Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | ||
Mar. 31, 2017 | May 04, 2017 | ||
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Snap Interactive, Inc | ||
Trading Symbol | STVI | ||
Entity Central Index Key | 1,355,839 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q1 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | [1] | 6,451,151 | |
[1] | Excludes 264,286 shares of unvested restricted stock. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,023,964 | $ 4,162,596 |
Credit card holdback receivable | 173,579 | 172,169 |
Accounts receivable, net of allowances and reserves of $53,109 and $57,674, respectively | 685,313 | 958,695 |
Prepaid expense and other current assets | 399,618 | 1,047,483 |
Total current assets | 6,282,474 | 6,340,943 |
Property and equipment, net | 725,263 | 793,305 |
Goodwill | 14,304,667 | 14,304,667 |
Intangible assets, net | 5,184,005 | 5,605,193 |
Long-term security deposits | 131,547 | 397,608 |
Other receivables | 84,428 | 82,435 |
Total assets | 26,712,384 | 27,524,151 |
Current liabilities: | ||
Accounts payable | 2,235,582 | 1,665,831 |
Accrued expenses and other current liabilities | 161,652 | 472,406 |
Deferred subscription revenue | 2,748,350 | 2,828,827 |
Total current liabilities | 5,145,584 | 4,967,064 |
Deferred rent, net of current portion | 261,286 | |
Deferred tax liability | 1,452,339 | 1,452,339 |
Total liabilities | 6,597,923 | 6,680,689 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 14,285,715 shares authorized, 6,714,915 shares issued and outstanding | 6,715 | 6,715 |
Additional paid-in capital | 16,175,270 | 15,865,568 |
Retained earnings | 3,932,476 | 4,971,179 |
Total stockholders' equity | 20,114,461 | 20,843,462 |
Total liabilities and stockholders' equity | $ 26,712,384 | $ 27,524,151 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowances and reserves on accounts receivables | $ 53,109 | $ 57,674 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 14,285,715 | 14,285,715 |
Common stock, shares issued | 6,714,915 | 6,714,915 |
Common stock, shares outstanding | 6,714,915 | 6,714,915 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Subscription revenue | $ 6,223,685 | $ 4,389,274 |
Advertising revenue | 495,267 | 548,424 |
Total revenues | 6,718,952 | 4,937,698 |
Costs and expenses: | ||
Cost of revenue | 1,282,505 | 1,399,000 |
Sales and marketing expense | 2,230,492 | 918,616 |
Product development expense | 2,211,344 | 2,092,835 |
General and administrative expense | 2,070,127 | 486,743 |
Total costs and expenses | 7,794,468 | 4,897,194 |
(Loss) income from operations | (1,075,516) | 40,504 |
Interest income, net | 36,813 | 285 |
(Loss) income before provision for income taxes | (1,038,703) | 40,789 |
Provision for income taxes | ||
Net (loss) income | $ (1,038,703) | $ 40,789 |
Net (loss) income per share of common stock: | ||
Basic and diluted | $ (0.15) | $ 0.01 |
Weighted average number of shares of common stock used in calculating net (loss) income per share of common stock: | ||
Basic and diluted | 6,714,915 | 5,228,617 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Defict) (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) |
Begining balance at Dec. 31, 2016 | $ 20,843,462 | $ 6,715 | $ 15,865,568 | $ 4,971,179 |
Balance, Shares at Dec. 31, 2016 | 6,714,915 | |||
Stock-based compensation expense for restricted stock awards and stock options | 309,702 | 309,702 | ||
Net (loss) income | (1,038,703) | (1,038,703) | ||
Ending balance at Mar. 31, 2017 | $ 20,114,461 | $ 6,715 | $ 16,175,270 | $ 3,932,476 |
Balance, Shares at Mar. 31, 2017 | 6,714,915 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (1,038,703) | $ 40,789 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation of property and equipment | 130,637 | 104,824 |
Amortization of intangible assets | 421,188 | 137,776 |
Stock-based compensation expense | 309,702 | 14,211 |
Changes in operating assets and liabilities: | ||
Credit card holdback receivable | (1,410) | |
Accounts receivable | 273,382 | 336,515 |
Prepaid expenses and other current assets | 647,865 | 768 |
Accounts payable, accrued expenses and other current liabilities | 276,141 | (42,991) |
Deferred rent | 4,775 | (37,375) |
Deferred subscription revenue | (80,477) | (146,863) |
Net cash provided by operating activities | 943,100 | 407,654 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (62,595) | (107,866) |
Accrued interest from notes receivables issued to employees | (1,993) | |
Net cash used in investing activities | (64,588) | (107,866) |
Cash flows from financing activities: | ||
Payments of capital lease obligations | (17,144) | |
Net cash used in financing activities | (17,144) | |
Net increase in cash and cash equivalents | 861,368 | 299,788 |
Balance of cash and cash equivalents at beginning of period | 4,162,596 | 6,676,557 |
Balance of cash and cash equivalents at end of period | 5,023,964 | 6,976,345 |
Supplemental disclosure of cash flow information: | ||
Cash paid in interest | 158 | |
Cash paid in taxes | $ 18,304 | $ 716 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Basis of Presentation [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation On October 7, 2016, Snap Interactive, Inc. and its wholly owned subsidiary, Snap Mobile Limited (collectively, “SNAP”) completed a business combination with privately-held A.V.M. Software, Inc. and its wholly owned subsidiaries, Paltalk Software Inc., Paltalk Holdings, Inc., Tiny Acquisition Inc., Camshare, Inc. and Fire Talk LLC (collectively, “AVM”) in accordance with the terms of an Agreement and Plan of Merger (the “Merger Agreement”), by and among SNAP, SAVM Acquisition Corporation, SNAP’s former wholly owned subsidiary, AVM and Jason Katz, pursuant to which AVM merged with and into SAVM Acquisition Corporation, with AVM surviving as a wholly owned subsidiary of SNAP (the “Merger”). Under U.S. generally accepted accounting principles (“GAAP”), the Merger is treated as a “reverse merger” under the acquisition method of accounting. For accounting purposes, AVM is considered to have acquired SNAP. Consequently, the historical financial statements reflect the operations and financial condition of AVM and operating results of SNAP are reported beginning on the closing date of the Merger (collectively, the “Company”). The Company is an Internet software company. Under its registered trademarks, the Company develops and operates social networking software that enables spontaneous global real time audio/video conversation via the internet and operates a portfolio of dating applications. The condensed consolidated financial statements included in this report have been prepared on a going concern basis in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The Company has not included certain information normally included in annual financial statements pursuant to those rules and regulations, although it believes that the disclosure included herein is adequate to make the information presented not misleading. The condensed consolidated financial statements contained herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “Form 10-K”), filed with the SEC on March 28, 2017. In the opinion of management, the accompanying unaudited condensed consolidated financial information contains all normal and recurring adjustments necessary to fairly present the condensed consolidated balance sheet, results of operations, cash flows and changes in the stockholders’ equity of the Company for the interim periods presented. The Company’s historical results are not necessarily indicative of future operating results and the results for the three months ended March 31, 2017 are not necessarily indicative of results for the year ending December 31, 2017, or for any other period. The Company completed a 1-for-35 reverse stock split which became effective at the close of regular trading hours on January 5, 2017 and the Company’s common stock began trading on a post-reverse stock split basis at the opening of regular trading hours on January 6, 2017. Except as otherwise provided herein, all share and per-share amounts of the Company’s common stock and stock options have been adjusted to give effect to the reverse stock split for all periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies During the three months ended March 31, 2017, there were no material changes to the Company’s significant accounting policies from those disclosed in the Form 10-K. Certain significant accountant policies relied on in the preparation of the accompanying unaudited condensed consolidated financial statements are as follows: Significant Estimates and Judgments The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and at the date of the condensed consolidated 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 estimates used to determine the fair value of the Company’s common stock up until the time of the Merger, and stock options issued in share based payment arrangements, collectability of the Company’s 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. The Company bases estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates. Adoption of Recent Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-09, which revises the guidance in Accounting Standards Codification (“ASC”) 718 , Compensation - Stock Compensation Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition - Principal versus Agent (reporting revenue gross versus net) Revenue from Contracts with Customers Identifying Performance Obligations and Licensing Revenue Recognition – New Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04 , Intangibles - Goodwill and Other (Topic 350 Simplifying the Accounting for Goodwill Impairment. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | 3. Property and Equipment, Net Property and equipment, net consisted of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 (unaudited) Computer equipment $ 3,724,149 $ 3,720,985 Website development 2,110,410 2,050,980 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 5,956,312 5,893,718 Less: Accumulated depreciation (5,231,049 ) (5,100,413 ) Total property and equipment, net $ 725,263 $ 793,305 Depreciation expense for the three months ended March 31, 2017 was $130,637, as compared to $104,824 for the three months ended March 31, 2016. The Company only holds property and equipment in the United States. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net [Abstract] | |
Intangible Assets, Net | 4. Intangible Assets, Net Intangible assets, net consisted of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 50,000 $ (19,375 ) $ 30,625 $ 50,000 $ (18,750 ) $ 31,250 Trade names, trademarks product names, URLs 1,555,000 (393,854 ) 1,161,146 1,555,000 (329,979 ) 1,225,021 Internally developed software 2,720,000 (1,598,696 ) 1,121,304 2,720,000 (1,498,029 ) 1,221,971 Subscriber/customer relationships 4,219,000 (1,559,570 ) 2,659,430 4,219,000 (1,338,799 ) 2,880,201 Lead pool 282,000 (70,500 ) 211,500 282,000 (35,250 ) 246,750 Total intangible assets $ 8,826,000 $ (3,641,995 ) $ 5,184,005 $ 8,826,000 $ (3,220,807 ) $ 5,605,193 Amortization expense for the three months ended March 31, 2017 and 2016 was $421,188 and $137,776, respectively. The estimated aggregate amortization expense for each of the next five years and thereafter will approximate $1,262,309 in 2017, $1,599,719 in 2018, $1,087,333 in 2019, $592,681 in 2020, $444,167 in 2021 and $197,796 thereafter. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following at March 31, 2017 and December 31, 2016: March 31, December 31, 2017 2016 (unaudited) Compensation, benefits and payroll taxes $ 92,450 $ 311,845 Other accrued expenses 69,202 160,561 Total accrued expenses and other current liabilities $ 161,652 $ 472,406 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation The Snap Interactive, Inc. Amended and Restated 2011 Long-Term Incentive Plan (the “2011 Plan”) was terminated as to future awards on May 16, 2016. A total of 181,604 shares of the Company’s common stock may be delivered pursuant to outstanding options awarded under the 2011 Plan, however no additional awards may be granted under such plan. The Snap Interactive, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”) was adopted by the Company’s stockholders on May 16, 2016 and permits the Company to award stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance awards, 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 2016 Plan is 428,572 shares, 100% of which may be issued pursuant to incentive stock options. In addition, the maximum number of shares of common stock that may be issued under the 2016 Plan may be increased by an indeterminate number of shares of common stock underlying outstanding awards issued under the 2011 Plan that are forfeited, expired, cancelled or settled in cash. As of March 31, 2017, there were 4,216 shares available for future issuance under the 2016 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 three months ended: March 31, 2017 Expected volatility 138.7 % Expected life of option 6.2 Risk free interest rate 2.0 % Expected dividend yield 0.0 % The expected life of the options is the period of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has been determined using the "simplified" method as prescribed by Staff Accounting Bulletin 110, which uses the midpoint between the vesting date and the end of the contractual term. The volatility of the Company’s common stock is calculated using the Company’s historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. The Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly. The Company estimates pre-vesting forfeitures primarily based on the Company’s historical experience and is adjusted to reflect actual forfeitures as the stock based awards vest. The following tables summarize stock option activity during the three months ended March 31, 2017: Weighted Number of Average Exercise Options Price Stock Options: Outstanding at January 1, 2017 573,110 $ 6.94 Granted 52,683 4.91 Expired or canceled, during the period (17,143 ) 21.00 Forfeited, during the period (1,896 ) 6.04 Outstanding at March 31, 2017 606,754 $ 6.37 Exercisable at March 31, 2017 361,351 $ 7.69 On February 2, 2017, the Company entered into an option cancellation and release agreement with an employee, pursuant to which each of the parties agreed to cancel outstanding options to purchase an aggregate of 17,143 shares of common stock of the Company at an exercise price of $21.00 per share. In exchange for the cancellation of the options, the Company granted the employee replacement options to purchase an aggregate of 17,143 shares of common stock of the Company at an exercise price of $6.00 per share. On March 31, 2017, the aggregate intrinsic value of stock options that were outstanding and exercisable was $61,478 and $35,154, respectively. On March 31, 2016, the aggregate intrinsic value of stock options that were outstanding and exercisable was $235,860 and $225,170, 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 three months ended March 31, 2017 was $206,064. No options were granted during the three months ended March 31, 2016. Stock-based compensation expense relating to stock options was $124,328 and $14,211 for the three months ended March 31, 2017 and 2016, respectively, of which $4,426 is included in cost of revenue, $1,700 is included in sales and marketing expense, $15,568 is included in product development expense and $102,634 is included in general and administrative expense in the accompanying condensed consolidated statements of operations. At March 31, 2017, there was $733,521 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 4 years. Restricted Stock Awards The following table summarizes restricted stock award activity for the three months ended March 31, 2017: Weighted Average Number of Grant Date RSAs Fair Value Restricted Stock Awards: Outstanding at January 1, 2017 264,286 $ 20.29 Granted - - Expired or canceled, during the period - - Forfeited, during the period - - Outstanding at March 31, 2017 264,286 $ 20.29 At March 31, 2017, there was $1,853,739 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 3 years. Stock-based compensation expense relating to restricted stock awards was $185,374 and $0 for the three months ended March 31, 2017 and 2016, respectively, which is included in general and administrative expense in the accompanying condensed consolidated statements of operations. |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Net (Loss) Income Per Share [Abstract] | |
Net (Loss) Income Per Share | 7. Net (Loss) Income Per Share Basic net (loss) income 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
Commitments | 3 Months Ended |
Mar. 31, 2017 | |
Commitments [Abstract] | |
Commitments | 8. Commitments Operating Lease Agreements As result of the Merger, the Company entered into a lease for office space located at 320 W 37th Street, 13th Floor, New York, NY 10018. 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. On March 3, 2017, the Company entered into an agreement to terminate the lease for this office space. Under the terms of the agreement, the Company must vacate the offices by May 31, 2017 and the Company agreed to forfeit its security deposit of $200,659. Total rent, utilities, real estate tax expense and commercial rent tax expense relating to operating lease agreements for the three months ended March 31, 2017 and 2016 were $72,076 and $173,975, respectively. Capital Lease Agreements As result of the Merger, the Company acquired five three-year capital lease agreements with HP. The Company’s monthly payments under these capital leases are approximately $7,600. The Company recognizes these leases on the Consolidated Balance Sheet under accrued expenses and other current liabilities. Litigation, Claims and Assessments The Company may be included in legal proceedings, claims and assessments arising in the ordinary course of business. The Company evaluates the need for a reserve for specific legal matters based on the probability of an unfavorable outcome and the reasonability of an estimable loss. No reserve was deemed necessary as of March 31, 2017. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events Employment Agreement On May 5, 2017, we entered into an employment agreement with Eric Sackowitz pursuant to which Mr. Sackowitz agreed to serve as the Company’s Chief Technology Officer. Mr. Sackowtiz’s employment agreement provides for an annual base salary of $265,000, effective retroactively to February 1, 2017, and a one year term with automatic successive one year renewals unless earlier terminated in accordance with its terms. The employment agreement contains customary provisions relating to annual incentive bonuses, severance and change of control benefits, confidentiality, non-solicitation, non-disparagement and non-competition. Executive Stock Options On April 13, 2017, the Compensation Committee of the Company’s Board of Directors awarded Alexander Harrington, Chief Executive Office, (i) a stock option representing the right to purchase 80,000 shares of common stock at an exercise price equal to $3.63 per share, with the shares underlying this stock option vesting 25% on the six month anniversary of the date of grant and the remaining three tranches vesting on each of the first, second and third anniversaries of the first vesting date and (ii) a stock option representing the right to purchase 24,000 shares of common stock at an exercise price equal to $3.63 per share, with the shares underlying this stock option vesting based on the Company’s achievement of certain performance goals related to its annual revenues. In addition, on April 13, 2017, the Compensation Committee of the Company’s Board of Directors awarded Jason Katz, Chief Operating Officer and Chairman of the Board of Directors, a stock option representing the right to purchase 70,000 shares of common stock at an exercise price equal to $3.63 per share, with (i) 17,500 of the underlying shares vesting based on the Company’s achievement of certain performance goals related to its earnings before interest, tax, depreciation, and amortization and (ii) 52,500 of the underlying shares vesting based on the Company’s achievement of certain performance goals related to its annual revenues. On May 5, 2017, the Compensation Committee of the Company’s Board of Directors awarded each of Mr. Harrington and Mr. Sackowitz a stock option representing the right to purchase 28,571 shares of common stock at an exercise price equal to $3.36 per share. The shares underlying these stock options vest in four equal installments on each anniversary of the date of grant. In addition, the Company entered into an option cancellation agreement with Mr. Sackowitz pursuant to which an outstanding fully-vested option held by Mr. Sackowitz representing the right to purchase 15,678 shares of common stock at an exercise price of $6.65 per share was cancelled and exchanged for a new fully-vested stock option representing the right to purchase 15,678 shares of common stock at an exercise price of $3.36 per share. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Significant Estimates and Judgments | Significant Estimates and Judgments The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and at the date of the condensed consolidated 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 estimates used to determine the fair value of the Company’s common stock up until the time of the Merger, and stock options issued in share based payment arrangements, collectability of the Company’s 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. The Company bases estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates. |
Adoption of Recent Accounting Standards | Adoption of Recent Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-09, which revises the guidance in Accounting Standards Codification (“ASC”) 718 , Compensation - Stock Compensation |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition - Principal versus Agent (reporting revenue gross versus net) Revenue from Contracts with Customers Identifying Performance Obligations and Licensing Revenue Recognition – New Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU No. 2016-02, Leases In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04 , Intangibles - Goodwill and Other (Topic 350 Simplifying the Accounting for Goodwill Impairment. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment, net | March 31, 2017 December 31, 2016 (unaudited) Computer equipment $ 3,724,149 $ 3,720,985 Website development 2,110,410 2,050,980 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 5,956,312 5,893,718 Less: Accumulated depreciation (5,231,049 ) (5,100,413 ) Total property and equipment, net $ 725,263 $ 793,305 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net [Abstract] | |
Schedule of Intangible assets, net | March 31, 2017 December 31, 2016 (unaudited) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 50,000 $ (19,375 ) $ 30,625 $ 50,000 $ (18,750 ) $ 31,250 Trade names, trademarks product names, URLs 1,555,000 (393,854 ) 1,161,146 1,555,000 (329,979 ) 1,225,021 Internally developed software 2,720,000 (1,598,696 ) 1,121,304 2,720,000 (1,498,029 ) 1,221,971 Subscriber/customer relationships 4,219,000 (1,559,570 ) 2,659,430 4,219,000 (1,338,799 ) 2,880,201 Lead pool 282,000 (70,500 ) 211,500 282,000 (35,250 ) 246,750 Total intangible assets $ 8,826,000 $ (3,641,995 ) $ 5,184,005 $ 8,826,000 $ (3,220,807 ) $ 5,605,193 |
Accrued Expenses and Other Cu19
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2017 2016 (unaudited) Compensation, benefits and payroll taxes $ 92,450 $ 311,845 Other accrued expenses 69,202 160,561 Total accrued expenses and other current liabilities $ 161,652 $ 472,406 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used in the Black-Scholes pricing model to estimate the fair value of the options granted | March 31, 2017 Expected volatility 138.7 % Expected life of option 6.2 Risk free interest rate 2.0 % Expected dividend yield 0.0 % |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock award activity | Weighted Number of Average Exercise Options Price Stock Options: Outstanding at January 1, 2017 573,110 $ 6.94 Granted 52,683 4.91 Expired or canceled, during the period (17,143 ) 21.00 Forfeited, during the period (1,896 ) 6.04 Outstanding at March 31, 2017 606,754 $ 6.37 Exercisable at March 31, 2017 361,351 $ 7.69 |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock award activity | Weighted Average Number of Grant Date RSAs Fair Value Restricted Stock Awards: Outstanding at January 1, 2017 264,286 $ 20.29 Granted - - Expired or canceled, during the period - - Forfeited, during the period - - Outstanding at March 31, 2017 264,286 $ 20.29 |
Organization and Basis of Pre21
Organization and Basis of Presentation (Details) | Jan. 05, 2017 |
Organization and Basis of Presentation (Textual) | |
Reverse stock split, description | 1-for-35 reverse stock split |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 5,956,312 | $ 5,893,718 |
Less: Accumulated depreciation | (5,231,049) | (5,100,413) |
Total property and equipment, net | 725,263 | 793,305 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,724,149 | 3,720,985 |
Website development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,110,410 | 2,050,980 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 89,027 | 89,027 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 32,726 | $ 32,726 |
Property and Equipment, Net (23
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense of property and equipment | $ 130,637 | $ 104,824 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 8,826,000 | $ 8,826,000 |
Accumulated Amortization | (3,641,995) | (3,220,807) |
Net Carrying Amount | 5,184,005 | 5,605,193 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,000 | 50,000 |
Accumulated Amortization | (19,375) | (18,750) |
Net Carrying Amount | 30,625 | 31,250 |
Trade names, trademarks, product names, URLs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,555,000 | 1,555,000 |
Accumulated Amortization | (393,854) | (329,979) |
Net Carrying Amount | 1,161,146 | 1,225,021 |
Internally developed software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,720,000 | 2,720,000 |
Accumulated Amortization | (1,598,696) | (1,498,029) |
Net Carrying Amount | 1,121,304 | 1,221,971 |
Subscriber/customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,219,000 | 4,219,000 |
Accumulated Amortization | (1,559,570) | (1,338,799) |
Net Carrying Amount | 2,659,430 | 2,880,201 |
Lead pool [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 282,000 | 282,000 |
Accumulated Amortization | (70,500) | (35,250) |
Net Carrying Amount | $ 211,500 | $ 246,750 |
Intangible Assets, Net (Detai25
Intangible Assets, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Intangible Assets, Net (Textual) | ||
Amortization expense | $ 421,188 | $ 137,776 |
Estimated aggregate amortization expense for 2017 | 1,262,309 | |
Estimated aggregate amortization expense for 2018 | 1,599,719 | |
Estimated aggregate amortization expense for 2019 | 1,087,333 | |
Estimated aggregate amortization expense for 2020 | 592,681 | |
Estimated aggregate amortization expense for 2021 | 444,167 | |
Estimated aggregate amortization expense thereafter | $ 197,796 |
Accrued Expenses and Other Cu26
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities | ||
Compensation, benefits and payroll taxes | $ 92,450 | $ 311,845 |
Other accrued expenses | 69,202 | 160,561 |
Total accrued expenses and other current liabilities | $ 161,652 | $ 472,406 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2017 | |
Weighted average assumptions used to estimate fair value of options granted | |
Expected volatility | 138.70% |
Expected life of option | 6 years 2 months 12 days |
Risk free interest rate | 2.00% |
Expected dividend yield | 0.00% |
Stock-Based Compensation (Det28
Stock-Based Compensation (Details 1) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Schedule of stock options activity | |
Number of Options, Outstanding beginning balance | shares | 573,110 |
Number of Options, Granted | shares | 52,683 |
Number of Options, Expired or canceled, during the period | shares | (17,143) |
Number of Options, Forfeited, during the period | shares | (1,896) |
Number of Options, Outstanding ending balance | shares | 606,754 |
Number of Options, Exercisable | shares | 361,351 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 6.94 |
Weighted Average Exercise Price, Granted | $ / shares | 4.91 |
Weighted Average Exercise Price, Expired or canceled, during the period | $ / shares | 21 |
Weighted Average Exercise Price, Forfeited, during the period | $ / shares | 6.04 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 6.37 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 7.69 |
Stock-Based Compensation (Det29
Stock-Based Compensation (Details 2) - Restricted Stock Awards [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Schedule of restricted stock award activity | |
Number of RSAs, Outstanding beginning balance | shares | 264,286 |
Number of RSAs, Granted | shares | |
Number of RSAs, Expired or canceled, during the period | shares | |
Number of RSAs, Forfeited, during the period | shares | |
Number of RSAs, Outstanding ending balance | shares | 264,286 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ / shares | $ 2,029 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Weighted Average Grant Date Fair Value, Expired or canceled, during the period | $ / shares | |
Weighted Average Grant Date Fair Value, Forfeited, during the period | $ / shares | |
Weighted Average Grant Date Fair Value, Outstanding ending balance | $ / shares | $ 2,029 |
Stock-Based Compensation (Det30
Stock-Based Compensation (Details Textual) - USD ($) | Feb. 02, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | $ 309,702 | $ 14,211 | |
Cost of revenue [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | 4,426 | 4,426 | |
Sales and marketing expense [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | 1,700 | 1,700 | |
Product development expense [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | 15,568 | 15,568 | |
General and administrative expense [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | 102,634 | 102,634 | |
Stock Options [Member] | |||
Stock-Based Compensation (Textual) | |||
Stock options outstanding, intrinsic value | 61,478 | 35,154 | |
Stock options exercisable, intrinsic value | 148,251 | 225,170 | |
Aggregate fair value of options granted | 206,064 | ||
Total unrecognized compensation expense | $ 733,521 | ||
Weighted average expected recognition period of unrecognized compensation expense | 4 years | ||
Options to purchase aggregate common stock shares, cancelled | 17,143 | ||
Options to purchase aggregate common stock exercise price, cancelled | $ 21 | ||
Options to purchase aggregate common stock exchanged shares | 17,143 | ||
Options to purchase aggregate common stock exchanged exercise price per share | $ 6 | ||
Restricted Stock Awards [Member] | |||
Stock-Based Compensation (Textual) | |||
Total unrecognized compensation expense | $ 1,853,739 | ||
Weighted average expected recognition period of unrecognized compensation expense | 3 years | ||
Stock-based compensation expense | $ 124,328 | 14,211 | |
2016 Plan [Member] | |||
Stock-Based Compensation (Textual) | |||
Number of shares issued under plan | 428,572 | ||
Percentage of common stock delivered pursuant to incentive stock options | 100.00% | ||
Number of stock available for future issuance | 4,216 | ||
Terminated date of future awards | May 16, 2016 | ||
2011 Plan [Member] | |||
Stock-Based Compensation (Textual) | |||
Number of shares issued under plan | 181,604 | ||
Restricted Stock Awards One[Member] | |||
Stock-Based Compensation (Textual) | |||
Stock-based compensation expense | $ 185,374 | $ 0 |
Net (Loss) Income Per Share (De
Net (Loss) Income Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net (Loss) Income Per Share (Textual) | ||
Shares issuable excluded from computation of diluted net loss per share | 606,754 |
Commitments (Details)
Commitments (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 03, 2017 | |
Commitments (Textual) | |||
Monthly rent payment | $ 26,000 | ||
Security deposit | 200,659 | ||
Capital leases monthly payments | $ 7,600 | ||
Operating lease, description | The term of the lease runs until March 4, 2022. | ||
Total rent, utilities, real estate tax expense and commercial rent tax expense | $ 72,076 | $ 173,975 | |
Agreed to forfeit security deposit | $ 200,659 | ||
Merger, description | Company acquired five three-year capital lease agreements with HP. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent events [Member] - USD ($) | May 05, 2017 | Apr. 13, 2017 |
Subsequent Events [Textual] | ||
Annual base salary | $ 265,000 | |
Employment agreement, description | Effective retroactively to February 1, 2017, and a one year term with automatic successive one year renewals unless earlier terminated in accordance with its terms. | |
Alexander Harrington [Member] | ||
Subsequent Events [Textual] | ||
Stock option vesting, description | (i) a stock option representing the right to purchase 80,000 shares of common stock at an exercise price equal to $3.63 per share, with the shares underlying this stock option vesting 25% on the six month anniversary of the date of grant and the remaining three tranches vesting on each of the first, second and third anniversaries of the first vesting date and (ii) a stock option representing the right to purchase 24,000 shares of common stock at an exercise price equal to $3.63 per share, with the shares underlying this stock option vesting based on the Company's achievement of certain performance goals related to its annual revenues. | |
Stock option right to purchase | 28,571 | |
Exercise price | $ 3.36 | |
Stock options, description | The shares underlying these stock options vest in four equal installments on each anniversary of the date of grant. In addition, the Company entered into an option cancellation agreement with Mr. Sackowitz pursuant to which an outstanding fully-vested option held by Mr. Sackowitz representing the right to purchase 15,678 shares of common stock at an exercise price of $6.65 per share was cancelled and exchanged for a new fully-vested stock option representing the right to purchase 15,678 shares of common stock at an exercise price of $3.36 per share. | |
Jason Katz [Member] | ||
Subsequent Events [Textual] | ||
Stock option vesting, description | A stock option representing the right to purchase 70,000 shares of common stock at an exercise price equal to $3.63 per share, with (i) 17,500 of the underlying shares vesting based on the Company's achievement of certain performance goals related to its earnings before interest, tax, depreciation, and amortization and (ii) 52,500 of the underlying shares vesting based on the Company's achievement of certain performance goals related to its annual revenues. | |
Mr. Sackowitz [Member] | ||
Subsequent Events [Textual] | ||
Stock option right to purchase | 28,571 | |
Exercise price | $ 3.36 | |
Stock options, description | The shares underlying these stock options vest in four equal installments on each anniversary of the date of grant. In addition, the Company entered into an option cancellation agreement with Mr. Sackowitz pursuant to which an outstanding fully-vested option held by Mr. Sackowitz representing the right to purchase 15,678 shares of common stock at an exercise price of $6.65 per share was cancelled and exchanged for a new fully-vested stock option representing the right to purchase 15,678 shares of common stock at an exercise price of $3.36 per share. |