Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Mar. 20, 2020 | Jun. 30, 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-K | |||
Document Period End Date | Dec. 31, 2019 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2019 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
Entity Interactive Data Current | Yes | |||
Entity Public Float | $ 6,515,821 | |||
Entity Common Stock, Shares Outstanding | [1] | 6,877,004 | ||
Entity File Number | 000-52176 | |||
Entity Incorporation State Country Code | DE | |||
[1] | Excludes 1,900 shares of common stock that are held as treasury stock by PeerStream, Inc. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,427,058 | $ 6,555,376 |
Credit card holdback receivable | 11,323 | 94,498 |
Accounts receivable, net of allowances and reserves of $23,832 and $34,546, as of December 31, 2019 and 2018, respectively | 130,686 | 326,786 |
Prepaid expense and other current assets | 156,118 | 269,668 |
Current assets held for sale | 19,053 | |
Total current assets | 3,725,185 | 7,265,381 |
Operating lease right-of-use asset | 685,042 | 232,423 |
Property and equipment, net | 620,059 | 577,911 |
Goodwill | 6,326,250 | 13,086,472 |
Intangible assets, net | 627,891 | 884,223 |
Digital tokens | 148,229 | 832,892 |
Other assets | 86,876 | 116,767 |
Noncurrent assets held for sale | 1,436,499 | |
Total assets | 12,219,532 | 24,432,568 |
Current liabilities: | ||
Accounts payable | 1,007,851 | 2,842,947 |
Accrued expenses and other current liabilities | 434,739 | 737,945 |
Current portion of operating lease liabilities | 178,479 | 114,789 |
Deferred subscription revenue | 1,829,493 | 1,468,571 |
Deferred technology service revenue | 3,379,435 | |
Current liabilities held for sale | 617,410 | |
Total current liabilities | 3,450,562 | 9,161,097 |
Operating lease liabilities, non-current portion | 583,075 | 117,634 |
Total liabilities | 4,033,637 | 9,278,731 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 25,000,000 shares authorized, 6,878,904 and 6,868,679 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 6,879 | 6,869 |
Treasury stock, 1,900 and no shares, at par as of December 31, 2019 and 2018, respectively | (2,015) | |
Additional paid-in capital | 21,281,382 | 19,867,259 |
Accumulated deficit | (13,100,351) | (4,720,291) |
Total stockholders' equity | 8,185,895 | 15,153,837 |
Total liabilities and stockholders' equity | $ 12,219,532 | $ 24,432,568 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 23,832 | $ 34,546 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 6,878,904 | 6,868,679 |
Common stock, shares outstanding | 6,878,904 | 6,868,679 |
Treasury stock, shares | 1,900 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||
Subscription revenue | $ 11,405,787 | $ 14,336,146 |
Advertising revenue | 438,503 | 1,006,962 |
Technology service revenue | 3,439,327 | 4,988,692 |
Total revenue | 15,283,617 | 20,331,800 |
Costs and expenses | ||
Costs of revenue | 3,174,453 | 3,611,479 |
Sales and marketing expense | 1,056,967 | 1,804,317 |
Product development expense | 6,563,449 | 6,590,943 |
General and administrative expense | 6,343,859 | 7,873,936 |
Impairment loss on goodwill | 6,760,222 | |
Total costs and expenses | 23,898,950 | 19,880,675 |
Income (loss) from continuing operations | (8,615,333) | 451,125 |
Interest income | 156,423 | 81,180 |
Impairment loss on digital tokens | (625,368) | (2,535,235) |
Loss from continuing operations before provision for income taxes | (9,084,278) | (2,002,930) |
Benefit (expense) for income taxes | 141,593 | (3,001) |
Net loss from continuing operations | (8,942,685) | (2,005,931) |
Discontinued Operations: | ||
Gain on sale from discontinued operations | 826,770 | |
Loss from discontinued operations | (104,880) | (1,791,286) |
Income tax expense from discontinued operations | (159,265) | |
Net income (loss) from discontinued operations | 562,625 | (1,791,286) |
Net loss | $ (8,380,060) | $ (3,797,217) |
Basic net income (loss) per share of common stock: | ||
Continuing operations | $ (1.30) | $ (0.30) |
Discontinued operations | 0.08 | (0.26) |
Net loss per share of common stock | (1.22) | (0.56) |
Diluted net income (loss) per share of common stock: | ||
Continuing operations | (1.30) | (0.3) |
Discontinued operations | 0.08 | (0.26) |
Net loss per share of common stock | $ (1.22) | $ (0.56) |
Weighted average number of shares of common stock used in calculating net loss per share of common stock: | ||
Basic and diluted continuing operations | 6,873,652 | 6,721,633 |
Basic and diluted discontinued operations | 6,873,652 | 6,721,633 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Treasury Shares | Additional Paid-in Capital | Retained Earnings (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 | 1,592,121 | 1,592,121 | |||
Reconciliation of shares issued in stock-based compensation arrangement | $ 1 | 1 | |||
Reconciliation of shares issued in stock-based compensation arrangement, shares | 522 | ||||
Issuance of common stock for consulting services | $ 6 | 28,204 | 28,210 | ||
Issuance of common stock for consulting services, shares | 6,363 | ||||
Surrender of common stock for tax withholding | $ (20) | (99,980) | (100,000) | ||
Surrender of common stock for tax withholding, shares | (20,000) | ||||
Net loss | (3,797,217) | (3,797,217) | |||
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 | 1,385,118 | 1,385,118 | |||
Issuance of common stock for consulting services | $ 10 | 29,005 | 29,015 | ||
Issuance of common stock for consulting services, shares | 10,225 | ||||
Repurchased of common stock | $ (2,015) | (2,015) | |||
Repurchased of common stock, shares | (1,900) | ||||
Net loss | (8,380,060) | (8,380,060) | |||
Balance at Dec. 31, 2019 | $ 6,879 | $ (2,015) | $ 21,281,382 | $ (13,100,351) | $ 8,185,895 |
Balance, shares at Dec. 31, 2019 | 6,878,904 | (1,900) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (8,380,060) | $ (3,797,217) |
Less: Income (loss) from discontinued operations | 562,625 | (1,791,286) |
Loss from continuing operations | (8,942,685) | (2,005,931) |
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities of continuing operations: | ||
Depreciation of property and equipment | 349,082 | 387,452 |
Amortization of intangible assets | 256,332 | 1,599,721 |
Amortization of operating lease right-of-use assets | 178,158 | |
Reconciliation of shares issued in stock-based compensation arrangement | 1 | |
Surrender of common stock for tax withholding | (100,000) | |
Stock-based compensation | 1,385,118 | 1,592,121 |
Common stock issued for consulting services | 29,015 | |
Bad debt expense | 8,552 | |
Digital tokens received as payment for services | (3,368,127) | |
Impairment loss on goodwill | 6,760,222 | |
Impairment loss on digital tokens | 625,368 | 2,535,235 |
Realized gain from the sale of digital tokens | (70,995) | |
Changes in operating assets and liabilities: | ||
Credit card holdback receivable | 83,175 | 46,291 |
Accounts receivable | 196,100 | 143,810 |
Operating lease liability | (101,647) | |
Prepaid expense and other current assets | 113,550 | (60,425) |
Other assets | 29,891 | 32,770 |
Accounts payable, accrued expenses and other current liabilities | (2,138,302) | 800,993 |
Deferred subscription revenue | 360,922 | (467,845) |
Deferred technology service revenue | (3,379,435) | 3,379,435 |
Net cash (used in) provided by continuing operating activities | (4,266,131) | 4,524,053 |
Net cash used in discontinued operating activities | (199,232) | (1,791,286) |
Net cash (used in) provided by operating activities | (4,465,363) | 2,732,767 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (391,230) | (342,651) |
Proceeds from the sale of digital tokens | 130,290 | |
Net cash used in continuing investing activities | (260,940) | (342,651) |
Net cash provided by discontinued investing activities | 1,600,000 | |
Net cash provided by (used in) investing activities | 1,339,060 | (342,651) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock for stock option exercises | 28,210 | |
Purchase of treasury stock | (2,015) | |
Net cash provided by (used in) continuing financing activities | (2,015) | 28,210 |
Net cash provided by discontinued financing activities | ||
Net cash provided by (used in) financing activities | (2,015) | 28,210 |
Net increase (decrease) in cash and cash equivalents | (3,128,318) | 2,418,326 |
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 | 3,427,058 | 6,555,376 |
Non-cash investing and financing activities: | ||
Operating lease right-of-use asset and liability | $ 630,776 | $ 232,423 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business The accompanying 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 that power multimedia social applications. The Company has also developed a secure business communication solution for use worldwide. Our product portfolio includes Paltalk and Camfrog, which together host one of the world's largest collections of video-based communities. Our other products include Tinychat and Vumber. The Company has over 20 year history of technology innovation and holds 18 patents. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and with the requirements of the Security and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated upon consolidation. 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 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, subscription revenues net of refunds, credits, and known and estimated credit card chargebacks, the valuation allowance on deferred tax assets, fair value of digital tokens and impairment assessment of goodwill. 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. Revenue Recognition In accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers 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 year ended December 31, 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 consolidated balance sheets. The deferred revenue at December 31, 2018 was $1,468,571, of which $1,468,571 was subsequently recognized as subscription revenue during the year ended December 31, 2019. The ending balance of deferred revenue at December 31, 2019 was $1,829,493. 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 consolidated statements of operations. Virtual gift revenue for the year ended December 31, 2019 and 2018 was $5,079,837 and $7,422,884, respectively. The ending balance of deferred revenue at December 31, 2019 was $411,326. 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") was 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. 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 remaining $2.5 million due under the ProximaX Agreement. The portion of the upfront fee that remained unrecognized as of the termination of the ProximaX Agreement was $1.6 million and was recognized as revenue upon such termination, in addition to the $1.7 million of revenue recognized in the first quarter of 2019. Since there is no assurance of collectability on the remaining payments, revenue is being recognized as the payments under the Termination Agreement are received. For the year ended December 31, 2019, the Company recognized $22.4 thousand in revenue in connection with payments received. Digital Tokens Digital tokens consist of XPX tokens received in connection with the ProximaX Agreement. 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 had been based on the quoted market prices for the XPX tokens on the Kryptono Exchange. In September 2019, the Kryptono Exchange announced that as part of its periodic review of its listed digital assets it was determined that ProximaX no longer met its standards for continued listing. Accordingly, it delisted and ceased trading for XPX tokens on October 4, 2019. Because the value of XPX as listed on other exchanges had declined significantly, the Company recorded an impairment charge in the amount of $625,368 which is reported as a component of other income and expenses in the accompanying consolidated statements of operations for the year ended December 31, 2019. For the year ended December 31, 2019, the Company sold 61,716,857 digital tokens for $130,290. The gain of approximately $71,000 was recorded in the consolidated financial statements. Cost of revenue Cost of revenue consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent and bandwidth costs. Beginning in April 2018, cost of revenue also includes compensation and other employee-related costs for technical personnel and subcontracting costs relating to technology service revenue. We expect to experience corresponding growth in our cost of revenue as our software licensing and technology implementation services business grows. Sales and marketing Sales and marketing expense consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in sales and sales support functions. Advertising and promotional spend includes online marketing, including fees paid to search engines, and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our brands. Total advertising expense for the year ended December 31, 2019 was approximately $1.1 million and $5.3 million for the year ended December 31, 2018. Product development Product development expense, which relates to the development of technology of our applications, consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of service offerings as well as amortization of capitalized website development costs. General and administrative General and administrative expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and facilities costs and fees for other professional services. General and administrative expense also includes depreciation of property and equipment and amortization of intangible assets. Reportable Segment The Company operates in one reportable segment, and management assesses the Company's financial performance and makes operating decisions based on a single operating segment. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred taxes in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties would be included on the related tax liability line in the accompanying Consolidated Balance Sheets. Stock-Based Compensation In accordance with ASC No. 718, Compensation – Stock Compensation ("ASC 718") Equity instruments ("instruments") issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) The fair value of each option granted under the Company's Amended and Restated 2011 Long-Term Incentive Plan (the "2011 Plan") and 2016 Long-Term Incentive Plan (the "2016 Plan") was estimated using the Black-Scholes option-pricing model (see Note 7 for further details). Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company's common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non- employees are expected to hold their options prior to exercise, (iii) expected dividend yield on the Company's common stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Expected volatility is estimated based on the Company's historical volatilities. The expected life of options has been determined using the "simplified" method, which uses the midpoint between the vesting date and the end of the contractual term. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying dividends in the foreseeable future. Net Loss Per Share Basic net loss per common share is determined using the two-class method and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share Diluted net loss per common share reflects the more dilutive earnings per share amount calculated using the treasury stock method or the two-class method, taking into account any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options and unvested shares of restricted common stock (using the treasury stock method). To the extent stock options and unvested shares of restricted common stock are antidilutive, they are excluded from the calculation of diluted loss per share. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds. The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these banks. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. Receivables Accounts receivable are composed of amounts due from our advertising partners and from credit card processing companies following the initiation of subscription arrangements originated by our subscribers, which subscribers pay by credit cards. These receivables are unsecured and are typically settled by the payment processing company within several days of transaction processing accordingly, an allowance for doubtful accounts is considered. Accounts receivable from advertising partners and payment processing companies amounted to $130,686 and $326,786 on December 31, 2019 and December 31, 2018, respectively. As of December 31, 2019, three advertising partners accounted for 47% of accounts receivable. As of December 31, 2018, two advertising partners accounted for 23% of accounts receivable. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of those assets, as follows: Computers and equipment 5 years Website development 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term Repairs and maintenance costs are expensed as incurred. Property and equipment is evaluated for recoverability whenever events or changes in circumstances indicate that the carrying amounts of the assets might not be recoverable. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use and eventual disposition of the asset. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. No impairment losses were recorded on property and equipment for the periods presented in these consolidated financial statements. Website Development Costs In accordance with ASC 350-50, Website Development Costs Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company evaluates its goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other (as amended by ASU 2017-04) The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 of each fiscal year or more frequently if there are indicators that the carrying amount of the goodwill exceeds its carried value. The Company has one reporting unit. The Company performed a qualitative assessment and concluded that impairment of $6.8 million existed as of December 31, 2019, compared to no impairment for the year ended December 31, 2018 (See Note 12 for further details on impairment recorded). Intangible Assets The Company's intangible assets represent definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Patents 20 years Trade names, trademarks, product names, URLs 5-10 years Internally developed software 5-6 years Non-compete agreements 3 years Subscriber/customer relationships 3-12 years Lead pool 2 years The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. No impairments were recorded on intangible assets as no impairment indicators were noted for the periods presented in these consolidated financial statements. Asset and Liability Held for Sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. An asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale. As of December 31, 2018, the Company had an asset and liability held for sale as a result of the Asset Purchase Agreement with The Dating Company, LLC on January 31, 2019 pursuant to which we sold substantially all of the assets related to our online dating services business under the domain names FirstMet and 50more (see Note 3 for further details). Leases Effective December 31, 2018, the Company accounts for its leases under ASC 842, Leases ("ASC 842 Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, credit card holdback receivable, accounts payable, approximate fair value due to the short-term nature of these instruments. Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment In June 2018, the FASB issued an ASU to simplify several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation—Stock Compensation In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 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 $100.0 thousand of the purchase price that was 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 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 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: Year Ended December 31, 2019 2018 Revenues $ 440,225 $ 6,024,146 Costs of revenue (115,338 ) (1,272,733 ) Sales and marketing expense (270,200 ) (3,990,233 ) Product development expense (76,845 ) (1,454,049 ) General and administrative expense (82,722 ) (1,098,417 ) Loss from discontinued operations $ (104,880 ) $ (1,791,286 ) |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net consists of the following: December 31, 2019 2018 Computer equipment $ 3,706,017 $ 3,706,017 Website development 3,076,323 2,685,093 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,904,093 6,512,863 Less: Accumulated depreciation (6,284,034 ) (5,934,952 ) Total property and equipment, net $ 620,059 $ 577,911 Depreciation expense, which includes amortization of website development costs, for the years ended December 31, 2019 and 2018 was $349,082 and $387,452, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 5. Intangible Assets, Net Intangible assets, net consist of the following: December 31, 2019 2018 Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (26,250 ) $ 23,750 $ 50,000 $ (23,750 ) $ 26,250 Trade names, trademarks, product names, URLs 555,000 (446,479 ) 108,521 555,000 (390,979 ) 164,021 Internally developed software 1,990,000 (1,959,655 ) 30,345 1,990,000 (1,927,988 ) 62,012 Subscriber/customer relationships 2,279,000 (1,813,725 ) 465,275 2,279,000 (1,647,060 ) 631,940 Total intangible assets $ 4,874,000 $ (4,246,109 ) $ 627,891 $ 4,874,000 $ (3,989,777 ) $ 884,223 Amortization expense for the years ended December 31, 2019 and 2018 was $256,332 and $1,599,721, respectively. The estimated aggregate amortization expense for each of the next five years and thereafter will be $246,681 in 2020, $184,667 in 2021, $149,944 in 2022 and $46,599 thereafter. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The Company's provision for income taxes is comprised of the following: December 31, 2019 2018 Current Federal $ (151,597 ) $ - State and local 10,004 3,001 Total current (141,593 ) 3,001 Deferred Federal - - State and local - - Change in valuation allowance - - Total deferred - - Total provision (benefit) $ (141,593 ) $ 3,001 In 2019, as a result of the gain recorded in discontinued operations related to the sale of the Dating Services Business, the Company recorded an income tax benefit of $159,265 from continuing operations pursuant to the intra-period allocation guidance in ASC 740-20-45-7 which was partially offset by an income tax provision of $17,672 for state and local taxes. The Company also recorded an income tax expense of $159,265 allocated to discontinued operations. In 2018, the Company recorded an income tax provision of $3,001 for state and local taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2019 2018 Deferred tax assets: Net operating losses $ 4,265,150 $ 4,529,410 Share-based compensation 989,763 1,061,421 Amortization of intangible assets 1,056,162 767,591 Rent 168,036 - Tax credits 62,969 62,969 Other 72,032 10,528 Subtotal 6,614,116 6,431,919 Less: valuation allowance: (6,349,900 ) (6,339,578 ) Total deferred tax assets 264,216 92,341 Deferred tax liabilities: Intangibles - - Property and equipment (264,216 ) (92,341 ) Other - - Total deferred tax liabilities (264,216 ) (92,341 ) Net deferred tax assets $ - $ - In assessing the Company's ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Based on these factors including cumulative losses in recent years, the Company determined that its deferred tax assets are not realizable on a more-likely-than-not basis and has recorded a valuation allowance against its net deferred tax assets. The Company's valuation allowance increased by $10,322 during 2019. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company's deferred income tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly. The Company's effective tax rate differs from the U.S. federal statutory income tax rate of 21% for 2019 and 2018 as follows: 2019 2018 Income tax (expense) benefit at federal statutory rate 21.0 % 21.0 % Permanent differences (6.7 )% (0.7 )% State and local taxes (0.2 )% (2.4 )% Valuation allowance (0.1 )% (18.2 )% Deferred tax adjustment (12.6 )% 0.0 % Other 0.1 % 0.2 % Effective tax rate 1.6 % (0.1 )% The Company applies the applicable authoritative guidance which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, 2019, the Company has no uncertain tax positions. As such, there are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months from December 31, 2019. The Company files a federal income tax return and income tax returns in various state tax jurisdictions. The open tax years for the federal income tax return is 2016 through 2019. The state income tax returns have varying statutes of limitations. The open tax years relating to any of the Company's federal and state net operating losses begin in 2009. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: December 31, 2019 2018 Compensation, benefits and payroll taxes $ 138,001 $ 355,300 Income tax payable 17,672 - Other accrued expenses 279,066 382,645 Total accrued expenses and other current liabilities $ 434,739 $ 737,945 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 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 December 31, 2019, there were 454,792 shares available for future issuance under the 2016 Plan. Treasury Shares On April 29, 2019, the Company implemented a stock repurchase plan to repurchase up to $500 thousand of its common stock for cash. The repurchase plan expires on April 29, 2020. The Company has purchased 1,900 shares of its common stock under the repurchase plan as of December 31, 2019 and has classified them as treasury shares. Shares issued for consulting services On January 15, 2019 and October 1, 2019, we issued 6,000 and 4,225 shares of our common stock, respectively, to PCG Advisory, Inc. as consideration for investor relations services. The total expense for these grants was $29,005 and is included in general and administrative expense in the consolidated financial statements. 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 years ended: December 31, 2019 2018 Expected volatility 171.0-177.0 % 159.0-167.0 % Expected life of option 5.0-6.3 5.2-6.2 Risk free interest rate 1.7-2.5 % 2.3-2.9 % Expected dividend yield 0.0 % 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 year ended December 31, 2019: Number of Weighted Outstanding at January 1, 2019 1,037,797 $ 4.17 Granted 268,294 3.17 Exercised during period - 4.55 Forfeited or canceled, during the period (263,661 ) 4.34 Expired, during the period (21,187 ) 4.55 Outstanding at December 31, 2019 1,021,243 $ 4.82 Exercisable at December 31, 2019 764,400 $ 5.34 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 December 31, 2019, there was $635,013 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 1.78 years. On December 31, 2019, there was no aggregate intrinsic value of stock options that were outstanding and exercisable. On December 31, 2018, the aggregate intrinsic value of stock options that were outstanding and exercisable was $725,604 and $365,861, 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 year ended December 31, 2019, the Company granted options to employees to purchase an aggregate of 268,294 shares of common stock. These options vest between one and four years and have a term of ten years and have a weighted average exercise price of $3.17. The aggregate fair value for the options granted during the years ended December 31, 2019 and 2018 was $469,179 and $708,501, respectively. Stock-based compensation expense for the Company's stock options included in the consolidated statements of operations is as follows: Year Ended 2019 2018 Cost of revenue $ 1,478 $ 2,398 Sales and marketing expense 130 985 Product development expense 117,375 27,919 General and administrative expense 710,013 819,325 Total stock-based compensation expense $ 828,996 $ 850,627 Restricted Stock Awards The following table summarizes restricted stock award activity for the year ended December 31, 2019: Number of Weighted Unvested at January 1, 2019 158,571 $ 20.29 Granted - - Expired or canceled, during the period (20,000 ) 20.29 Forfeited, during the period (138,571 ) 20.29 Unvested at December 31, 2019 - $ - At December 31, 2019, there was no unrecognized compensation expense related to unvested restricted stock awards. Stock-based compensation expense relating to restricted stock awards for the years ended December 31, 2019 and 2018 was $556,122 and $741,494, respectively, which is included in general and administrative expense in the consolidated financial statements. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 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 following table summarizes the net income (loss) per share calculation: Years Ended 2019 2018 Net income (loss) from discontinued operations - basic and diluted $ 562,625 $ (1,791,286 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted from discontinued operations $ 0.08 $ (0.26 ) Years Ended 2019 2018 Net income (loss) from continuing operations - basic and diluted $ (8,942,685 ) $ (2,005,931 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted from continuing operations $ (1.30 ) $ (0.30 ) Years Ended 2019 2018 Net income (loss) - basic and diluted $ (8,380,060 ) $ (3,797,217 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted $ (1.22 ) $ (0.56 ) |
Leases
Leases | 12 Months Ended |
Dec. 31, 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 May 1, 2019, the Company entered into a lease agreement for 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 per month. The term of the sublease runs until April 26, 2023. As of December 31, 2019, the Company had no long-term leases that were classified as a financing lease. As of December 31, 2019, the Company did not have additional operating and financing leases that have not yet commenced. At December 31, 2019, the Company had operating lease liabilities of approximately $0.6 million and right of use assets of approximately $0.7 million, which are included in the consolidated balance sheet. Total rent expense for the year ended December 31, 2019 was $394,636, of which $52,136 was sublease income, and is recorded in general and administrative expense on the consolidated statements of operations. The following summarizes quantitative information about the Company's operating leases: Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 392,424 $ 273,073 Short-term lease rent expense 2,212 20,355 Total rent expense $ 394,636 $ 293,428 The following table summarizes the Company's operating and financing leases: Years Ended December 31, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 178,158 $ - Weighted average remaining lease term Operating leases 3.1 3.0 Weighted average discount rate Operating leases 2.5 % 3.7 % On December 31, 2019, future minimum payments under non-cancelable operating leases were as follows: For the years ending December 31, Amount 2020 $ 381,291 2021 382,238 2022 304,101 2023 102,418 Total $ 1,170,048 Less: present value adjustment (484,340 ) Present value of minimum lease payments $ 685,708 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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 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 December 31, 2019. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 12. Goodwill The Company test goodwill and indefinite-lived intangible assets for impairment annually and whenever events or circumstances arise that indicate an impairment may exist. The Company recorded $6,760,222 of goodwill impairment for the year ended December 31, 2019 due to a sustained decrease in market price per share. At December 31, 2019, the market price per share declined to $1.29 and as such, the company tested for an impairment and concluded that the goodwill should be reduced as result of the decline in the market price per share and fair value of the reporting unit. At December 31, 2019, the goodwill was $6,326,250 and $13,086,472 for the year ended December 31, 2018. The following table reflects changes in the carrying amount of goodwill for our reporting unit for the years ended December 31, 2019 and 2018: Balance at January 1, 2018 $ 13,086,472 Impairment - Balance at December 31, 2018 13,086,472 Impairment (6,760,222 ) Balance at December 31, 2019 $ 6,326,250 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On February 21, 2020, we entered into an Asset Purchase Agreement (the "SecureCo Purchase Agreement") with SecureCo, LLC ("SecureCo"), whereby we agreed to sell substantially all of the assets related to our secure communications business, which includes communication solutions and operations capabilities with respect to the development and commercialization of secure messaging and data applications, software and middleware for enterprise and government client targets (the "Secure Communications Assets"), to SecureCo for a cash purchase price of approximately $540,000, which is comprised of a base purchase price of $500,000 plus the reimbursement or waiver of certain severance expenses payable by the Company to certain former executive officers. In addition, we shall be entitled to receive a transition service fee of five percent (5%) of all revenue received by SecureCo or its Affiliates pursuant to certain unassignable contracts. The closing of the sale of the Assets is subject to the fulfilment of certain conditions by the Company and SecureCo, including, among other things, a condition that SecureCo shall have received financing that is sufficient to fund the purchase price. If the transaction is consummated, we do not expect to continue to pursue secured communications products or technology implementation services as part of our overall business strategy. If the transaction is not consummated , we expect to take a measured approach with respect to the potential commercialization of these products in a fiscally responsible manner. Management has evaluated subsequent events or transactions occurring through the date the 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) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and with the requirements of the Security and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated upon consolidation. |
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 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, subscription revenues net of refunds, credits, and known and estimated credit card chargebacks, the valuation allowance on deferred tax assets, fair value of digital tokens and impairment assessment of goodwill. 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. |
Revenue Recognition | Revenue Recognition In accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers |
Subscription Revenue | 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 year ended December 31, 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 consolidated balance sheets. The deferred revenue at December 31, 2018 was $1,468,571, of which $1,468,571 was subsequently recognized as subscription revenue during the year ended December 31, 2019. The ending balance of deferred revenue at December 31, 2019 was $1,829,493. 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 consolidated statements of operations. Virtual gift revenue for the year ended December 31, 2019 and 2018 was $5,079,837 and $7,422,884, respectively. The ending balance of deferred revenue at December 31, 2019 was $411,326. |
Advertising Revenue | 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 | Technology Service Revenue Revenue under the Company's technology services agreement (the "ProximaX Agreement") with ProximaX Limited ("ProximaX") was 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. 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 remaining $2.5 million due under the ProximaX Agreement. The portion of the upfront fee that remained unrecognized as of the termination of the ProximaX Agreement was $1.6 million and was recognized as revenue upon such termination, in addition to the $1.7 million of revenue recognized in the first quarter of 2019. Since there is no assurance of collectability on the remaining payments, revenue is being recognized as the payments under the Termination Agreement are received. For the year ended December 31, 2019, the Company recognized $22.4 thousand in revenue in connection with payments received. |
Digital Tokens | Digital Tokens Digital tokens consist of XPX tokens received in connection with the ProximaX Agreement. 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 had been based on the quoted market prices for the XPX tokens on the Kryptono Exchange. In September 2019, the Kryptono Exchange announced that as part of its periodic review of its listed digital assets it was determined that ProximaX no longer met its standards for continued listing. Accordingly, it delisted and ceased trading for XPX tokens on October 4, 2019. Because the value of XPX as listed on other exchanges had declined significantly, the Company recorded an impairment charge in the amount of $625,368 which is reported as a component of other income and expenses in the accompanying consolidated statements of operations for the year ended December 31, 2019. For the year ended December 31, 2019, the Company sold 61,716,857 digital tokens for $130,290. The gain of approximately $71,000 was recorded in the consolidated financial statements. |
Cost of revenue | Cost of revenue Cost of revenue consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting fees, and data center rent and bandwidth costs. Beginning in April 2018, cost of revenue also includes compensation and other employee-related costs for technical personnel and subcontracting costs relating to technology service revenue. We expect to experience corresponding growth in our cost of revenue as our software licensing and technology implementation services business grows. |
Sales and marketing | Sales and marketing Sales and marketing expense consists primarily of advertising expenditures and compensation (including stock-based compensation) and other employee-related costs for personnel engaged in sales and sales support functions. Advertising and promotional spend includes online marketing, including fees paid to search engines, and offline marketing, which primarily consists of partner-related payments to those who direct traffic to our brands. Total advertising expense for the year ended December 31, 2019 was approximately $1.1 million and $5.3 million for the year ended December 31, 2018. |
Product development | Product development Product development expense, which relates to the development of technology of our applications, consists primarily of compensation (including stock-based compensation) and other employee-related costs that are not capitalized for personnel engaged in the design, testing and enhancement of service offerings as well as amortization of capitalized website development costs. |
General and administrative | General and administrative General and administrative expense consists primarily of compensation (including stock-based compensation) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, human resources and facilities costs and fees for other professional services. General and administrative expense also includes depreciation of property and equipment and amortization of intangible assets. |
Reportable Segment | Reportable Segment The Company operates in one reportable segment, and management assesses the Company's financial performance and makes operating decisions based on a single operating segment. |
Reclassifications | 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 loss. |
Income Taxes | I ncome Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred taxes in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties would be included on the related tax liability line in the accompanying Consolidated Balance Sheets. |
Stock-Based Compensation | Stock-Based Compensation In accordance with ASC No. 718, Compensation – Stock Compensation ("ASC 718") Equity instruments ("instruments") issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASU No. 2018-07, Compensation — Stock Compensation (Topic 718) The fair value of each option granted under the Company's Amended and Restated 2011 Long-Term Incentive Plan (the "2011 Plan") and 2016 Long-Term Incentive Plan (the "2016 Plan") was estimated using the Black-Scholes option-pricing model (see Note 7 for further details). Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company's common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non- employees are expected to hold their options prior to exercise, (iii) expected dividend yield on the Company's common stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Expected volatility is estimated based on the Company's historical volatilities. The expected life of options has been determined using the "simplified" method, which uses the midpoint between the vesting date and the end of the contractual term. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying dividends in the foreseeable future. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is determined using the two-class method and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period as defined by ASC No. 260, Earnings Per Share Diluted net loss per common share reflects the more dilutive earnings per share amount calculated using the treasury stock method or the two-class method, taking into account any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options and unvested shares of restricted common stock (using the treasury stock method). To the extent stock options and unvested shares of restricted common stock are antidilutive, they are excluded from the calculation of diluted loss per share. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds. The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. As part of its cash management process, the Company periodically reviews the relative credit standing of these banks. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. |
Receivables | Receivables Accounts receivable are composed of amounts due from our advertising partners and from credit card processing companies following the initiation of subscription arrangements originated by our subscribers, which subscribers pay by credit cards. These receivables are unsecured and are typically settled by the payment processing company within several days of transaction processing accordingly, an allowance for doubtful accounts is considered. Accounts receivable from advertising partners and payment processing companies amounted to $130,686 and $326,786 on December 31, 2019 and December 31, 2018, respectively. As of December 31, 2019, three advertising partners accounted for 47% of accounts receivable. As of December 31, 2018, two advertising partners accounted for 23% of accounts receivable. |
Property and equipment | Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of those assets, as follows: Computers and equipment 5 years Website development 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term Repairs and maintenance costs are expensed as incurred. Property and equipment is evaluated for recoverability whenever events or changes in circumstances indicate that the carrying amounts of the assets might not be recoverable. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use and eventual disposition of the asset. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. No impairment losses were recorded on property and equipment for the periods presented in these consolidated financial statements. |
Website Development Costs | Website Development Costs In accordance with ASC 350-50, Website Development Costs |
Goodwill | Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company evaluates its goodwill for impairment in accordance with ASC 350, Intangibles – Goodwill and Other (as amended by ASU 2017-04) The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 of each fiscal year or more frequently if there are indicators that the carrying amount of the goodwill exceeds its carried value. The Company has one reporting unit. The Company performed a qualitative assessment and concluded that impairment of $6.8 million existed as of December 31, 2019, compared to no impairment for the year ended December 31, 2018 (See Note 12 for further details on impairment recorded). |
Intangible Assets | Intangible Assets The Company's intangible assets represent definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Patents 20 years Trade names, trademarks, product names, URLs 5-10 years Internally developed software 5-6 years Non-compete agreements 3 years Subscriber/customer relationships 3-12 years Lead pool 2 years The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. No impairments were recorded on intangible assets as no impairment indicators were noted for the periods presented in these consolidated financial statements. |
Asset and Liability Held for Sale | Asset and Liability Held for Sale An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value. An asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale. As of December 31, 2018, the Company had an asset and liability held for sale as a result of the Asset Purchase Agreement with The Dating Company, LLC on January 31, 2019 pursuant to which we sold substantially all of the assets related to our online dating services business under the domain names FirstMet and 50more (see Note 3 for further details). |
Leases | Leases Effective December 31, 2018, the Company accounts for its leases under ASC 842, Leases ("ASC 842"). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, credit card holdback receivable, accounts payable, approximate fair value due to the short-term nature of these instruments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance during the fourth quarter of fiscal year 2019, and its adoption had a significant impact on the Company's consolidated financial statements (refer to Note 12 for further details). In June 2018, the FASB issued an ASU to simplify several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in this ASU are effective for the Company on January 1, 2019. The Company adopted this guidance, and its adoption did not have any significant impact on the Company's consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. The Company has not early adopted ASU 2019-12 and is currently evaluating its impact financial position, results of operations, and cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of property plant and equipment useful life | Computers and equipment 5 years Website development 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term |
Schedule of finite lived intangible assets useful life | Patents 20 years Trade names, trademarks, product names, URLs 5-10 years Internally developed software 5-6 years Non-compete agreements 3 years Subscriber/customer relationships 3-12 years Lead pool 2 years |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations [Abstract] | |
Schedule of loss from discontinued operations | Year Ended December 31, 2019 2018 Revenues $ 440,225 $ 6,024,146 Costs of revenue (115,338 ) (1,272,733 ) Sales and marketing expense (270,200 ) (3,990,233 ) Product development expense (76,845 ) (1,454,049 ) General and administrative expense (82,722 ) (1,098,417 ) Loss from discontinued operations $ (104,880 ) $ (1,791,286 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | December 31, 2019 2018 Computer equipment $ 3,706,017 $ 3,706,017 Website development 3,076,323 2,685,093 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,904,093 6,512,863 Less: Accumulated depreciation (6,284,034 ) (5,934,952 ) Total property and equipment, net $ 620,059 $ 577,911 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | December 31, 2019 2018 Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (26,250 ) $ 23,750 $ 50,000 $ (23,750 ) $ 26,250 Trade names, trademarks, product names, URLs 555,000 (446,479 ) 108,521 555,000 (390,979 ) 164,021 Internally developed software 1,990,000 (1,959,655 ) 30,345 1,990,000 (1,927,988 ) 62,012 Subscriber/customer relationships 2,279,000 (1,813,725 ) 465,275 2,279,000 (1,647,060 ) 631,940 Total intangible assets $ 4,874,000 $ (4,246,109 ) $ 627,891 $ 4,874,000 $ (3,989,777 ) $ 884,223 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of income taxes provision | December 31, 2019 2018 Current Federal $ (151,597 ) $ - State and local 10,004 3,001 Total current (141,593 ) 3,001 Deferred Federal - - State and local - - Change in valuation allowance - - Total deferred - - Total provision (benefit) $ (141,593 ) $ 3,001 |
Schedule of deferred tax assets and liabilities | December 31, 2019 2018 Deferred tax assets: Net operating losses $ 4,265,150 $ 4,529,410 Share-based compensation 989,763 1,061,421 Amortization of intangible assets 1,056,162 767,591 Rent 168,036 - Tax credits 62,969 62,969 Other 72,032 10,528 Subtotal 6,614,116 6,431,919 Less: valuation allowance: (6,349,900 ) (6,339,578 ) Total deferred tax assets 264,216 92,341 Deferred tax liabilities: Intangibles - - Property and equipment (264,216 ) (92,341 ) Other - - Total deferred tax liabilities (264,216 ) (92,341 ) Net deferred tax assets $ - $ - |
Schedule of effective income tax rate | 2019 2018 Income tax (expense) benefit at federal statutory rate 21.0 % 21.0 % Permanent differences (6.7 )% (0.7 )% State and local taxes (0.2 )% (2.4 )% Valuation allowance (0.1 )% (18.2 )% Deferred tax adjustment (12.6 )% 0.0 % Other 0.1 % 0.2 % Effective tax rate 1.6 % (0.1 )% |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | December 31, 2019 2018 Compensation, benefits and payroll taxes $ 138,001 $ 355,300 Income tax payable 17,672 - Other accrued expenses 279,066 382,645 Total accrued expenses and other current liabilities $ 434,739 $ 737,945 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of assumptions used in Black-Scholes pricing model to estimate the fair value of the options granted | December 31, 2019 2018 Expected volatility 171.0-177.0 % 159.0-167.0 % Expected life of option 5.0-6.3 5.2-6.2 Risk free interest rate 1.7-2.5 % 2.3-2.9 % Expected dividend yield 0.0 % 0.0 % |
Schedule of stock option activity | Number of Weighted Outstanding at January 1, 2019 1,037,797 $ 4.17 Granted 268,294 3.17 Exercised during period - 4.55 Forfeited or canceled, during the period (263,661 ) 4.34 Expired, during the period (21,187 ) 4.55 Outstanding at December 31, 2019 1,021,243 $ 4.82 Exercisable at December 31, 2019 764,400 $ 5.34 |
Schedule of stock-based compensation expense | Year Ended 2019 2018 Cost of revenue $ 1,478 $ 2,398 Sales and marketing expense 130 985 Product development expense 117,375 27,919 General and administrative expense 710,013 819,325 Total stock-based compensation expense $ 828,996 $ 850,627 |
Schedule of restricted stock award activity | Number of Weighted Unvested at January 1, 2019 158,571 $ 20.29 Granted - - Expired or canceled, during the period (20,000 ) 20.29 Forfeited, during the period (138,571 ) 20.29 Unvested at December 31, 2019 - $ - |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share attributable | Years Ended 2019 2018 Net income (loss) from discontinued operations - basic and diluted $ 562,625 $ (1,791,286 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted from discontinued operations $ 0.08 $ (0.26 ) Years Ended 2019 2018 Net income (loss) from continuing operations - basic and diluted $ (8,942,685 ) $ (2,005,931 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted from continuing operations $ (1.30 ) $ (0.30 ) Years Ended 2019 2018 Net income (loss) - basic and diluted $ (8,380,060 ) $ (3,797,217 ) Weighted average shares outstanding – basic and diluted 6,873,652 6,721,633 Per share data: Basic and diluted $ (1.22 ) $ (0.56 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of operating leases | Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 392,424 $ 273,073 Short-term lease rent expense 2,212 20,355 Total rent expense $ 394,636 $ 293,428 |
Schedule of general and administrative expense | Years Ended December 31, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 178,158 $ - Weighted average remaining lease term Operating leases 3.1 3.0 Weighted average discount rate Operating leases 2.5 % 3.7 % |
Schedule of minimum operating lease payments | For the years ending December 31, Amount 2020 $ 381,291 2021 382,238 2022 304,101 2023 102,418 Total $ 1,170,048 Less: present value adjustment (484,340 ) Present value of minimum lease payments $ 685,708 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill Tables Abstract | |
Schedule of Goodwill | Balance at January 1, 2018 $ 13,086,472 Impairment - Balance at December 31, 2018 13,086,472 Impairment (6,760,222 ) Balance at December 31, 2019 $ 6,326,250 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computers and equipment [Member] | |
Property and equipment, estimated useful life | 5 years |
Website development [Member] | |
Property and equipment, estimated useful life | 3 years |
Furniture and fixtures [Member] | |
Property and equipment, estimated useful life | 7 years |
Leasehold improvements [Member] | |
Property and equipment, estimated useful life | Shorter of estimated useful life or remaining lease term |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2019 | |
Patents [Member] | |
Intangible assets estimated useful lives | 20 years |
Trade names, trademarks, product names, URLs [Member] | Minimum [Member] | |
Intangible assets estimated useful lives | 5 years |
Trade names, trademarks, product names, URLs [Member] | Maximum [Member] | |
Intangible assets estimated useful lives | 10 years |
Internally developed software [Member] | Minimum [Member] | |
Intangible assets estimated useful lives | 5 years |
Internally developed software [Member] | Maximum [Member] | |
Intangible assets estimated useful lives | 6 years |
Non-compete agreements [Member] | |
Intangible assets estimated useful lives | 3 years |
Subscriber/customer relationships [Member] | Minimum [Member] | |
Intangible assets estimated useful lives | 3 years |
Subscriber/customer relationships [Member] | Maximum [Member] | |
Intangible assets estimated useful lives | 12 years |
Lead pool [Member] | |
Intangible assets estimated useful lives | 2 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Dec. 31, 2019USD ($)Partnersshares | Dec. 31, 2018USD ($)Partners | |
Summary of Significant Accounting Policies (Textual) | ||
Deferred revenue | $ 1,829,493 | $ 1,468,571 |
Subscription revenue | $ 11,405,787 | 14,336,146 |
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 remaining $2.5 million due under the ProximaX Agreement. The portion of the upfront fee that remained unrecognized as of the termination of the ProximaX Agreement was $1.6 million and was recognized as revenue upon such termination, in addition to the $1.7 million of revenue recognized in the first quarter of 2019. Since there is no assurance of collectability on the remaining payments, revenue is being recognized as the payments under the Termination Agreement are received. For the year ended December 31, 2019, the Company recognized $22.4 thousand in revenue in connection with payments received. | |
Sold digital tokens shares | shares | 61,716,857 | |
Sold digital tokens value | $ 130,290 | |
Recorded of immaterial loss | $ 71,000 | |
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. | |
Total advertising expenses | $ 1,100,000 | 5,300,000 |
Accounts receivable amount | $ 130,686 | $ 326,786 |
Advertising partners accounts receivable, Percentage | 47.00% | 23.00% |
Number of partners | Partners | 3 | 2 |
Goodwill impairment loss | $ 6,760,222 | |
Revenue recognized | 1,700,000 | |
Subscription Revenue [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Deferred revenue | 411,326 | |
Subscription revenue | 1,468,571 | |
Virtual gift and micro-transaction revenue | 5,079,837 | $ 7,422,884 |
Revenue payments | 22,400 | |
Impairment loss on digital tokens | $ 625,368 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loss from discontinued operations | $ (1,791,286) | $ 562,625 |
Dating Services Business [Member] | ||
Revenues | 440,225 | 6,024,146 |
Costs of revenue | (115,338) | (1,272,733) |
Sales and marketing expense | (270,200) | (3,990,233) |
Product development expense | (76,845) | (1,454,049) |
General and administrative expense | (82,722) | (1,098,417) |
Loss from discontinued operations | $ (104,880) | $ (1,791,286) |
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 ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 6,904,093 | $ 6,512,863 |
Less: Accumulated depreciation | (6,284,034) | (5,934,952) |
Total property and equipment, net | 620,059 | 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 | 3,076,323 | 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 ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense | $ 349,082 | $ 387,452 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,874,000 | $ 4,874,000 |
Accumulated Amortization | (4,246,100) | (3,989,777) |
Net Carrying Amount | 627,891 | 884,223 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,000 | 50,000 |
Accumulated Amortization | (26,250) | (23,750) |
Net Carrying Amount | 23,750 | 26,250 |
Trade names, trademarks product names, URLs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 555,000 | 555,000 |
Accumulated Amortization | (446,479) | (390,979) |
Net Carrying Amount | 108,521 | 164,021 |
Internally developed software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,990,000 | 1,990,000 |
Accumulated Amortization | (1,959,655) | (1,927,988) |
Net Carrying Amount | 30,345 | 62,012 |
Subscriber/customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,279,000 | 2,279,000 |
Accumulated Amortization | (1,813,725) | (1,647,060) |
Net Carrying Amount | $ 465,275 | $ 631,940 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets, Net (Textual) | ||
Amortization expense | $ 256,332 | $ 1,599,721 |
Estimated aggregate amortization expense for 2020 | 246,681 | |
Estimated aggregate amortization expense for 2021 | 184,667 | |
Estimated aggregate amortization expense for 2022 | 149,944 | |
Estimated aggregate amortization expense for thereafter | $ 46,599 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current | ||
Federal | $ (151,597) | |
State and local | 10,004 | 3,001 |
Total current | (141,593) | 3,001 |
Deferred | ||
Federal | ||
State and local | ||
Change in valuation allowance | ||
Total deferred | ||
Total provision (benefit) | $ (141,593) | $ 3,001 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating losses | $ 4,265,150 | $ 4,529,410 |
Share-based compensation | 989,763 | 1,061,421 |
Amortization of intangible assets | 1,056,162 | 767,591 |
Rent | 168,036 | |
Tax credits | 62,969 | 62,969 |
Other | 72,032 | 10,528 |
Subtotal | 6,614,116 | 6,431,919 |
Less: valuation allowance: | (6,349,900) | (6,339,578) |
Total deferred tax assets | 264,216 | 92,341 |
Deferred tax liabilities: | ||
Intangibles | ||
Property and equipment | (264,216) | (92,341) |
Other | ||
Total deferred tax liabilities | (264,216) | (92,341) |
Net deferred tax assets |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax (expense) benefit at federal statutory rate | 21.00% | 21.00% |
Permanent differences | (3.00%) | (0.70%) |
State and local taxes | (0.20%) | (2.40%) |
Valuation allowance | (0.10%) | (18.20%) |
Deferred tax adjustment | (15.80%) | 0.00% |
Other | 0.10% | 0.20% |
Effective tax rate | 2.00% | (0.10%) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes (Textual) | ||
Valuation allowance increased | $ 10,322 | |
Income tax expense (benefit) at federal statutory rate | 21.00% | 21.00% |
Operating loss carry forwards expiring date | Expire in 2030 to 2037 | |
Income tax expense from discontinued operations | $ (159,265) | |
Income tax payable | 17,672 | |
Income tax expense from continuing operations | 159,265 | |
State and local | $ 10,004 | $ 3,001 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Compensation, benefits and payroll taxes | $ 138,001 | $ 355,300 |
Income tax payable | 17,672 | |
Other accrued expenses | 279,066 | 382,645 |
Total accrued expenses and other current liabilities | $ 434,739 | $ 737,945 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 171.00% | 159.00% |
Expected life of option (in years) | 5 years | 5 years 2 months 12 days |
Risk free interest rate | 1.70% | 2.30% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 177.00% | 167.00% |
Expected life of option (in years) | 6 years 3 months 19 days | 6 years 2 months 12 days |
Risk free interest rate | 2.50% | 2.90% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock Option [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Stock Options: | |
Number of Options, Outstanding beginning balance | shares | 1,037,797 |
Number of Options, Granted | shares | 268,294 |
Number of Options, Exercised | shares | |
Number of Options, Forfeited or canceled, during the period | shares | (263,661) |
Number of Options, Expired, during the period | shares | (21,187) |
Number of Options, Outstanding ending balance | shares | 1,021,243 |
Number of Options, Exercisable | shares | 764,400 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 4.17 |
Weighted Average Exercise Price, Granted | $ / shares | 3.17 |
Weighted Average Exercise Price, Exercised | $ / shares | 4.55 |
Weighted Average Exercise Price, Forfeited or canceled, during the period | $ / shares | 4.34 |
Weighted Average Exercise Price, Expired, during the period | $ / shares | 4.55 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 4.82 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.34 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock-based compensation expense | $ 1,385,118 | $ 1,592,121 |
Cost of revenue [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock-based compensation expense | 1,478 | 2,398 |
Sales and marketing expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock-based compensation expense | 130 | 985 |
Product development expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock-based compensation expense | 117,375 | 27,919 |
General and administrative expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock-based compensation expense | $ 710,013 | $ 819,325 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Restricted Stock Awards: | |
Number of Restricted Stock Awards, Beginning balance | shares | 158,571 |
Number of Restricted Stock Awards, Granted | shares | |
Number of Restricted Stock Awards, Expired or canceled, during the period | shares | (20,000) |
Number of Restricted Stock Awards, Forfeited, during the period | shares | (138,571) |
Number of Restricted Stock Awards, Ending balance | shares | |
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 | 20.29 |
Weighted Average Grant Date Fair Value, Forfeited, during the period | $ / shares | 20.29 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Oct. 01, 2019 | May 07, 2019 | Jan. 15, 2019 | Apr. 29, 2019 | May 16, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity (Textual) | |||||||
Aggregate fair value of options granted | $ 469,179 | $ 708,501 | |||||
Total unrecognized compensation expense | $ 635,013 | ||||||
Weighted average expected recognition period of unrecognized compensation expense | 1 year 9 months 11 days | ||||||
Stock-based compensation expense | $ 1,385,118 | 1,592,121 | |||||
Aggregate intrinsic value of stock options, outstanding | 725,604 | ||||||
Aggregate intrinsic value of stock options, exercisable | 365,861 | ||||||
Aggregate granted options to employees, Shares | 268,294 | ||||||
Repurchased shares of common stock | $ 500,000 | ||||||
Repurchase of common stock shares | 1,900 | ||||||
Repurchase plan expires date | Apr. 29, 2020 | ||||||
Weighted average exercise price | $ 3.17 | ||||||
Vesting period, description | These options vest between one and four years and have a term of ten years and have a weighted average exercise price of $3.17. | ||||||
Total expense | $ 29,005 | ||||||
2016 Plan [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Number of stock available for future issuance | 454,792 | ||||||
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 accounted for these agreements as an option modification and recognized approximately $115,000 of stock compensation expense in connection with the agreements. | ||||||
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) | |||||||
Stock-based compensation expense | $ 556,122 | $ 741,494 | |||||
Consulting Services [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Shares issue of common stock | 4,225 | 6,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income (loss) from discontinued operations - basic and diluted | $ (1,791,286) | $ 562,625 |
Weighted average shares outstanding - basic and diluted | 6,873,652 | 6,721,633 |
Per share data: | ||
Basic and diluted from discontinued operations | $ (0.26) | $ 0.08 |
Net Income (Loss) Per Share (_2
Net Income (Loss) Per Share (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income (loss) from continuing operations - basic and diluted | $ (8,942,685) | $ (2,005,931) |
Weighted average shares outstanding - basic and diluted | 6,873,652 | 6,721,633 |
Per share data: | ||
Basic and diluted from continuing operations | $ (1.30) | $ (0.30) |
Net Income (Loss) Per Share (_3
Net Income (Loss) Per Share (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income (loss) - basic and diluted | $ (8,380,060) | $ (3,797,217) |
Weighted average shares outstanding - basic and diluted | 6,873,652 | 6,721,633 |
Per share data: | ||
Basic and diluted | $ (1.22) | $ (0.56) |
Net Income (Loss) Per Share (_4
Net Income (Loss) Per Share (Details Textual) | 12 Months Ended |
Dec. 31, 2019shares | |
Earnings Per Share [Abstract] | |
Shares not included in the computation of diluted net income (loss) per share | 1,021,243 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Lease cost | ||
Operating lease cost | $ 392,424 | $ 273,073 |
Short-term lease rent expense | 2,212 | 20,355 |
Total rent expense | $ 394,636 | $ 293,428 |
Leases (Details 1)
Leases (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities, Operating cash flows from operating leases | $ 178,158 | |
Weighted average remaining lease term, Operating leases | 3 years 1 month 6 days | 3 years |
Weighted average discount rate, Operating leases | 2.50% | 3.70% |
Leases (Details 2)
Leases (Details 2) | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 381,291 |
2021 | 382,238 |
2022 | 304,101 |
2023 | 102,418 |
Total | 1,170,048 |
Less: present value adjustment | (484,340) |
Present value of minimum lease payments | $ 685,708 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | Jun. 07, 2016 | May 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases (Textual) | ||||
Security deposit amount | $ 133,968 | |||
Rent payments per month | $ 5,900 | $ 33,492 | ||
Operating lease expenses | $ 394,636 | $ 293,428 | ||
Operating lease, description | Commenced on September 1, 2016 and runs through November 30, 2021. | The term of the lease runs until April 26, 2023. | ||
sublease income | 52,136 | |||
Current portion of operating lease liabilities | 178,479 | 114,789 | ||
Operating lease right-of-use asset | $ 685,042 | $ 232,423 | ||
Lease Agreements [Member] | ||||
Leases (Textual) | ||||
Rent payments per month | $ 11,164 | |||
Operating lease, description | The term of the sublease runs until April 26, 2023. |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Impairment | $ 6,760,222 | |
Goodwill [Member] | ||
Beginning balance | 13,086,472 | $ 13,086,472 |
Impairment | (6,760,222) | |
Ending balance | $ 6,326,250 | $ 13,086,472 |
Goodwill (Details Textual)
Goodwill (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill (Textual) | ||
Market price per share | $ 1.29 | |
Impairment | $ 6,760,222 | |
Goodwill | $ 6,326,250 | $ 13,086,472 |
Subsequent Events (Details)
Subsequent Events (Details) - Asset Purchase Agreement [Member] | 1 Months Ended |
Feb. 21, 2020USD ($) | |
Subsequent Events (Textual) | |
Cash purchase price | $ 540,000 |
Description of purchase price | We entered into an Asset Purchase Agreement (the "SecureCo Purchase Agreement") with SecureCo, LLC ("SecureCo"), whereby we agreed to sell substantially all of the assets related to our secure communications business, which includes communication solutions and operations capabilities with respect to the development and commercialization of secure messaging and data applications, software and middleware for enterprise and government client targets (the "Secure Communications Assets"), to SecureCo for a cash purchase price of approximately $540,000, which is comprised of a base purchase price of $500,000 plus the reimbursement or waiver of certain severance expenses payable by the Company to certain former executive officers. In addition, we shall be entitled to receive a transition service fee of five percent (5%) of all revenue received by SecureCo or its Affiliates pursuant to certain unassignable contracts. |