Company from January 2013 to January 31, 2015. Pursuant to the service agreement, the Company has agreed to pay monthly recurring fees in the amount of $8,450 as well as nonrecurring fees totaling $9,700. The agreement will automatically renew for additional service terms of twelve months unless terminated earlier by either party. | |
On January 11, 2013, the Company obtained a Letter of Credit from JP Morgan Chase Bank, N.A. in the amount of $200,000, in favor of HP. This letter will expire on January 31, 2014. | |
On January 31, 2013, the Company entered into a severance and general release agreement with Darrell Lerner. Pursuant to this agreement, the Company granted 150,000 restricted shares of common stock to Mr. Darrell Lerner, having a fair value of $124,500, that will vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner’s termination of service without “cause”; or (iv) the date of Mr. Darrell Lerner’s termination of service due to the Company’s nonrenewal of the consulting agreement without “cause”. | |
On January 31, 2013, the Company entered into a three-year consulting agreement with Darrell Lerner. Pursuant to the consulting agreement, Mr. Darrell Lerner has agreed to provide consulting services relating to assisting and advising the Company on legal, financial and other matters for which Mr. Darrell Lerner has knowledge that pertains to the Company. During the consulting period, the Company will pay Mr. Darrell Lerner a monthly consulting fee of $25,000 during the first two years of the agreement and $30,000 per month from February 1, 2015 until the termination of the consulting agreement. As additional compensation for his consulting services, Mr. Darrell Lerner’s previous restricted stock awards will continue to vest as provided in the underlying award agreements as long as Mr. Darrell Lerner continues to provide services under the consulting agreement; provided, however that the awards shall immediately become fully vested upon the date the Company terminates the consulting agreement without “cause” or the date of Mr. Darrell Lerner’s termination of service due to the Company’s nonrenewal of the consulting agreement without “cause”. | |
On January 31, 2013, the Company entered into a subscription agreement with DCL Ventures, Inc. and Darrell Lerner. Pursuant to the terms and subject to the conditions set forth in the agreement, the Company agreed to purchase shares of DCL Ventures, Inc. common stock, $0.0001 par value, at a purchase price per share equal to the lowest price per share paid by investors in the initial third party sale for an aggregate purchase price of $50,000, subject to the occurrence of certain conditions at closing. The consummation of the initial investment shall take place simultaneously with, or promptly after, the closing of the initial third party sale; provided, that if the initial third party sale occurs on or before March 31, 2013, the initial closing shall take place no later than March 31, 2013; and (ii) the Company agrees to purchase additional shares of common stock for an aggregate purchase price of $150,000. The Company can require DCL Ventures, Inc. or Mr. Darrell Lerner to repurchase the secondary shares from the Company if, at any time prior to the thirty month anniversary of the date of the secondary closing, Mr. Darrell Lerner is not a stockholder, employee, or member of the board of directors of the Company. | |
Restatement_of_Certain_Consoli
Restatement of Certain Consolidated Financial Statements | 12 Months Ended | ||||||||||||
Dec. 31, 2012 | |||||||||||||
Restatement Of Certain Consolidated Financial Statements [Abstract] | |||||||||||||
Restatement of Certain Consolidated Financial Statements | |||||||||||||
16. Restatement of Certain Consolidated Financial Statements | |||||||||||||
Our Consolidated Balance Sheet as of December 31, 2011, our Consolidated Statement of Operations for the year ended December 31, 2011, our Consolidated Statement of Changes in Stockholders' Equity for the year ended December 31, 2011 and our Consolidated Statement of Cash Flows for the year ended December 31, 2011 have been restated to correct the accounting for warrants issued as part of the Company’s January 2011 equity financing. The Company has determined that, as prescribed under Accounting Standards Codification 480, Distinguishing Liabilities from Equity, these warrants should have been classified as liabilities on the Company’s Consolidated Balance Sheet because, according to the warrants' terms, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. The proper accounting for this warrant liability requires the liability to be recorded at fair value on the Company’s Consolidated Balance Sheets, with corresponding changes in such fair value to be recognized in earnings on the Company’s Consolidated Statements of Operations in each subsequent period. | |||||||||||||
Accordingly, the Company has restated the financial statements referenced above to correct this error. The correction of this error did not impact the operating results of the Company or its overall liquidity. The effects of the restatement on the Company’s consolidated financial statements are set forth in the tables below: | |||||||||||||
Consolidated Balance Sheet as of December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Warrant liability | $ | - | $ | 937,000 | $ | 937,000 | |||||||
Total liabilities | 5,092,870 | 937,000 | 6,029,870 | ||||||||||
Additional paid-in capital | 11,231,864 | -2,975,000 | 8,256,864 | ||||||||||
Accumulated deficit | -5,722,743 | 2,038,000 | -3,684,743 | ||||||||||
Total Stockholders' Equity | 5,547,701 | -937,000 | 4,610,701 | ||||||||||
Consolidated Statements of Operations for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Mark-to-market adjustment on warrant liability | $ | - | $ | 2,038,000 | $ | 2,038,000 | |||||||
Total Other Income (Expense) | 32,767 | 2,038,000 | 2,070,767 | ||||||||||
Loss Before Provision For Income Taxes | -3,631,173 | 2,038,000 | -1,593,173 | ||||||||||
Net Loss | -3,631,173 | 2,038,000 | -1,593,173 | ||||||||||
Net Loss Per Share - Basic and diluted | -0.1 | 0.06 | -0.04 | ||||||||||
Consolidated Statement of Changes in Stockholders' Equity for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Additional paid-in capital | $ | 11,231,864 | $ | -2,975,000 | $ | 8,256,864 | |||||||
Accumulated deficit | -5,722,743 | 2,038,000 | -3,684,743 | ||||||||||
Total Stockholders' Equity | 5,547,701 | -937,000 | 4,610,701 | ||||||||||
Consolidated Statements of Cash Flows for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Net Loss | $ | -3,631,173 | $ | 2,038,000 | $ | -1,593,173 | |||||||
Mark-to-market adjustment on warrant liability | - | -2,038,000 | -2,038,000 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2012 | ||
Summary Of Significant Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, were prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany balances and transactions have been eliminated upon consolidation. | ||
Significant Estimates and Judgments | Significant Estimates and Judgments | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the provision for future credit card chargebacks and refunds on subscription revenue, estimates used to determine the fair value of our common stock, stock options, non-cash capital stock issuances, stock-based compensation and common stock warrants, collectability of our accounts receivable and the valuation allowance on deferred tax assets. Management evaluates these estimates on an ongoing basis. Changes in estimates are recorded in the period in which they become known. We base estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates. | ||
Comparative Data | Comparative Data | |
Certain amounts from prior periods have been reclassified to conform to the current period presentation, including: | ||
● | The reclassification of a $61,572 reserve for future credit card chargebacks from accrued expenses and other current liabilities to accounts receivable; | |
● | The reclassification of noncurrent deferred rent of $61,640 from accrued expenses and other current liabilities to long-term deferred rent; and | |
● | The reclassification of stock-based compensation of $342,714 relating to non-developers from a programming, hosting and technology expense to compensation expense. | |
Revenue Recognition | Revenue Recognition | |
The Company recognizes revenue on arrangements in accordance with Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. | ||
The Company has revenue streams consisting of subscriptions and advertisements. The Company recognizes revenue from monthly premium subscription fees beginning in the month in which the services are provided. Revenues are presented net of refunds, credits, and known and estimated credit card chargebacks. During 2012, subscriptions were offered in durations of one-, three-, six- and twelve-month terms. Longer-term plans (those with durations longer than one month) are generally available at discounted monthly rates. All subscription fees, however, are collected at the time of purchase regardless of the length of the subscription term. Revenues from multi-month subscriptions are recognized over the length of the subscription term rather than when the subscription is purchased. The difference between the gross cash receipts collected and the revenue recognized from those sales during that reporting period will appear as deferred revenue. | ||
The Company recognizes advertising revenue as earned on a click-through, impression, registration or subscription basis. When a user clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), registers for an external website via an advertisement clicked on through the Company’s application (CPA basis), or clicks on an offer to subscribe to premium features on the Company’s applications, the contract amount is recognized as revenue. | ||
The Company’s payment processors have established routine reserve accounts to secure the performance of the Company’s obligations under its service agreements, which is standard practice within the payment processing industry. These reserve accounts withhold a small percentage of the Company’s sales in a segregated account in the form of a six-month rolling reserve. The funds that are withheld each month are returned to the Company on a monthly basis after six months of being held in the reserve account and any remaining funds will be returned to the Company 90 to 180 days following termination of such agreements. These funds are classified as credit card holdback receivable and totaled $287,293 and $441,840 at December 31, 2012 and December 31, 2011, respectively. | ||
The Company has an additional reserve for potential credit card chargebacks based on historical experience and knowledge of the industry. As of December 31, 2012, the Company reserved $36,129 for potential future credit card chargebacks and the amount was included in accounts receivable, net on the Consolidated Balance Sheet. | ||
Business Segments | Business Segments | |
The Company operates in one reportable segment and management assesses the Company’s financial performance and makes operating decisions based on one single operating unit. | ||
Stock-Based Compensation | Stock-Based Compensation | |
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company measures the compensation costs of stock-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs in the financial statements over the period during which employees are required to provide services. Stock-based compensation arrangements include stock options and restricted stock awards. | ||
Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505. | ||
The fair value of each option granted under the Company's Amended and Restated 2011 Long-term Incentive Plan (the “Plan”) was estimated using the Black-Scholes option-pricing model (see Note 10 for further details). Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of the Company's common stock price, (ii) the expected life of the award, which for options is the period of time over which employees and non-employees are expected to hold their options prior to exercise, (iii) expected dividend yield on the Company's common stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Expected volatility is estimated based on the Company's historical volatilities. The expected life of options has been determined using the "simplified" method as prescribed by Staff Accounting Bulletin (“SAB”) No. 110, an amendment to SAB No. 107, which uses the midpoint between the vesting date and the end of the contractual term. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying dividends in the foreseeable future. | ||
Programming, Hosting and Technology Expense | Programming, Hosting and Technology Expense | |
Programming, hosting and technology expense includes the expenses associated with the operation of data centers, including labor, consulting, hosting, server, web design and programming expenses. | ||
Advertising and Marketing | Advertising and Marketing | |
Advertising and marketing costs are expensed as incurred. Advertising and marketing expense was $9,876,097 and $14,626,963 for the years ended December 31, 2012 and 2011, respectively. | ||
Research and Development | Research and Development | |
The Company has adopted the provisions of ASC No. 350, Intangibles – Goodwill & Other. Costs incurred in the planning stage of a website are expensed as research and development expenses while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years. The Company did not capitalize any research and development expenses during the years ended December 31, 2012 and 2011. | ||
Income Taxes | Income Taxes | |
The Company accounts for income taxes using the asset and liability method prescribed by ASC No. 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry forwards. Deferred taxes are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in results of operations in the period that includes the enactment date. | ||
Each reporting period, the Company assesses whether its deferred tax assets are more-likely-than-not realizable, in determining whether it is necessary to record a valuation allowance. This includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of the Company's deferred tax assets. | ||
The Company recognizes the impact of an uncertain tax position in its financial statements if, in management's judgment, the position is more-likely-than-not sustainable upon audit based on the position's technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for uncertain tax positions is necessary. Different conclusions reached in this assessment can have a material impact on our consolidated financial statements. Currently, we have no uncertain tax positions. | ||
Net Income (Loss) Per Share | Net Income (Loss) Per Share | |
Basic net income (loss) per common share is determined using the two-class method and is computed by dividing net income (loss) attributable to Snap Interactive Inc. common shareholders by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share. The two-class method is an earnings allocation formula that determines income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The two-class method treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. According to the contractual terms of participating securities, such securities do not participate in losses. | ||
Diluted net income (loss) per common share reflects the more dilutive earnings per share amount calculated using the treasury stock method or the two-class method, taking into account any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options and unvested shares of restricted common stock (using the treasury stock method). To the extent stock options, stock equivalents and warrants are antidilutive, they are excluded from the calculation of diluted income per share. | ||
Cash and cash equivalents | Cash and Cash Equivalents | |
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks, money market funds and certain investments in commercial paper. | ||
Investments | Investments | |
The Company's investment portfolio may at any time contain investments in U.S. Treasury obligations, securities guaranteed by the U.S. government, certificates of deposit, corporate notes and bonds, medium-term notes, commercial paper, and money market mutual funds, with original maturities less than one year. | ||
The Company's investments with original maturity dates in excess of three months are classified as short-term investments on the Consolidated Balance Sheets. Short-term investments classified as held-to-maturity are recorded at amortized cost. Interest earned on short-term investments is recorded to "Interest income" which is presented net of Interest expense on the Consolidated Statements of Operations. | ||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |
The carrying amounts of the Company's cash and cash equivalents, short-term investments classified as held-to-maturity, accounts receivable, credit card holdback receivable, prepaid expenses, accounts payable, accrued expenses and deferred revenue, approximate fair value due to the short-term nature of these instruments. | ||
Receivables | Receivables | |
At December 31, 2012, we had accounts receivable from payment processors and advertising networks that place advertisements on our application in the amount of $328,680 and $27,469, respectively. The settlement of credit card sales by payment processors typically occurs several days after the date of the charge, and we generally receive payments from mobile payment processors and advertising networks on a monthly basis. | ||
Concentration of Credit Risk | Concentration of Credit Risk | |
At times the Company has cash in bank accounts in excess of FDIC insurance limits. The Company had approximately $4,995,958 and $1,561,947 in excess of FDIC insurance limits as of December 31, 2012 and December 31, 2011, respectively. The Company also had credit card holdback receivables of $287,293 and $441,840, which were held by payment processors, and of which $139,389 and $248,534 were not FDIC insured as of December 31, 2012 and December 31, 2011, respectively. | ||
Furniture, Fixtures and Equipment | Furniture, Fixtures and Equipment | |
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of those assets, as follows: | ||
Software and website costs | 3 years | |
Computers and office equipment | 5 years | |
Furniture and fixtures | 7 years | |
Leasehold improvements | Shorter of estimated useful life or remaining lease term | |
Repairs and maintenance costs are expensed as incurred. | ||
Other Intangible and Long-Lived Assets | Other Intangible and Long-Lived Assets | |
The Company's long-lived assets primarily consist of computer and office equipment and software, furniture and fixtures and leasehold improvements, which are subject to depreciation over the useful life of the asset. Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. No impairments were recorded on long-lived assets for the periods presented in these consolidated financial statements. | ||
Intangible Assets, net | Intangible Assets, net | |
The Company’s intangible assets, net represents definite-lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: | ||
Domain name | 15 years | |
No impairments were recorded on intangible assets and no impairment indicators were noted for the periods presented in these consolidated financial statements. | ||
Warrant liability | Warrant Liability | |
The Company issued common stock warrants in January 2011 in conjunction with an equity financing. In accordance with ASC 480, Distinguishing Liabilities from Equity, the fair value of these warrants is classified as a liability on the Company’s Consolidated Balance Sheets because, according to the warrants' terms, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Corresponding changes in the fair value of the warrants are recognized in earnings on the Company’s Consolidated Statements of Operations in each subsequent period. | ||
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement | |
On May 12, 2011, the Financial Accounting Standards Board (“FASB”) issued revised authoritative guidance (Accounting Standards Update (“ASU”) No. 2011-04) covering fair value measurements and disclosures. The amended guidance include provisions for (1) the application of concepts of "highest and best use" and "valuation premises", (2) an option to measure groups of offsetting assets and liabilities on a net basis, (3) incorporation of certain premiums and discounts in fair value measurements, and (4) measurement of the fair value of certain instruments classified in stockholders' equity. The revised guidance is effective for interim and annual periods beginning after December 15, 2011. The Company adopted this revised authoritative guidance prospectively for new or materially modified arrangements beginning January 1, 2012. The adoption of this revised authoritative guidance update did not have a significant impact on the Company’s consolidated financial statements. | ||
Restatement of Certain Consolidated Financial Statements | Restatement of Previously Issued Consolidated Financial Statements | |
We have restated our consolidated financial statements as of and for the year ended December 31, 2011 as described in "Note 16. Restatement of Consolidated Financial Statements." | ||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |
Dec. 31, 2012 | ||
Summary Of Significant Accounting Policies [Abstract] | ||
Schedule of property and equipment useful life | ||
Software and website costs | 3 years | |
Computers and office equipment | 5 years | |
Furniture and fixtures | 7 years | |
Leasehold improvements | Shorter of estimated useful life or remaining lease term | |
Schedule of finite lived intangible assets useful life | ||
Domain name | 15 years |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accounts Receivable, Net and Notes Receivable [Abstract] | ||||||||||||||||||
Schedule of accounts receivable, net | ||||||||||||||||||
June 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
(Unaudited) | Accounts receivable | $ | 356,148 | $ | 665,154 | |||||||||||||
Accounts receivable | $ | 375,111 | $ | 356,148 | Less: Allowance for doubtful accounts | - | (123,392 | ) | ||||||||||
Less: Reserve for future chargebacks | (41,929 | ) | (36,129 | ) | Less: Reserve for future chargebacks | (36,129 | ) | (61,572 | ) | |||||||||
Total accounts receivable, net | $ | 333,182 | $ | 320,019 | Total accounts receivable, net | $ | 320,019 | $ | 480,190 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments and Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Jun-13 | December 31, 2012 | 31-Dec-12 | December 31, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ASSETS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES: | Cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liability | $ | — | $ | — | $ | 445,075 | $ | 445,075 | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | U.S. government securities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Total warrant liability | $ | — | $ | — | $ | 445,075 | $ | 445,075 | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | Certificates of deposit | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Total cash equivalents | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government securities (1) | $ | — | $ | — | $ | — | $ | — | $ | 3,506,205 | $ | — | $ | — | $ | 3,506,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | — | — | — | — | 2,975,000 | — | — | 2,975,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total short-term investments | $ | — | $ | — | $ | — | $ | — | $ | 6,481,205 | $ | — | $ | — | $ | 6,481,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock warrants | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | $ | — | $ | — | $ | 937,000 | $ | 937,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total common stock warrants | $ | — | $ | — | $ | 1,616,325 | $ | 1,616,325 | $ | — | $ | — | $ | 937,000 | $ | 937,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Includes amortization premium paid of $8,733 as of December 31, 2011. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated fair value of the warrant liability | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | December 31, | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | Stock price | $ | 1.25 | $ | 0.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | Strike price | $ | 2.5 | $ | 2.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock price | $ | 0.51 | $ | 1.25 | Remaining contractual term (years) | 3.1 | 4.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Strike price | $ | 2.5 | $ | 2.5 | Volatility | 171.90% | 215.50% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining contractual term (years) | 2.6 | 3.1 | Adjusted volatility | 121.10% | 125.50% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Volatility | 141.8 | % | 171.9 | % | Risk-free rate | 0.40% | 0.60% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted volatility | 123 | % | 121.1 | % | Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free rate | 0.5 | % | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend yield | 0 | % | 0 | % |
Fixed_Assets_and_Intangible_As1
Fixed Assets and Intangible Assets, Net (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Fixed Assets and Intangible Assets, Net [Abstract] | ||||||||||||||||||
Schedule of fixed assets and intangible assets | ||||||||||||||||||
June 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
(Unaudited) | Computer equipment | $ | 211,896 | $ | 143,461 | |||||||||||||
Computer equipment | $ | 239,875 | $ | 211,896 | Furniture and fixtures | 142,856 | 159,051 | |||||||||||
Furniture and fixtures | 142,856 | 142,856 | Leasehold improvements | 377,727 | 329,156 | |||||||||||||
Leasehold improvements | 382,376 | 377,727 | Software | 8,047 | 7,342 | |||||||||||||
Software | 10,968 | 8,047 | Website domain name | 24,938 | 24,938 | |||||||||||||
Website domain name | 124,938 | 24,938 | Website costs | 40,500 | 40,500 | |||||||||||||
Website costs | 40,500 | 40,500 | Total fixed assets | 805,964 | 704,448 | |||||||||||||
Total fixed assets | 941,513 | 805,964 | Less: Accumulated depreciation and amortization | (257,415 | ) | (125,985 | ) | |||||||||||
Less: Accumulated depreciation and amortization | (342,977 | ) | (257,415 | ) | Total fixed assets and intangible assets, net | $ | 548,549 | $ | 578,463 | |||||||||
Total fixed assets and intangible assets, net | $ | 598,536 | $ | 548,549 | ||||||||||||||
Schedule of estimated future amortization and depreciation of intangible and tangible assets | ||||||||||||||||||
Year | Amount | |||||||||||||||||
2013 | $ | 161,547 | ||||||||||||||||
2014 | 156,498 | |||||||||||||||||
2015 | 122,365 | |||||||||||||||||
2016 | 52,886 | |||||||||||||||||
2017 and thereafter | 55,253 | |||||||||||||||||
$ | 548,549 | |||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Taxes [Abstract] | |||||||||
Schedule of components of deferred tax assets and liabilities | |||||||||
Years Ended December 31, | |||||||||
2012 | 2011 | ||||||||
Deferred Tax Liability: | |||||||||
Furniture, fixtures, equipment and intangibles | $ | (64,437 | ) | $ | (37,072 | ) | |||
Other | (10,162 | ) | - | ||||||
Warrants | (627,056 | ) | (842,260 | ) | |||||
Deferred Tax Assets | |||||||||
Stock options for services | 1,049,578 | 562,163 | |||||||
Net operating loss carry-forward | 3,237,128 | 1,924,412 | |||||||
Reserve for future charge backs | 16,674 | - | |||||||
Valuation allowance | (3,601,725 | ) | (1,607,243 | ) | |||||
Net deferred tax assets (liabilities) | $ | - | $ | - | |||||
Summary of reconciliation of federal income tax provision from continuing operations at statutory rate | |||||||||
Years Ended December 31, | |||||||||
2012 | 2011 | ||||||||
Federal income tax benefit at statutory rate | $ | (1,410,724 | ) | $ | (557,891 | ) | |||
Increase (decrease) in income taxes resulting from: | |||||||||
State and local income taxes | (598,095 | ) | (153,636 | ) | |||||
Change in deferred tax asset valuation allowance | 1,994,482 | 702,147 | |||||||
Stock based compensation | - | - | |||||||
Non-deductible expenses | 14,337 | 9,380 | |||||||
Other | - | - | |||||||
Income Tax Expense | $ | - | $ | - |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accrued Expenses and Other Current Liabilities [Abstract] | ||||||||||||||||||
Schedule of accrued expenses and other current liabilities | December 31, | December 31, | ||||||||||||||||
June 30, | December 31, | 2012 | 2011 | |||||||||||||||
2013 | 2012 | Compensation and benefits | $ | 39,344 | $ | 817,656 | ||||||||||||
(Unaudited) | Deferred rent | 30,354 | 40,475 | |||||||||||||||
Compensation and benefits | $ | 293,333 | $ | 39,344 | Professional fees | 163,500 | - | |||||||||||
Deferred rent | 33,894 | 30,354 | Other accrued expenses | 6,851 | 6,852 | |||||||||||||
Professional fees | 60,401 | 163,500 | Total accrued expenses and other current liabilities | $ | 240,049 | $ | 864,983 | |||||||||||
Other accrued expenses | 6,851 | 6,851 | ||||||||||||||||
Total accrued expenses and other current liabilities | $ | 394,479 | $ | 240,049 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||
Weighted average assumptions used to estimate fair value of options granted | ||||||||||||||||||
Six Months Ended | Year | |||||||||||||||||
30-Jun-13 | Ended | |||||||||||||||||
Expected volatility | 259.31 | % | 31-Dec-12 | |||||||||||||||
Expected life of option | 6.20 Years | Expected volatility | 292.52% | |||||||||||||||
Risk free interest rate | 1.11 | % | Expected life of option | 5.96 Years | ||||||||||||||
Expected dividend yield | 0 | % | Risk free interest rate | 0.98% | ||||||||||||||
Expected dividend yield | 0.00% | |||||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||
Schedule of stock options granted | Number of | Weighted | ||||||||||||||||
Number of | Weighted | Options | Average | |||||||||||||||
Options | Average | Exercise Price | ||||||||||||||||
Exercise Price | Stock Options: | |||||||||||||||||
Stock Options: | Outstanding at December 31, 2011 | 8,118,955 | $ | 0.41 | ||||||||||||||
Outstanding at December 31, 2012 | 4,525,205 | $ | 0.97 | Granted | 1,502,000 | 1.41 | ||||||||||||
Granted | 1,316,960 | 0.57 | Exercised | (470,000 | ) | 0.64 | ||||||||||||
Exercised | - | - | Expired or canceled, during the period | (4,515,000 | ) | 0.13 | ||||||||||||
Expired or canceled, during the period | (750,000 | ) | 1.08 | Forfeited, during the period | (110,750 | ) | 0.97 | |||||||||||
Forfeited, during the period | (295,500 | ) | 1.04 | Outstanding at December 31, 2012 | 4,525,205 | 0.97 | ||||||||||||
Outstanding at June 30, 2013 | 4,796,665 | 0.84 | Exercisable at December 31, 2012 | 2,171,614 | $ | 0.73 | ||||||||||||
Exercisable at June 30, 2013 | 1,967,478 | $ | 0.78 | |||||||||||||||
Schedule of unvested stock options / restricted stock award | Number of | Weighted | ||||||||||||||||
Options | Average | |||||||||||||||||
Grant Date Fair Value | ||||||||||||||||||
Unvested Stock Options: | ||||||||||||||||||
Unvested stock options outstanding at December 31, 2011 | 1,885,955 | $ | 0.54 | |||||||||||||||
Granted | 1,502,000 | 1.26 | ||||||||||||||||
Vested | (923,614 | ) | 0.55 | |||||||||||||||
Forfeited, during the period | (110,750 | ) | 0.68 | |||||||||||||||
Unvested stock options outstanding at December 31, 2012 | 2,353,591 | $ | 0.99 | |||||||||||||||
Non-employee Stock Option [Member] | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||
Schedule of stock options granted | Number of | Weighted | ||||||||||||||||
Number of | Weighted | Options | Average | |||||||||||||||
Options | Average | Exercise Price | ||||||||||||||||
Exercise Price | Non-employee Stock Options: | |||||||||||||||||
Non-employee Stock Options: | Outstanding at December 31, 2011 | 530,000 | $ | 0.94 | ||||||||||||||
Outstanding at December 31, 2012 | 900,000 | $ | 1.08 | Granted | 400,000 | 1.21 | ||||||||||||
Granted | 50,000 | 0.54 | Exercised | (30,000 | ) | 0.33 | ||||||||||||
Exercised | - | Expired or canceled, during the period | - | |||||||||||||||
Expired or canceled, during the period | (750,000 | ) | 1.08 | Forfeited, during the period | - | |||||||||||||
Forfeited, during the period | - | Outstanding at December 31, 2012 | 900,000 | 1.08 | ||||||||||||||
Outstanding at June 30, 2013 | 200,000 | 0.93 | Exercisable at December 31, 2012 | 525,000 | $ | 0.99 | ||||||||||||
Exercisable at June 30, 2013 | 150,000 | $ | 1.06 | |||||||||||||||
Restricted Stock Awards [Member] | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||
Schedule of unvested stock options / restricted stock award | Number of | Weighted | ||||||||||||||||
Number of | Weighted | RSAs | Average | |||||||||||||||
RSAs | Average | Grant Date | ||||||||||||||||
Grant Date | Fair Value | |||||||||||||||||
Fair Value | Restricted Stock Awards: | |||||||||||||||||
Restricted Stock Awards: | Outstanding at December 31, 2011 | 5,150,000 | $ | 0.65 | ||||||||||||||
Outstanding at December 31, 2012 | 5,175,000 | $ | 0.68 | Granted | 325,000 | 1.12 | ||||||||||||
Granted | 5,630,000 | 0.53 | Vested | - | ||||||||||||||
Vested | - | Expired or canceled, during the period | (300,000 | ) | 0.45 | |||||||||||||
Forfeited, during the period | - | Forfeited, during the period | - | |||||||||||||||
Outstanding at June 30, 2013 | 10,805,000 | $ | 0.6 | Outstanding at December 31, 2012 | 5,175,000 | $ | 0.68 | |||||||||||
Unvested Stock Options [Member] | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||
Schedule of stock options granted | ||||||||||||||||||
Number of | Weighted | |||||||||||||||||
Options | Average | |||||||||||||||||
Grant Date | ||||||||||||||||||
Fair Value | ||||||||||||||||||
Unvested Stock Options: | ||||||||||||||||||
Unvested stock options outstanding at December 31, 2012 | 2,353,591 | $ | 0.99 | |||||||||||||||
Granted | 1,316,960 | 0.56 | ||||||||||||||||
Vested | (265,864 | ) | 1 | |||||||||||||||
Expired or canceled, during the period | (300,000 | ) | 1.21 | |||||||||||||||
Forfeited, during the period | (275,500 | ) | 0.7 | |||||||||||||||
Unvested stock options outstanding at June 30, 2013 | 2,829,187 | $ | 0.77 | |||||||||||||||
Common_Stock_Purchase_Warrants1
Common Stock Purchase Warrants (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Common Stock Purchase Warrants and Stock-Based Compensation [Abstract] | ||||||||||||||||||
Schedule of warrant activity | Number of | Weighted | Number of | Weighted | ||||||||||||||
Warrants | Average | Warrants | Average | |||||||||||||||
Exercise Price | Exercise Price | |||||||||||||||||
Stock Warrants: | Stock Warrants: | |||||||||||||||||
Outstanding at December 31, 2012 | 2,342,500 | $ | 2.5 | Outstanding at December 31, 2011 | 2,342,500 | $ | 2.5 | |||||||||||
Granted | - | - | Granted | - | ||||||||||||||
Exercised | - | - | Exercised | - | ||||||||||||||
Forfeited | - | - | Forfeited | - | ||||||||||||||
Outstanding at June 30, 2013 | 2,342,500 | 2.5 | Outstanding at December 31, 2012 | 2,342,500 | 2.5 | |||||||||||||
Warrants exercisable at June 30, 2013 | 2,342,500 | $ | 2.5 | Warrants exercisable at December 31, 2012 | 2,342,500 | $ | 2.5 | |||||||||||
Net_Loss_Per_Common_Share_Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||
Net Loss Per Common Share [Abstract] | ||||||||||||||||||||||||||
Reconciliation of the numerator and denominator used in computing basic and diluted net loss per common share | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
June 30, | June 30, | Year Ended | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | December 31, | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||
Numerator: | Numerator: | |||||||||||||||||||||||||
Net loss | $ | (1,472,413 | ) | $ | (1,034,223 | ) | $ | (1,627,483 | ) | $ | (4,029,860 | ) | Net loss | $ | (4,030,641 | ) | $ | (1,593,173 | ) | |||||||
Denominator: | Denominator: | |||||||||||||||||||||||||
Basic shares: | Basic shares: | |||||||||||||||||||||||||
Weighted-average common shares outstanding | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Weighted-average common shares outstanding | 38,611,758 | 37,619,208 | |||||||||||||||||||
Diluted shares: | Diluted shares: | |||||||||||||||||||||||||
Weighted-average common shares used to compute basic net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Weighted-average shares used to compute basic net loss per share | 38,611,758 | 37,619,208 | |||||||||||||||||||
Weighted-average common shares used to compute diluted net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | Add: Weighted average shares assumed to be issued upon conversion of convertible notes as of the date of issuance | - | - | |||||||||||||||||||
Warrants and options as of beginning of period | - | - | ||||||||||||||||||||||||
Net loss per common share: | Weighted-average shares used to compute diluted net loss per share | 38,611,758 | 37,619,208 | |||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.10 | ) | ||||||||||||||
Diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.10 | ) | Net loss per share: | |||||||||||||
Basic | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||||||||||||||
Diluted | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||||||||||||||
Commitments_Tables
Commitments (Tables) | 12 Months Ended | |||||
Dec. 31, 2012 | ||||||
Commitments [Abstract] | ||||||
Schedule of future minimum payments under non-cancelable operating leases | ||||||
Year | Amount | |||||
2013 | $ | 388,128 | ||||
2014 | 352,769 | |||||
2015 | 74,373 | |||||
2016 | - | |||||
2017 and thereafter | - | |||||
Total | $ | 815,270 | ||||
Restatement_of_Certain_Consoli1
Restatement of Certain Consolidated Financial Statements (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2012 | |||||||||||||
Restatement Of Certain Consolidated Financial Statements [Abstract] | |||||||||||||
Effects of the restatement on the Company's consolidated financial statements | |||||||||||||
Consolidated Balance Sheet as of December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Warrant liability | $ | - | $ | 937,000 | $ | 937,000 | |||||||
Total liabilities | 5,092,870 | 937,000 | 6,029,870 | ||||||||||
Additional paid-in capital | 11,231,864 | -2,975,000 | 8,256,864 | ||||||||||
Accumulated deficit | -5,722,743 | 2,038,000 | -3,684,743 | ||||||||||
Total Stockholders' Equity | 5,547,701 | -937,000 | 4,610,701 | ||||||||||
Consolidated Statements of Operations for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Mark-to-market adjustment on warrant liability | $ | - | $ | 2,038,000 | $ | 2,038,000 | |||||||
Total Other Income (Expense) | 32,767 | 2,038,000 | 2,070,767 | ||||||||||
Loss Before Provision For Income Taxes | -3,631,173 | 2,038,000 | -1,593,173 | ||||||||||
Net Loss | -3,631,173 | 2,038,000 | -1,593,173 | ||||||||||
Net Loss Per Share - Basic and diluted | -0.1 | 0.06 | -0.04 | ||||||||||
Consolidated Statement of Changes in Stockholders' Equity for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Additional paid-in capital | $ | 11,231,864 | $ | -2,975,000 | $ | 8,256,864 | |||||||
Accumulated deficit | -5,722,743 | 2,038,000 | -3,684,743 | ||||||||||
Total Stockholders' Equity | 5,547,701 | -937,000 | 4,610,701 | ||||||||||
Consolidated Statements of Cash Flows for the Year Ended December 31, 2011: | |||||||||||||
As Originally Reported | Effect of | As Restated | |||||||||||
Restatement | |||||||||||||
Net Loss | $ | -3,631,173 | $ | 2,038,000 | $ | -1,593,173 | |||||||
Mark-to-market adjustment on warrant liability | - | -2,038,000 | -2,038,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2012 | |
Software and website costs [Member] | |
Schedule of property and equipment useful life | |
Estimated useful life | 3 years |
Computers and office equipment [Member] | |
Schedule of property and equipment useful life | |
Estimated useful life | 5 years |
Furniture and fixtures [Member] | |
Schedule of property and equipment useful life | |
Estimated useful life | 7 years |
Leasehold improvements [Member] | |
Schedule of property and equipment useful life | |
Estimated useful life | Shorter of estimated useful life or remaining lease term |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (Domain name [Member]) | 12 Months Ended |
Dec. 31, 2012 | |
Domain name [Member] | |
Schedule of finite lived intangible assets useful life | |
Estimated useful life | 15 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Segment | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Reserve for future chargebacks | $41,929 | $41,929 | $36,129 | $61,572 | ||
Long term deferred rent | 30,214 | 30,214 | 48,340 | 61,640 | ||
Stock based compensation related to non developers | 342,714 | |||||
Description of subscription offered | During 2012, subscriptions were offered in durations of one-, three-, six- and twelve-month terms. | |||||
Description of period for payback of remaining funds | The funds that are withheld each month are returned to the Company on a monthly basis after six months of being held in the reserve account and any remaining funds will be returned to the Company 90 to 180 days following termination of such agreements. | |||||
Credit card holdback receivable | 256,924 | 256,924 | 287,293 | 441,840 | ||
Number of operating segments | 1 | |||||
Expected dividend yield | 0.00% | |||||
Advertising and marketing | 952,248 | 3,023,656 | 2,083,929 | 7,543,897 | 9,876,097 | 14,626,963 |
Receivable from payment processors | 328,680 | |||||
Receivable from advertising network | 27,469 | 64,330 | ||||
Cash in excess of FDIC insurance limits | 4,995,958 | 1,561,947 | ||||
Credit card holdback receivables in excess of FDIC insurance limits | $139,389 | $248,534 | ||||
Research and Development Expense [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Estimated useful life | Three years |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2011 | Jan. 11, 2013 | |
HP [Member] | ||||
Restricted Cash (Textual) | ||||
Letter of Credit from JP Morgan Chase Bank | $200,000 | |||
Letter of credit facility from JP Morgan Chase Bank, expiration date | 31-Jan-14 | |||
Letter of credit increased amount | 270,000 | |||
Cash collateral guarantee for monthly credit line | 105.00% | |||
Credit line, monthly borrowing capacity | 100,000 | 200,000 | ||
Description of collateral fee | 105% of the monthly credit line of $100,000 | |||
Description of collateral guarantee | Cash collateral guarantee of 105% of the monthly credit line of $100,000 in a certificate of deposit for twelve months as collateral. | |||
Restricted cash | $105,000 | $375,211 |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of accounts receivable, net | |||
Accounts receivable | $375,111 | $356,148 | $665,154 |
Less: Allowance for doubtful accounts | -123,392 | ||
Less: Reserve for future chargebacks | -41,929 | -36,129 | -61,572 |
Total accounts receivable, net | $333,182 | $320,019 | $480,190 |
Accounts_Receivable_Net_Detail1
Accounts Receivable, Net (Details Textual) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts Receivable, Net (Textual) | |||
Unsettled transactions from credit card payment processors | $157,826 | $112,885 | $220,272 |
Accounts receivable due from Apple Inc. | 201,096 | 201,859 | 176,118 |
Receivable from advertising network | $27,469 | $64,330 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring [Member], USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 6,481,205 | ||
LIABILITIES: | |||
Total warrant liability | 445,075 | 1,616,325 | 937,000 |
Common stock warrant [Member] | |||
LIABILITIES: | |||
Total warrant liability | 1,616,325 | 937,000 | |
Warrant Liability [Member] | |||
LIABILITIES: | |||
Total warrant liability | 445,075 | 1,616,325 | |
U.S. government securities [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 3,506,205 | ||
Certificates of deposit [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 2,975,000 | ||
Level 1 [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 6,481,205 | ||
LIABILITIES: | |||
Total warrant liability | |||
Level 1 [Member] | Common stock warrant [Member] | |||
LIABILITIES: | |||
Total warrant liability | |||
Level 1 [Member] | Warrant Liability [Member] | |||
LIABILITIES: | |||
Total warrant liability | |||
Level 1 [Member] | U.S. government securities [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 3,506,205 | ||
Level 1 [Member] | Certificates of deposit [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | 2,975,000 | ||
Level 2 [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | |||
LIABILITIES: | |||
Total warrant liability | |||
Level 2 [Member] | Common stock warrant [Member] | |||
LIABILITIES: | |||
Total warrant liability | |||
Level 2 [Member] | Warrant Liability [Member] | |||
LIABILITIES: | |||
Total warrant liability | |||
Level 2 [Member] | U.S. government securities [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | |||
Level 2 [Member] | Certificates of deposit [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | |||
Level 3 [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | |||
LIABILITIES: | |||
Total warrant liability | 445,075 | 1,616,325 | 937,000 |
Level 3 [Member] | Common stock warrant [Member] | |||
LIABILITIES: | |||
Total warrant liability | 1,616,325 | 937,000 | |
Level 3 [Member] | Warrant Liability [Member] | |||
LIABILITIES: | |||
Total warrant liability | 445,075 | 1,616,325 | |
Level 3 [Member] | U.S. government securities [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments | |||
Level 3 [Member] | Certificates of deposit [Member] | |||
Cash equivalents: | |||
Total cash equivalents | |||
Short-term investments: | |||
Total short-term investments |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of estimated fair value of the warrant liability | |||
Stock price | $0.51 | $1.25 | $0.65 |
Strike price | $2.50 | $2.50 | $2.50 |
Remaining contractual term (years) | 2 years 7 months 6 days | 3 years 1 month 6 days | 4 years 1 month 6 days |
Volatility | 141.80% | 171.90% | 215.50% |
Adjusted volatility | 123.00% | 121.10% | 125.50% |
Risk-free rate | 0.50% | 0.40% | 0.60% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details Textual) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Investments and Fair Value Measurements (Textual) | |||
Short-term investments, amortization premium paid | $8,733 | ||
Incremental discount rate premium due to lack of marketability | 10.00% | 10.00% |
CostMethod_Investment_Details
Cost-Method Investment (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2013 | Jan. 31, 2013 | |
DCL Ventures Inc. [Member] | DCL Ventures Inc. [Member] | ||||||
Cost-Method Investment (Textual) | |||||||
Common stock, par value | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | ||
Share purchase under initial investment | 50,000 | ||||||
Investment in DCL Ventures, Inc. | $50,000 | $0 | $50,000 | ||||
Investments | 50,000 | 50,000 | |||||
Impairment loss | $0 | $0 |
Fixed_Assets_and_Intangible_As2
Fixed Assets and Intangible Assets, Net (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of fixed assets and intangible assets | |||
Total fixed assets | $941,513 | $805,964 | $704,448 |
Less: Accumulated depreciation and amortization | -342,977 | -257,415 | -125,985 |
Total fixed assets and intangible assets, net | 598,536 | 548,549 | 578,463 |
Computer equipment [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | 239,875 | 211,896 | 143,461 |
Furniture and fixtures [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | 142,856 | 142,856 | 159,051 |
Leasehold improvements [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | 382,376 | 377,727 | 329,156 |
Software [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | 10,968 | 8,047 | 7,342 |
Website domain name [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | 124,938 | 24,938 | 24,938 |
Website costs [Member] | |||
Schedule of fixed assets and intangible assets | |||
Total fixed assets | $40,500 | $40,500 | $40,500 |
Fixed_Assets_and_Intangible_As3
Fixed Assets and Intangible Assets, Net (Details 1) (USD $) | Dec. 31, 2012 |
Schedule of estimated future amortization and depreciation of intangible and tangible assets | |
2013 | $161,547 |
2014 | 156,498 |
2015 | 122,365 |
2016 | 52,886 |
2017 and thereafter | 55,253 |
Estimated future amortization and depreciation of intangible and tangible assets, Total | $548,549 |
Fixed_Assets_and_Intangible_As4
Fixed Assets and Intangible Assets, Net (Details Textual) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 23, 2013 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fixed Assets and Intangible Assets, Net (Textual) | |||||
Depreciation and amortization expense | $85,563 | $72,476 | $151,007 | $51,180 | |
Common stock issued for domain name, shares | 100,000 | 100,000 | |||
Common stock issued for domain name, value | $100,000 | $100,000 |
Notes_Receivable_Details
Notes Receivable (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Notes Receivable (Textual) | |||
Notes receivable | $168,098 | $165,716 | $138,803 |
Maturity period of due note | At various times during 2021-2023 | At various times during 2021-2023 | |
Notes receivable, interest rate, minimum | 2.31% | 2.31% | |
Notes receivable, interest rate, maximum | 3.57% | 3.57% | |
Current Employee [Member] | |||
Notes Receivable (Textual) | |||
Notes receivable | 92,152 | ||
Former Employees [Member] | |||
Notes Receivable (Textual) | |||
Notes receivable | $73,564 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred Tax Liability: | ||
Furniture, fixtures, equipment and intangibles | ($64,437) | ($37,072) |
Other | -10,162 | |
Warrants | -627,056 | -842,260 |
Deferred Tax Assets | ||
Stock options for services | 1,049,578 | 562,163 |
Net operating loss carry-forward | 3,237,128 | 1,924,412 |
Reserve for future charge backs | 16,674 | |
Valuation allowance | -3,601,725 | -1,607,243 |
Net deferred tax asset (liabilities) |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of reconciliation of federal income tax provision from continuing operations at statutory rate | ||||||
Federal income tax benefit at statutory rate | ($1,410,724) | ($557,891) | ||||
Increase (decrease) in income taxes resulting from: | ||||||
State and local income taxes | -598,095 | -153,636 | ||||
Change in deferred tax asset valuation allowance | 1,994,482 | 702,407 | ||||
Stock based compensation | ||||||
Non-deductible expenses | 14,337 | 9,380 | ||||
Other | ||||||
Income Tax Expense (Benefit), Total |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes (Textual) | ||||||
Provision for income taxes | ||||||
Valuation allowance | 3,601,725 | 1,607,243 | ||||
Change in deferred tax asset valuation allowance | 1,994,482 | 702,407 | ||||
Amount of windfall tax benefit | 26,128 | |||||
Federal net operating loss carryforward | $7,088,700 | |||||
Operating Loss Carryforwards, Expiration Dates | 30-Jun-32 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of accrued expenses and other current liabilities | |||
Compensation and benefits | $293,333 | $39,344 | $817,656 |
Deferred rent | 33,894 | 30,354 | 40,475 |
Professional fees | 60,401 | 163,500 | |
Other accrued expenses | 6,851 | 6,851 | 6,852 |
Total accrued expenses and other current liabilities | $394,479 | $240,049 | $864,983 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Weighted average assumptions used to estimate fair value of options granted | ||
Expected dividend yield | 0.00% | |
Stock Options [Member] | ||
Weighted average assumptions used to estimate fair value of options granted | ||
Expected volatility | 259.31% | 292.52% |
Expected life of option | 6 years 2 months 12 days | 5 years 11 months 16 days |
Risk free interest rate | 1.11% | 0.98% |
Expected dividend yield | 0.00% | 0.00% |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 1) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Stock Options [Member] | ||
Schedule of Stock Options, Non-employee Stock Option and Unvested Stock Options | ||
Beginning Balance | 4,525,205 | 8,118,955 |
Granted | 1,316,960 | 1,502,000 |
Exercised | -470,000 | |
Expired or canceled, during the period | -750,000 | -4,515,000 |
Forfeited, Number of Options/Warrants | -295,500 | -110,750 |
Ending Balance, Number of Options/Warrants | 4,796,665 | 4,525,205 |
Options/Warrants exercisable | 1,967,478 | 2,171,614 |
Beginning Balance, Weighted Average Exercise Price | $0.97 | $0.41 |
Granted, Weighted Average Exercise Price | $0.57 | $1.41 |
Exercised, Weighted Average Exercise Price | $0.64 | |
Expired or canceled, during the period, Weighted Average Exercise Price | $1.08 | $0.13 |
Forfeited, Weighted Average Exercise Price | $1.04 | $0.97 |
Ending Balance, Weighted Average Exercise Price | $0.84 | $0.97 |
Exercisable, Weighted Average Exercise Price | $0.78 | $0.73 |
Non-employee Stock Option [Member] | ||
Schedule of Stock Options, Non-employee Stock Option and Unvested Stock Options | ||
Beginning Balance | 900,000 | 530,000 |
Granted | 50,000 | 400,000 |
Exercised | -300,000 | |
Expired or canceled, during the period | -750,000 | |
Forfeited, Number of Options/Warrants | ||
Ending Balance, Number of Options/Warrants | 200,000 | 900,000 |
Options/Warrants exercisable | 150,000 | 525,000 |
Beginning Balance, Weighted Average Exercise Price | $1.08 | $0.94 |
Granted, Weighted Average Exercise Price | $0.54 | $1.21 |
Exercised, Weighted Average Exercise Price | $0.33 | |
Expired or canceled, during the period, Weighted Average Exercise Price | $1.08 | |
Forfeited, Weighted Average Exercise Price | ||
Ending Balance, Weighted Average Exercise Price | $0.93 | $1.08 |
Exercisable, Weighted Average Exercise Price | $1.06 | $0.99 |
Unvested Stock Options [Member] | ||
Schedule of Stock Options, Non-employee Stock Option and Unvested Stock Options | ||
Beginning Balance | 2,353,591 | 1,885,955 |
Granted | 1,316,960 | 1,502,000 |
Vested | -265,864 | |
Expired or canceled, during the period | -300,000 | -923,614 |
Forfeited, Number of Options/Warrants | -275,500 | -110,750 |
Ending Balance, Number of Options/Warrants | 2,829,187 | 2,353,591 |
Beginning Balance, Weighted Average Exercise Price | $0.99 | $0.54 |
Granted, Weighted Average Exercise Price | $0.56 | $1.26 |
Vested | $1 | |
Expired or canceled, during the period, Weighted Average Exercise Price | $1.21 | $0.55 |
Forfeited, Weighted Average Exercise Price | $0.70 | $0.68 |
Ending Balance, Weighted Average Exercise Price | $0.77 | $0.99 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 2) (Restricted Stock [Member], USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Restricted Stock [Member] | ||
Schedule of restricted stock award | ||
Beginning balance | 5,175,000 | 5,150,000 |
Granted | 5,630,000 | 325,000 |
Vested | ||
Expired or canceled, during the period | -300,000 | |
Forfeited, during the period | ||
Ending balance | 10,805,000 | 5,175,000 |
Weighted average grant date fair value, Beginning balance | $0.68 | $0.65 |
Weighted average grant date fair value, Granted | $0.53 | $1.12 |
Weighted average grant date fair value, Vested | ||
Weighted average exercise price, Expired or canceled, during the period | $0.45 | |
Weighted average grant date fair value, Forfeited | ||
Weighted average grant date fair value, Ending balance | $0.60 | $0.68 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock-Based Compensation (Textual) | ||||||
Stock-based compensation expense | $445,069 | $609,793 | $1,129,960 | $438,395 | ||
Number of shares authorized under Option | 7,500,000 | 7,500,000 | 7,500,000 | |||
Percentage of common stock delivered pursuant to incentive stock options | 1.00% | 100.00% | ||||
Number of stock reserved for issuance | 2,943,335 | 2,943,335 | 3,134,795 | |||
Stock Options [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Stock options outstanding, intrinsic value | 82,730 | 2,813,293 | 82,730 | 2,813,293 | 1,807,362 | 2,561,209 |
Stock options exercisable, intrinsic value | 82,635 | 1,571,783 | 82,635 | 1,571,783 | 1,179,516 | 2,469,865 |
Stock-based compensation expense | 370,122 | 324,510 | 445,069 | 609,793 | 814,996 | 321,281 |
Non Employee Stock Option [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Stock options outstanding, intrinsic value | 0 | 270,010 | 0 | 270,010 | 152,500 | 9,510 |
Stock options exercisable, intrinsic value | 0 | 261,510 | 0 | 261,510 | 137,500 | 9,510 |
Stock-based compensation expense | 23,210 | 18,600 | 115,178 | 11,692 | ||
Adjusted amount to reduce expense related to stock option | 1,269 | |||||
Total unrecognized compensation cost related to non-vested stock options | 419,206 | 26,023 | ||||
Weighted average expected recognition period of compensation cost not yet recognized | 1 year 6 months 25 days | 8 months 8 days | ||||
Restricted Stock [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Stock-based compensation expense | 314,964 | 88,710 | ||||
Total unrecognized compensation cost related to non-vested stock options | 3,169,203 | 3,120,167 | ||||
Weighted average expected recognition period of compensation cost not yet recognized | 9 years | 9 years 11 months 8 days | ||||
Restricted stock recorded as issued on the Company's Consolidated Balance Sheet | 10,805,000 | 10,805,000 | 5,175,000 | 5,150,000 | ||
Unvested Stock Options [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Total unrecognized compensation cost related to non-vested stock options | 1,481,725 | 1,498,460 | 1,481,725 | 1,498,460 | 1,846,201 | 858,457 |
Weighted average expected recognition period of compensation cost not yet recognized | 2 years 10 months 17 days | 2 years 9 months 22 days | 2 years 6 months 29 days | 2 years 8 months 1 day | ||
Unvested Non-employee Stock Options [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Total unrecognized compensation cost related to non-vested stock options | 106,200 | 7,303 | 106,200 | 7,303 | ||
Weighted average expected recognition period of compensation cost not yet recognized | 1 month 28 days | 2 months 8 days | ||||
Unvested Restricted Stock Award [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Stock-based compensation expense | 250,208 | 77,437 | 338,573 | 154,874 | ||
Total unrecognized compensation cost related to non-vested stock options | $5,804,730 | $2,963,744 | $5,804,730 | $2,963,744 | ||
Weighted average expected recognition period of compensation cost not yet recognized | 6 years 1 month 13 days | 9 years 5 months 8 days | ||||
Restricted stock recorded as issued on the Company's Consolidated Balance Sheet | 10,805,000 | 10,805,000 |
Common_Stock_Purchase_Warrants2
Common Stock Purchase Warrants (Details) (Stock Warrant [Member], USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Stock Warrant [Member] | ||
Schedule of warrant activity | ||
Beginning Balance | 2,342,500 | 2,342,500 |
Granted | ||
Exercised | ||
Forfeited, Number of Options/Warrants | ||
Ending Balance, Number of Options/Warrants | 2,342,500 | 2,342,500 |
Options/Warrants exercisable | 2,342,500 | 2,342,500 |
Beginning Balance, Weighted Average Exercise Price | $2.50 | $2.50 |
Granted, Weighted Average Exercise Price | ||
Exercised, Weighted Average Exercise Price | ||
Forfeited, Weighted Average Exercise Price | ||
Ending Balance, Weighted Average Exercise Price | $2.50 | $2.50 |
Exercisable, Weighted Average Exercise Price | $2.50 | $2.50 |
Common_Stock_Purchase_Warrants3
Common Stock Purchase Warrants (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Apr. 30, 2011 | Jan. 31, 2011 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Common Stock Purchase Warrants (Textual) | ||||||||
Gross proceeds from equity financing | $8,500,000 | |||||||
Common stock shares issued for warrant exercised | 2,125,000 | |||||||
Warrants expiration period | 5 years | |||||||
Shares of common stock issued | 4,250,000 | |||||||
Common stock price per share | $2 | |||||||
Warrants expiration date | 19-Jan-16 | |||||||
Warrants exercise price | $2.50 | $2.50 | ||||||
Net proceeds from issuance of warrants | 7,915,700 | |||||||
Offering cost of warrants | 584,300 | |||||||
Fair value of warrants | 445,075 | 445,075 | 1,616,325 | 937,000 | ||||
Mark-to-market adjustment on warrant liability | 70,275 | 117,125 | 1,171,250 | -1,171,250 | -679,325 | 2,038,000 | ||
Investor [Member] | ||||||||
Common Stock Purchase Warrants (Textual) | ||||||||
Gross proceeds from equity financing | $88,125 | |||||||
Common stock shares issued for warrant exercised | 37,500 | |||||||
Placement Agent [Member] | ||||||||
Common Stock Purchase Warrants (Textual) | ||||||||
Warrant issued to purchase common stock | 255,000 |
Common_Stock_Issued_for_Domain1
Common Stock Issued for Domain Name (Details) (USD $) | 0 Months Ended | 6 Months Ended |
Jan. 23, 2013 | Jun. 30, 2013 | |
Common Stock Issued For Domain Name Textual [Abstract] | ||
Common stock issued for domain name, value | $100,000 | $100,000 |
Common stock issued for domain name, shares | 100,000 | 100,000 |
Amount recorded to fixed and intangible assets | 100,000 | |
Amount recorded to common stock | 100 | |
Amount recorded to additional paid-in capital | $99,900 |
Net_Loss_Per_Common_Share_Deta
Net Loss Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Numerator: | ||||||
Net loss | ($1,472,413) | ($1,034,223) | ($1,627,483) | ($4,029,860) | ($4,030,641) | ($1,593,173) |
Basic shares: | ||||||
Weighted-average common shares outstanding | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | 38,611,758 | 37,619,208 |
Diluted shares: | ||||||
Weighted-average common shares used to compute basic net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | 38,611,758 | 37,619,208 |
Add: Weighted average shares assumed to be issued upon conversion of convertible notes as of the date of issuance | ||||||
Warrants and options as of beginning of period | ||||||
Weighted-average common shares used to compute diluted net loss per common share | 38,932,826 | 38,580,261 | 38,920,671 | 38,580,261 | 38,611,758 | 37,619,208 |
Net loss per share: | ||||||
Basic | ($0.04) | ($0.03) | ($0.04) | ($0.10) | ($0.10) | ($0.04) |
Diluted | ($0.04) | ($0.03) | ($0.04) | ($0.10) | ($0.10) | ($0.04) |
Net_Loss_Per_Common_Share_Deta1
Net Loss Per Common Share (Details Textual) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock Option and Warrants [Member] | ||||
Net Loss Per Common Share (Textual) | ||||
Shares issuable excluded from computation of diluted net loss per share | 7,139,165 | 8,991,955 | 6,867,705 | 10,461,455 |
Convertible Debt [Member] | ||||
Net Loss Per Common Share (Textual) | ||||
Shares issuable excluded from computation of diluted net loss per share | 823,157 |
Commitments_Details
Commitments (Details) (USD $) | Dec. 31, 2012 |
Schedule of future minimum payments under non-cancelable operating leases | |
2013 | $388,128 |
2014 | 352,769 |
2015 | 74,373 |
2016 | |
2017 and thereafter | |
Total | $815,270 |
Commitments_Details_Textual
Commitments (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 6 Months Ended | |||
23-May-11 | 31-May-11 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 11, 2013 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Jun. 30, 2013 | |
HP [Member] | HP [Member] | HP [Member] | HP [Member] | Equinix [Member] | |||||||
Agreement | |||||||||||
Commitments (Textual) | |||||||||||
Term of non-cancellable operating lease | 46 months | 2 years | |||||||||
Monthly rent expense on operating lease until January 2014 | $8,649 | ||||||||||
Monthly rent expense on operating lease until September 2014 | 6,584 | ||||||||||
Rent expense | 126,991 | 126,991 | 253,982 | 84,661 | 25,948 | 4,130 | 42,468 | ||||
Letter of Credit from JP Morgan Chase Bank | 200,000 | ||||||||||
Letter of credit facility from JP Morgan Chase Bank, expiration date | 31-Jan-14 | ||||||||||
Term of service agreement | 2 years | ||||||||||
Monthly recurring fees | 8,450 | ||||||||||
Nonrecurring fees | 9,700 | ||||||||||
Description of renewal of service agreement | Agreement automatically renews for additional twelve month terms unless earlier terminated by either party. | ||||||||||
Hosting expense | 63,907 | ||||||||||
Number of lease agreements | 3 | ||||||||||
Letter of credit increased amount | 270,000 | ||||||||||
Start date of lease | 1-Jun-11 | 1-Jun-11 | |||||||||
Expiration date of lease | 30-Mar-15 | 30-Mar-15 | |||||||||
Operating lease, base rent | $973,595 | $973,595 | |||||||||
Operating lease termination terms | The Company can terminate the final five months of the lease with eight months prior notice and the payment of unamortized costs. | The Company can terminate the final five months of the lease with eight months prior notice and the payment of unamortized costs. | |||||||||
Minimum notice period to terminate lease | 8 months |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 1 Months Ended | 6 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
Jan. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2012 | Jan. 31, 2013 | Apr. 10, 2013 | Jun. 30, 2013 | Apr. 10, 2013 | Jun. 30, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Jan. 31, 2013 | Dec. 31, 2012 | |
Employee | Byron Lerner [Member] | Darrell Lerner [Member] | Clifford Lerner, the Company's President and Chief Executive Officer [Member] | Clifford Lerner, the Company's President and Chief Executive Officer [Member] | Jon Pedersen, the Company's Chief Financial Officer [Member] | Jon Pedersen, the Company's Chief Financial Officer [Member] | Dcl Ventures Inc [Member] | Dcl Ventures Inc [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | ||||
Chief executive officer and Darrell Lerner [Member] | Darrell Lerner [Member] | Darrell Lerner [Member] | ||||||||||||||||
Related Party Transactions (Textual) | ||||||||||||||||||
Restricted stock, granted | 5,630,000 | 325,000 | 5,150,000 | 150,000 | 325,000 | |||||||||||||
Restricted stock, fair value | $2,762,500 | $124,500 | $364,000 | |||||||||||||||
Exercise price of stock option | 300,000 | |||||||||||||||||
Description of vesting period | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner's termination of service without "cause"; or (iv) the date of Mr. Darrell Lerner's termination of service due to the Company's nonrenewal of the consulting agreement without "cause". | Vesting upon the earlier of the tenth anniversary of the date of grant or a change in control. | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner's termination of service without "cause"; or (iv) the date of Mr. Darrell Lerner's termination of service due to the Company's nonrenewal of the consulting agreement without "cause" | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; or (iii) on his termination of service without "cause". | ||||||||||||||
Restricted stock recorded as issued on the Company's Consolidated Balance Sheet | 10,805,000 | 5,175,000 | 5,150,000 | |||||||||||||||
Consulting agreement term | 2 years | 3 years | ||||||||||||||||
Per month consulting fee | 8,000 | |||||||||||||||||
Issuance of restricted shares of common stock | 5,000,000 | 480,000 | ||||||||||||||||
Stock option, Granted | 700,000 | |||||||||||||||||
Exercise price of stock option | $0.52 | |||||||||||||||||
Par value of common stock affiliates under Subscription Agreement | $0.00 | $0.00 | ||||||||||||||||
Aggregate purchase price of shares under Subscription Agreement | 50,000 | 50,000 | ||||||||||||||||
Aggregate purchase shares under subscription agreement | 50,000 | |||||||||||||||||
Additional aggregate purchase price of shares under Subscription Agreement | 150,000 | 150,000 | ||||||||||||||||
Additional purchase of shares under Subscription Agreement | 150,000 | |||||||||||||||||
Amount paid for second investment | 25,000 | |||||||||||||||||
Terms of the restricted stock award agreement | Terms of the restricted stock award agreement, (i) fifty percent (50%) of the restricted shares will vest on the third anniversary of grant date, and (ii) the remaining fifty percent (50%) shares will vest on the fourth anniversary of grant date; provided, that any unvested shares will immediately vest on the effective date of a change in control. | Terms of the restricted stock award agreement, (i) fifty percent (50%) of the restricted shares will vest on the third anniversary of grant date, and (ii) the remaining fifty percent (50%) of the restricted shares will vest on the fourth anniversary of grant date; provided, that any unvested shares will immediately vest on the effective date of a change in control. | ||||||||||||||||
Description related to vesting of stock option | The shares of common stock underlying Mr. Pedersen's stock option will vest one-fourth on each of the first, second, third and fourth anniversaries of the date of grant; provided, that (i) upon the effective date of a "change in control," 50% of all then unvested shares of common stock underlying the option will vest immediately and the remaining unvested shares of common stock underlying the option will vest on the earlier of (a) the original vesting date or (b) equally on the first and second anniversary of the effective date of the change in control (subject to early termination or forfeiture in accordance with the terms of the stock option agreement), (ii) any vested options will be forfeited immediately upon violation of any non-competition or non-solicitation agreement between the Company and Mr. Pedersen and (iii) upon termination of Mr. Pedersen's employment without cause, the option will remain exercisable until the tenth anniversary of the date of grant to the extent the shares underlying the option are vested. | |||||||||||||||||
Notes receivable due from current and former employees | $168,098 | $165,716 | $138,803 | |||||||||||||||
Number of current employees | 1 | |||||||||||||||||
Number of former employees | 2 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Jan. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | Jan. 31, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2013 | Jan. 11, 2013 | |
Restricted Stock [Member] | Restricted Stock [Member] | Darrell Lerner [Member] | Darrell Lerner [Member] | Darrell Lerner [Member] | Equinix Operating Co, Inc [Member] | HP [Member] | |||
Restricted Stock [Member] | Restricted Stock [Member] | ||||||||
Subsequent Events (Textual) | |||||||||
Restricted stock, granted | 5,630,000 | 325,000 | 150,000 | 325,000 | |||||
Restricted stock, fair value | $124,500 | $364,000 | |||||||
Description of vesting period | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner's termination of service without "cause"; or (iv) the date of Mr. Darrell Lerner's termination of service due to the Company's nonrenewal of the consulting agreement without "cause". | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; (iii) on Mr. Darrell Lerner's termination of service without "cause"; or (iv) the date of Mr. Darrell Lerner's termination of service due to the Company's nonrenewal of the consulting agreement without "cause" | Vest upon the earlier of (i) the tenth anniversary of the grant date; (ii) a change in control; or (iii) on his termination of service without "cause". | ||||||
Consulting agreement term | 3 years | 2 years | |||||||
Per month consulting fee for first two years | 25,000 | ||||||||
Per month consulting fee beginning February 1, 2015 and ending upon the termination of the Consulting Agreement | 30,000 | ||||||||
Par value of common stock affiliates under Subscription Agreement | $0.00 | ||||||||
Aggregate purchase price of shares under Subscription Agreement | 50,000 | ||||||||
Additional aggregate purchase price of shares under Subscription Agreement | 150,000 | ||||||||
Monthly recurring fee payable pursuant to service agreement | 8,450 | ||||||||
Monthly nonrecurring fee payable pursuant to service agreement | 9,700 | ||||||||
Service agreement, additional renewable service term | 12 months | ||||||||
Letter of credit, amount available | $100,000 | $200,000 | |||||||
Letter of credit expiration date | 31-Jan-14 |
Restatement_of_Certain_Consoli2
Restatement of Certain Consolidated Financial Statements (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Effect of restatement on the Company's balance sheet | |||||||
Warrant liability | $445,075 | $445,075 | $1,616,325 | $937,000 | |||
Total liabilities | 3,891,363 | 3,891,363 | 5,228,126 | 6,029,870 | |||
Additional paid-in capital | 9,982,391 | 9,982,391 | 9,437,422 | 8,256,864 | |||
Accumulated deficit | -9,342,867 | -9,342,867 | -7,715,384 | -3,684,743 | |||
Total Stockholders' Equity | 1,830,115 | 4,610,701 | 664,697 | ||||
Effects of the restatement on the Company's statement of operations | |||||||
Mark-to-market adjustment on warrant liability | 1,171,250 | -1,171,250 | -679,325 | 2,038,000 | |||
Total Other Income (Expense) | 16,885 | 16,885 | -16,885 | 3,909 | |||
Net loss before income tax | -3,961,397 | -1,593,173 | |||||
Net loss | -3,961,397 | -1,593,173 | |||||
Net Loss Per Share - Basic and diluted | ($0.04) | ($0.03) | ($0.04) | ($0.10) | ($0.10) | ($0.04) | |
Effect of restatement on the Company's statement of changes in stockholders' equity | |||||||
Additional paid-in capital | 9,982,391 | 9,982,391 | 9,437,422 | 8,256,864 | |||
Accumulated deficit | -9,342,867 | -9,342,867 | -7,715,384 | -3,684,743 | |||
Total Stockholders' Equity | 1,830,115 | 4,610,701 | 664,697 | ||||
Effect of restatement on company's statement of cash flows | |||||||
Net loss | -3,961,397 | -1,593,173 | |||||
Mark-to-market adjustment on warrant liability | -1,171,250 | 1,171,250 | 679,325 | -2,038,000 | |||
As Originally Reported [Member] | |||||||
Effect of restatement on the Company's balance sheet | |||||||
Warrant liability | |||||||
Total liabilities | 5,092,870 | ||||||
Additional paid-in capital | 11,231,864 | ||||||
Accumulated deficit | -5,722,743 | ||||||
Total Stockholders' Equity | 5,547,701 | ||||||
Effects of the restatement on the Company's statement of operations | |||||||
Mark-to-market adjustment on warrant liability | |||||||
Total Other Income (Expense) | 32,767 | ||||||
Net loss before income tax | -3,631,173 | ||||||
Net loss | -3,631,173 | ||||||
Net Loss Per Share - Basic and diluted | ($0.10) | ||||||
Effect of restatement on the Company's statement of changes in stockholders' equity | |||||||
Additional paid-in capital | 11,231,864 | ||||||
Accumulated deficit | -5,722,743 | ||||||
Total Stockholders' Equity | 5,547,701 | ||||||
Effect of restatement on company's statement of cash flows | |||||||
Net loss | -3,631,173 | ||||||
Mark-to-market adjustment on warrant liability | |||||||
Effect of Restatement [Member] | |||||||
Effect of restatement on the Company's balance sheet | |||||||
Warrant liability | 937,000 | ||||||
Total liabilities | 937,000 | ||||||
Additional paid-in capital | -2,975,000 | ||||||
Accumulated deficit | 2,038,000 | ||||||
Total Stockholders' Equity | -937,000 | ||||||
Effects of the restatement on the Company's statement of operations | |||||||
Mark-to-market adjustment on warrant liability | 2,038,000 | ||||||
Total Other Income (Expense) | 2,038,000 | ||||||
Net loss before income tax | 2,038,000 | ||||||
Net loss | 2,038,000 | ||||||
Net Loss Per Share - Basic and diluted | $0.06 | ||||||
Effect of restatement on the Company's statement of changes in stockholders' equity | |||||||
Additional paid-in capital | -2,975,000 | ||||||
Accumulated deficit | 2,038,000 | ||||||
Total Stockholders' Equity | -937,000 | ||||||
Effect of restatement on company's statement of cash flows | |||||||
Net loss | 2,038,000 | ||||||
Mark-to-market adjustment on warrant liability | ($2,038,000) |