Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PeerStream, Inc. | |
Entity Central Index Key | 0001355839 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 000-52176 | |
Entity Common Stock, Shares Outstanding | 6,874,679 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,641,988 | $ 6,555,376 |
Credit card holdback receivable | 29,860 | 94,498 |
Accounts receivable, net of allowances and reserves of $34,546 as of June 30, 2019 and December 31, 2018 | 135,582 | 326,786 |
Prepaid expense and other current assets | 413,150 | 269,668 |
Current assets held for sale | 19,053 | |
Total current assets | 5,220,580 | 7,265,381 |
Operating lease right-of-use assets | 780,640 | 232,423 |
Property and equipment, net | 595,972 | 577,911 |
Goodwill | 13,086,472 | 13,086,472 |
Intangible assets, net | 756,058 | 884,223 |
Digital tokens | 776,792 | 832,892 |
Other assets | 151,226 | 116,767 |
Noncurrent assets held for sale | 1,436,499 | |
Total assets | 21,367,740 | 24,432,568 |
Current liabilities: | ||
Accounts payable | 1,525,589 | 2,842,947 |
Accrued expenses and other current liabilities | 365,712 | 737,945 |
Current portion of operating lease liabilities | 133,849 | 114,789 |
Deferred subscription revenue | 1,477,367 | 1,468,571 |
Deferred technology service revenue | 3,379,435 | |
Other liabilities | 43,910 | |
Current liabilities held for sale | 617,410 | |
Total current liabilities | 3,546,427 | 9,161,097 |
Operating lease liabilities, non-current portion | 646,791 | 117,634 |
Total liabilities | 4,193,218 | 9,278,731 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 25,000,000 shares authorized; and 6,874,679 shares and 6,868,679 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 6,875 | 6,869 |
Additional paid-in capital | 20,797,939 | 19,867,259 |
Accumulated deficit | (3,630,292) | (4,720,291) |
Total stockholders' equity | 17,174,522 | 15,153,837 |
Total liabilities and stockholders' equity | $ 21,367,740 | $ 24,432,568 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 34,546 | $ 34,546 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 6,874,679 | 6,868,679 |
Common stock, shares outstanding | 6,874,679 | 6,868,679 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Subscription revenue | $ 3,049,900 | $ 3,476,473 | $ 6,054,255 | $ 7,313,878 |
Advertising revenue | 110,869 | 256,652 | 231,359 | 489,651 |
Technology service revenue | 1,712,105 | 2,092,032 | 3,460,435 | 2,092,032 |
Total revenues | 4,872,874 | 5,825,157 | 9,746,049 | 9,895,561 |
Costs and expenses: | ||||
Cost of revenue | 892,470 | 1,002,654 | 1,844,689 | 1,731,685 |
Sales and marketing expense | 230,996 | 433,128 | 608,147 | 799,107 |
Product development expense | 1,711,974 | 1,508,078 | 3,483,539 | 3,209,949 |
General and administrative expense | 1,614,387 | 2,217,374 | 3,491,859 | 3,942,667 |
Total costs and expenses | 4,449,827 | 5,161,234 | 9,428,234 | 9,683,408 |
Income from continuing operations | 423,047 | 663,923 | 317,815 | 212,153 |
Interest income, net | 24,837 | 16,772 | 54,794 | 19,710 |
Change in fair value of digital tokens | (1,959,404) | (1,959,404) | ||
Income (loss) from continuing operations before provision for income taxes | 447,884 | (1,278,709) | 372,609 | (1,727,541) |
Benefit (expense) for income taxes | (163,490) | (15,500) | (4,500) | (15,500) |
Net income (loss) from continuing operations | 284,394 | (1,294,209) | 368,109 | (1,743,041) |
Discontinued Operations: | ||||
Gain on sale from discontinued operations | 826,770 | |||
Loss from discontinued operations | (570,806) | (104,880) | (930,629) | |
Income tax benefit on discontinued operations | 158,990 | |||
Net income (loss) from discontinued operations | 158,990 | (570,806) | 721,890 | (930,629) |
Net income (loss) | $ 443,384 | $ (1,865,015) | $ 1,089,999 | $ (2,673,670) |
Basic net income (loss) per share of common stock: | ||||
Continuing operations | $ 0.04 | $ (0.19) | $ 0.05 | $ (0.25) |
Discontinued operations | 0.02 | (0.08) | 0.11 | (0.14) |
Basic net income (loss) per share of common stock | 0.06 | (0.27) | 0.16 | (0.39) |
Diluted net income (loss) per share of common stock: | ||||
Continuing operations | 0.04 | (0.19) | 0.05 | (0.25) |
Discontinued operations | 0.02 | (0.08) | 0.11 | (0.14) |
Diluted net income (loss) per share of common stock | $ 0.06 | $ (0.27) | $ 0.16 | $ (0.39) |
Weighted average number of shares of common stock used in calculating net income (loss) per share of common stock: | ||||
Basic | 6,874,679 | 6,882,316 | 6,874,314 | 6,882,316 |
Diluted | 6,886,900 | 6,882,316 | 6,875,195 | 6,882,316 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 6,882 | $ 18,346,914 | $ (923,074) | $ 17,430,722 |
Balance, shares at Dec. 31, 2017 | 6,881,794 | |||
Stock-based compensation expense for restricted stock awards and stock options | 389,215 | 389,215 | ||
Net income (loss) | (808,655) | (808,655) | ||
Balance at Mar. 31, 2018 | $ 6,882 | 18,736,129 | (1,731,729) | 17,011,282 |
Balance, shares at Mar. 31, 2018 | 6,881,794 | |||
Stock-based compensation expense for restricted stock awards and stock options | 403,385 | 403,385 | ||
Reconciliation of shares issued in stock-based compensation arrangement | $ 1 | |||
Reconciliation of shares issued in stock-based compensation arrangement, shares | 522 | |||
Net income (loss) | (1,865,015) | (1,865,015) | ||
Balance at Jun. 30, 2018 | $ 6,883 | 19,139,514 | (3,596,744) | 15,549,653 |
Balance, shares at Jun. 30, 2018 | 6,882,316 | |||
Balance at Dec. 31, 2018 | $ 6,869 | 19,867,259 | (4,720,291) | 15,153,837 |
Balance, shares at Dec. 31, 2018 | 6,868,679 | |||
Stock-based compensation expense for restricted stock awards and stock options | 452,525 | 452,525 | ||
Issuance of common stock for consulting services | $ 6 | 34,494 | 34,500 | |
Issuance of common stockfor consulting services, shares | 6,000 | |||
Net income (loss) | 646,615 | 646,615 | ||
Balance at Mar. 31, 2019 | $ 6,875 | 20,354,278 | (4,073,676) | 16,287,477 |
Balance, shares at Mar. 31, 2019 | 6,874,679 | |||
Stock-based compensation expense for restricted stock awards and stock options | 443,661 | 443,661 | ||
Net income (loss) | 443,384 | 443,384 | ||
Balance at Jun. 30, 2019 | $ 6,875 | $ 20,797,939 | $ (3,630,292) | $ 17,174,522 |
Balance, shares at Jun. 30, 2019 | 6,874,679 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,089,999 | $ (2,673,670) |
Less: Income (loss) from discontinued operations | 721,890 | (930,629) |
Income (loss) from continuing operations | 368,109 | (1,743,041) |
Adjustments to reconcile net income (loss) from continuing operations to net cash (used in) provided by operating activities of continuing operations: | ||
Depreciation of property and equipment | 177,435 | 206,138 |
Amortization of intangible assets | 128,165 | 842,376 |
Stock-based compensation expense | 896,186 | 792,600 |
Common stock issued for consulting services | 34,500 | 1 |
Bad debt expense | 8,552 | |
Digital tokens received as payment for services | (3,368,127) | |
Impairment loss on digital tokens | 1,959,404 | |
Changes in operating assets and liabilities: | ||
Credit card holdback receivable | 64,638 | 29,123 |
Accounts receivable | 191,204 | 249,856 |
Prepaid expenses and other current assets | (143,482) | (204,916) |
Other assets | (34,459) | 34,094 |
Accounts payable, accrued expenses and other current liabilities | (1,689,591) | (225,812) |
Other liabilities | 43,910 | |
Deferred subscription revenue | 8,796 | (164,027) |
Deferred technology service revenue | (3,379,435) | 6,276,095 |
Net cash (used in) provided by continuing operating activities | (3,334,024) | 4,692,316 |
Net cash used in discontinued operating activities | (39,967) | (930,629) |
Net cash (used in) provided by operating activities | (3,373,991) | 3,761,687 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (195,497) | (159,900) |
Proceeds from the sale of digital tokens | 56,100 | |
Net cash used in continuing investing activities | (139,397) | (159,900) |
Net cash provided by discontinued investing activities | 1,600,000 | |
Net cash provided by (used in) investing activities | 1,460,603 | (159,900) |
Cash flows from financing activities: | ||
Net cash provided by (used in) continuing financing activities | ||
Net cash provided by (used in) discontinued financing activities | ||
Net cash provided by (used in) financing activities | ||
Net increase (decrease) in cash and cash equivalents | (1,913,388) | 3,601,787 |
Balance of cash and cash equivalents at beginning of period | 6,555,376 | 4,137,050 |
Balance of cash and cash equivalents at end of period | 4,641,988 | 7,738,837 |
Supplemental disclosure of cash flow information | ||
Cash paid in interest | ||
Cash paid in income taxes | $ 81,661 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business The accompanying condensed consolidated financial statements include PeerStream, Inc. and its wholly owned subsidiaries, A.V.M. Software, Inc., Paltalk Software Inc., Paltalk Holdings, Inc., Tiny Acquisition Inc., Camshare, Inc., Fire Talk LLC and Vumber LLC (collectively, the "Company," "we," "our" or "us"). The Company is a communications software innovator developing enhanced security and privacy solutions for multimedia communication and data transmission. Our offerings target consumer, government and enterprise clients. Using multi-layered encryption, blockchain technology and other recent innovations, we are developing our proprietary PeerStream Protocol ("PSP") to offer clients maximal data security and confidentiality over distributed or decentralized networks. We also offer our Backchannel product suite, which includes cross platform applications, middleware and software development kits ("SDKs") designed to offer a highly secure end user communication experience when coupled with PSP. For 20 years, we have built and continue to operate innovative consumer applications, including Paltalk and Camfrog, two of the largest live video social communities. The Company has a long history of technology innovation and holds 26 patents. The condensed consolidated financial statements included in this report have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States ("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 and notes required by GAAP for complete 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, 2018, filed with the SEC on March 22, 2019 (the "Form 10-K"). 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 six months ended June 30, 2019 are not necessarily indicative of results for the year ending December 31, 2019, or for any other period. Reclassifications Certain prior period amounts have been reclassified for comparative purposes to conform to the current presentation. These reclassifications have no impact on the previously reported net income (loss). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies For a detailed discussion about the Company's significant accounting policies, see the Form 10-K. During the six months ended June 30, 2019, there were no significant changes made to the Company's significant accounting policies. Significant Estimates and Assumptions 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 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 stock options issued in share-based payment arrangements, collectability of the Company's accounts receivable, measurements of proportional performance under certain service contracts 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. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-04, Intangibles - Goodwill and Other (Topic 350) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) Revenue In accordance with ASC No. 606, revenue from contracts with customers is recognized when control of the promised services is transferred to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Sales tax is excluded from reported revenue. The Company has elected the practical expedient allowable by the guidance to not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. Subscription Revenue The Company generates subscription revenue primarily from monthly premium subscription services. Subscription revenues are presented net of refunds, credits, and known and estimated credit card chargebacks. During the six months ended June 30, 2019 and 2018, subscriptions were offered in durations of one-, three-, six- and twelve- month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets. The deferred revenue at December 31, 2018 was $1,468,571, of which approximately $1,150,454 was subsequently recognized as subscription revenue during the six months ended June 30, 2019. The ending balance of deferred revenue at June 30, 2019 was $1,477,367. In addition, the Company offers virtual gifts to its users. Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. These gifts are given among users to enhance communication and are typically redeemed within 30 days of purchase. Upon purchase, the virtual gifts are credited to the users' account and are under the users' control. Virtual gift revenue is recognized upon the users' utilization of such at the fixed transaction price and included in subscription revenue in the accompanying condensed consolidated statements of operations. Virtual gift revenue was approximately $1,478,239 and $2,899,073 for the three and six months ended June 30, 2019, respectively. Virtual gift revenue was approximately $1,742,423 and $3,752,923 for the three and six months ended June 30, 2018, respectively. Advertising Revenue The Company generates advertising revenue from the display of advertisements on its products through contractual agreements with third parties that are based on the number of advertising impressions delivered. Measurements of impressions include when a customer clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), or registers for an external website via an advertisement by clicking on or through the application (CPA basis). Advertising revenue is dependent upon traffic as well as the advertising inventory placed on the Company's products. Technology Service Revenue Revenue under the Company's technology services agreement (the "ProximaX Agreement") with ProximaX Limited ("ProximaX") is recognized based upon proportional performance using labor hours as the unit of measurement. Pursuant to the terms of the ProximaX Agreement, ProximaX agreed to pay the Company, among other things, up to an aggregate of $10.0 million of cash or certain highly liquid cryptocurrencies in exchange for the Company's services, $5.0 million of which was paid in May 2018, $2.5 million of which was due upon completion the second development milestone set forth in the ProximaX Agreement and $2.5 million of which was due upon completion of the third development milestone set forth in the ProximaX Agreement. The contractual upfront fee was paid in the Ethereum cryptocurrency and subsequently converted into U.S. dollars. The upfront fee also included 216.0 million XPX tokens. The total upfront fee was recognized as revenue under the input method based on proportional performance using labor hours as the unit of measurement. The portion of the upfront fee that remained unrecognized as of the termination of the ProximaX Agreement was $1,631,105 and was recognized as revenue upon such termination. In the second quarter of 2019, the Company completed, and ProximaX accepted delivery of, the work constituting the second development milestone under the ProximaX Agreement. During the final stages of delivery of the second milestone, ProximaX informed the Company that capital constraints made it unable to pay the Company the $2.5 million as stipulated under the ProximaX Agreement. Accordingly, the Company and ProximaX entered into an agreement, effective June 24, 2019, to terminate the ProximaX Agreement (the "Termination Agreement") and provide for payment terms for the $2.5 million due under the ProximaX Agreement. Since there is no assurance of collectability on the remaining payments, revenue will be recognized as the payments under the Termination Agreement are received. Digital Tokens Digital tokens consist of XPX tokens received in connection with the technology services agreement with ProximaX. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies and other digital tokens under current GAAP, the Company has determined to account for these tokens as indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other Indefinite-lived intangible assets are recorded at cost and are not subject to amortization but shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If, at the time of an impairment test, the carrying amount of an intangible asset exceeds its fair value, an impairment loss in an amount equal to the excess is recognized. Fair value of the digital tokens is based on the quoted market prices on the Kryptono Exchange. During the second quarter of 2019, the Company sold 16,604,747 digital tokens for $56,100. The loss recorded of approximately $8,000 was immaterial in respect to the condensed consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 3. Discontinued Operations On January 31, 2019, the Company entered into an Asset Purchase Agreement with The Dating Company, LLC, pursuant to which the Company sold substantially all of the assets related to its online dating services business under the domain names FirstMet, 50more, and The Grade (collectively, the “Dating Services Business”) for a cash purchase price of $1.6 million, with $100,000 of the purchase price to be held in an escrow account to secure certain of the Company’s post-closing indemnification obligations. The closing of the asset sale was effective as of January 31, 2019. In the first quarter of 2019, management determined that the disposal of the Dating Services Business met the criteria for presentation as discontinued operations. Accordingly, the results of the Dating Services Business are presented as discontinued operations in our condensed consolidated statements of operations and are excluded from continuing operations for all periods presented. In addition, the assets and liabilities of the Dating Services Business are classified as held for sale in our condensed consolidated balance sheets for all periods presented. The operations of the Dating Services Business are included in our results as discontinued operations through January 31, 2019, the date of sale. The following tables summarize the major line items included in loss from discontinued operations for the Dating Services Business: Three Months Ended Six Months Ended June 30, June 30, 2018 2018 Revenues $ 1,566,230 $ 3,243,876 Costs of revenue (376,051 ) (660,047 ) Sales and marketing expense (1,059,748 ) (2,083,760 ) Product development expense (417,820 ) (863,864 ) General and administrative expense (283,417 ) (566,833 ) Loss from discontinued operations $ (570,806 ) $ (930,629 ) Three Months Ended Six Months Ended June 30, June 30, 2019 2019 Revenues $ - $ 440,225 Costs of revenue - (115,338 ) Sales and marketing expense - (270,200 ) Product development expense - (76,845 ) General and administrative expense - (82,722 ) Loss from discontinued operations $ - $ (104,880 ) |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net consisted of the following at June 30, 2019 and December 31, 2018: June 30, December 31, (unaudited) Computer equipment $ 3,706,017 $ 3,706,017 Website development 2,880,588 2,685,093 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,708,359 6,512,863 Less: Accumulated depreciation (6,112,387 ) (5,934,952 ) Total property and equipment, net $ 595,972 $ 577,911 Depreciation expense for the three and six months ended June 30, 2019 was $88,820 and $177,435, respectively, as compared to $106,148 and $206,138 for the three and six months ended June 30, 2018, respectively. The Company only holds property and equipment in the United States. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 5. Intangible Assets, Net Intangible assets, net consisted of the following at June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 (unaudited) Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (25,000 ) $ 25,000 $ 50,000 $ (23,750 ) $ 26,250 Trade names, trademarks product names, URLs 555,000 (418,728 ) 136,272 555,000 (390,979 ) 164,021 Internally developed software 1,990,000 (1,943,822 ) 46,178 1,990,000 (1,927,988 ) 62,012 Subscriber/customer relationships 2,279,000 (1,730,392 ) 548,608 2,279,000 (1,647,060 ) 631,940 Total intangible assets $ 4,874,000 $ (4,117,942 ) $ 756,058 $ 4,874,000 $ (3,989,777 ) $ 884,223 Amortization expense for the three and six months ended June 30, 2019 was $64,083 and $128,165, respectively, as compared to $421,189 and $842,372 for the three and six months ended June 30, 2018, respectively. The estimated aggregate amortization expense for each of the next five years will be $128,167 in 2019, $246,681 in 2020, $184,667 in 2021, $149,944 in 2022 and $46,599 in 2023. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following at June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 (unaudited) Compensation, benefits and payroll taxes $ 79,813 $ 355,300 Other accrued expenses 285,899 382,645 Total accrued expenses and other current liabilities $ 365,712 $ 737,945 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company’s provision for income taxes consists of federal and state taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. As of June 30, 2019, our conclusion regarding the realizability of our US deferred tax assets did not change and we have recorded a full valuation allowance against them. For the three months ended June 30, 2019, the Company recorded an income tax provision of $163,490 from continuing operations. The Company recorded an income tax provision for state and local taxes and reversed the income tax benefit recorded during the three months ended March 31, 2019 as the intra-period allocation guidance no longer applies as the Company reported income from both continuing and discontinued operations. For the six-months ended June 30, 2019, the Company recorded an income tax provision of $4,500. The effective tax rate for the three and six months ended June 30, 2019 was 35.9% and 1.18%, respectively. For the three and six months ended June 30, 2018, the Company recorded an income tax provision from continuing operations of $15,500 and $15,500, respectively. The effective tax rate for the three and six months ended June 30, 2018 was (0.80%) and (0.56%), respectively. The effective tax rate differs from the statutory rate of 21% as no benefit has been provided to current year pre-tax losses as the Company concluded its deferred tax assets are not realizable on a more-likely-than-not basis. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity The PeerStream, 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 issued pursuant to outstanding options awarded under the 2011 Plan; however, no additional awards may be granted under such plan. The PeerStream, 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 1,300,000 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 June 30, 2019, there were 418,346 shares available for future issuance under the 2016 Plan. On April 29, 2019, we implemented a stock repurchase plan to repurchase up to $500 thousand of our common stock for cash. The repurchase plan expires on April 29, 2020. There were no repurchased shares of our common stock as of June 30, 2019. 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 following period: Six Months June 30, 2019 Expected volatility 165.0 - 175.0 % Expected life of option 5.0-5.5 Risk free interest rate 2.2 - 2.5 % 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 the 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 adjusts pre-vesting forfeitures to reflect actual forfeitures as the stock-based awards vest. The following table summarizes stock option activity during the six months ended June 30, 2019: Weighted Number of Average Options Price Stock Options: Outstanding at January 1, 2019 1,037,797 $ 5.36 Granted 193,294 3.71 Forfeited or canceled, during the period (152,215 ) 4.47 Expired, during the period (21,187 ) 4.55 Outstanding at June 30, 2019 1,057,689 $ 4.96 Exercisable at June 30, 2019 712,118 $ 5.50 On May 7, 2019, in connection with Judy Krandel’s resignation as an officer and employee of the Company, the Company (i) entered into an option cancellation and release agreement, pursuant to which the Company canceled Ms. Krandel’s option award agreement, dated November 15, 2016, related to the award of a stock option representing the right to purchase 142,857 shares of common stock and (ii) entered into a revised option agreement granting Ms. Krandel a stock option representing the right to purchase up to 142,857 shares of common stock at an exercise price equal to $3.55 per share (the “Revised Option Agreement”). The stock option subject to the Revised Option Agreement vests: (i) 50% on the date of grant, (ii) 25% on May 15, 2019 and (iii) 25% in 12 equal installments on the 15th day of each month, with the first tranche vesting on June 15, 2019 and the last tranche vesting on May 15, 2020. The Company accounted for these agreements as an option modification and recognized approximately $115,000 of stock compensation expense in connection with the agreements. At June 30, 2019, there was $810,526 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 1.3 years. On June 30, 2019, the aggregate intrinsic value of stock options that were outstanding and exercisable was $154,514 and $99,340, respectively. On June 30, 2018, the aggregate intrinsic value of stock options that were outstanding and exercisable was $2,923,478 and $1,400,918, 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. During the six months ended June 30, 2019, the Company granted options to employees to purchase an aggregate 193,294 shares of common stock at exercise prices ranging from $3.55 to $4.55 per share. The options vest on the grant date or between one and four years and have a term of ten years. The aggregate fair value for the options granted during the six months ended June 30, 2019 was $337,598. The aggregate fair value for the options granted during the six months ended June 30, 2018 was $522,774. Stock-based compensation expense for the Company’s stock options included in the condensed consolidated statements of operations is as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of revenue $ 363 $ 651 $ 724 $ 1,341 Sales and marketing expense 45 971 90 2,221 Product development expense 10,065 12,873 99,809 19,260 General and administrative expense 247,814 203,518 424,815 399,030 Total stock compensation expense $ 258,287 $ 218,013 $ 525,438 $ 421,852 Restricted Stock Awards The following table summarizes restricted stock award activity for the six months ended June 30, 2019: Weighted Average Number of Grant Date RSAs Fair Value Restricted Stock Awards: Unvested at January 1, 2019 79,286 $ 20.29 Granted - - Expired or canceled, during the period - - Forfeited, during the period - - Unvested at June 30, 2019 79,286 $ 20.29 At June 30, 2019, there was $185,374 of total unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted average period of 0.3 years. Stock-based compensation expense relating to restricted stock awards included in general and administrative expense for the three and six months ended June 30, 2019 was $185,374 and $370,748, respectively, as compared to $185,374 and $370,746 for the three and six months ended June 30, 2018, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 9. Net Income (Loss) Per Share Basic net income (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 The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company's common stockholder's consists of the following: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Basic weighted-average number of shares 6,874,679 6,874,314 Effect of dilutive securities Stock options 12,221 881 Diluted weighted-average number of shares 6,886,900 6,875,195 For the three and six months ended June 30, 2018, 1,063,509 shares upon the exercise of outstanding stock options and 158,571 shares of unvested restricted stock were not included in the computation of diluted net loss per share because their inclusion would be antidilutive. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases Operating Leases On June 7, 2016, the Company entered into a lease agreement with Jericho Executive Center LLC for office space at 30 Jericho Executive Plaza in Jericho, New York, which commenced on September 1, 2016 and runs through November 30, 2021. The Company’s monthly office rent payments under the lease are currently approximately $5,900 per month. On September 18, 2017, the Company entered into a lease agreement for a second office space located at 122 East 42nd Street in New York, NY that expired on July 31, 2019 and paid a security deposit in the amount of $8,000. The Company’s monthly office rent payments under the lease are currently approximately $4,000 per month. On May 1, 2019, the Company entered into a lease agreement for an additional office space located at 122 East 42nd Street in New York, NY and paid a $133,968 security deposit in the form of a letter of credit. The term of the lease runs until April 26, 2023. The Company’s monthly office rent payments under the lease are currently approximately $33,492 per month. On May 1, 2019, the Company entered into a sublease agreement with Telecom Infrastructure Corp. for office space located at 122 East 42nd Street in New York, NY, pursuant to which Telecom Infrastructure Corp. is required to pay the Company $11,164 a month. The term of the sublease runs until April 26, 2023. As of June 30, 2019, the Company had no long-term leases that were classified as financing leases. As of June 30, 2019, the Company did not have additional operating and financing leases that have not yet commenced. Total operating lease expense for the six months ended June 30, 2019 was $178,305 and is recorded in general and administrative expense on the unaudited condensed statements of operations. Six Months Ended June 30, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 548,217 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 642,159 Weighted average remaining lease term Operating leases 3.6 Weighted average discount rate Operating leases 2.5 % |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Legal Proceedings On December 16, 2016, a wholly owned subsidiary of the Company, Paltalk Holdings, Inc., filed a patent infringement lawsuit in Delaware against Riot Games, Inc. and Valve Corporation for infringement of U.S. Patent Nos. 5,822,523 and 6,226,686 with respect to their online games League of Legends and Defense of the Ancients 2. These two patents were previously asserted against, and then licensed to, Microsoft, Sony, and Activision. In 2018, Valve Corporation moved to transfer the litigation from Delaware to the Western District of Washington. Such motion was granted by the court. Riot Games, Inc. has filed a total of four inter partes reviews at the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office, two per patent held by Paltalk Holdings, Inc., seeking to have the Paltalk Holdings, Inc. patents declared invalid. On May 14, 2019, the PTAB rejected the validity of the patents. The Company is currently pursuing an appeal of the PTAB’s ruling. 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 June 30, 2019. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued and determined that no other events or transactions are required to be disclosed herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Estimates and Assumptions | Significant Estimates and Assumptions 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 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 stock options issued in share-based payment arrangements, collectability of the Company's accounts receivable, measurements of proportional performance under certain service contracts 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-04, Intangibles - Goodwill and Other (Topic 350) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) |
Revenue | Revenue In accordance with ASC No. 606, revenue from contracts with customers is recognized when control of the promised services is transferred to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. Sales tax is excluded from reported revenue. The Company has elected the practical expedient allowable by the guidance to not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. Subscription Revenue The Company generates subscription revenue primarily from monthly premium subscription services. Subscription revenues are presented net of refunds, credits, and known and estimated credit card chargebacks. During the six months ended June 30, 2019 and 2018, subscriptions were offered in durations of one-, three-, six- and twelve- month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets. The deferred revenue at December 31, 2018 was $1,468,571, of which approximately $1,150,454 was subsequently recognized as subscription revenue during the six months ended June 30, 2019. The ending balance of deferred revenue at June 30, 2019 was $1,477,367. In addition, the Company offers virtual gifts to its users. Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. These gifts are given among users to enhance communication and are typically redeemed within 30 days of purchase. Upon purchase, the virtual gifts are credited to the users' account and are under the users' control. Virtual gift revenue is recognized upon the users' utilization of such at the fixed transaction price and included in subscription revenue in the accompanying condensed consolidated statements of operations. Virtual gift revenue was approximately $1,478,239 and $2,899,073 for the three and six months ended June 30, 2019, respectively. Virtual gift revenue was approximately $1,742,423 and $3,752,923 for the three and six months ended June 30, 2018, respectively. Advertising Revenue The Company generates advertising revenue from the display of advertisements on its products through contractual agreements with third parties that are based on the number of advertising impressions delivered. Measurements of impressions include when a customer clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), or registers for an external website via an advertisement by clicking on or through the application (CPA basis). Advertising revenue is dependent upon traffic as well as the advertising inventory placed on the Company's products. Technology Service Revenue Revenue under the Company's technology services agreement (the "ProximaX Agreement") with ProximaX Limited ("ProximaX") is recognized based upon proportional performance using labor hours as the unit of measurement. Pursuant to the terms of the ProximaX Agreement, ProximaX agreed to pay the Company, among other things, up to an aggregate of $10.0 million of cash or certain highly liquid cryptocurrencies in exchange for the Company's services, $5.0 million of which was paid in May 2018, $2.5 million of which was due upon completion the second development milestone set forth in the ProximaX Agreement and $2.5 million of which was due upon completion of the third development milestone set forth in the ProximaX Agreement. The contractual upfront fee was paid in the Ethereum cryptocurrency and subsequently converted into U.S. dollars. The upfront fee also included 216.0 million XPX tokens. The total upfront fee was recognized as revenue under the input method based on proportional performance using labor hours as the unit of measurement. The portion of the upfront fee that remained unrecognized as of the termination of the ProximaX Agreement was $1,631,105 and was recognized as revenue upon such termination. In the second quarter of 2019, the Company completed, and ProximaX accepted delivery of, the work constituting the second development milestone under the ProximaX Agreement. During the final stages of delivery of the second milestone, ProximaX informed the Company that capital constraints made it unable to pay the Company the $2.5 million as stipulated under the ProximaX Agreement. Accordingly, the Company and ProximaX entered into an agreement, effective June 24, 2019, to terminate the ProximaX Agreement (the "Termination Agreement") and provide for payment terms for the $2.5 million due under the ProximaX Agreement. Since there is no assurance of collectability on the remaining payments, revenue will be recognized as the payments under the Termination Agreement are received. |
Digital Tokens | Digital Tokens Digital tokens consist of XPX tokens received in connection with the technology services agreement with ProximaX. Given that there is limited precedent regarding the classification and measurement of cryptocurrencies and other digital tokens under current GAAP, the Company has determined to account for these tokens as indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other Indefinite-lived intangible assets are recorded at cost and are not subject to amortization but shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If, at the time of an impairment test, the carrying amount of an intangible asset exceeds its fair value, an impairment loss in an amount equal to the excess is recognized. Fair value of the digital tokens is based on the quoted market prices on the Kryptono Exchange. During the second quarter of 2019, the Company sold 16,604,747 digital tokens for $56,100. The loss recorded of approximately $8,000 was immaterial in respect to the condensed consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations [Abstract] | |
Schedule of loss from discontinued operations | Three Months Ended Six Months Ended June 30, June 30, 2018 2018 Revenues $ 1,566,230 $ 3,243,876 Costs of revenue (376,051 ) (660,047 ) Sales and marketing expense (1,059,748 ) (2,083,760 ) Product development expense (417,820 ) (863,864 ) General and administrative expense (283,417 ) (566,833 ) Loss from discontinued operations $ (570,806 ) $ (930,629 ) Three Months Ended Six Months Ended June 30, June 30, 2019 2019 Revenues $ - $ 440,225 Costs of revenue - (115,338 ) Sales and marketing expense - (270,200 ) Product development expense - (76,845 ) General and administrative expense - (82,722 ) Loss from discontinued operations $ - $ (104,880 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | June 30, December 31, (unaudited) Computer equipment $ 3,706,017 $ 3,706,017 Website development 2,880,588 2,685,093 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,708,359 6,512,863 Less: Accumulated depreciation (6,112,387 ) (5,934,952 ) Total property and equipment, net $ 595,972 $ 577,911 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | June 30, December 31, 2019 2018 (unaudited) Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (25,000 ) $ 25,000 $ 50,000 $ (23,750 ) $ 26,250 Trade names, trademarks product names, URLs 555,000 (418,728 ) 136,272 555,000 (390,979 ) 164,021 Internally developed software 1,990,000 (1,943,822 ) 46,178 1,990,000 (1,927,988 ) 62,012 Subscriber/customer relationships 2,279,000 (1,730,392 ) 548,608 2,279,000 (1,647,060 ) 631,940 Total intangible assets $ 4,874,000 $ (4,117,942 ) $ 756,058 $ 4,874,000 $ (3,989,777 ) $ 884,223 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | June 30, December 31, 2019 2018 (unaudited) Compensation, benefits and payroll taxes $ 79,813 $ 355,300 Other accrued expenses 285,899 382,645 Total accrued expenses and other current liabilities $ 365,712 $ 737,945 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of assumptions used in Black-Scholes pricing model to estimate the fair value of the options granted | Six Months June 30, 2019 Expected volatility 165.0 - 175.0 % Expected life of option 5.0-5.5 Risk free interest rate 2.2 - 2.5 % Expected dividend yield 0.0 % |
Schedule of stock option activity | Weighted Number of Average Options Price Stock Options: Outstanding at January 1, 2019 1,037,797 $ 5.36 Granted 193,294 3.71 Forfeited or canceled, during the period (152,215 ) 4.47 Expired, during the period (21,187 ) 4.55 Outstanding at June 30, 2019 1,057,689 $ 4.96 Exercisable at June 30, 2019 712,118 $ 5.50 |
Schedule of stock-based compensation expense | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of revenue $ 363 $ 651 $ 724 $ 1,341 Sales and marketing expense 45 971 90 2,221 Product development expense 10,065 12,873 99,809 19,260 General and administrative expense 247,814 203,518 424,815 399,030 Total stock compensation expense $ 258,287 $ 218,013 $ 525,438 $ 421,852 |
Schedule of restricted stock award activity | Weighted Average Number of Grant Date RSAs Fair Value Restricted Stock Awards: Unvested at January 1, 2019 79,286 $ 20.29 Granted - - Expired or canceled, during the period - - Forfeited, during the period - - Unvested at June 30, 2019 79,286 $ 20.29 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share attributable | Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Basic weighted-average number of shares 6,874,679 6,874,314 Effect of dilutive securities Stock options 12,221 881 Diluted weighted-average number of shares 6,886,900 6,875,195 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of general and administrative expense | Six Months Ended June 30, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 548,217 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 642,159 Weighted average remaining lease term Operating leases 3.6 Weighted average discount rate Operating leases 2.5 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | |||||
Deferred revenue | $ 1,477,367 | $ 1,477,367 | $ 1,468,571 | ||
Subscription revenue | 3,049,900 | $ 3,476,473 | 6,054,255 | $ 7,313,878 | |
Virtual gift and micro-transaction revenue | 1,478,239 | ||||
Unrecognized upfront fee amount | 1,631,105 | ||||
Remaining payment revenue | 5,000,000 | $ 5,000,000 | |||
Description of service revenue | Pursuant to the terms of the ProximaX Agreement, ProximaX agreed to pay the Company, among other things, up to an aggregate of $10.0 million of cash or certain highly liquid cryptocurrencies in exchange for the Company's services, $5.0 million of which was paid in May 2018, $2.5 million of which was due upon completion the second development milestone set forth in the ProximaX Agreement and $2.5 million of which was due upon completion of the third development milestone set forth in the ProximaX Agreement. The contractual upfront fee was paid in the Ethereum cryptocurrency and subsequently converted into U.S. dollars. The upfront fee also included 216.0 million XPX tokens. The total upfront fee was recognized as revenue under the input method based on proportional performance using labor hours as the unit of measurement. | ||||
Description of payments milestone | During the final stages of delivery of the second milestone, ProximaX informed the Company that capital constraints made it unable to pay the Company the $2.5 million as stipulated under the ProximaX Agreement. Accordingly, the Company and ProximaX entered into an agreement, effective June 24, 2019, to terminate the ProximaX Agreement (the "Termination Agreement") and provide for payment terms for the $2.5 million due under the ProximaX Agreement. Since there is no assurance of collectability on the remaining payments, revenue will be recognized as the payments under the Termination Agreement are received. | ||||
Sold digital tokens shares | 16,604,747 | ||||
Sold digital tokens value | $ 56,100 | ||||
Recorded of immaterial loss | $ 8,000 | ||||
Description of purchase credits | Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. | ||||
Subscription Revenue [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Subscription revenue | $ 1,150,454 | ||||
Virtual gift and micro-transaction revenue | $ 1,478,239 | $ 1,742,423 | $ 2,899,073 | $ 3,752,923 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Dating Services Business [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 1,566,230 | $ 440,225 | $ 3,243,876 | |
Costs of revenue | (376,051) | (115,338) | (660,047) | |
Sales and marketing expense | (1,059,748) | (270,200) | (2,083,760) | |
Product development expense | (417,820) | (76,845) | (863,864) | |
General and administrative expense | (283,417) | (82,722) | (566,833) | |
Loss from discontinued operations | $ (570,806) | $ (104,880) | $ (930,629) |
Discontinued Operations (Deta_2
Discontinued Operations (Details Textual) | Jan. 31, 2019USD ($) |
Discontinued Operations (Textual) | |
Cash purchase price | $ 1,600,000 |
Escrow amount held in purchase price | $ 100,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 6,708,359 | $ 6,512,863 |
Less: Accumulated depreciation | (6,112,387) | (5,934,952) |
Total property and equipment, net | 595,972 | 577,911 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,706,017 | 3,706,017 |
Website development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,880,588 | 2,685,093 |
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 (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property and Equipment, Net (Textual) | ||||
Depreciation expense | $ 88,820 | $ 106,148 | $ 177,435 | $ 206,138 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,874,000 | $ 4,874,000 |
Accumulated Amortization | (4,117,942) | (3,989,777) |
Net Carrying Amount | 756,058 | 884,223 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,000 | 50,000 |
Accumulated Amortization | (25,000) | (23,750) |
Net Carrying Amount | 25,000 | 26,250 |
Trade names, trademarks product names, URLs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 555,000 | 555,000 |
Accumulated Amortization | (418,728) | (390,979) |
Net Carrying Amount | 136,272 | 164,021 |
Internally developed software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,990,000 | 1,990,000 |
Accumulated Amortization | (1,943,822) | (1,927,988) |
Net Carrying Amount | 46,178 | 62,012 |
Subscriber/customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,279,000 | 2,279,000 |
Accumulated Amortization | (1,730,392) | (1,647,060) |
Net Carrying Amount | $ 548,608 | $ 631,940 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Intangible Assets, Net (Textual) | ||||
Amortization expense | $ 64,083 | $ 421,189 | $ 128,165 | $ 842,376 |
Estimated aggregate amortization expense for 2019 | 128,167 | 128,167 | ||
Estimated aggregate amortization expense for 2020 | 246,681 | 246,681 | ||
Estimated aggregate amortization expense for 2021 | 184,667 | 184,667 | ||
Estimated aggregate amortization expense for 2022 | 149,944 | 149,944 | ||
Estimated aggregate amortization expense for 2023 | $ 46,599 | $ 46,599 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Compensation, benefits and payroll taxes | $ 79,813 | $ 355,300 |
Other accrued expenses | 285,899 | 382,645 |
Total accrued expenses and other current liabilities | $ 365,712 | $ 737,945 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes (Textual) | ||||
Income tax provision from continuing operations | $ 163,490 | $ 15,500 | $ 4,500 | $ 15,500 |
Effective tax rate | 35.90% | (0.80%) | 1.18% | (0.56%) |
Effective tax rate from statutory rate | 21.00% | 21.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Stock Option [Member] | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 165.00% |
Expected life of option | 5 years |
Risk free interest rate | 2.20% |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 175.00% |
Expected life of option | 5 years 6 months |
Risk free interest rate | 2.50% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock Option [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Stock Options: | |
Number of Options, Outstanding beginning balance | shares | 1,037,797 |
Number of Options, Granted | shares | 193,294 |
Number of Options, Forfeited or canceled, during the period | shares | (152,215) |
Number of Options, Expired, during the period | shares | (21,187) |
Number of Options, Outstanding ending balance | shares | 1,057,689 |
Number of Options, Exercisable | shares | 712,118 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 5.36 |
Weighted Average Exercise Price, Granted | $ / shares | 3.71 |
Weighted Average Exercise Price, Forfeited or canceled, during the period | $ / shares | 4.47 |
Weighted Average Exercise Price, Expired, during the period | $ / shares | 4.55 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 4.96 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.50 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | $ 896,186 | $ 792,600 | ||
Cost of revenue [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | $ 363 | $ 651 | 724 | 1,341 |
Sales and marketing expense [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | 45 | 971 | 90 | 2,221 |
Product development expense [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | 10,065 | 12,873 | 99,809 | 19,260 |
General and administrative expense [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | 247,814 | 203,518 | 424,815 | 399,030 |
Total stock compensation expense [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Stock-based compensation expense | $ 258,287 | $ 218,013 | $ 525,438 | $ 421,852 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - Restricted Stock [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Restricted Stock Awards: | |
Number of Restricted Stock Awards, Beginning balance | shares | 79,286 |
Number of Restricted Stock Awards, Granted | shares | |
Number of Restricted Stock Awards, Expired or canceled, during the period | shares | |
Number of Restricted Stock Awards, Forfeited, during the period | shares | |
Number of Restricted Stock Awards, Ending balance | shares | 79,286 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 20.29 |
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, Ending balance | $ / shares | $ 20.29 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | May 07, 2019 | Apr. 29, 2019 | May 16, 2016 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Stockholders' Equity (Textual) | ||||||||
Aggregate fair value of options granted | $ 337,598 | $ 522,774 | ||||||
Total unrecognized compensation expense | $ 810,526 | $ 810,526 | ||||||
Weighted average expected recognition period of unrecognized compensation expense | 1 year 3 months 19 days | |||||||
Number of stock available for future issuance | 413,290 | 413,290 | ||||||
Stock-based compensation expense | $ 896,186 | 792,600 | ||||||
Proceeds from common stock | $ 34,500 | |||||||
Aggregate intrinsic value of stock options, outstanding | $ 154,514 | $ 2,923,478 | 154,514 | 2,923,478 | ||||
Aggregate intrinsic value of stock options, exercisable | $ 99,340 | 1,400,918 | $ 99,340 | 1,400,918 | ||||
Aggregate granted options to employees, Shares | 193,294 | |||||||
Repurchased shares of common stock | $ 500,000 | |||||||
Repurchase plan expires date | Apr. 29, 2020 | |||||||
2016 Plan [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Number of stock available for future issuance | 418,346 | 418,346 | ||||||
Judy Krandel [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Stock option transaction, description | The Company (i) entered into an option cancellation and release agreement, pursuant to which the Company canceled Ms. Krandel's option award agreement, dated November 15, 2016, related to the award of a stock option representing the right to purchase 142,857 shares of common stock and (ii) entered into a revised option agreement granting Ms. Krandel a stock option representing the right to purchase up to 142,857 shares of common stock at an exercise price equal to $3.55 per share (the "Revised Option Agreement"). The stock option subject to the Revised Option Agreement vests: (i) 50% on the date of grant, (ii) 25% on May 15, 2019 and (iii) 25% in 12 equal installments on the 15th day of each month, with the first tranche vesting on June 15, 2019 and the last tranche vesting on May 15, 2020. The Company recognized approximately $115,000 of stock compensation expense in connection with the agreement. | |||||||
Minimum [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Stock options, exercise price | $ 3.55 | |||||||
Maximum [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Stock options, exercise price | $ 4.55 | |||||||
Stock Compensation Plan [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Number of shares issued under plan | 1,300,000 | |||||||
Percentage of common stock delivered pursuant to incentive stock options | 100.00% | |||||||
Stock Compensation Plan One [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Number of shares issued under plan | 181,604 | |||||||
Restricted Stock [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Total unrecognized compensation expense | $ 185,374 | $ 185,374 | ||||||
Weighted average expected recognition period of unrecognized compensation expense | 3 months 19 days | |||||||
Stock-based compensation expense | $ 185,374 | $ 185,374 | $ 370,748 | $ 370,746 | ||||
Vesting shares of restricted stock |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average number of shares | 6,874,679 | 6,874,314 | ||
Effect of dilutive securities Stock options | 12,221 | 881 | ||
Diluted weighted-average number of shares | 6,886,900 | 6,882,316 | 6,875,195 | 6,882,316 |
Net Income (Loss) Per Share (_2
Net Income (Loss) Per Share (Details Textual) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Shares upon the exercise of outstanding stock options | 12,211 | 1,063,509 | 881 | 1,063,509 |
Unvested restricted stock | 79,286 | 158,571 | 79,286 | 158,571 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities, Operating cash flows from operating leases | $ 548,217 |
Right-of-use assets obtained in exchange for lease obligations, Operating leases | $ 642,159 |
Weighted average remaining lease term, Operating leases | 3 years 7 months 6 days |
Weighted average discount rate, Operating leases | 2.50% |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | Jun. 07, 2016 | May 01, 2019 | Sep. 18, 2017 | Jun. 30, 2019 |
Leases (Textual) | ||||
Security deposit amount | $ 133,968 | $ 8,000 | ||
Rent payments per month | $ 5,900 | $ 33,492 | $ 4,000 | |
Operating lease expenses | $ 178,305 | |||
Operating lease, description | Commenced on September 1, 2016 and runs through November 30, 2021. | The term of the lease runs until April 26, 2023. | The term of the lease runs until July 31, 2019. | |
Lease expires date | Jul. 31, 2019 | |||
Lease Agreements [Member] | ||||
Leases (Textual) | ||||
Rent payments per month | $ 11,164 |