Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | ||
Mar. 31, 2020 | May 01, 2020 | ||
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PeerStream, Inc. | ||
Entity Central Index Key | 0001355839 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2020 | ||
Document Fiscal Period Focus | Q1 | ||
Document Fiscal Year Focus | 2020 | ||
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 Common Stock, Shares Outstanding | [1] | 6,870,404 | |
Entity File Number | 000-52176 | ||
Entity Incorporation State Country Code | DE | ||
[1] | Excludes 8,500 shares of common stock that are held as treasury stock by PeerStream, Inc. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 3,436,710 | $ 3,427,058 |
Accounts receivable, net of allowances and reserves of $23,832 as of March 31, 2020 and December 31, 2019 | 122,801 | 130,686 |
Prepaid expense and other current assets | 159,570 | 167,441 |
Total current assets | 3,719,081 | 3,725,185 |
Operating lease right-of-use assets | 646,513 | 685,042 |
Property and equipment, net | 531,199 | 620,059 |
Goodwill | 6,326,250 | 6,326,250 |
Intangible assets, net | 563,807 | 627,891 |
Digital tokens | 119,802 | 148,229 |
Other assets | 30,834 | 86,876 |
Total assets | 11,937,486 | 12,219,532 |
Current liabilities: | ||
Accounts payable | 1,308,776 | 1,007,851 |
Accrued expenses and other current liabilities | 311,699 | 434,739 |
Current portion of operating lease liabilities | 195,144 | 178,479 |
Deferred subscription revenue | 1,764,634 | 1,829,493 |
Total current liabilities | 3,580,253 | 3,450,562 |
Operating lease liabilities, non-current portion | 527,756 | 583,075 |
Total liabilities | 4,108,009 | 4,033,637 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 25,000,000 shares authorized; and 6,878,904 shares issued and 6,870,404 and 6,877,004 shares outstanding as of March 31, 2020 and December 31, 2019, respectively | 6,879 | 6,879 |
Treasury stock, 8,500 and 1,900 shares, at par as of March 31, 2020 and December 31, 2019, respectively | (9,255) | (2,015) |
Additional paid-in capital | 21,370,588 | 21,281,382 |
Accumulated deficit | (13,538,735) | (13,100,351) |
Total stockholders' equity | 7,829,477 | 8,185,895 |
Total liabilities and stockholders' equity | $ 11,937,486 | $ 12,219,532 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 23,832 | $ 23,832 |
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 | 6,878,904 |
Common stock, shares outstanding | 6,870,404 | 6,877,004 |
Treasury stock, shares | 8,500 | 1,900 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Subscription revenue | $ 2,650,123 | $ 3,004,355 |
Advertising revenue | 55,667 | 120,490 |
Technology service revenue | 14,952 | 1,748,330 |
Total revenues | 2,720,742 | 4,873,175 |
Costs and expenses: | ||
Cost of revenue | 622,724 | 952,219 |
Sales and marketing expense | 191,670 | 377,151 |
Product development expense | 1,250,696 | 1,771,565 |
General and administrative expense | 1,019,254 | 1,877,472 |
Total costs and expenses | 3,084,344 | 4,978,407 |
Loss from continuing operations | (363,602) | (105,232) |
Other expense | (84,469) | |
Interest income, net | 12,187 | 29,957 |
Loss from continuing operations before provision for income taxes | (435,884) | (75,275) |
Benefit (expense) for income taxes | (2,500) | 158,990 |
Net income (loss) from continuing operations | (438,384) | 83,715 |
Discontinued Operations: | ||
Gain on sale from discontinued operations | 826,770 | |
Loss from discontinued operations | (104,880) | |
Income tax expense on discontinued operations | (158,990) | |
Net income from discontinued operations | 562,900 | |
Net income (loss) | $ (438,384) | $ 646,615 |
Basic net income (loss) per share of common stock: | ||
Continuing operations | $ (0.06) | $ 0.01 |
Discontinued operations | 0.08 | |
Basic net income (loss) per share of common stock | (0.06) | 0.09 |
Diluted net income (loss) per share of common stock: | ||
Continuing operations | (0.06) | 0.01 |
Discontinued operations | 0.08 | |
Diluted net income (loss) per share of common stock | $ (0.06) | $ 0.09 |
Weighted average number of shares of common stock used in calculating net income (loss) per share of common stock: | ||
Basic | 6,873,571 | 6,794,660 |
Diluted | 6,873,571 | 6,794,660 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Shares | Treasury Shares | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at Dec. 31, 2018 | $ 6,869 | $ 19,867,259 | $ (4,720,291) | $ 15,153,837 | |
Balance, shares at Dec. 31, 2018 | 6,868,679 | ||||
Stock-based compensation expense for restricted stock awards and stock options | 452,525 | 452,525 | |||
Issuance of common stock for consulting services | $ 6 | 34,494 | 34,500 | ||
Issuance of common stock for consulting services, shares | 6,000 | ||||
Net income/loss | 646,615 | 646,615 | |||
Balance at Mar. 31, 2019 | $ 6,875 | 20,354,278 | (4,073,676) | 16,287,477 | |
Balance, shares at Mar. 31, 2019 | 6,874,679 | ||||
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) | |||
Stock-based compensation expense | 89,206 | 89,206 | |||
Repurchases of common stock | $ (6,600) | $ (7,240) | |||
Repurchases of common stock, shares | (7,240) | ||||
Net income/loss | (438,384) | (438,384) | |||
Balance at Mar. 31, 2020 | $ 6,879 | $ (9,255) | $ 21,370,588 | $ (13,538,735) | $ 7,829,477 |
Balance, shares at Mar. 31, 2020 | 6,878,904 | (8,500) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (438,384) | $ 646,615 |
Less: Income from discontinued operations | 562,900 | |
Income (loss) from continuing operations | (438,384) | 83,715 |
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 | 88,860 | 88,614 |
Amortization of intangible assets | 64,084 | 64,082 |
Amortization of operating lease right-of-use assets | 38,529 | |
Realized loss from the sale of digital tokens | 28,427 | |
Stock-based compensation | 89,206 | 452,525 |
Common stock issued for consulting services | 34,500 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,885 | 206,303 |
Operating lease liability | (38,654) | |
Prepaid expenses and other current assets | 7,871 | (63,658) |
Other assets | 56,042 | (481) |
Accounts payable, accrued expenses and other current liabilities | 177,885 | (1,726,234) |
Deferred subscription revenue | (64,859) | 20,894 |
Deferred technology service revenue | (1,748,330) | |
Net cash (used in) provided by continuing operating activities | 16,892 | (2,588,070) |
Net cash used in discontinued operating activities | (198,957) | |
Net cash (used in) provided by operating activities | 16,892 | (2,787,027) |
Cash flows from investing activities: | ||
Payment for property and equipment, including website development, net | (99,075) | |
Net cash used in continuing investing activities | (99,075) | |
Net cash provided by discontinued investing activities | 1,600,000 | |
Net cash provided by investing activities | 1,500,925 | |
Cash flows from financing activities: | ||
Purchase of treasury stock | (7,240) | |
Net cash used in continuing financing activities | (7,240) | |
Net cash used in discontinued financing activities | ||
Net cash used in financing activities | (7,240) | |
Net increase (decrease) in cash and cash equivalents | 9,652 | (1,286,102) |
Balance of cash and cash equivalents at beginning of period | 3,427,058 | 6,555,376 |
Balance of cash and cash equivalents at end of period | $ 3,436,710 | $ 5,269,274 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business The accompanying condensed consolidated financial statements include PeerStream, Inc. and its wholly owned subsidiaries, A.V.M. Software, Inc., Paltalk Software Inc., Paltalk Holdings, Inc., Tiny Acquisition Inc., Camshare, Inc., Fire Talk LLC and Vumber LLC (collectively, the "Company," "we," "our" or "us"). The Company is a communications software innovator that powers 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 an over 20-year history of technology innovation and holds 18 patents. The condensed consolidated financial statements included in this report have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States ("GAAP") and the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial information. The Company has not included certain information and notes required by GAAP for complete financial statements pursuant to those rules and regulations, although it believes that the disclosure included herein is adequate to make the information presented not misleading. The condensed consolidated financial statements contained herein should be read in conjunction with the Company's audited consolidated financial statements and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 24, 2020 (the "Form 10-K"). In the opinion of management, the accompanying unaudited condensed consolidated financial information contains all normal and recurring adjustments necessary to fairly present the condensed consolidated balance sheet, results of operations, cash flows and changes in the stockholders' equity of the Company for the interim periods presented. The Company's historical results are not necessarily indicative of future operating results, and the results for the three months ended March 31, 2020 are not necessarily indicative of results for the year ending December 31, 2020, or for any other period. Reclassifications Certain prior period amounts have been reclassified for comparative purposes to conform to the current presentation. These reclassifications have no impact on the previously reported net income (loss). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies For a detailed discussion about the Company's significant accounting policies, see the Form 10-K. During the three months ended March 31, 2020, there were no significant changes made to the Company's significant accounting policies. Significant Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the estimates used to determine the fair value of the stock options issued in share based payment arrangements, collectability of the Company's accounts receivable, measurements of proportional performance under certain service contracts, 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. Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Revenue 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 three months ended March 31, 2020 and 2019, subscriptions were offered in durations of one-, three-, six- and twelve- month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets. The deferred revenue at December 31, 2019 was $1,829,493, of which $1,043,533 was subsequently recognized as subscription revenue during the three months ended March 31, 2020. The ending balance of deferred revenue at March 31, 2020 was $1,764,634. In addition, the Company offers virtual gifts to its users. Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. These gifts are given among users to enhance communication and are typically redeemed within 30 days of purchase. Upon purchase, the virtual gifts are credited to the users' account and are under the users' control. Virtual gift revenue is recognized upon the users' utilization of such at the fixed transaction price and included in subscription revenue in the accompanying condensed consolidated statements of operations. Virtual gift revenue was approximately $1,215,061 and $1,420,834 for the three months ended March 31, 2020 and 2019, respectively. The ending balance of deferred revenue from virtual gifts at March 31, 2020 and 2019 was $204,121 and $0, respectively. Advertising Revenue The Company generates advertising revenue from the display of advertisements on its products through contractual agreements with third parties that are based on the number of advertising impressions delivered. Measurements of impressions include when a customer clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), or registers for an external website via an advertisement by clicking on or through the application (CPA basis). Advertising revenue is dependent upon traffic as well as the advertising inventory placed on the Company's products. Technology Service Revenue Revenue under the Company's technology services agreement (the "ProximaX Agreement") with ProximaX Limited ("ProximaX") 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 three months ended March 31, 2020, the Company recognized approximately $15.0 thousand in revenue in connection with payments received under the Termination Agreement. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
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 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: Three Months Ended March 31, 2020 2019 Revenues $ - $ 440,225 Costs of revenue - (115,338 ) Sales and marketing expense - (270,200 ) Product development expense - (76,845 ) General and administrative expense - (82,722 ) Loss from discontinued operations $ - $ (104,880 ) |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net consisted of the following at March 31, 2020 and December 31, 2019: March 31, December 31, (unaudited) Computer equipment $ 3,706,017 $ 3,706,017 Website development 3,076,323 3,076,323 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,904,093 6,904,093 Less: Accumulated depreciation (6,372,894 ) (6,284,034 ) Total property and equipment, net $ 531,199 $ 620,059 Depreciation expense for the three months ended March 31, 2020 was $88,860 as compared to $88,614 for the three months ended March 31, 2019. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 5. Goodwill The Company tests 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 of the Company's common stock. At December 31, 2019, the market price per share of the Company's common stock 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. The Company determined there were no indicators that would lead to a test for impairment during the three months ended, March 31, 2020. Goodwill was $6,326,250 at March 31, 2020 and December 31, 2019. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 6. Intangible Assets, Net Intangible assets, net consisted of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 (unaudited) Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (26,875 ) $ 23,125 $ 50,000 $ (26,250 ) $ 23,750 Trade names, trademarks product names, URLs 555,000 (460,354 ) 94,646 555,000 (446,479 ) 108,521 Internally developed software 1,990,000 (1,967,572 ) 22,428 1,990,000 (1,959,655 ) 30,345 Subscriber/customer relationships 2,279,000 (1,855,392 ) 423,608 2,279,000 (1,813,725 ) 465,275 Total intangible assets $ 4,874,000 $ (4,310,193 ) $ 563,807 $ 4,874,000 $ (4,246,109 ) $ 627,891 Amortization expense for the three months ended March 31, 2020 was $64,084, as compared to $64,082 for the three months ended March 31, 2019. The estimated aggregate amortization expense for each of the next five years and thereafter will be $182,597 in 2020, $184,667 in 2021, $149,944 in 2022, $18,000 in 2023, $17,354 in 2024 and $11,245 thereafter. |
Digital Tokens
Digital Tokens | 3 Months Ended |
Mar. 31, 2020 | |
Digital Tokens [Abstract] | |
Digital Tokens | 7. 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. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following at March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 (unaudited) Compensation, benefits and payroll taxes $ 168,000 $ 347,601 Income tax payable 20,172 17,672 Other accrued expenses 123,527 69,466 Total accrued expenses and other current liabilities $ 311,699 $ 434,739 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Company's provision for income taxes consists of federal and state taxes, as applicable, in amounts necessary to align the Company's year-to-date tax provision with the effective rate that it expects to achieve for the full year. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. As of March 31, 2020, our conclusion regarding the realizability of our U.S. deferred tax assets did not change and we have recorded a full valuation allowance against them. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted in response to COVID-19 pandemic. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. The CARES Act made various tax law changes. including. among other things. (i) increasing the limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended (the "Code"), for 2018 through 2020 to permit additional expensing of interest, (ii) enacting a technical correction so that qualified improvement property can be immediately expensed under Section 168(k) of the IRC, (iii) making modifications to the federal net operating loss rules, including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes, and (iv) enhancing the recoverability of alternative minimum tax credits. Given the Company's full valuation allowance position, the CARES Act did not have a material impact on the Company's condensed consolidated financial statements. For the three months ended March 31, 2020, the Company recorded an income tax provision of $2,500. The effective tax rate for the three months ended March 31, 2020 was (0.57%). The effective tax rate differs from the statutory rate of 21% as the Company has concluded that its deferred tax assets are not realizable on a more-likely-than-not basis. For the three months ended March 31, 2019, the Company recorded an income tax benefit from continuing operations of $158,990 on a pre-tax loss of $75,275. As a result of the gain recorded in discontinued operations in connection with the sale of the Dating Services Business, the Company was able to record an income tax benefit in continuing operations under the intra-period allocation guidance. As such, our effective tax rate of 211.21% differed from the statutory rate of 21%. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 10. 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 121,930 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 March 31, 2020, there were 702,660 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 $500,000 of its common stock for cash. The repurchase plan expired on April 29, 2020. The Company had purchased 8,500 shares of its common stock under the repurchase plan as of March 31, 2020 and has classified them as treasury shares. Stock Options The following table summarizes the assumptions used in the Black-Scholes pricing model to estimate the fair value of the options granted during the following period: Three Months Ended March 31, 2020 Expected volatility 188.0 % Expected life of option (in years) 5.3 Risk free interest rate 0.59 % Expected dividend yield 0.0 % The expected life of the options is the period of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has been determined using the "simplified" method as prescribed by Staff Accounting Bulletin 110, which uses the midpoint between the vesting date and the end of the contractual term. The volatility of the Company's common stock is calculated using the Company's historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. The Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly. The Company estimates pre-vesting forfeitures primarily based on the Company's historical experience and is adjusted to reflect actual forfeitures as the stock-based awards vest. The following table summarizes stock option activity during the three months ended March 31, 2020: Weighted Number of Average Options Price Stock Options: Outstanding at January 1, 2020 1,021,243 $ 4.82 Granted 24,000 0.80 Forfeited or canceled, during the period (229,575 ) 3.61 Expired, during the period (42,293 ) 4.07 Outstanding at March 31, 2020 773,375 $ 5.09 Exercisable at March 31, 2020 551,093 $ 6.03 At March 31, 2020, there was $303,703 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 1.7 years. On March 31, 2020, the aggregate intrinsic value of stock options that were outstanding and exercisable was $1,440 and $360, respectively. On March 31, 2019, the aggregate intrinsic value of stock options that were outstanding and exercisable was $238,293 and $124,821, 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 three months ended March 31, 2020, the Company granted options to members of the Board of Directors to purchase an aggregate 24,000 shares of common stock at an exercise price of $0.80 per share. The options vest in four equal quarterly installments on the last day of each calendar quarter in 2020 and have a term of ten years. The aggregate fair value for the options granted during the three months ended March 31, 2020 and 2019 was $18,664 and $187,429, respectively. Stock-based compensation expense for the Company's stock options included in the condensed consolidated statements of operations is as follows: Three Months Ended March 31, 2020 2019 Cost of revenue $ 373 $ 361 Sales and marketing expense 20 45 Product development expense 7,381 89,743 General and administrative expense 81,432 177,002 Total stock compensation expense $ 89,206 $ 267,151 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 11. 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 For the three months ended March 31, 2020, 773,375 of shares issuable upon the exercise of outstanding stock options were not included in the computation of diluted net income (loss) per share for continuing operations because their inclusion would be antidilutive. For the three months ended March 31, 2019, 1,062,745 shares issuable upon the exercise of outstanding stock options and 79,286 shares of unvested restricted stock were not included in the computation of diluted net income per share because their inclusion would be anti-dilutive. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 12. 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. We have been notified that, due to the coronavirus outbreak, Telecom Infrastructure Corp. is currently unable to make its monthly payments under the sublease agreement, and such payments ceased being made in March 2020. We are currently in discussions with Telecom Infrastructure Corp. concerning its nonpayment and we are exploring all remedies available to us. As of March 31, 2020, the Company had no long-term leases that were classified as a financing lease. As of March 31, 2020, the Company did not have additional operating and financing leases that have not yet commenced. At March 31, 2020, the Company had operating lease liabilities of approximately $0.7 million and right of use assets of approximately $0.6 million, which are included in the condensed consolidated balance sheet. Total rent expense for the three months ended March 31, 2020 was $61,895, of which $36,095 was sublease income, and $81,816 for the three months ended March 31, 2019. Rent expense is recorded in general and administrative expense on the condensed consolidated statements of operations. The following table summarizes the Company's operating leases: Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 38,529 $ 48,692 Weighted average assumptions: Remaining lease term 2.9 2.1 Discount rate 2.5 % 3.6 % On March 31, 2020, future minimum payments under non-cancelable operating leases were as follows: For the years ending December 31, Amount 2020 $ 286,944 2021 382,237 2022 304,101 2023 102,418 Total $ 1,075,700 Less: present value adjustment (352,800 ) Present value of minimum lease payments $ 722,900 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. 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 March 31, 2020. |
Pending Sale of Secured Communi
Pending Sale of Secured Communications Assets | 3 Months Ended |
Mar. 31, 2020 | |
Pending Sale of Secured Communications Assets [Abstract] | |
Pending Sale of Secured Communications Assets | 14. Pending Sale of Secured Communications Assets 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. The SecureCo Purchase Agreement may be terminated by either party if the conditions to closing have not been fulfilled by April 15, 2020, provided that such date may be extended to May 31, 2020 conditioned upon a $2,000 per business day increase in the purchase price payable by SecureCo for every day past April 15, 2020. As of April 15, 2020, the conditions to closing under the SecureCo Purchase Agreement had not been fulfilled, and accordingly, the purchase price payable by SecureCo began and will continue to increase by $2,000 per business day until the conditions to closing under the SecureCo Purchase Agreement have been fulfilled. 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events In December 2019, a strain of coronavirus was reported to have surfaced in Wuhan, China, and has since reached multiple other countries, including the United States, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in affected countries. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of the coronavirus has had and could continue to have an adverse effect on the global markets and its economy, including on the availability and pricing of employees and resources, and other aspects of the global economy. Although we cannot predict the impact that the recent outbreak of coronavirus will have on our business or results of operations in 2020, to date, our core multimedia social applications have been able to support the increased demand we have experienced. On April 13, 2020, to help ensure adequate liquidity in light of the uncertainties posed by the coronavirus pandemic, we applied for a $506,500 loan (the "Loan") under the Small Business Administration ("SBA") Paycheck Protection Program under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). On May 3, 2020, we entered into a promissory note (the "Note") in favor of Citibank, N.A., as lender (the "Lender"). The Note has a two-year term, matures on May 3, 2022, and bears interest at a stated rate of 1.0% per annum. Monthly principal and interest payments will commence in December 2020. We did not provide any collateral or guarantees for the Loan, nor did we pay any facility charge to obtain the Loan. The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. We may prepay the principal of the Loan at any time without incurring any prepayment charges. The Loan may be partially or fully forgiven if we comply with the provisions of the CARES Act, including the use of Loan proceeds for payroll costs, rent, utilities and certain other expenses, and at least 75% of the Loan proceeds must be used for payroll costs as defined in the CARES Act. Any forgiveness of the Loan will be subject to approval by the SBA and the Lender. PeerStream continues to serve as a form of safe and entertaining communication during this global pandemic and in order to help those affected in hardest hit countries will continue to offer some of our group video conferencing services free of charge. Management has evaluated subsequent events or transactions occurring through the date the condensed consolidated financial statements were issued and determined that no other events or transactions are required to be disclosed herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Estimates and Assumptions | Significant Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the estimates used to determine the fair value of the stock options issued in share based payment arrangements, collectability of the Company's accounts receivable, measurements of proportional performance under certain service contracts, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Revenue | Revenue 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 three months ended March 31, 2020 and 2019, subscriptions were offered in durations of one-, three-, six- and twelve- month terms. All subscription fees, however, are paid by credit card at the origination of the subscription regardless of the term of the subscription. Revenues from multi-month subscriptions are recognized on a straight-line basis over the period where the service is offered to the customer, indicated by length of the subscription term purchased. The unearned portion of subscription revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets. The deferred revenue at December 31, 2019 was $1,829,493, of which $1,043,533 was subsequently recognized as subscription revenue during the three months ended March 31, 2020. The ending balance of deferred revenue at March 31, 2020 was $1,764,634. In addition, the Company offers virtual gifts to its users. Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. These gifts are given among users to enhance communication and are typically redeemed within 30 days of purchase. Upon purchase, the virtual gifts are credited to the users' account and are under the users' control. Virtual gift revenue is recognized upon the users' utilization of such at the fixed transaction price and included in subscription revenue in the accompanying condensed consolidated statements of operations. Virtual gift revenue was approximately $1,215,061 and $1,420,834 for the three months ended March 31, 2020 and 2019, respectively. The ending balance of deferred revenue from virtual gifts at March 31, 2020 and 2019 was $204,121 and $0, respectively. Advertising Revenue The Company generates advertising revenue from the display of advertisements on its products through contractual agreements with third parties that are based on the number of advertising impressions delivered. Measurements of impressions include when a customer clicks an advertisement (CPC basis), views an advertisement impression (CPM basis), or registers for an external website via an advertisement by clicking on or through the application (CPA basis). Advertising revenue is dependent upon traffic as well as the advertising inventory placed on the Company's products. Technology Service Revenue Revenue under the Company's technology services agreement (the "ProximaX Agreement") with ProximaX Limited ("ProximaX") 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 three months ended March 31, 2020, the Company recognized approximately $15.0 thousand in revenue in connection with payments received under the Termination Agreement. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations [Abstract] | |
Schedule of loss from discontinued operations | Three Months Ended March 31, 2020 2019 Revenues $ - $ 440,225 Costs of revenue - (115,338 ) Sales and marketing expense - (270,200 ) Product development expense - (76,845 ) General and administrative expense - (82,722 ) Loss from discontinued operations $ - $ (104,880 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | March 31, December 31, (unaudited) Computer equipment $ 3,706,017 $ 3,706,017 Website development 3,076,323 3,076,323 Furniture and fixtures 89,027 89,027 Leasehold improvements 32,726 32,726 Total property and equipment 6,904,093 6,904,093 Less: Accumulated depreciation (6,372,894 ) (6,284,034 ) Total property and equipment, net $ 531,199 $ 620,059 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | March 31, 2020 December 31, 2019 (unaudited) Gross Accumulated Net Gross Accumulated Net Patents $ 50,000 $ (26,875 ) $ 23,125 $ 50,000 $ (26,250 ) $ 23,750 Trade names, trademarks product names, URLs 555,000 (460,354 ) 94,646 555,000 (446,479 ) 108,521 Internally developed software 1,990,000 (1,967,572 ) 22,428 1,990,000 (1,959,655 ) 30,345 Subscriber/customer relationships 2,279,000 (1,855,392 ) 423,608 2,279,000 (1,813,725 ) 465,275 Total intangible assets $ 4,874,000 $ (4,310,193 ) $ 563,807 $ 4,874,000 $ (4,246,109 ) $ 627,891 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2020 2019 (unaudited) Compensation, benefits and payroll taxes $ 168,000 $ 347,601 Income tax payable 20,172 17,672 Other accrued expenses 123,527 69,466 Total accrued expenses and other current liabilities $ 311,699 $ 434,739 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of assumptions used in Black-Scholes pricing model to estimate the fair value of the options granted | Three Months Ended March 31, 2020 Expected volatility 188.0 % Expected life of option (in years) 5.3 Risk free interest rate 0.59 % Expected dividend yield 0.0 % |
Schedule of stock option activity | Weighted Number of Average Options Price Stock Options: Outstanding at January 1, 2020 1,021,243 $ 4.82 Granted 24,000 0.80 Forfeited or canceled, during the period (229,575 ) 3.61 Expired, during the period (42,293 ) 4.07 Outstanding at March 31, 2020 773,375 $ 5.09 Exercisable at March 31, 2020 551,093 $ 6.03 |
Schedule of stock-based compensation expense | Three Months Ended March 31, 2020 2019 Cost of revenue $ 373 $ 361 Sales and marketing expense 20 45 Product development expense 7,381 89,743 General and administrative expense 81,432 177,002 Total stock compensation expense $ 89,206 $ 267,151 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of operating leases | Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 38,529 $ 48,692 Weighted average assumptions: Remaining lease term 2.9 2.1 Discount rate 2.5 % 3.6 % |
Schedule of minimum operating lease payments | For the years ending December 31, Amount 2020 $ 286,944 2021 382,237 2022 304,101 2023 102,418 Total $ 1,075,700 Less: present value adjustment (352,800 ) Present value of minimum lease payments $ 722,900 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Textual) | |||
Deferred revenue | $ 1,764,634 | $ 1,829,493 | |
Subscription revenue | $ 2,650,123 | $ 3,004,355 | |
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. | ||
Description of purchase credits | Users may purchase credits in $5, $10 or $20 increments that can be redeemed for a host of virtual gifts such as a rose, a beer or a car, among other items. | ||
Subscription Revenue [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Subscription revenue | $ 1,043,533 | ||
Virtual gift and micro-transaction revenue | 1,215,061 | 1,420,834 | |
Deferred revenue from virtual gifts | 204,121 | $ 0 | |
Revenue payments | $ 15,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Dating Services Business [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 440,225 | |
Costs of revenue | (115,338) | |
Sales and marketing expense | (270,200) | |
Product development expense | (76,845) | |
General and administrative expense | (82,722) | |
Loss from discontinued operations | $ (104,880) |
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 ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 6,904,093 | $ 6,904,093 |
Less: Accumulated depreciation | (6,372,894) | (6,284,034) |
Total property and equipment, net | 531,199 | 620,059 |
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 | 3,076,323 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 89,027 | 89,027 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 32,726 | $ 32,726 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 88,860 | $ 88,614 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Goodwill (Textual) | ||
Market price per share | $ 1.29 | |
Impairment | $ 6,760,222 | |
Goodwill | $ 6,326,250 | $ 6,326,250 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,874,000 | $ 4,874,000 |
Accumulated Amortization | (4,310,193) | (4,246,109) |
Net Carrying Amount | 563,807 | 627,891 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,000 | 50,000 |
Accumulated Amortization | (26,875) | (26,250) |
Net Carrying Amount | 23,125 | 23,750 |
Trade names, trademarks product names, URLs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 555,000 | 555,000 |
Accumulated Amortization | (460,354) | (446,479) |
Net Carrying Amount | 94,646 | 108,521 |
Internally developed software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,990,000 | 1,990,000 |
Accumulated Amortization | (1,967,572) | (1,959,655) |
Net Carrying Amount | 22,428 | 30,345 |
Subscriber/customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,279,000 | 2,279,000 |
Accumulated Amortization | (1,855,392) | (1,813,725) |
Net Carrying Amount | $ 423,608 | $ 465,275 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Intangible Assets, Net (Textual) | ||
Amortization expense | $ 64,084 | $ 64,082 |
Estimated aggregate amortization expense for 2020 | 182,597 | |
Estimated aggregate amortization expense for 2021 | 184,667 | |
Estimated aggregate amortization expense for 2022 | 149,944 | |
Estimated aggregate amortization expense for 2023 | 18,000 | |
Estimated aggregate amortization expense for 2024 | 17,354 | |
Estimated aggregate amortization expense for thereafter | $ 11,245 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Compensation, benefits and payroll taxes | $ 168,000 | $ 347,601 |
Income tax payable | 20,172 | 17,672 |
Other accrued expenses | 123,527 | 69,466 |
Total accrued expenses and other current liabilities | $ 311,699 | $ 434,739 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes (Textual) | ||
Income tax provision from continuing operations | $ 2,500 | $ (158,990) |
Effective tax rate | 0.57% | 211.21% |
Effective tax rate from statutory rate | 21.00% | 21.00% |
Pre-tax loss | $ (435,884) | $ (75,275) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Stock Option [Member] | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 188.00% |
Expected life of option (in years) | 5 years 3 months 19 days |
Risk free interest rate | 0.59% |
Expected dividend yield | 0.00% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock Option [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Stock Options: | |
Number of Options, Outstanding beginning balance | shares | 1,021,243 |
Number of Options, Granted | shares | 24,000 |
Number of Options, Forfeited or canceled, during the period | shares | (229,575) |
Number of Options, Expired, during the period | shares | (42,293) |
Number of Options, Outstanding ending balance | shares | 773,375 |
Number of Options, Exercisable | shares | 551,093 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 4.82 |
Weighted Average Exercise Price, Granted | $ / shares | 0.8 |
Weighted Average Exercise Price, Forfeited or canceled, during the period | $ / shares | 3.61 |
Weighted Average Exercise Price, Expired, during the period | $ / shares | 4.07 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 5.09 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.03 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock compensation expense | $ 89,206 | $ 452,525 |
Cost of revenue [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock compensation expense | 373 | 361 |
Sales and marketing expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock compensation expense | 20 | 45 |
Product development expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock compensation expense | 7,381 | 89,743 |
General and administrative expense [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock compensation expense | $ 81,432 | $ 177,002 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Apr. 29, 2019 | May 16, 2016 | Mar. 31, 2020 | Mar. 31, 2019 | |
Stockholders' Equity (Textual) | ||||
Aggregate fair value of options granted | $ 18,664 | $ 187,429 | ||
Total unrecognized compensation expense | $ 303,703 | |||
Weighted average expected recognition period of unrecognized compensation expense | 1 year 8 months 12 days | |||
Aggregate intrinsic value of stock options, outstanding | $ 1,440 | 238,293 | ||
Aggregate intrinsic value of stock options, exercisable | $ 360 | $ 124,821 | ||
Aggregate granted options to board of director, Shares | 24,000 | |||
Repurchased shares of common stock | $ 500,000 | |||
Repurchase of common stock shares | 8,500 | |||
Repurchase plan expires date | Apr. 29, 2020 | |||
Weighted average exercise price | $ 0.80 | |||
Vesting period, description | The options vest in four equal quarterly installments on the last day of each calendar quarter in 2020 and have a term of ten years. | |||
2016 Plan [Member] | ||||
Stockholders' Equity (Textual) | ||||
Number of stock available for future issuance | 702,660 | |||
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 | 121,930 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Shares not included in the computation of diluted net income (loss) per share | 773,375 | 1,062,745 |
Unvested restricted stock | 79,286 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 38,529 | $ 48,692 |
Weighted average assumptions: | ||
Remaining lease term | 2 years 10 months 25 days | 2 years 1 month 6 days |
Discount rate | 2.50% | 3.60% |
Leases (Details 1)
Leases (Details 1) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 286,944 |
2021 | 382,237 |
2022 | 304,101 |
2023 | 102,418 |
Total | 1,075,700 |
Less: present value adjustment | (352,800) |
Present value of minimum lease payments | $ 722,900 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | Jun. 07, 2016 | May 01, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Leases (Textual) | |||||
Security deposit amount | $ 133,968 | ||||
Rent payments per month | $ 5,900 | $ 33,492 | |||
Operating lease liabilities | $ 700,000 | ||||
Operating lease, description | Commenced on September 1, 2016 and runs through November 30, 2021. | The term of the lease runs until April 26, 2023. | |||
Rent expenses | 61,895 | ||||
Sublease income | 36,095 | $ 81,816 | |||
Current portion of operating lease liabilities | 195,144 | $ 178,479 | |||
Operating lease right-of-use asset | $ 646,513 | $ 685,042 | |||
Lease Agreements [Member] | |||||
Leases (Textual) | |||||
Rent payments per month | $ 11,164 | ||||
Operating lease, description | The term of the sublease runs until April 26, 2023. |
Pending Sale of Secured Commu_2
Pending Sale of Secured Communications Assets (Details) - SecureCo Purchase Agreement [Member] | 2 Months Ended |
Feb. 21, 2020USD ($) | |
Pending sale of secured communications assets (Textual) | |
Cash purchase price | $ 540,000 |
Reimbursement purchase price | $ 500,000 |
Transition service fee percentage, description | 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. |
SecureCo purchase agreement, description | The SecureCo Purchase Agreement may be terminated by either party if the conditions to closing have not been fulfilled by April 15, 2020, provided that such date may be extended to May 31, 2020 conditioned upon a $2,000 per business day increase in the purchase price payable by SecureCo for every day past April 15, 2020. As of April 15, 2020, the conditions to closing under the SecureCo Purchase Agreement had not been fulfilled, and accordingly, the purchase price payable by SecureCo began and will continue to increase by $2,000 per business day until the conditions to closing under the SecureCo Purchase Agreement have been fulfilled. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Apr. 13, 2020 |
Subsequent Events (Textual) | |
Uncertainty impact, description | The uncertainties posed by the coronavirus pandemic, we applied for a $506,500 loan (the "Loan") under the Small Business Administration ("SBA") Paycheck Protection Program under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). |
Maturity date | May 3, 2022 |
Bears interest rate | 1.00% |