Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Snap Interactive, Inc | ||
Entity Central Index Key | 1,355,839 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 3,358,830 | ||
Entity Common Stock, Shares Outstanding | 39,692,826 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 2,131,262 | $ 1,138,385 |
Credit card holdback receivable | 165,853 | 648,759 |
Accounts receivable, net of allowances and reserves of $55,468 and $42,533, respectively | $ 206,547 | 221,128 |
Short term security deposits | 115,104 | |
Prepaid expense and other current assets | $ 108,871 | 93,542 |
Total current assets | 2,612,533 | 2,216,918 |
Fixed assets and intangible assets, net | 387,617 | 563,123 |
Notes receivable | 81,123 | 78,520 |
Long term security deposits | 279,410 | 135,000 |
Investments | 200,000 | 200,000 |
Total assets | 3,560,683 | 3,193,561 |
Current liabilities: | ||
Accounts payable | 1,065,662 | 1,074,345 |
Accrued expenses and other current liabilities | $ 367,018 | 1,062,836 |
Notes payable | 400,000 | |
Deferred subscription revenue | $ 1,505,862 | 1,952,075 |
Deferred advertising revenue | 13,427 | |
Total current liabilities | $ 2,938,542 | $ 4,502,683 |
Deferred rent, net of current portion | 99,595 | |
Convertible note payable, net of discount | 1,636,585 | |
Derivative liabilities | 473,425 | $ 23,425 |
Capital lease obligations, net of current portion | 75,560 | 149,055 |
Total liabilities | $ 5,223,707 | $ 4,675,163 |
Commitments and Contingencies | ||
Stockholders' deficit: | ||
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, 50,017,826 and 49,507,826 shares issued, respectively, and 39,692,826 and 39,182,826 shares outstanding, respectively | $ 39,693 | $ 39,183 |
Additional paid-in capital | 12,974,409 | 11,858,489 |
Accumulated deficit | (14,677,126) | (13,379,274) |
Total stockholders' deficit | (1,663,024) | (1,481,602) |
Total liabilities and stockholders' deficit | $ 3,560,683 | $ 3,193,561 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheets [Abstract] | ||
Allowances and reserves on accounts receivables | $ 55,468 | $ 42,533 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 50,017,826 | 49,507,826 |
Common stock, shares outstanding | 39,692,826 | 39,182,826 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | ||
Subscription revenue | $ 11,568,273 | $ 12,769,012 |
Advertising revenue | 452,757 | 789,678 |
Total revenue | 12,021,030 | 13,558,690 |
Costs and expenses: | ||
Cost of revenue | 1,702,321 | 1,860,727 |
Sales and marketing expense | 5,414,563 | 5,742,935 |
Product development expense | 2,103,300 | 2,926,802 |
General and administrative expense | 4,200,378 | 4,772,328 |
Total operating costs and expenses | 13,420,562 | 15,302,792 |
Loss from Operations | (1,399,532) | (1,744,102) |
Interest expense, net | (1,538,320) | (30,900) |
Change in fair value of derivative liabilities | 1,640,000 | 117,125 |
Net loss | $ (1,297,852) | $ (1,657,877) |
Loss per share of common stock: | ||
Basic and diluted | $ (0.03) | $ (0.04) |
Weighted average number of common shares used in calculating net loss per share of common stock: | ||
Basic and diluted | 39,627,264 | 39,169,196 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2013 | $ (869,059) | $ 39,133 | $ 10,813,205 | $ (11,721,397) |
Balance, Shares at Dec. 31, 2013 | 39,132,826 | |||
Common stock issued for consulting services | $ 50 | (50) | ||
Common stock issued for consulting services, Shares | 50,000 | |||
Stock-based compensation expense for restricted stock awards | $ 899,856 | 899,856 | ||
Stock-based compensation expense for stock options | 140,728 | 140,728 | ||
Warrants issued for debt issuance cost | 4,750 | $ 4,750 | ||
Net loss | (1,657,877) | $ (1,657,877) | ||
Balance at Dec. 31, 2014 | $ (1,481,602) | $ 39,183 | $ 11,858,489 | $ (13,379,274) |
Balance, Shares at Dec. 31, 2014 | 39,182,826 | |||
Common stock issued in connection with Securities Purchase Agreement | $ 350 | (350) | ||
Common stock issued in connection with Securities Purchase Agreement, Shares | 350,000 | |||
Common stock issued in connection with Advisory Services Agreement | $ 30,000 | $ 150 | 29,850 | |
Common stock issued in connection with Advisory Services Agreement, Shares | 150,000 | |||
Stock-based compensation expense for restricted stock awards and shares issued for consulting services | 880,829 | $ 10 | 880,819 | |
Stock-based compensation expense for restricted stock awards and shares issued for consulting services, Shares | 10,000 | |||
Stock-based compensation expense for stock options | 205,601 | $ 205,601 | ||
Net loss | (1,297,852) | $ (1,297,852) | ||
Balance at Dec. 31, 2015 | $ (1,663,024) | $ 39,693 | $ 12,974,409 | $ (14,677,126) |
Balance, Shares at Dec. 31, 2015 | 39,692,826 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (1,297,852) | $ (1,657,877) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | $ 167,161 | 181,675 |
Lease obligation interest expense | 3,473 | |
Stock-based compensation expense | $ 1,086,430 | $ 1,040,585 |
Loss on disposal of fixed assets | 79,628 | |
Amortization of debt issuance cost | 139,406 | $ 3,958 |
Amortization of debt discount | 932,219 | |
Change in fair value of derivative liabilities | $ (1,640,000) | $ (117,125) |
Changes in operating assets and liabilities: | ||
Restricted cash | 490,315 | |
Credit card holdback receivable | $ 482,906 | (416,495) |
Accounts receivable | 14,581 | 164,242 |
Security deposits | (85,554) | (250,104) |
Prepaid expenses and other current assets | (16,120) | 22,113 |
Accounts payable, accrued expenses and other current liabilities | (703,802) | 567,579 |
Deferred rent | 88,718 | (38,644) |
Deferred subscription revenue | (446,213) | 125,304 |
Deferred advertising revenue | (13,427) | (286,573) |
Net cash used in operating activities | (1,211,919) | (167,574) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (77,283) | $ (3,731) |
Proceeds from sale of fixed assets | 6,000 | |
Security deposits for property and equipment | $ 56,248 | |
Purchase of non-marketable equity securities | $ (100,000) | |
Repayment (issuance) to employees of note receivable and accrued interest | $ (2,603) | 92,046 |
Net cash used in investing activities | (17,638) | (11,685) |
Cash flows from financing activities: | ||
Payments of capital lease obligations | (63,317) | $ (9,708) |
Repayment of promissory notes | (400,000) | |
Payment of financing costs | (314,249) | |
Proceeds from issuance of convertible promissory note | 3,000,000 | $ 400,000 |
Net cash provided by financing activities | 2,222,434 | 390,292 |
Net increase in cash and cash equivalents | 992,877 | 211,033 |
Balance of cash and cash equivalents at beginning of year | 1,138,385 | 927,352 |
Balance of cash and cash equivalents at end of year | 2,131,262 | $ 1,138,385 |
Supplemental disclosure of cash flow information: | ||
Cash paid in interest | $ 316,000 | |
Cash paid in taxes | ||
Non-cash investing and financing activities: | ||
Compound embedded derivative under the Note and Securities Purchase Agreement recorded as derivative liabilities (See Note 6) | $ 1,748,000 | |
Warrants issued under the Advisory Services Agreement as additional consideration for the Note and recorded as derivative liabilities (See Note 6) | 342,000 | |
Warrants issued for debt issuance costs | $ 4,750 | |
Common stock issued under the Advisory Services Agreement as additional consideration for the Note | $ 30,000 | |
Equipment acquired under capital lease obligations | $ 218,605 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
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 subsidiary, Snap Mobile Limited, the “Company”) was incorporated under the laws of the State of Delaware on July 19, 2005. Snap Mobile Limited is a United Kingdom corporation, and was incorporated on September 10, 2009. The Company operates a portfolio of two dating applications, FirstMet, available through desktop and mobile platforms, and The Grade, which is available through iOS and Android platforms. In March 2016, we completed a rebranding of our dating application “Are You Interested?” (“AYI”) under the name FirstMet. |
Going Concern and Management's
Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2015 | |
Going Concern and Management's Plans [Abstract] | |
Going Concern and Management's Plans | 2. Going Concern and Management’s Plans The Company reported a loss of $1.3 million for the year ended December 31, 2015. On December 31, 2015, the Company’s accumulated deficit amounted to $14.7 million. The Company’s convertible note payable with a principal amount outstanding of $3 million matures on February 13, 2017. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company needs to raise additional capital in order to sustain its operations while continuing the longer term efforts contemplated under its business plan. The Company cannot provide any assurance that it will raise additional capital. Management believes that the Company has access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company has not secured any commitment for new financing at this time nor can it provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the Company is unable to secure additional capital, it may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. The accompanying financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3 . Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, 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 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 subscription revenue refunds, estimates used to determine the fair value of our common stock, stock options, non-cash capital stock issuances, stock-based compensation, derivative instruments, debt discounts, conversion features 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. Convertible Instruments The Company evaluates and bifurcates conversion features from the instruments containing such features and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the underlying instrument, (b) the hybrid instrument that contains both the embedded derivative instrument and the underlying instrument is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the underlying instrument is deemed to be conventional as that term is described under applicable GAAP. Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement in common stock or (ii) give the Company a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement). The Company classifies the following contracts as either an asset or a liability: contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement) or (iii) contain reset provisions. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, including the conversion feature embedded in the 12% Senior Secured Convertible Note (the “Note”) and warrants issued under the Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of February 13, 2015, by and between the Company and Sigma Opportunity Fund II, LLC (“Sigma II”), contained various price and interest rate reset provisions and have been classified as derivative liabilities as more fully described in Note 5. Revenue Recognition The Company recognizes revenue on arrangements in accordance with Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. 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 2014 and 2015, 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. 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’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 receivables and totaled $165,853 and $648,759 on December 31, 2015 and December 31, 2014, respectively. We generate advertising revenue from advertising agreements with third parties. We recognize advertising revenue from these agreements ratably over the term of the agreement. Cost of revenue Cost of revenue consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent and bandwidth costs. Sales and marketing Sales and marketing expense consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in sales, and sales support functions. Sales and marketing spend includes online marketing, including fees paid to search engines, and offline marketing, which is primarily partner-related payments to those who direct traffic to our brands. Total advertising expense for the year ended December 31, 2015 was $5,049,494, as compared to $5,158,003 for the year ended December 31, 2014. For the year ended December 31, 2015, advertising expense for FirstMet and The Grade was $4,866,392 and $183,102, respectively. For the year ended December 31, 2014, advertising expense for FirstMet and The Grade was $5,143,795 and $14,208, respectively. Product development Product development expense consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology. The Company has adopted the provisions of ASC No. 350, Intangibles – Goodwill & Other General and administrative General and administrative expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in exec Business Segments The Company operates in one reportable segment, and management assesses the Company’s financial performance and makes operating decisions based on a single operating unit. Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by ASC No. 740, Income Taxes 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, the Company has no uncertain tax positions. The Company includes interest and penalties as a component of income tax on the consolidated statements of operations and had no interest or penalties for 2015 or 2014. Stock-Based Compensation In accordance with ASC No. 718, Compensation – Stock Compensation 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 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 13 for further details). Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company's common stock price, (ii) 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. Net Loss Per Share Basic net loss per common share is determined using the two-class method and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share Diluted net 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 and money market funds. The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. Investments The Company follows 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. Reclassification Certain prior period amounts have been reclassified for comparative purposes to conform to the fiscal 2015 presentation. These reclassifications have no impact on the previously reported net loss. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, 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 On December 31, 2015, the Company had accounts receivable from payment processors in the amount of $262,015, as compared to $263,661 on December 31, 2014. 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. The Company has an additional reserve for potential credit card chargebacks based on historical experience and knowledge of the industry. The Company reserved $55,468 and $42,533 for potential future credit card chargebacks as of December 31, 2015 and 2014, 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: 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. 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: Software and website costs 3 years AYI.com domain name 15 years FirstMet.com 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. Recently Adopted Accounting Pronouncement In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-03 (“ASU 2015-03”), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern, which is included in Accounting Standards Codification 205, Presentation of Financial Statements. This update provides an explicit requirement for management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has not yet determined the effect of the adoption of this standard and it is expected to have a material impact on the Company’s financial position and results of operations. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable, Net and Notes Receivable [Abstract] | |
Accounts Receivable, Net | 4. Accounts Receivable, Net Accounts receivable, net consisted of the following as of December 31, 2015 and December 31, 2014: December 31, December 31, 2015 2014 Accounts receivable $ 262,015 $ 263,661 Less: reserve for future chargebacks (55,468 ) (42,533 ) Total accounts receivable, net $ 206,547 $ 221,128 Credit card payments for subscriptions and micro-transactions typically settle several days after the date of purchase. The amount of unsettled transactions due from credit card payment processors as reported under accounts receivable on the Company’s Consolidated Balance Sheet was $147,582 as of December 31, 2015, as compared to $135,535 as of December 31, 2014. The amount of accounts receivable due from Apple Inc. was $76,074, or 36.8% of the Company’s accounts receivable, as of December 31, 2015, compared to $116,427, or 52.6% of the Company’s accounts receivable, as of December 31, 2014. |
Security Deposits
Security Deposits | 12 Months Ended |
Dec. 31, 2015 | |
Security Deposits [Abstract] | |
Security Deposits | 5 . Security Deposits In October 2014, the Company issued a $135,000 security deposit which replaced the previous letter of credit as part of the new capital lease obligations for equipment with Hewlett Packard Financial Services Company (“HP”). In November 2015, HP returned $60,000 of the security deposit. The Company recorded $75,000 and $135,000 under long-term security deposits on its Consolidated Balance Sheet as of December 31, 2015 and December 31, 2014, respectively. In February 2015, the Company issued $200,659 as a security deposit as part of a new office rent lease (see Note 14). The Company recorded the $200,659 under long-term security deposits on its Consolidated Balance Sheet as of December 31, 2015. In November 2015, the Company issued $3,751 as a security deposit as part of the Company’s new data center. The Company recorded the $3,751 under long-term security deposits on its Consolidated Balance Sheet as of December 31, 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements 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, would generally 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 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. The following table summarizes the liabilities measured at fair value on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total LIABILITIES: Warrant liabilities $ - $ - $ 273,425 $ 273,425 Compound embedded derivative - - 200,000 200,000 Total derivative liabilities $ - $ - $ 473,425 $ 473,425 The following table summarizes the liabilities measured at fair value on a recurring basis as of December 31, 2014: Level 1 Level 2 Level 3 Total LIABILITIES: Warrant liability $ - $ - $ 23,425 $ 23,425 Total derivative liability $ - $ - $ 23,425 $ 23,425 Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, who report to the Chief Financial Officer, determine its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. Level 3 Valuation Techniques: Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company deems financial instruments which do not have fixed settlement provisions to be derivative instruments. The common stock purchase warrants and the conversion feature embedded in the Note do not have fixed settlement provisions because their exercise prices may be lowered if the Company issues securities at a lower price in the future. In addition, the Company issued warrants to purchase common stock in January 2011 in conjunction with an equity financing. In accordance with ASC Topic 480, Distinguishing Liabilities from Equity The Company’s derivative liabilities are carried at fair value and were 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 derivative liabilities at each measurement date using a Monte-Carlo style simulation, as the value of certain features of the warrant derivative liabilities would not be captured by the standard Black-Scholes model. A significant increase in the volatility and/or stock price of the Company would, in isolation, result in significantly higher fair value. The following table summarizes the values of certain assumptions used by the Company to estimate the fair value of the warrant liabilities as of December 31, 2015 and December 31, 2014: December 31, December 31, 2015 2014 Stock price $ 0.08 $ 0.20 Weighted average strike price $ 0.64 $ 2.50 Remaining contractual term (years) 4.12 1.1 Volatility 95.0 % 125.7 % Risk-free rate 1.54 % 0.3 % Dividend yield 0.0 % 0.0 % The following table summarizes the values of certain assumptions used by the Company to estimate the fair value of the compound embedded derivative as of December 31, 2015: December 31, 2015 Stock price $ 0.08 Strike price $ 0.20 Remaining contractual term (years) 1.12 Volatility 95.0 % Risk-free rate 0.7 % Dividend yield 0.0 % The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis: Years Ended December 31, 2015 2014 Beginning balance $ 23,425 $ 140,550 Fair value of derivatives issued 2,090,000 - Change in fair value of derivative liabilities (1,640,000 ) (117,125 ) Ending balance $ 473,425 $ 23,425 |
Cost-Method Investment
Cost-Method Investment | 12 Months Ended |
Dec. 31, 2015 | |
Investments, All Other Investments [Abstract] | |
Cost-Method Investment | 7. 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 has made multiple investments in DCL by purchasing (i) 50,000 shares of DCL’s common stock for an aggregate purchase price of $50,000 in April 2013, (ii) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in July 2013, (iii) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in October 2013, (iv) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in January 2014, (v) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in April 2014, (vi) 25,000 shares of DCL’s common stock for an aggregate price of $25,000 in July 2014 and (vii) 25,000 shares of DCL’s common stock for an aggregate price of $25,000 in September 2014. These nonmarketable securities have been recorded in “Investments” on the Company’s Consolidated Balance Sheet measured on a cost basis. As of December 31, 2015, the aggregate carrying amount of the Company’s cost-method investment in DCL, which was a non-controlled related party entity, was $200,000. The Company assesses all cost-method investments for impairment quarterly. No impairment loss was recorded during the year ended December 31, 2015. 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 Ass
Fixed Assets and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
Fixed Assets and Intangible Assets, Net [Abstract] | |
Fixed Assets and Intangible Assets, Net | 8 . Fixed Assets and Intangible Assets, Net Fixed assets and intangible assets, net consisted of the following on December 31, 2015 and December 31, 2014: December 31, December 31, 2015 2014 Computer equipment $ 260,355 $ 256,610 Furniture and fixtures 98,160 142,856 Leasehold improvements 21,026 382,376 Software 10,968 10,968 Website domain name 139,025 124,938 Website costs 40,500 40,500 Equipment under capital leases 218,605 218,605 Total fixed assets and intangible assets 788,639 1,176,853 Less: Accumulated depreciation and amortization (401,022 ) (613,730 ) Total fixed assets and intangible assets, net $ 387,617 $ 563,123 Depreciation and amortization expense for the year ended December 31, 2015 was $167,161, as compared to $181,675 for the year ended December 31, 2014. The Company only holds fixed assets in the United States. As of December 31, 2015 and 2014, the Company held equipment under capital leases in the gross amount of $218,605 net of accumulated amortization of $80,647 and $7,779, respectively. Amortization expense for the capital leases for the year ended December 31, 2015 was $72,868, as compared to $7,779 for the year ended December 31, 2014. During March 2015, the Company disposed of fixed assets, primarily consisting of leasehold improvements and furniture and fixtures, in connection with the relocation of the Company’s corporate headquarters. The net loss on the disposal of the fixed assets for the year ended December 31, 2015 was $79,628. Amortization expense to be recorded as it relates solely to the Company’s intangible assets as of December 31, 2015 is approximately $8,390 per year through 2024. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable, Net and Notes Receivable [Abstract] | |
Notes Receivable | 9 . Notes Receivable As of December 31, 2015, the Company had notes receivable due in the aggregate amount of $81,123 from two former employees. The employees issued the notes to the Company since the Company paid taxes for stock-based compensation on these employees’ behalf in 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 ranging from 2.80% to 3.57% per annum. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 10 . Income Taxes The income tax provision (benefit) consists of the following: For The Years Ended December 31, 2015 2014 Federal: Current $ - $ - Deferred (434,364 ) (588,940 ) State and local: Current - - Deferred (22,664 ) (5,949 ) (457,028 ) (594,889 ) Change in valuation allowance 457,028 594,889 Income tax provision (benefit) $ - $ - Significant components of the Company's deferred tax assets and liabilities are as follows: Years Ended December 31, 2015 2014 Deferred Tax Liability: Furniture, fixtures, equipment and intangibles $ (18,784 ) $ (32,089 ) Other - (27,258 ) Warrants (1,055,849 ) (1,039,489 ) Debt discount (424,920 ) - Deferred Tax Assets: Stock options for services 1,684,668 1,275,925 Net operating loss carry-forward 4,765,793 4,510,554 Derivative liabilities 171,716 - Reserve for future charge backs and other 50,356 28,309 Valuation allowance (5,172,980 ) (4,715,952 ) Net deferred tax assets (liabilities) $ - $ - Due to uncertainties regarding benefits and utilization of the total deferred tax assets, a valuation allowance of $5,172,980 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 $457,028 from 2014 to 2015. On December 31, 2015, the Company had U.S. federal tax net operating loss (“NOL”) carry-forwards of $13,322,521, which will expire between 2030 and 2035. 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 is as follows: Years Ended 2015 2014 Federal income tax benefit at statutory rate $ (441,270 ) $ (580,257 ) Increase (decrease) in income taxes resulting from: State and local income taxes (22,667 ) 204,366 Change in deferred tax asset valuation allowance 457,028 367,359 Non-deductible expenses and other 6,909 8,532 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: 2009 through 2014. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | 11 . Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following on December 31, 2015 and December 31, 2014: December 31, December 31, 2015 2014 Compensation and benefits $ 176,410 $ 360,515 Deferred rent - 10,877 Professional fees 102,200 254,807 Repayment of advertising agreement advance - 329,165 Other accrued expenses 88,408 107,472 Total accrued expenses and other current liabilities $ 367,018 $ 1,062,836 |
Notes and Convertible Note Paya
Notes and Convertible Note Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes and Convertible Note Payable [Abstract] | |
Notes and Convertible Note Payable | 12. Notes and Convertible Note Payable Notes Payable On April 24, 2014, the Company issued a promissory note in the amount of $300,000 to a related party, Clifford Lerner, President of The Grade and the Chairman of the Company’s Board of Directors. The promissory note was originally due and payable on January 24, 2015, but was subsequently amended to extend its maturity for an additional nine months and was due and payable on October 24, 2015 and bore interest at the rate of nine percent (9%) per annum. On March 25, 2015, the promissory note was repaid in full. Interest expense for the year ended December 31, 2015 was $1,844, as compared to $18,516 for the year ended December 31, 2014. On May 20, 2014, the Company issued a promissory note in the amount of $100,000 and a warrant to purchase 25,000 shares of its common stock to Thomas Carrella. The promissory note was due and payable on February 20, 2015 and bore interest at the rate of fifteen percent (15%) per annum. The Company calculated the fair value of the warrant using Black-Scholes option pricing model and recorded $4,750 of deferred financing costs related to the issuance of the warrant that were amortized over the term of the promissory note. On February 20, 2015, the promissory note was repaid in full. Interest expense for the year ended December 31, 2015 was $2,029, as compared to $9,221 for the year ended December 31, 2014. Securities Purchase Agreement On February 13, 2015, pursuant to the Securities Purchase Agreement, the Company closed a private placement of debt and equity securities for aggregate gross proceeds of $3,000,000. In connection with the Securities Purchase Agreement, the Company issued Sigma II (i) 350,000 shares of the Company’s common stock, (ii) the Note in the aggregate principal amount of $3,000,000 and (iii) a warrant to purchase up to 10,500,000 shares of the Company’s common stock. The Company incurred financing costs of $314,249 in connection with the Securities Purchase Agreement that will be amortized over the term of the Note. Amortization for the deferred financing cost was $138,614 for the year ended December 31, 2015. The Note bears interest at a rate of 12% per annum and matures on the earlier of February 13, 2017 or a change in control. During any time while the Note is outstanding, the outstanding principal balance of the Note, together with all accrued and unpaid interest, is convertible into shares of the Company’s common stock at the option of Sigma II at a conversion price of $0.20 per share, subject to certain adjustments, including reset adjustments to the conversion price if the Company issues securities at lower prices in the future, as disclosed in Note 5. The Company’s obligations under the Note are secured by a first priority lien on all of its assets and property. The Note is also secured by up to 65% of the outstanding capital stock and other equity interests of Snap Mobile Limited, the Company’s wholly owned subsidiary. Snap Mobile Limited is also a guarantor of the Note. An event of default under the Note includes, among other things, (i) the Company’s failure to pay any amounts due and payable when and as required, (ii) failure of a representation or warranty made by the Company to be correct and accurate when made, (iii) the institution of bankruptcy or similar proceedings against the Company and (iv) the Company’s inability to pay debts as they become due. The Note also requires the Company to maintain an aggregate cash balance of $1,350,000 in its bank accounts or it will be required to make partial prepayments on the Note. If the Company fails to maintain this aggregate cash balance in its bank accounts for a thirty day period, it is required to make a $125,000 prepayment on the Note. For each subsequent calendar month that the aggregate cash balance in the Company’s bank accounts does not equal or exceed $1,500,000, the Company must make an additional $125,000 prepayment on the Note. The Note contains a compound embedded derivative consisting of an embedded conversion feature and interest make-whole provisions and was accounted for as a derivative liability with an aggregate fair value of $950,000. In addition, the fair value of the warrants was $798,000 and was also required to be accounted for as a derivative liability. Both instruments were also recorded as debt discounts on the date the Note was issued. The Company is amortizing the debt discount using the effective interest method over the life of the Note, which is two years. Contractual interest expense under the Note incurred for year ended December 31, 2015 was $316,000, respectively. Simultaneously with the closing of the private placement, the Company entered into the Advisory Agreement with Sigma pursuant to which Sigma agreed to provide the Company with certain advisory and consulting services. In connection with the Advisory Agreement, the Company issued Sigma 150,000 shares of the Company’s common stock and a warrant to purchase up to 4,500,000 shares of the Company’s common stock. Both the shares of common stock and the warrant issued were fully vested and non-forfeitable on the date that the Advisory Agreement was entered into. Based on the terms of the Advisory Agreement and the criteria outlined in ASC 505-50, Equity-Based Payments to Non-Employees In addition to the issuance of common stock and warrants under the Advisory Agreement, the Company also agreed to pay Sigma a monthly advisory fee of $10,000, up to an aggregate limit of $240,000, subject to certain exceptions, over the life of the Note (the “Cash Payment”). If the Company were to prepay the Note or the repayment of the Note was accelerated for certain reasons, the Company would still be required to remit either a portion or the full amount of the Cash Payment. The Company also agreed to pay Sigma a cash payment of $150,000 if the Company effectuates a dilutive issuance (as defined) while the Note is outstanding (the “Dilutive Cash Payment”). The Company determined that, based on the make-whole features associated with the Cash Payment and the contingent make-whole features associated with the Dilutive Cash Payment, that these payments are required to be treated as derivative instruments in accordance with ASC 815. The fair value of these instruments was included in the value of the compound embedded derivative discussed above. Amortization expense relating to the aggregate debt discounts for the year ended December 31, 2015 was $932,219, which is included as interest expense on the accompanying Consolidated Statements of Operations. The effective interest rate under the Note for the year ended December 31, 2015 was 52%. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation and Common Stock Warrants [Abstract] | |
Stock-Based Compensation | 13. 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 stock, restricted stock units, shares of 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 issued pursuant to awards under the Plan is 7,500,000 shares, 100% of which may be issued pursuant to incentive stock options. As of December 31, 2015, there were 1,347,797 shares available for future issuance under the Plan. 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 year ended December 31, 2015: Years Ended December 31, December 31, 2014 Expected volatility 176.5 % 199.8 % Expected life of option 5.80 6.23 Risk free interest rate 1.6 % 1.9 % Expected dividend yield 0.0 % 0.0 % The following table summarizes stock option activity for the year ended December 31, 2015: Number of Options Weighted Average Exercise Price Stock Options: Outstanding on January 1, 2015 3,808,253 $ 0.55 Granted 3,993,300 0.10 Expired or canceled (1,080,000 ) 0.29 Forfeited (544,350 ) 0.30 Outstanding on December 31, 2015 6,177,203 0.33 Exercisable on December 31, 2015 2,466,423 0.66 On October 13, 2015, the Company entered into an option cancellation and release agreement with three employees, pursuant to which each of the parties agreed to cancel outstanding options to purchase an aggregate of 1,040,000 shares of common stock of the Company at exercise prices ranging from $0.27 per share to $0.40 per share. In exchange for the cancellation of the options, the Company granted the employees replacement options to purchase an aggregate of 1,040,000 shares of common stock of the Company at an exercise price of $0.08 per share. The incremental expense for the exchange was $15,175, of which $5,038 is included in stock-based compensation for the year ended December 31, 2015. On December 31, 2015, the aggregate intrinsic value of stock options that were outstanding and exercisable was $200 and $0, respectively. On December 31, 2014, the aggregate intrinsic value of stock options that were outstanding and exercisable was $0, 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. The aggregate fair value for the options granted during the year ended December 31, 2015 was $322,639, as compared to $812,169 during the year ended December 31, 2014. Stock-based compensation expense relating to stock options for year ended December 31, 2015 was $205,601, as compared to $140,728 for the year ended December 31, 2014. The Company estimates potential forfeitures of stock awards and adjusts 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. The disclosure forfeiture rate for the year ended December 31, 2015 was 37.0%. On December 31, 2015, there was $423,160 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 6.08 years. Restricted Stock Awards The following table summarizes restricted stock award activity for the year ended December 31, 2015: Number of RSAs Weighted Average Grant Date Fair Value Restricted Stock Awards: Outstanding on January 1, 2015 10,325,000 $ 0.56 Vested - - Forfeited, during the period - - Outstanding on December 31, 2015 10,325,000 $ 0.56 On December 31, 2015, there was $2,550,209 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 3.49 years. Stock-based compensation expense relating to restricted stock awards for the year ended December 31, 2015 was $880,829, as compared to $899,856 for the year ended December 31, 2014. Non-employee restricted stock award activity described below is also included in total restricted stock award activity summarized on the previous table. The following table summarizes non-employee restricted stock award activity for the year ended December 31, 2015: Number of RSAs Weighted Average Grant Date Fair Value Non-Employee Restricted Stock Awards: Outstanding on January 1, 2015 1,075,000 $ 0.42 Vested - - Outstanding on December 31, 2015 1,075,000 $ 0.42 On December 31, 2015, there was $77,136 of total unrecognized stock-based compensation expense related to non-employee unvested restricted stock awards, which is expected to be recognized over a weighted average period of 6.36 years. Stock-based compensation expense relating to non-employee restricted stock awards for the year ended December 31, 2015 was ($44,229), as compared to $20,211 for the year ended December 31, 2014. |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation and Common Stock Warrants [Abstract] | |
Common Stock Warrants | 14. Common Stock Warrants The following table summarizes warrant activity for the year ended December 31, 2015: Number of Warrants Weighted Average Exercise Price Stock Warrants: Outstanding on January 1, 2015 2,367,500 $ 2.48 Granted 15,000,000 0.35 Exercised - - Forfeited - - Outstanding on December 31, 2015 17,367,500 0.64 Warrants exercisable on December 31, 2015 17,367,500 $ 0.64 |
Loss Per Share of Common Stock
Loss Per Share of Common Stock | 12 Months Ended |
Dec. 31, 2015 | |
Loss Per Share of Common Stock [Abstract] | |
Loss Per Share of Common Stock | 15. Loss Per Share of Common Stock Basic loss per share of common stock is computed based upon the number of weighted average shares of common stock outstanding as defined by ASC Topic 260, Earnings Per Share. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating Lease Agreements During 2013, the Company entered into a two-year service agreement with Equinix Operating Co., Inc. (“Equinix”) whereby Equinix agreed to 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 year ended December 31, 2015 was $179,700, as compared to $177,110 for the year ended December 31, 2014. On November 2, 2015, the Company gave 90-days’ notice to Equinix to terminate the operating lease agreement. The lease subsequently ended on January 31, 2016. On February 4, 2015, the Company entered into a lease for office space located at 320 W 37th Street, 13th Floor, New York, NY 10018 and paid a security deposit in the amount of $200,659. The term of the lease runs until March 4, 2022. The Company’s monthly office rent payments under the lease are currently approximately $26,000 per month and escalate on an annual basis for each year of the term of the lease thereafter. The Company accounts for rent expense using the straight line method of accounting, deferring the difference between actual rent due and the straight line amount. Rent expense under this lease for the year ended December 31, 2015 was $275,171. On December 31, 2015, future minimum payments under non-cancelable operating leases were as follows: Year Amount 2016 308,513 2017 317,768 2018 343,311 2019 356,813 2020 367,517 Thereafter 441,941 Total $ 2,135,863 Capital Lease Agreements In October 2014, two HP lease agreements were canceled due to price negotiations and we entered into two new three-year lease agreements with HP for equipment and certain financed items. In December 2014, we cancelled our remaining operating lease agreements and entered into two additional three-year capital lease agreements with notes. The Company recognized these leases on its Consolidated Balance Sheets under capitalized lease obligations. Amortization for equipment under capital leases was $72,868 for the year ended December 31, 2015, as compared to $7,779 for the year ended December 31, 2014. Rent payments for equipment under capital leases were $90,936 for the year ended December 31, 2015, as compared to $7,578 for the year ended December 31, 2014. On December 31, 2015, future minimum payments under non-cancelable capital leases were as follows: Year Amount 2016 90,936 2017 81,228 Total $ 172,164 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related Party Transactions On January 31, 2013, the Company entered into a subscription agreement with Darrell Lerner and DCL in connection with his separation from the Company. Pursuant to this agreement, the Company purchased (i) 50,000 shares of DCL’s common stock for an aggregate purchase price of $50,000 in April 2013, (ii) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in July 2013, (iii) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in October 2013, (iv) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in January 2014, (v) 25,000 shares of DCL’s common stock for an aggregate purchase price of $25,000 in April 2014, (vi) 25,000 shares of DCL’s common stock for an aggregate price of $25,000 in July 2014 and (vii) 25,000 shares of DCL’s common stock for an aggregate price of $25,000 in September 2014. These nonmarketable securities have been recorded in “Investments” on the Company’s Consolidated Balance Sheet measured on a cost basis. On January 31, 2013, the Company entered into a consulting agreement with Darrell Lerner, pursuant to which Mr. Lerner agreed to serve as a consultant to the Company for an initial term of three years, beginning on February 1, 2013 (the “Effective Date”). The agreement was subsequently amended to provide for automatically renewing one-year terms unless either party provides written notice of non-renewal. Pursuant to the agreement, Mr. Lerner agreed to assist and advise the Company on legal, financial and other matters for which he has knowledge that pertains to the Company, as the Company reasonably requests. As compensation for his services, the Company agreed to pay Mr. Lerner a monthly fee of $25,000 for the initial two year period of the agreement and a monthly fee of $5,000 for every month thereafter. The monthly payments under the agreement are conditioned upon Mr. Lerner’s compliance with a customary confidentiality covenant covering certain information concerning the Company, a covenant not to compete during the term of the agreement and for a period of one year following the termination of the agreement, a non-disparagement covenant regarding the Company and a non-solicitation covenant for a period of six months immediately following the later of the termination of the agreement or the end of the term of the agreement. Consulting expense under this agreement for the year ended December 31, 2015 was $80,034, as compared to $305,600 for the year ended December 31, 2014. The Company or Mr. Lerner may terminate the agreement at any time without notice prior to or at the expiration of the term. If the Company terminates the agreement without “cause” (as defined in the agreement), the Company has agreed to (i) pay Mr. Lerner the amount of the unpaid monthly fees owed to Mr. Lerner for the period from the Effective Date to the two year anniversary of the Effective Date and (ii) take all commercially reasonably actions to cause (A) 325,000 shares of restricted common stock of the Company previously granted to Mr. Lerner, (B) 600,000 shares of restricted common stock of the Company previously granted to Mr. Lerner and (iii) 150,000 shares of restricted common stock of the Company granted to Mr. Lerner pursuant to the agreement, to be vested as of the date of such termination. Stock-based compensation expense relating to non-employee restricted stock awards for the year ended December 31, 2015 was ($44,229), as compared to $14,585 for the year ended December 31, 2014. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events On January 31, 2016, the Company amended the consulting agreement with Darrell Lerner, pursuant to which the monthly fee owed to Mr. Lerner was reduced to $3,000 and the term of the agreement was set to automatically renew for successive one-year periods beginning on February 1, 2016 unless either party provides written notice of non-renewal. On March 3, 2016, the Company amended its employment agreement with Alexander Harrington, dated as of February 28, 2014, as amended, to provide that Mr. Harrington’s annual incentive bonus for the year ended December 31, 2015 would be replaced with (i) a cash payment of $25,000 and (ii) the right to receive a stock option representing the right to purchase 50,000 shares of Snap’s common stock at an exercise price of $0.20 per share. On March 3, 2016, the Company entered into a restricted stock cancellation and release agreement with Clifford Lerner, the Company’s President of the Grade, pursuant to which the Company cancelled a grant of 5,000,000 restricted shares of common stock awarded to Mr. Lerner on April 10, 2013 that would have vested 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. Subsequently, on March 3, 2016, the Board of Directors awarded Mr. Lerner a replacement award of 5,000,000 restricted shares that vest 100% on the (10th) tenth anniversary of the date of grant, provided Mr. Lerner is providing services to the Company on such date. In addition, on March 3, 2016, the Board of Directors awarded Mr. Lerner a stock option representing the right to purchase 50,000 shares of common stock at an exercise price of $0.20 per share, with the shares underlying such option vesting in four (4) equal annual installments on the first, second, third and fourth anniversary of the date of grant, provided that Mr. Lerner is providing services to the Company on such dates. On March 3, 2016, the Board of Directors of the Company increased the size of the Board of Directors from four (4) members to five (5) members and appointed Judy Krandel to the Board of Directors, effective March 3, 2016. Ms. Krandel will serve as a director until the Company’s 2016 annual meeting of stockholders. Ms. Krandel has not been appointed to any committees of the Board of Directors at this time. Ms. Krandel is entitled to receive a cash fee for her service as a non-employee member of the Board of Directors and for her service on any committee of the Board of Directors of $15,000 and $2,500 per year, respectively. As additional consideration for her service, the Board of Directors awarded Ms. Krandel a stock option representing the right to purchase 100,000 shares of the Company’s common stock at an exercise price equal to $0.11 per share which was the fair market value of a share of common stock as of the close of market on March 3, 2016. The shares underlying the stock option will vest in three (3) equal annual installments on the first, second and third anniversaries of the date of grant, provided that Ms. Krandel is providing services to the Company on such dates. Management has evaluated subsequent events or transactions occurring through the date the consolidated financial statements were issued and determined that no additional events or transactions are required to be disclosed herein. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 subsidiary, 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 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 subscription revenue refunds, estimates used to determine the fair value of our common stock, stock options, non-cash capital stock issuances, stock-based compensation, derivative instruments, debt discounts, conversion features 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. |
Convertible Instruments | Convertible Instruments The Company evaluates and bifurcates conversion features from the instruments containing such features and accounts for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the underlying instrument, (b) the hybrid instrument that contains both the embedded derivative instrument and the underlying instrument is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the underlying instrument is deemed to be conventional as that term is described under applicable GAAP. |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement in common stock or (ii) give the Company a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement). The Company classifies the following contracts as either an asset or a liability: contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in common stock (physical settlement or net-share settlement) or (iii) contain reset provisions. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, including the conversion feature embedded in the 12% Senior Secured Convertible Note (the “Note”) and warrants issued under the Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of February 13, 2015, by and between the Company and Sigma Opportunity Fund II, LLC (“Sigma II”), contained various price and interest rate reset provisions and have been classified as derivative liabilities as more fully described in Note 5. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue on arrangements in accordance with Accounting Standards Codification (“ASC”) No. 605, Revenue Recognition. 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 2014 and 2015, 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. 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’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 receivables and totaled $165,853 and $648,759 on December 31, 2015 and December 31, 2014, respectively. We generate advertising revenue from advertising agreements with third parties. We recognize advertising revenue from these agreements ratably over the term of the agreement. |
Cost of revenue | Cost of revenue Cost of revenue consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent and bandwidth costs. |
Sales and marketing | Sales and marketing Sales and marketing expense consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in sales, and sales support functions. Sales and marketing spend includes online marketing, including fees paid to search engines, and offline marketing, which is primarily partner-related payments to those who direct traffic to our brands. Total advertising expense for the year ended December 31, 2015 was $5,049,494, as compared to $5,158,003 for the year ended December 31, 2014. For the year ended December 31, 2015, advertising expense for FirstMet and The Grade was $4,866,392 and $183,102, respectively. For the year ended December 31, 2014, advertising expense for FirstMet and The Grade was $5,143,795 and $14,208, respectively. |
Product development | Product development Product development expense consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology. The Company has adopted the provisions of ASC No. 350, Intangibles – Goodwill & Other |
General and administrative | General and administrative General and administrative expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources, and facilities costs and fees for professional services. General and administrative also includes depreciation of fixed assets such as computers, and furniture and fixtures. |
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 a single operating unit. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by ASC No. 740, Income Taxes 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, the Company has no uncertain tax positions. The Company includes interest and penalties as a component of income tax on the consolidated statements of operations and had no interest or penalties for 2015 or 2014. |
Stock-Based Compensation | Stock-Based Compensation In accordance with ASC No. 718, Compensation – Stock Compensation 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 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 13 for further details). Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company's common stock price, (ii) 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. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is determined using the two-class method and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share Diluted net 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 and money market funds. The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. |
Investments | Investments The Company follows 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. |
Reclassification | Reclassification Certain prior period amounts have been reclassified for comparative purposes to conform to the fiscal 2015 presentation. These reclassifications have no impact on the previously reported net loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, 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 On December 31, 2015, the Company had accounts receivable from payment processors in the amount of $262,015, as compared to $263,661 on December 31, 2014. 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. The Company has an additional reserve for potential credit card chargebacks based on historical experience and knowledge of the industry. The Company reserved $55,468 and $42,533 for potential future credit card chargebacks as of December 31, 2015 and 2014, 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: 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. 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: Software and website costs 3 years AYI.com domain name 15 years FirstMet.com 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. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncement In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-03 (“ASU 2015-03”), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern, which is included in Accounting Standards Codification 205, Presentation of Financial Statements. This update provides an explicit requirement for management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company has not yet determined the effect of the adoption of this standard and it is expected to have a material impact on the Company’s financial position and results of operations. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property plant and equipment useful life | 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 | Software and website costs 3 years AYI.com domain name 15 years FirstMet.com domain name 15 years |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable, Net and Notes Receivable [Abstract] | |
Schedule of accounts receivable, net | December 31, December 31, 2015 2014 Accounts receivable $ 262,015 $ 263,661 Less: reserve for future chargebacks (55,468 ) (42,533 ) Total accounts receivable, net $ 206,547 $ 221,128 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
Schedule of liabilities measured at fair value | Level 1 Level 2 Level 3 Total LIABILITIES: Warrant liabilities $ - $ - $ 273,425 $ 273,425 Compound embedded derivative - - 200,000 200,000 Total derivative liabilities $ - $ - $ 473,425 $ 473,425 Level 1 Level 2 Level 3 Total LIABILITIES: Warrant liability $ - $ - $ 23,425 $ 23,425 Total derivative liability $ - $ - $ 23,425 $ 23,425 |
Schedule of estimated fair value of the warrant liability | December 31, December 31, 2015 2014 Stock price $ 0.08 $ 0.20 Weighted average strike price $ 0.64 $ 2.50 Remaining contractual term (years) 4.12 1.1 Volatility 95.0 % 125.7 % Risk-free rate 1.54 % 0.3 % Dividend yield 0.0 % 0.0 % December 31, 2015 Stock price $ 0.08 Strike price $ 0.20 Remaining contractual term (years) 1.12 Volatility 95.0 % Risk-free rate 0.7 % Dividend yield 0.0 % |
Schedule of financial liabilities that are measured at fair value on a recurring basis | Years Ended December 31, 2015 2014 Beginning balance $ 23,425 $ 140,550 Fair value of derivatives issued 2,090,000 - Change in fair value of derivative liabilities (1,640,000 ) (117,125 ) Ending balance $ 473,425 $ 23,425 |
Fixed Assets and Intangible A29
Fixed Assets and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fixed Assets and Intangible Assets, Net [Abstract] | |
Schedule of fixed assets and intangible assets, net | December 31, December 31, 2015 2014 Computer equipment $ 260,355 $ 256,610 Furniture and fixtures 98,160 142,856 Leasehold improvements 21,026 382,376 Software 10,968 10,968 Website domain name 139,025 124,938 Website costs 40,500 40,500 Equipment under capital leases 218,605 218,605 Total fixed assets and intangible assets 788,639 1,176,853 Less: Accumulated depreciation and amortization (401,022 ) (613,730 ) Total fixed assets and intangible assets, net $ 387,617 $ 563,123 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Summary of income tax provision (benefit) | For The Years Ended December 31, 2015 2014 Federal: Current $ - $ - Deferred (434,364 ) (588,940 ) State and local: Current - - Deferred (22,664 ) (5,949 ) (457,028 ) (594,889 ) Change in valuation allowance 457,028 594,889 Income tax provision (benefit) $ - $ - |
Schedule of components of deferred tax assets and liabilities | Years Ended December 31, 2015 2014 Deferred Tax Liability: Furniture, fixtures, equipment and intangibles $ (18,784 ) $ (32,089 ) Other - (27,258 ) Warrants (1,055,849 ) (1,039,489 ) Debt discount (424,920 ) - Deferred Tax Assets: Stock options for services 1,684,668 1,275,925 Net operating loss carry-forward 4,765,793 4,510,554 Derivative liabilities 171,716 - Reserve for future charge backs and other 50,356 28,309 Valuation allowance (5,172,980 ) (4,715,952 ) Net deferred tax assets (liabilities) $ - $ - |
Summary of reconciliation of federal income tax provision from continuing operations at statutory rate | Years Ended 2015 2014 Federal income tax benefit at statutory rate $ (441,270 ) $ (580,257 ) Increase (decrease) in income taxes resulting from: State and local income taxes (22,667 ) 204,366 Change in deferred tax asset valuation allowance 457,028 367,359 Non-deductible expenses and other 6,909 8,532 Income Tax Expense $ - $ - |
Accrued Expenses and Other Cu31
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | December 31, December 31, 2015 2014 Compensation and benefits $ 176,410 $ 360,515 Deferred rent - 10,877 Professional fees 102,200 254,807 Repayment of advertising agreement advance - 329,165 Other accrued expenses 88,408 107,472 Total accrued expenses and other current liabilities $ 367,018 $ 1,062,836 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of weighted average assumptions used to estimate fair value of options granted | Years Ended December 31, December 31, 2014 Expected volatility 176.5 % 199.8 % Expected life of option 5.80 6.23 Risk free interest rate 1.6 % 1.9 % Expected dividend yield 0.0 % 0.0 % |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | Number of Options Weighted Average Exercise Price Stock Options: Outstanding on January 1, 2015 3,808,253 $ 0.55 Granted 3,993,300 0.10 Expired or canceled (1,080,000 ) 0.29 Forfeited (544,350 ) 0.30 Outstanding on December 31, 2015 6,177,203 0.33 Exercisable on December 31, 2015 2,466,423 0.66 |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock award activity | Number of RSAs Weighted Average Grant Date Fair Value Restricted Stock Awards: Outstanding on January 1, 2015 10,325,000 $ 0.56 Vested - - Forfeited, during the period - - Outstanding on December 31, 2015 10,325,000 $ 0.56 |
Non-Employee Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock award activity | Number of RSAs Weighted Average Grant Date Fair Value Non-Employee Restricted Stock Awards: Outstanding on January 1, 2015 1,075,000 $ 0.42 Vested - - Outstanding on December 31, 2015 1,075,000 $ 0.42 |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation and Common Stock Warrants [Abstract] | |
Schedule of warrant activity | Number of Warrants Weighted Average Exercise Price Stock Warrants: Outstanding on January 1, 2015 2,367,500 $ 2.48 Granted 15,000,000 0.35 Exercised - - Forfeited - - Outstanding on December 31, 2015 17,367,500 0.64 Warrants exercisable on December 31, 2015 17,367,500 $ 0.64 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum payments under non-cancelable operating leases | Year Amount 2016 308,513 2017 317,768 2018 343,311 2019 356,813 2020 367,517 Thereafter 441,941 Total $ 2,135,863 |
Schedula of future minimum payments under non-cancelable capital leases | Year Amount 2016 90,936 2017 81,228 Total $ 172,164 |
Going Concern and Management'35
Going Concern and Management's Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Going Concern and Management's Plans (Textual) | ||
Net loss | $ (1,297,852) | $ (1,657,877) |
Accumulated deficit | (14,677,126) | $ (13,379,274) |
Convertible note payable | $ 3,000,000 | |
Maturity date | Feb. 13, 2017 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2015 | |
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 Accoun37
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
Software and website costs [Member] | |
Schedule of finite lived intangible assets useful life | |
Intangible assets estimated useful lives | 3 years |
AYI.com domain name [Member] | |
Schedule of finite lived intangible assets useful life | |
Intangible assets estimated useful lives | 15 years |
FirstMet.com domain name [Member] | |
Schedule of finite lived intangible assets useful life | |
Intangible assets estimated useful lives | 15 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies (Textual) | ||
Percentage of convertible note | 12.00% | |
Credit card holdback receivable | $ 165,853 | $ 648,759 |
Allowances and reserves on accounts receivables | 55,468 | 42,533 |
Advertising expense | 5,049,494 | 5,158,003 |
Accounts receivable | 262,015 | 263,661 |
Firstmet [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Advertising expense | 4,866,392 | 5,143,795 |
Grade [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Advertising expense | $ 183,102 | $ 14,208 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of accounts receivable, net | ||
Accounts receivable | $ 262,015 | $ 263,661 |
Less: reserve for future chargebacks | (55,468) | (42,533) |
Total accounts receivable, net | $ 206,547 | $ 221,128 |
Accounts Receivable, Net (Det40
Accounts Receivable, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts Receivable, Net (Textual) | ||
Unsettled transactions from credit card payment processors | $ 147,582 | $ 135,535 |
Accounts receivable due from Apple Inc. | $ 76,074 | $ 116,427 |
Percentage of accounts receivable | 36.80% | 52.60% |
Security Deposits (Details)
Security Deposits (Details) - USD ($) | 1 Months Ended | ||||
Nov. 30, 2015 | Dec. 31, 2015 | Feb. 28, 2015 | Dec. 31, 2014 | Oct. 31, 2014 | |
Security Deposits (Textual) | |||||
New capital lease obligations for equipment | $ 135,000 | ||||
Long term security deposits | $ 279,410 | $ 135,000 | |||
Security deposits | $ 3,751 | $ 200,659 | |||
Office [Member] | |||||
Security Deposits (Textual) | |||||
Long term security deposits | 200,659 | ||||
Data center [Member] | |||||
Security Deposits (Textual) | |||||
Long term security deposits | 3,751 | ||||
HP [Member] | |||||
Security Deposits (Textual) | |||||
Long term security deposits | $ 75,000 | $ 135,000 | |||
Refund of security deposit | $ 60,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring [Member] - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
LIABILITIES: | ||
Total derivative liabilities | $ 473,425 | $ 23,425 |
Warrant liabilities [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | 273,425 | $ 23,425 |
Compound embedded derivative [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | $ 200,000 | |
Level 1 [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 1 [Member] | Warrant liabilities [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 1 [Member] | Compound embedded derivative [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 2 [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 2 [Member] | Warrant liabilities [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 2 [Member] | Compound embedded derivative [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | ||
Level 3 [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | $ 473,425 | $ 23,425 |
Level 3 [Member] | Warrant liabilities [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | 273,425 | $ 23,425 |
Level 3 [Member] | Compound embedded derivative [Member] | ||
LIABILITIES: | ||
Total derivative liabilities | $ 200,000 |
Fair Value Measurements (Deta43
Fair Value Measurements (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of estimated fair value of the warrant liability | ||
Stock price | $ 0.08 | |
Weighted average strike price | $ 0.20 | |
Remaining contractual term (years) | 1 year 1 month 13 days | |
Volatility | 95.00% | |
Risk-free rate | 0.70% | |
Dividend yield | 0.00% | |
Warrant liabilities [Member] | ||
Schedule of estimated fair value of the warrant liability | ||
Stock price | $ 0.08 | $ 0.20 |
Weighted average strike price | $ 0.64 | $ 2.50 |
Remaining contractual term (years) | 4 years 1 month 13 days | 1 year 1 month 6 days |
Volatility | 95.00% | 125.70% |
Risk-free rate | 1.54% | 0.30% |
Dividend yield | 0.00% | 0.00% |
Fair Value Measurements (Deta44
Fair Value Measurements (Details 2) - Recurring [Member] - Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of financial liabilities that are measured at fair value on a recurring basis | ||
Beginning balance | $ 23,425 | $ 140,550 |
Fair value of derivatives issued | 2,090,000 | |
Change in fair value of derivative liabilities | (1,640,000) | $ (117,125) |
Ending balance | $ 473,425 | $ 23,425 |
Fair Value Measurements (Deta45
Fair Value Measurements (Details Textual) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements (Textual) | |
Incremental discount rate premium due to lack of marketability | 10.00% |
Cost-Method Investment (Details
Cost-Method Investment (Details) - USD ($) | 1 Months Ended | ||||||||
Sep. 30, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cost Method Investment Textual [Abstract] | |||||||||
Investments | $ 200,000 | $ 200,000 | |||||||
Dcl Ventures Inc [Member] | |||||||||
Cost Method Investment Textual [Abstract] | |||||||||
Share purchase under initial investment | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 50,000 | ||
Investment in DCL Ventures, Inc | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 50,000 |
Fixed Assets and Intangible A47
Fixed Assets and Intangible Assets, Net (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | $ 788,639 | $ 1,176,853 |
Less: Accumulated depreciation and amortization | (401,022) | (613,730) |
Total fixed assets and intangible assets, net | 387,617 | 563,123 |
Computer equipment [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 260,355 | 256,610 |
Furniture and fixtures [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 98,160 | 142,856 |
Leasehold improvements [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 21,026 | 382,376 |
Software [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 10,968 | 10,968 |
Website domain name [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 139,025 | 124,938 |
Website costs [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | 40,500 | 40,500 |
Equipment under capital leases [Member] | ||
Schedule of fixed assets and intangible assets [Abstract] | ||
Total fixed assets and intangible assets | $ 218,605 | $ 218,605 |
Fixed Assets and Intangible A48
Fixed Assets and Intangible Assets, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 167,161 | $ 181,675 |
Loss on disposal of fixed assets | 79,628 | |
Property, plant and equipment | 788,639 | $ 1,176,853 |
Amortization expense for capital leases | 72,868 | 7,779 |
Amortization expense for intangible assets | 8,390 | |
Equipment under capital leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 218,605 | 218,605 |
Accumulated amortization | $ 80,647 | $ 7,779 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Notes Receivable (Textual) | ||
Notes receivable | $ 81,123 | $ 78,520 |
Maturity period of due note | At various times during 2021-2023 | |
Notes receivable, interest rate, minimum | 2.80% | |
Notes receivable, interest rate, maximum | 3.57% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Federal: | ||
Current | ||
Deferred | $ (434,364) | $ (588,940) |
State and local: | ||
Current | ||
Deferred | $ (22,664) | $ (5,949) |
Total of federal and state and local | (457,028) | (594,889) |
Change in valuation allowance | $ 457,028 | $ 594,889 |
Income tax provision (benefit) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Liability: | ||
Furniture, fixtures, equipment and intangibles | $ (18,784) | $ (32,089) |
Other | (27,258) | |
Warrants | $ (1,055,849) | $ (1,039,489) |
Debt discount | (424,920) | |
Deferred Tax Assets: | ||
Stock options for services | 1,684,668 | $ 1,275,925 |
Net operating loss carry-forward | 4,765,793 | $ 4,510,554 |
Reserve for future charge backs and other | 171,716 | |
Derivative liabilities | 50,356 | $ 28,309 |
Valuation allowance | $ (5,172,980) | $ (4,715,952) |
Net deferred tax assets (liabilities) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Federal income tax benefit at statutory rate | $ (441,270) | $ (580,257) |
Increase (decrease) in income taxes resulting from: | ||
State and local income taxes | (22,667) | 204,366 |
Change in deferred tax asset valuation allowance | 457,028 | 367,359 |
Non-deductible expenses and other | $ 6,909 | $ 8,532 |
Income Tax Expense |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes (Textual) | ||
Provision for income taxes | ||
Valuation allowance | $ 5,172,980 | $ 4,715,952 |
Increased in valuation allowance of total deferred asset | 457,028 | |
Federal net operating loss carryforward | $ 13,322,521 | |
Operating loss carryforwards expiration, Description | Expire between 2030 and 2035. |
Accrued Expenses and Other Cu54
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of accrued expenses and other current liabilities | ||
Compensation and benefits | $ 176,410 | $ 360,515 |
Deferred rent | 10,877 | |
Professional fees | $ 102,200 | 254,807 |
Repayment of advertising agreement advance | 329,165 | |
Other accrued expenses | $ 88,408 | 107,472 |
Total accrued expenses and other current liabilities | $ 367,018 | $ 1,062,836 |
Notes and Convertible Note Pa55
Notes and Convertible Note Payable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 13, 2015 | May. 20, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 24, 2014 | |
Notes and Convertible Note Payable (Textual) | |||||
Warrant issued to purchase common stock | 25,000 | ||||
Deferred financing cost | $ 4,750 | ||||
Maturity date | Feb. 13, 2017 | ||||
Advisory fees | $ 240,000 | ||||
Promissory note to a related party | $ 100,000 | $ 300,000 | |||
Promissory note payable interest rate | 15.00% | 9.00% | |||
Promissory note issued to purchase warrant | 25,000 | ||||
Amortization of debt discount | $ 932,219 | ||||
Effective interest rate | 12.00% | ||||
Common Stock [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Shares issued for consulting services, shares | 50,000 | ||||
Grant date fair value | $ 30,000 | ||||
Warrant [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Grant date fair value | $ 342,000 | ||||
Securities Purchase Agreement [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Debt and equity securities | $ 3,000,000 | ||||
Shares of common stock issued | 350,000 | ||||
Aggregate principal amount | $ 3,000,000 | ||||
Warrant issued to purchase common stock | 10,500,000 | ||||
Deferred financing cost | $ 314,249 | ||||
Interest rate | 12.00% | ||||
Maturity date | Feb. 13, 2017 | ||||
Conversion price | $ 0.20 | ||||
Convertible note, description | (i) The Company's failure to pay any amounts due and payable when and as required, (ii) failure of a representation or warranty made by the Company to be correct and accurate when made, (iii) the institution of bankruptcy or similar proceedings against the Company and (iv) the Company's inability to pay debts as they become due. The Note also requires the Company to maintain an aggregate cash balance of $1,350,000 in its bank accounts or it will be required to make partial prepayments on the Note. If the Company fails to maintain this aggregate cash balance in its bank accounts for a thirty day period, it is required to make a $125,000 prepayment on the Note. For each subsequent calendar month that the aggregate cash balance in the Company's bank accounts does not equal or exceed $1,500,000, the Company must make an additional $125,000 prepayment on the Note. | ||||
Percentage of outstanding capital stock secured | 65.00% | ||||
Interest expense under convertible debt | $ 138,614 | ||||
Fair value of embedded conversion feature and warrants | 950,000 | ||||
Fair value of the warrants | 798,000 | ||||
Amortization of deferred financing cost | $ 316,000 | ||||
Effective interest rate | 52.00% | ||||
Advisory Agreement [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Warrant issued to purchase common stock | 4,500,000 | ||||
Shares issued for consulting services, shares | 150,000 | ||||
Advisory fees | $ 10,000 | ||||
Derivative instruments | 150,000 | ||||
Promissory note [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Interest expense under convertible debt | 1,844 | $ 18,516 | |||
Promissory note one [Member] | |||||
Notes and Convertible Note Payable (Textual) | |||||
Interest expense under convertible debt | $ 2,029 | $ 9,221 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Stock Options [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average assumptions used to estimate fair value of options granted | ||
Expected volatility | 176.50% | 199.80% |
Expected life of option | 5 years 9 months 18 days | 6 years 2 months 23 days |
Risk free interest rate | 1.60% | 1.90% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation (Det57
Stock-Based Compensation (Details 1) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Schedule of Stock Options, Non-employee Stock Option and Unvested Stock Options | |
Beginning Balance, Number of Options/Warrants | shares | 3,808,253 |
Granted | shares | 3,993,300 |
Expired or canceled | shares | (1,080,000) |
Forfeited | shares | (544,350) |
Ending Balance, Number of Options/Warrants | shares | 6,177,203 |
Options/Warrants exercisable | shares | 2,466,423 |
Beginning Balance, Weighted Average Exercise Price | $ / shares | $ 0.55 |
Granted, Weighted Average Exercise Price | $ / shares | 0.10 |
Expired or canceled, Weighted Average Exercise Price | $ / shares | 0.29 |
Forfeited, Weighted Average Exercise Price | $ / shares | 0.30 |
Ending Balance, Weighted Average Exercise Price | $ / shares | 0.33 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.66 |
Stock-Based Compensation (Det58
Stock-Based Compensation (Details 2) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock [Member] | |
Schedule of restricted stock award and non-employee stock option activity | |
Beginning balance | shares | 10,325,000 |
Vested | shares | |
Forfeited, during the period | shares | |
Ending balance | shares | 10,325,000 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 0.56 |
Weighted average grant date fair value, Vested | $ / shares | |
Weighted average grant date fair value, Forfeited | $ / shares | |
Weighted average grant date fair value, Ending balance | $ / shares | $ 0.56 |
Non-Employee Restricted Stock Awards [Member] | |
Schedule of restricted stock award and non-employee stock option activity | |
Beginning balance | shares | 1,075,000 |
Vested | shares | |
Ending balance | shares | 1,075,000 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 0.42 |
Weighted average grant date fair value, Vested | $ / shares | |
Weighted average grant date fair value, Ending balance | $ / shares | $ 0.42 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details Textual) | Oct. 13, 2015Employees$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) |
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | $ 1,086,430 | $ 1,040,585 | |
Number of shares authorized under plan | shares | 7,500,000 | ||
Percentage of common stock delivered pursuant to incentive stock options | 100.00% | ||
Number of stock reserved for issuance | shares | 1,347,797 | ||
Incremental expense | $ 15,175 | ||
Share-based compensation | 5,038 | ||
Stock Options [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock options outstanding, intrinsic value | 200 | 0 | |
Stock options exercisable, intrinsic value | 4,328 | 0 | |
Stock-based compensation expense | 205,601 | 140,728 | |
Total unrecognized compensation expenses | $ 423,160 | ||
Weighted average expected recognition period of compensation cost not yet recognized | 6 years 29 days | ||
Aggregate fair value of option granted | $ 322,639 | 812,169 | |
Forfeiture rate | 37.00% | ||
Number of shares granted in lieu of cancelation of options | shares | 1,040,000 | ||
Common stock exercise price | $ / shares | $ 0.08 | ||
Number of employees | Employees | 3 | ||
Stock Options [Member] | Maximum [Member] | |||
Stock-Based Compensation (Textual) | |||
Common stock exercise price | $ / shares | $ 0.40 | ||
Stock Options [Member] | Minimum [Member] | |||
Stock-Based Compensation (Textual) | |||
Common stock exercise price | $ / shares | $ 0.27 | ||
Restricted Stock [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | $ 880,829 | 899,856 | |
Unvested Restricted Stock Award [Member] | |||
Stock-Based Compensation (Textual) | |||
Total unrecognized compensation expenses | $ 2,550,209 | ||
Weighted average expected recognition period of compensation cost not yet recognized | 3 years 5 months 27 days | ||
Non-employee unvested restricted stock awards [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | $ (44,229) | $ 20,211 | |
Total unrecognized compensation expenses | $ 77,136 | ||
Weighted average expected recognition period of compensation cost not yet recognized | 6 years 4 months 10 days |
Common Stock Warrants (Details)
Common Stock Warrants (Details) - Stock Warrant [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Schedule of warrant activity | |
Beginning Balance, Number of Options/Warrants | shares | 2,367,500 |
Granted | shares | 15,000,000 |
Exercised | shares | |
Forfeited | shares | |
Ending Balance, Number of Options/Warrants | shares | 17,367,500 |
Options/Warrants exercisable | shares | 17,367,500 |
Beginning Balance, Weighted Average Exercise Price | $ / shares | $ 2.48 |
Granted, Weighted Average Exercise Price | $ / shares | $ 0.35 |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited, Weighted Average Exercise Price | $ / shares | |
Ending Balance, Weighted Average Exercise Price | $ / shares | $ 0.64 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.64 |
Loss Per Share of Common Stock
Loss Per Share of Common Stock (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Option and Warrants [Member] | ||
Loss Per Share of Common Stock (Textual) | ||
Shares issuable excluded from computation of diluted net loss per share | 48,869,703 | 16,500,753 |
Commitments and Contingencies62
Commitments and Contingencies (Details) | Dec. 31, 2015USD ($) |
Schedule of future minimum payments under non-cancelable operating leases | |
2,016 | $ 308,513 |
2,017 | 317,768 |
2,018 | 343,311 |
2,019 | 356,813 |
2,020 | 367,517 |
Thereafter | 441,941 |
Total | $ 2,135,863 |
Commitments and Contingencies63
Commitments and Contingencies (Details 1) | Dec. 31, 2015USD ($) |
Schedule of future minimum payments under non-cancelable capital leases | |
2,016 | $ 90,936 |
2,017 | 81,228 |
Total | $ 172,164 |
Commitments and Contingencies64
Commitments and Contingencies (Details Textual) | Feb. 04, 2015USD ($) | Oct. 31, 2014Agreement | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Nov. 30, 2015USD ($) | Feb. 28, 2015USD ($) |
Commitments and Contingencies (Textual) | |||||||
Payments for rent | $ 90,936 | $ 7,578 | |||||
Security deposit | $ 3,751 | $ 200,659 | |||||
Monthly office rent payments on operating lease | $ 26,000 | ||||||
Expiration date of lease | Mar. 4, 2022 | ||||||
Amortization expense for capital leases | 72,868 | 7,779 | |||||
Office Space [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Payments for rent | 275,171 | ||||||
HP [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Number of lease agreements cancelled | Agreement | 2 | ||||||
Description of capital lease agreements | Two HP lease agreements were canceled due to price negotiations and we entered into two new three-year lease agreements with HP for equipment and certain financed items. | ||||||
Amortization expense for capital leases | 72,868 | ||||||
Equinix [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Monthly recurring fees | $ 8,450 | ||||||
Nonrecurring fees | $ 9,700 | ||||||
Hosting expense | $ 179,700 | $ 177,110 | |||||
Term of service agreement | 3 years | ||||||
Description of renewal of service agreement | Agreement automatically renews for additional twelve month terms unless earlier terminated by either party. | ||||||
Expiration date of lease | Jan. 31, 2016 | ||||||
Operating lease termination day | 90 days |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transactions (Textual) | ||||||||||
Promissory note, amount | $ 3,000,000 | |||||||||
Stock-based compensation expense | 1,086,430 | $ 1,040,585 | ||||||||
Consulting expense | 80,034 | 305,600 | ||||||||
Non-employee unvested restricted stock awards [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Stock-based compensation expense | $ (44,229) | $ 20,211 | ||||||||
Lerner [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Consulting agreement term | 3 years | |||||||||
Initial compensation fee | $ 25,000 | |||||||||
Per month consulting fee | $ 5,000 | |||||||||
Compensation agreement term | 2 years | |||||||||
Lerner [Member] | Issuance One [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Issuance of restricted shares of common stock | 325,000 | |||||||||
Lerner [Member] | Issuance Two [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Issuance of restricted shares of common stock | 600,000 | |||||||||
Lerner [Member] | Issuance Three [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Issuance of restricted shares of common stock | 150,000 | |||||||||
Dcl Ventures Inc [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Share purchase under initial investment | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 50,000 | |||
Investment in DCL Ventures, Inc | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | $ 50,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 03, 2016 | Jan. 31, 2016 | Jan. 31, 2013 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||
Subsequent event, Description | The term of the agreement was set to automatically renew for successive one-year periods beginning on February 1, 2016 unless either party provides written notice of non-renewal. | |||
Stock price | $ 0.08 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Subsequent event, Description | (i) a cash payment of $25,000 and (ii) the right to receive a stock option representing the right to purchase 50,000 shares of Snap's common stock at an exercise price of $0.20 per share. | |||
Lerner [Member] | ||||
Subsequent Event [Line Items] | ||||
Per month consulting fee | $ 5,000 | |||
Lerner [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Per month consulting fee | $ 3,000 | |||
Subsequent event, Description | On April 10, 2013 that would have vested 50% on the third anniversary of the date of grant and 50% on the fourth anniversary of the date of grant. Subsequently, on March 3, 2016, the Board awarded Mr. Lerner a replacement award of 5,000,000 restricted shares that vest 100% on the (10th) tenth anniversary of the date of grant, provided Mr. Lerner is providing services to the Company on such date. | |||
Exercise price | $ 0.20 | |||
Purchase shares of common stock | 50,000 | |||
Cancellation of restricted stock | 5,000,000 | |||
Krandel [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Exercise price | $ 0.11 | |||
Purchase shares of common stock | 100,000 | |||
Stock price | $ 0.001 | |||
Krandel [Member] | Nonemployee [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Cash fee for service | $ 15,000 | |||
Krandel [Member] | Committee [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Cash fee for service | $ 2,500 |