Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | SPINDLE, INC. | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 1,403,802 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 64,296,519 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | FY | |
Entity Public Float | $ 8,129,352 | |
Trading Symbol | spdl |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 161,226 | $ 169,807 |
Restricted cash | 20,000 | |
Accounts receivable, net | 105,096 | 82,393 |
Prepaid expenses and deposits | 1,789,547 | 90,810 |
Inventory | 10,579 | 100,647 |
Total current assets | 2,066,448 | 463,657 |
Other assets | ||
Property and equipment, net | 16,921 | 22,145 |
Intangible assets, net | 1,422,750 | 1,673,736 |
Assets held for sale, net | 441,970 | |
Goodwill, net | 4,636,212 | 5,306,205 |
Total other assets | 6,075,883 | 7,444,056 |
Total assets | 8,142,331 | 7,907,713 |
Current liabilities | ||
Accounts payable and accrued liabilities | 342,201 | 578,610 |
Advances | 190,000 | 215,000 |
Accrued liabilities - related party | 14,437 | 681,655 |
Notes payable - related party, net | 66,053 | 172,108 |
Total current liabilities | 612,691 | 1,647,373 |
Total liabilities | $ 612,691 | $ 1,647,373 |
Stockholders' equity | ||
Preferred stock, value | ||
Common stock, value | $ 64,297 | $ 42,069 |
Common stock payable | 697 | 108 |
Additional paid-in capital | 26,576,761 | 21,470,580 |
Accumulated deficit | (19,112,115) | (15,252,417) |
Total stockholders' equity | 7,529,640 | 6,260,340 |
Total liabilities and stockholders' equity | $ 8,142,331 | $ 7,907,713 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheets | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 64,296,519 | 42,068,773 |
Common stock, shares outstanding | 64,296,519 | 42,068,773 |
Common shares payable, unissued | 696,853 | 107,853 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement | ||
Sales income | $ 521,037 | $ 868,462 |
Cost of sales | 211,941 | 311,364 |
Gross profit | 309,096 | 557,098 |
Expenses: | ||
Depreciation and amortization | 546,785 | 592,135 |
Promotional and marketing | 49,485 | 126,215 |
Consulting | 436,529 | 2,377,212 |
Salaries and wages | 1,601,751 | 3,050,064 |
Director fees | 203,900 | 174,839 |
Professional fees | 374,021 | 1,100,240 |
General and administrative expenses | 261,984 | 566,618 |
Impairment of goodwill | 669,993 | 669,993 |
Impairment of long-lived assets | 254,940 | 69,808 |
Total operating expenses | 4,399,388 | 8,727,126 |
Net operating income (loss) | (4,090,292) | (8,170,028) |
Other income (expense) | ||
Gain (loss) on sale of assets | 269,817 | |
Interest expense, net | 1,558 | |
Interest expense - related party | 55 | 1,994 |
Gain (loss) on earnout settlement | 750,000 | |
Other expense | 38,522 | |
Total other income (expense) | 230,594 | (741,994) |
Loss before provision for income taxes | $ (3,859,698) | $ (8,922,022) |
Provision for income taxes | ||
Net (loss) | $ (3,859,698) | $ (8,922,022) |
Weighted average number of common shares outstanding - basic and diluted | 47,564,687 | 38,349,031 |
Net (loss) per share - basic and diluted | $ (0.08) | $ (0.23) |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-in Capital | Common Stock Payable | Unamortized Equity Compensation | Accumulated (Deficit) | Total |
Beginning Balance, shares at Dec. 31, 2013 | 32,663,065 | |||||
Beginning Balance, amount at Dec. 31, 2013 | $ 32,663 | $ 11,401,077 | $ 662 | $ (48,735) | $ (6,330,395) | $ 5,055,272 |
Shares issued for services, shares | 1,798,458 | |||||
Shares issued for services, value | $ 1,799 | 2,919,655 | 8 | $ 2,921,471 | ||
Shares issued for cash, shares | 3,790,000 | 3,790,000 | ||||
Shares issued for cash, value | $ 3,790 | 1,941,110 | 100 | $ 1,945,000 | ||
Shares issued for compensation, shares | 513,000 | |||||
Shares issued for compensation, value | $ 513 | 862,737 | 863,250 | |||
Shares issued for other events, shares | 2,424,075 | |||||
Shares issued for other events, value | $ 2,424 | 749,000 | (1,424) | 3,132,500 | ||
Shares issued for purchase of assets, shares | 1,642,000 | |||||
Shares issued for purchase of assets, value | $ 1,642 | 3,003,218 | 3,004,860 | |||
Shares previously authorized, shares | 662,250 | |||||
Shares previously authorized, value | $ 662 | (662) | ||||
Stock option amortization | 593,774 | $ 48,735 | 642,509 | |||
Net loss for the period | (8,922,022) | (8,922,022) | ||||
Ending Balance, shares at Dec. 31, 2014 | 42,068,773 | |||||
Ending Balance, amount at Dec. 31, 2014 | $ 42,069 | 21,470,580 | 108 | (15,252,417) | 6,260,340 | |
Shares issued for services, shares | 14,206,080 | |||||
Shares issued for services, value | $ 14,206 | 2,607,357 | 565 | 2,622,128 | ||
Shares issued for cash, shares | 350,000 | |||||
Shares issued for cash, value | $ 350 | 174,650 | 175,000 | |||
Shares issued for compensation, shares | 371,666 | |||||
Shares issued for compensation, value | $ 372 | 68,894 | 24 | 69,290 | ||
Shares issued for other events, shares | 7,000,000 | |||||
Shares issued for other events, value | $ 7,000 | 1,603,000 | 1,610,000 | |||
Shares issued for purchase of assets, shares | 300,000 | |||||
Shares issued for purchase of assets, value | $ 300 | 74,700 | 75,000 | |||
Stock option amortization | 577,580 | 577,580 | ||||
Net loss for the period | (3,859,698) | (3,859,698) | ||||
Ending Balance, shares at Dec. 31, 2015 | 64,296,519 | |||||
Ending Balance, amount at Dec. 31, 2015 | $ 64,297 | $ 26,576,761 | $ 697 | $ (19,112,115) | $ 7,529,640 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Shares issued for services, value | $ 2,622,128 | $ 2,921,471 |
Shares issued for other events, value | 1,610,000 | 3,132,500 |
Shares issued for purchase of assets, value | $ 75,000 | $ 3,004,860 |
To individuals and companies for services | ||
Shares issued for services, shares | 14,206,080 | 1,195,500 |
Shares issued for services, value | $ 2,622,128 | $ 2,104,947 |
For legal services | ||
Shares issued for services, shares | 602,958 | |
Shares issued for services, value | $ 816,524 | |
For litigation settlement | ||
Shares issued for other events, shares | 1,424,075 | |
For MeNetwork amendment | ||
Shares issued for other events, shares | 1,000,000 | |
Shares issued for other events, value | $ 3,132,500 | |
For HWW license agreement | ||
Shares issued for other events, shares | 7,000,000 | |
Shares issued for other events, value | $ 1,610,000 | |
Yowza!! Asset acquisition | ||
Shares issued for purchase of assets, shares | 1,642,000 | |
Shares issued for purchase of assets, value | $ 3,004,860 | |
Catalyst acquisition | ||
Shares issued for purchase of assets, shares | 300,000 | |
Shares issued for purchase of assets, value | $ 75,000 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | ||
Net (loss) | $ (3,859,698) | $ (8,922,022) |
Adjustments to reconcile net loss to net cash (used) by operating activities: | ||
Shares issued for services | 471,351 | 2,553,973 |
Shares issued for officer compensation | 200,663 | 709,700 |
Shares issued for MeNetwork earnout | 750,000 | |
Depreciation and amortization | 546,785 | 592,135 |
Impairment of long-lived assets | 254,940 | 69,808 |
Impairment of goodwill | 669,993 | 669,993 |
Amortization of debt discounts - related party | 55 | 2,999 |
Sharebased compensation expense | 577,579 | 796,058 |
Gain on sale of assets | 269,817 | |
Increase (decrease) in allowance for doubtful accounts | (11,250) | 283 |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | 55,620 | 89,019 |
(Increase) decrease in prepaid expenses | (88,737) | 118,430 |
(Increase) in inventory | 90,068 | (39,597) |
(Increase) in advances | (25,000) | |
(Increase) decrease in deposits and other assets | 8,960 | |
Increase in accounts payable and accrued expenses | 68,966 | 375,505 |
(Decrease) increase in expenses - related party | 946,702 | 537,988 |
(Decrease) increase in accrued interest - related party | (5,019) | |
Net cash (used in) operating activities | (360,530) | (1,691,787) |
Cash flows from investing activities | ||
Acquisition of intellectual property | 501,367 | |
Sale of residual assets | 678,366 | |
Additions to capitalized software development | 515,417 | 542,362 |
Net cash provided by (used in) investing activities | 162,949 | (1,043,729) |
Cash flows from financing activities | ||
Proceeds from restricted cash account | 20,000 | |
Proceeds for advances | 215,000 | |
Proceeds for notes payable - related party | 45,000 | |
Payments for notes payable - related party | 6,000 | |
Proceeds from sale of common stock | 175,000 | 1,945,000 |
Net cash provided by (used in) financing activities | 189,000 | 2,205,000 |
Net increase (decrease) in cash | (8,581) | (530,516) |
Cash - beginning of the period | 169,807 | 700,323 |
Cash - ending of the period | 161,226 | $ 169,807 |
Supplemental disclosures: | ||
Interest paid | $ 1,059 | |
Income taxes paid | ||
Non-cash transactions: | ||
Shares issued for services | $ 471,351 | $ 2,553,973 |
Shares issued for officer compensation | 200,663 | 709,700 |
Shares issued for prepaid expenses | 37,042 | |
Shares issued for accounts payable | 305,375 | 330,454 |
Shares issued for accrued liabilities | 1,714,030 | |
Shares issued for acquisitions | 1,685,000 | 3,004,861 |
Options and shares issued for share based compensation expense | $ 577,579 | 642,508 |
Shares issued for share based compensation expense | 73,600 | |
Shares issued for MeNetwork earnout | $ 750,000 |
Organization of the Company and
Organization of the Company and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Organization of the Company and Significant Accounting Policies | NOTE 1 - ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES Organization We were originally incorporated in the State of Nevada on January 8, 2007 as “Coyote Hills Golf, Inc.” We were previously an online retailer of golf-related apparel, equipment and supplies. Prior to the acquisition of the assets of Spindle Mobile, Inc. (“Spindle Mobile”), as described below, we generated minimal revenues from the golf-related business. On December 2, 2011, we acquired certain assets and intellectual property from Spindle Mobile, a Delaware corporation in the business of data processing, mobile payments fields and other related fields, in exchange for approximately 80% of the issued and outstanding common stock of the Company, which shares were distributed to the stockholders of Spindle Mobile, pursuant to the terms and conditions of an Asset Purchase Agreement (the "Spindle Mobile Agreement"). Concurrent with the closing of the Spindle Mobile Agreement, we amended our articles of incorporation to change our name from "Coyote Hills Golf, Inc." to "Spindle, Inc." Additionally, we changed our authorized capital from 100,000,000 shares of common stock and 100,000,000 shares of preferred stock, $0.001 par value to 300,000,000 shares of common stock, $0.001 par value, and 50,000,000 preferred stock, $0.001 par value. The actions were approved on November 11, 2011, by the consent of the majority stockholders who represented 90% of our issued and outstanding common stock, and were effective on of December 2, 2011. On December 31, 2012 (the “Parallel Acquisition Closing Date”), pursuant to that certain Asset Purchase Agreement (the “Parallel Agreement”) by and between the Company and Parallel Solutions Inc., a Nevada corporation (“Parallel”), the Company acquired substantially all of Parallel’s assets used in connection with its business of facilitating electronic payment processing services to merchants (the “Parallel Assets”), assumed certain specified liabilities and hired seven employees of Parallel in exchange for 538,570 unregistered shares of common stock, of which 53,857 shares (the "Parallel Indemnification Escrow") and 100,000 shares (the "Parallel Deferred Consent Escrow”) were deposited in escrow with our transfer agent. The Parallel Indemnification Escrow was released on January 23, 2014. On October 29, 2013, the Parallel Deferred Consent Escrow was released to Parallel after certain specified contract assignments and residual revenue streams were assigned to the Company pursuant to the Parallel Agreement. In June of 2015, the Parallel Assets were sold. On March 20, 2013 (the “MeNetwork Closing Date”), the Company assumed certain liabilities and acquired substantially all of the assets of MeNetwork, Inc., a Delaware corporation (“MeNetwork”), used in connection with its business of developing, marketing and licensing a mobile marketing platform for use by merchants and consumers (the “MeNetwork Assets”), pursuant to an Asset Purchase Agreement dated March 1, 2013 by and between Spindle and MeNetwork (the “MeNetwork Agreement”). As consideration for the assumption of the liabilities and the acquisition of the MeNetwork Assets, the Company issued an aggregate of 2,750,000 shares of common stock to the stockholders of MeNetwork, of which 350,000 were deposited in escrow with our transfer agent for the purposes of satisfying any indemnification claims. The MeNetwork Indemnification Escrow was released pursuant to the MeNetwork Agreement. On October 7, 2013, the Company issued an additional 750,000 shares of common stock to Ashton Craig Page, the former director and Chief Operating Officer of MeNetwork and a former director of the Company, pursuant to the terms and conditions of the MeNetwork Agreement. On December 12, 2014, the Company, and Ashton Craig Page, in his capacity as the representative of MeNetwork and the MeNetwork Stockholders (the “Representative”), entered into an Amendment and Waiver to Asset Purchase Agreement (the "Amendment), pursuant to which the Company agreed to issue and the Representative agreed to accept on behalf of MeNetwork and the MeNetwork Stockholders an acceleration of the issuance of up to an aggregate of 1,000,000 Earnout Shares on or before December 31, 2014 in full satisfaction of all obligations of the Company to issue the Earnout Shares pursuant to the Purchase Agreement during the Earnout Period. These shares were issued on December 23, 2014. On January 3, 2014 (the “Closing Date”), the Company acquired substantially all of the assets of Yowza International Inc. (renamed Y Dissolution, Inc.) (“Yowza!!) used in connection with its business of providing retail coupons through a mobile application (the “Yowza Assets”), and assumed certain liabilities of Yowza!! in an amount equal to $15,000 for consideration equal to (1) $500,000 in cash paid to Yowza!! and certain creditors and holders of outstanding promissory notes issued by Yowza!! and (2) an aggregate of 1,642,000 unregistered shares of our common stock (the “Aggregate Share Consideration”), issuable to the holders of Yowza!!’s outstanding capital stock. Ten percent of the Aggregate Share Consideration is issuable to certain executive management members and advisors of Yowza!! in accordance with consulting or employment agreements and subject to certain vesting provisions. In addition, an aggregate of 197,052 shares of common stock (the “Indemnification Escrow”), representing approximately 12% of the Aggregate Share Consideration, was deposited in escrow for a period of one year from the Closing Date. The Yowza!! Indemnification Escrow was released on January 12, 2015. The Indemnification Escrow is available to compensate Spindle pursuant to the indemnification obligations of Yowza!! under the Asset Purchase Agreement, and for any necessary accounts receivable adjustment after the Closing Date in the event Spindle is unable to collect the acquired outstanding accounts receivable of Yowza!! within 120 days after the Closing Date. On October 23, 2015 (the “Closing Date”) the Company completed the acquisition of specific assets of Catalyst Business Development, Inc. (“Catalyst”) pursuant to an Asset Purchase Agreement, dated September 14, 2015, by and between the Company and Catalyst in exchange for 300,000 unregistered shares of the Company’s common stock issued to the holders of Catalyst stock. The consideration amounted to $75,000 using a fair value of $0.25 per share at the Closing Date. The assets acquired include a white-labeled license of the Merchant Partners solution and various assets related to branding, marketing and sales. Spindle will continue to operate the gateway under the Catalyst brand. Reclassifications Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. Summary of significant accounting policies Cash and cash equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with an original maturity of three months or less from the date of purchase. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Revenue recognition Revenue is derived on a per message/notification basis through the Company’s patented technologies and a modular, adaptable platform designed to create multi-channel messaging gateways for all types of connected devices. The Company also earns revenue for services, such as programming, licensure on Software as a Service (“SaaS”) basis, and on a performance basis, such as when a client acquires a new customer through our platform. Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. Accounts receivable, net Accounts receivable primarily represents the net cash due from the Company's credit card and other payment processors for cleared transactions. The carrying amount of the Company's receivables is reduced by an allowance for doubtful accounts that reflects management's best estimate of amounts that will not be collected. The adequacy of the allowance is based on historical loss experience and information collected from individual customers. Accounts receivable are charged off against the allowance when it is determined that the receivable is uncollectible. Interest is not accrued on overdue accounts receivable. Inventory Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost or market. The Company records a write-down for inventories which have become obsolete or are in excess of anticipated demand or net realizable value. The Company periodically performs a detailed inventory review that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If actual demand or market conditions for the Company’s products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Company’s inventory, additional inventory write-downs may be required. In the fourth quarter of 2015, management’s review determined that the carrying value of inventory included items that were obsolete or would never be used by the Company. In this respect, equipment in inventory with a total cost of $103,307 was written off and a loss recorded. Property and equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts. Replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: Computer Software 3 years Computer Equipment 5 years Office furniture and equipment 7 years Long-lived assets The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” “ASC Topic 360-10-05” requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company recorded an impairment to its intellectual property for the year ended December 31, 2015 as further discussed in Note 6. Goodwill The Company accounts for goodwill in accordance with ASC Topic 805-30-25, “Accounting for Business Combinations” (“ASC Topic 805-30”) and “Accounting for Goodwill - Subsequent Measurement” (“ASC Topic 350-20-35”). ASC Topic 805-30 requires that the acquirer shall recognize goodwill as of the acquisition date as the excess of the fair value of the consideration transferred over the fair value of the net acquisition-date amounts of the identifiable assets and liabilities assumed. ASC Topic 350-20-35 requires that goodwill acquired in a purchase and determined to have an indefinite useful life is not amortized, but instead tested for impairment annually or more frequently when events or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. The Company’s annual goodwill impairment testing date is December 31 of each year. The Company first assesses qualitative factors to determine whether it’s necessary to perform the two-step goodwill impairment test. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the qualitative assessment results in an indication that it’s more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative assessment must be performed. Management has determined that the Company has one reporting unit for purposes of testing goodwill. The quantitative analysis involves estimating the fair value of its reporting unit utilizing a combination of valuation methods including market capitalization, the income approach and cash flows. Income and cash flow forecasts were used in the evaluation of goodwill based on management’s estimate of future performance. If goodwill is determined to be impaired as a result of this analysis, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value. The Company recorded impairment to its goodwill for each of the years ended December 31, 2015 and December 31, 2014 as further discussed in Note 8. Capitalized software development costs The Company capitalizes software development costs subsequent to establishing technological feasibility of a software application. Capitalized software development costs represent the costs associated with the development of the Company’s software applications used to generate revenue from our customers. Amortization of such costs is recorded on a software application-by-application basis, based on the greater of the proportion of current year sales to the total of current and estimated future sales for the applications or the straight-line method over the remaining estimated useful life of the software application. The Company continually evaluates the recoverability of capitalized software costs and will charge to operations amounts that are deemed unrecoverable for projects it abandons. Stock-based compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” (“ASC 505-50”) Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on compensation under ASC 505-50, In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. Loss per share The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of December 31, 2015 that have been excluded from the computation of diluted net loss per share amounted to 3,440,000 shares and include 600,000 warrants and 2,840,000 options. Of the 2,840,000 potential common shares at December 31, 2015, 1,245,833 had not vested. Potential common shares as of December 31, 2014 that have been excluded from the computation of diluted net loss per share amounted to 3,710,834 shares and include 250,000 warrants and 3,460,834 options. Of the 3,460,834 potential common shares at December 31, 2014, 1,342,500 had not vested. Income taxes The Company accounts for its income taxes under the provisions of “Income Taxes” (“ASC 740”). The method of accounting for income taxes under ASC 740 is the asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. Fair value of financial instruments We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the Company while unobservable inputs are generally developed internally, utilizing management’s estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: Level 1 - Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 - Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. Level 3 -Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability. If the only observable inputs are from inactive markets or for transactions which the Company evaluates as “distressed”, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Due to the short-term nature of our financial assets and liabilities, we consider their carrying amounts to approximate fair value. Recent Accounting Standards The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. In August 2014, The FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40).” (“ASU 2014-15”) provides guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern. In doing so, management will need to perform an evaluation at each interim and annual reporting period to determine whether or not there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If these conditions exist, the entity should evaluate whether the doubt is mitigated by management’s plans or events and should make such required disclosures. This guidance will be effective for the Company for its interim reporting for the quarter ended March 31, 2017. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Going Concern | NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred a net loss of ($3,859,698) and ($8,922,022) for the fiscal years ended December 31, 2015 and 2014, respectively and at December 31, 2015, has an accumulated deficit of ($19,112,115). In order to continue as a going concern, the Company may need, among other things, additional capital resources. There are no assurances that without generating new revenue in 2016 that the Company will be successful without additional financing. Should revenues not grow sufficiently and the company will not be able to secure additional financing through the sale of it securities or debt, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty. |
Accounts Receivable Disclosure
Accounts Receivable Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Accounts Receivable Disclosure | NOTE 3 - ACCOUNTS RECEIVABLE, NET Accounts receivable consist of the following at: December 31, December 31, 2015 2014 Due from customers and vendors $ 26,773 $ 93,643 Due from sale of residual assets 78,323 -- Less allowance for bad debts -- (11,250) Total accounts receivable, net $ 105,096 $ 82,393 |
Prepaid Expenses and Deposits D
Prepaid Expenses and Deposits Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Prepaid Expenses and Deposits Disclosure | NOTE 4 - PREPAID EXPENSES AND DEPOSITS Prepaid expenses and deposits consist of the following at: December 31, December 31, 2015 2014 Prepaid insurance $ 44,275 $ 42,167 Prepaid license and trademark fees 1,610,000 -- Prepaid consulting fees 129,751 37,042 Other prepaid expenses 5,521 8,219 Deposits -- 3,382 Total prepaid expenses and deposits $ 1,789,547 $ 90,810 On May 26, 2015, the Company entered into a loyalty agreement with Help Worldwide, Inc. (“HWW”), which provided that, upon the terms and subject to the conditions set forth therein, the Company will join the HWW network and become a licensed Loyalty Program Operator (“LPO”) to enable the delivery of a Yowza!! Points program for consumers and merchants in the Yowza!! program. HWW was also to build a Yowza!! branded Rewards Mall for the redemption of Yowza!! Points. Consideration paid to HWW for the LPO was 3,000,000 unregistered shares of the Company's common stock, which was issued directly to HWW. Pursuant to the Agreement, the Company and HWW will bundle their respective products to create a bundled package that will combine and co-brand the features of both parties' products (the “Bundled Package”). HWW will promote the Bundled Package including the co-branded mobile application to 30 million consumers. The consideration paid to HWW for the Bundled Package (“Trademark”) was 4,000,000 unregistered shares of the Company's Common Stock which was issued directly to HWW. The $690,000 value of the LPO license and the $920,000 value of the Trademark are reported as prepaid expenses until such time HWW performs its obligations under the agreement or the agreement is terminated. See Note 15, “Subsequent Events” for additional information on this transaction. |
Property and Equipment Disclosu
Property and Equipment Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Property and Equipment Disclosure | NOTE 5 - PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following at: December 31, December 31, 2015 2014 Office furniture & equipment $ 31,847 $ 32,895 Less: accumulated depreciation (14,926) (10,750) Total fixed assets, net $ 16,921 $ 22,145 During the years ended December 31, 2015 and December 31, 2014, the Company recorded depreciation expense of $5,225 and $5,225, respectively. |
Other Intangible Assets Disclos
Other Intangible Assets Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Other Intangible Assets Disclosure | NOTE 6 - OTHER INTANGIBLE ASSETS, NET Other intangible assets, net consist of the following at: December 31, 2015 Gross Accumulated Amortization December 31, 2015 Net Capitalized software costs $ 2,048,998 $ (763,684) $ 1,285,314 License agreements and contracts 75,000 -- 75,000 Domain names 85,000 (22,564) 62,436 Total intellectual property, net $ 2,208,998 $ (786,248) $ 1,422,750 December 31, 2014 Gross Accumulated Amortization December 31, 2014 Net Capitalized software costs $ 2,182,640 $ (582,017) $ 1,600,623 License agreements and contracts 69,808 (69,808) -- Domain names 85,000 (11,887) 73,113 Total intellectual property, net $ 2,337,448 $ (663,712) $ 1,673,736 During the year ended December 31, 2015, management reviewed the carrying amount of the assets and determined as a result of changes in the focus of the CompanyÂ’s current direction, certain costs that had been capitalized to software development would not be used and no longer had value to the Company. As a result of this analysis, $542,771 in costs were recorded as an impairment loss, net of $287,831 of amortization related to the assets. During the year ended December 31, 2014, management reviewed the carrying amount of the assets and determined as a result of diversification in the CompanyÂ’s business model due to its acquisitions, the license agreements previously recorded no longer yielded a net future cash flow. As a result of this analysis, the Company recorded, to other expense, an impairment loss of $69,808 in accordance with ASC Topic 360-10-05. |
Residual Contracts Disclosure
Residual Contracts Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Residual Contracts Disclosure | NOTE 7 - RESIDUAL CONTRACTS During the year ended December 31, 2014, management reviewed the carrying amount of the residual income stream purchased from Parallel Solutions, Inc. (“PSI”) in 2012. It was determined that as a result of diversification in the Company’s business model due to its acquisitions, that the previously estimated indefinite life of the asset be revised to reflect the Company’s future business development goals. The Company estimated a finite remaining useful life of forty-eight months and had recorded amortization expense of $147,324 as of December 31, 2014. On June 4, 2015, the Company entered into an agreement to sell the PSI residual income stream for a purchase price of $753,740. As a result of this transaction, $373,124 was recorded as a gain on sale of assets for the year ended December 31, 2015. As of December 31, 2015, the Company has received $678,366 of the purchase price and the balance of $78,323 is recorded to accounts receivable, net on the Company’s balance sheet. In 2015, until the date of the sale, the Company recorded an additional $61,385 of amortization expense, resulting in a total amortization of $208,708. |
Goodwill Disclosure
Goodwill Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Goodwill Disclosure | NOTE 8 - GOODWILL December 31, December 31, 2015 2014 Goodwill $ 5,976,198 $ 5,976,198 Less: accumulated impairment loss (1,339,986) (669,993) Total goodwill, net $ 4,636,212 $ 5,306,205 In connection with the MeNetwork acquisition (as further described in Note 12) on March 20, 2013, the Company assumed certain liabilities and acquired substantially all of the assets of MeNetwork. The Company recorded goodwill related to this acquisition of $2,679,970. During its 2014 annual evaluation of goodwill, the Company determined that the carrying amount of goodwill related to MeNetwork, exceeded its fair value. As a result, the Company recorded an impairment loss, to other expense, of $669,993 during the year ended December 31, 2014. This charge reflects the impact of partially sun-setting assets acquired from MeNetwork in conjunction with its integration of Yowza!! The Company again evaluated the carrying amount of goodwill in 2015. From this analysis based future cash flows and the value of the asset in relation to CompanyÂ’s new business direction, the Company determined that the fair value is only half of the original amount, and recorded an additional impairment loss of $669,993 to other expense for the year ended December 31, 2015. In connection with the acquisition (as further described in Note 12) on January 3, 2014, the Company assumed certain liabilities and acquired substantially all of the assets of Yowza!!. The Company recorded goodwill related to this acquisition of $3,296,228. During its annual evaluations of goodwill for both 2015 and 2014, the Company determined that the fair value of goodwill exceeded its carrying amount and as a result no impairment charge was recorded. The Company first assesses qualitative factors to determine whether itÂ’s necessary to perform the two-step goodwill impairment test. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the qualitative assessment results in an indication that itÂ’s more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative assessment must be performed. Management has determined that the Company has one reporting unit for purposes of testing goodwill. The quantitative analysis involves estimating the fair value of its reporting unit utilizing a combination of valuation methods including market capitalization, the income approach and cash flows. Income and cash flow forecasts were used in the evaluation of goodwill based on managementÂ’s estimate of future performance. If goodwill is determined to be impaired as a result of this analysis, an impairment loss is recorded equal to the difference between the assetÂ’s carrying value and fair value. The Company recorded impairment to its goodwill for each of the years ended December 31, 2015 and December 31, 2014 as further discussed in Note 8. |
Notes Payable - Related Party,
Notes Payable - Related Party, Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Notes Payable - Related Party, Disclosure | NOTE 9 - NOTES PAYABLE - RELATED PARTY On December 15, 2011, the Company issued a Promissory Grid Note to a director of the Company whereby formalizing various advances previously received from the director in the amount of $51,300 and allowing for future advances up to $250,000. The note is non-interest bearing, unsecured and matures on December 15, 2014. The Company imputed interest at a rate of 2% per annum and recorded a discount in the amount of $10,640. In connection with one of the previous advances in the amount of $25,000, the Company issued warrants to purchase up to 250,000 shares of the CompanyÂ’s common stock at a price per share of $1.00 resulting in an additional discount of $17,709. The total discount attributable to the Grid Note totaled $28,349 and is being amortized to interest expense over the term of the note. During the years ended December 31, 2015 and December 31, 2014, the Company repaid $6,000 and $55,000 of the principal balance of the loan, respectively. During the year ended December 31, 2014, the Company recorded a $100,000 note payable to a director of the Company. The note was non-interest bearing and unsecured. The Company imputed interest at a rate of 2% per annum and recorded a discount in the amount of $110. This note was paid in full with shares at December 31, 2015. During the years ended December 31, 2015 and December 31, 2014, respectively, interest expense of $55 and $1,994 related to amortization of the discount and interest on the unpaid notes was recorded. |
Stockholders' Equity Disclosure
Stockholders' Equity Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Stockholders' Equity Disclosure | NOTE 10 - STOCKHOLDERS’ EQUITY The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.001. During the year ended December 31, 2014, the Company: · · · · · · · During the year ended December 31, 2015, the Company: · · · |
Warrants and Options Disclosure
Warrants and Options Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Warrants and Options Disclosure | NOTE 11 - WARRANTS AND OPTIONS On October 29, 2012, our stockholders approved the 2012 Stock Incentive Plan (the “Plan”) that governs equity awards to our management, employees, directors and consultants. On November 7, 2013, our stockholders approved an amendment to the Plan which increased the total authorized amount of common stock issuable under the Plan from 3,000,000 to 6,000,000 shares. During 2013 the Company granted 322,000 options to officers, employees and directions to purchase shares of common stock at an exercise price of $0.50 per share, with grant date fair values of $0.77 to $1.36. The options vest ratably on an annual basis over one to three years. The options expire ten years from grant date. During 2014 the Company granted 3,006,000 options to officers, employees and directors to purchase shares of common stock at an exercise price of $0.50 per share, with grant date fair values of $0.51 to $1.87. The options vest ratably on an annual basis over three years. The options expire ten years from grant date. On March 11, 2015, the Board of Directors approved a private placement offering (the “Offering”) comprised of a unit (the “Unit”). Each Unit consists of one share of the Company’s common stock and one three-year warrant to purchase one share of the Company’s common stock. During the twelve months ended December 31, 2015, the Company sold 350,000 units under this offering. During 2015 the Company granted 91,250 options to employees to purchase shares of common stock at an exercise price of $0.50 per share, with grant date fair values of $0.18 to $0.35. The options vest ratably on an annual basis over three years, and expire ten years from grant date. In 2015, 73,750 of these shares were cancelled. Also in 2015, options for the purchase of 750,000 shares were granted to directors of the Company at an exercise price of $0.13 per share, with grant date fair values of $0.13. These options vest in full one year from grant date, have a ten-year expiration, and were granted outside of the Company’s 2012 Stock Plan. The estimated fair values of options granted during 2015, 2014 and 2013 were calculated using the following assumptions: 2015 2014 2013 Dividend yield 0.00% 0.00% 0.00% Expected volatility 94.42% to 188.60% 76.71% to 86.26% 63.64% to 72.80% Risk free interest rate 1.43% to 1.74% 1.49% to 1.78% 0.77% to 1.66% Expected term, in years 6.0 6.0 5.5 to 6.0 The following is a summary of the status of all of the Company’s stock warrants and options as of December 31, 2015: Number of Warrants and Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2013 2,976,000 Granted 2,392,500 - Exercised - - Forfeited/Cancelled (1,657,666) - Outstanding at December 31, 2014 3,710,834 $ 0.534 7.09 Exercisable at December 31, 2014 2,368,334 $ 0.553 6.33 Outstanding at December 31, 2014 3,710,834 Granted 1,191,250 - Exercised - - Forfeited/Cancelled (1,462,084) - Outstanding at December 31, 2015 3,590,000 $ 0.442 7.38 Exercisable at December 31, 2015 2,194,167 $ 0.557 6.15 |
Business Acquisitions Disclosur
Business Acquisitions Disclosure | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Business Acquisitions Disclosure | NOTE 12 - BUSINESS ACQUISITIONS On December 31, 2012 (the “Parallel Acquisition Closing Date”), pursuant to that certain Asset Purchase Agreement (the “Parallel Agreement”) by and between the Company and Parallel Solutions Inc., a Nevada corporation (“Parallel”), the Company acquired substantially all of Parallel’s assets used in connection with its business of facilitating electronic payment processing services to merchants (the “Parallel Assets”), assumed certain specified liabilities and hired seven employees of Parallel in exchange for 538,570 unregistered shares of common stock, of which 53,857 shares (the “Parallel Indemnification Escrow”) and 100,000 shares (the “Parallel Deferred Consent Escrow”) were deposited in escrow with our transfer agent. The Parallel Indemnification Escrow was released on January 23, 2014. On October 29, 2013, the Parallel Deferred Consent Escrow was released to Parallel after certain specified contract assignments and residual revenue streams were assigned to the Company pursuant to the Parallel Agreement. On March 20, 2013 (the “MeNetwork Closing Date”), the Company assumed certain liabilities and acquired substantially all of the assets of MeNetwork used in connection with its business of developing, marketing and licensing a mobile marketing platform for use by merchants and consumers (the “MeNetwork Assets”), pursuant to an Asset Purchase Agreement dated March 1, 2013 by and between Spindle and MeNetwork (the “MeNetwork Agreement”). As consideration for the assumption of the liabilities and the acquisition of the MeNetwork Assets, the Company issued an aggregate of 2,750,000 shares of common stock to the stockholders of MeNetwork, of which 350,000 shares are being held in escrow for a period of one year from the MeNetwork Closing Date for the purposes of satisfying any indemnification claims. In addition, on October 7, 2013, the Company issued an additional 750,000 shares of common stock to Ashton Craig Page, the former director and Chief Operating Officer of MeNetwork and a former director of the Company, pursuant to the terms and conditions of the MeNetwork Agreement. On December 12, 2014, the Company, and Ashton Craig Page, in his capacity as the representative of MeNetwork and the MeNetwork Stockholders (the “Representative”), entered into an Amendment and Waiver to Asset Purchase Agreement (the "Amendment), pursuant to which the Company agreed to issue and the Representative agreed to accept on behalf of MeNetwork and the MeNetwork Stockholders an acceleration of the issuance of up to an aggregate of 1,000,000 Earnout Shares on or before December 31, 2014 in full satisfaction of all obligations of the Company to issue the Earnout Shares pursuant to the Purchase Agreement during the Earnout Period. These shares were issued on December 23, 2014. Yowza!! Transaction As described in Note 1, “Organization of the Company and Significant Accounting Policies” the Company completed the Yowza!! Transaction on January 3, 2014. This transaction was accounted for as a business combination. As such, the Company has allocated the purchase price in accordance with ASC Topic 850-30 as previously described in the Company’s significant accounting policies. Consideration was determined as follows: Fair Value of Consideration Transferred Cash paid to Yowza!!, net of cash acquired $ 500,000 Fair value of Company's shares issued 3,004,860 Cash paid to extinguish debt, net of cash acquired (13,632) $ 3,491,228 The fair value of our shares issued in connection with the Yowza!! Transaction was determined to be $1.83, which was the fair value of the shares on the closing date of the acquisition. The Company’s allocation of the purchase price is as follows: Net assets acquired: Cash $ 1,368 Accounts receivable 2,928 Software development costs 200,000 Trademarks 10,000 Net liabilities assumed: Accounts payable (15,000) Goodwill 3,291,932 Total purchase price $ 3,491,228 Catalyst Transaction As described in Note 1, “Organization of the Company and Significant Accounting Policies” the Company completed the Catalyst Transaction on October 23, 2015. This transaction was accounted for as a purchase of assets. The fair value of our shares issued in connection with the Catalyst Transaction was determined to be $0.25, which was the fair value of the shares on the closing date of the acquisition. The total consideration of $75,000, which consists of the Catalyst Gateway license bundled with other contracts is reported on our balance sheet in “Other intangible assets, net. |
Income Taxes Disclosures
Income Taxes Disclosures | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Income Taxes Disclosures | NOTE 13 - INCOME TAXES FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates currently in effect. FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the CompanyÂ’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $477,297, which is calculated by multiplying a 35% estimated tax rate by the cumulative net operating loss (NOL) adjusted or the following items: For the periods ended December 31, 2015 2014 Book loss for the year $ (3,859,697) $ (8,922,022) Adjustments: Amortization 33,638 37,376 Impairment charges 1,212,763 739,801 Non-deductible stock compensation 1,249,590 1,594,245 Tax loss for the year $ (1,363,707) $ (6,550,600) Estimated effective tax rate 35% 35% Deferred tax asset $ (477,297) $ (2,292,710) The total valuation allowance is $477,297. Details for the last two periods follow: For the period ended December 31, 2015 2014 Deferred tax asset $ (477,297) $ (2,292,710) Valuation allowance 477,297 2,292,710 Current taxes payable -- -- Income tax expense $ -- $ -- The estimated corporate federal net operating loss (NOL) is presented below: Year Amount 2015 6,669,766 2014 5,336,059 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Subsequent Events | NOTE 14 - SUBSEQUENT EVENTS On May 26, 2015, the Company entered into a loyalty agreement with Help Worldwide, Inc. (“HWW”) which provided that the Company would join the HWW network and become a licensed Loyalty Program Operator (“LPO”) to enable delivery of a Yowza!! Points program for consumers and merchants in the Yowza!! program. HWW was also to build a Yowza!! branded Rewards Mall for the redemption of Yowza!! Points. On March 28, 2016, a settlement agreement was signed between the Company and HWW, terminating the LPO license agreement executed in May 2015. The settlement agreement stipulates that on or about March 31, 2016, HWW will return 6,500,000 of the 7,000,000 shares of Spindle restricted common stock issued to HWW for the license fee. The LPO license agreement was terminated amicably and not due to default or breach by any party. During the month of March, 2016, the Company issued 680,000 shares of unregistered stock to two members of our board of directors in accordance with terms of their consulting agreements. Also in March, 2015, 2,722,221 shares were purchased by and issued to various investors under the Securities Purchase Agreement in conjunction with our November 17, 2015 private placement offering. These shares are expected to become freely trading in the public market upon effective registration. |
Organization of the Company a22
Organization of the Company and Significant Accounting Policies: Cash and Cash Equivalents, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Cash and Cash Equivalents, Policy | Cash and cash equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with an original maturity of three months or less from the date of purchase. |
Organization of the Company a23
Organization of the Company and Significant Accounting Policies: Use of Estimates Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Use of Estimates Policy | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Organization of the Company a24
Organization of the Company and Significant Accounting Policies: Revenue Recognition Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Revenue Recognition Policy | Revenue recognition Revenue is derived on a per message/notification basis through the Company’s patented technologies and a modular, adaptable platform designed to create multi-channel messaging gateways for all types of connected devices. The Company also earns revenue for services, such as programming, licensure on Software as a Service (“SaaS”) basis, and on a performance basis, such as when a client acquires a new customer through our platform. Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. |
Organization of the Company a25
Organization of the Company and Significant Accounting Policies: Accounts Receivable Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Accounts Receivable Policy | Accounts receivable, net Accounts receivable primarily represents the net cash due from the Company's credit card and other payment processors for cleared transactions. The carrying amount of the Company's receivables is reduced by an allowance for doubtful accounts that reflects management's best estimate of amounts that will not be collected. The adequacy of the allowance is based on historical loss experience and information collected from individual customers. Accounts receivable are charged off against the allowance when it is determined that the receivable is uncollectible. Interest is not accrued on overdue accounts receivable. |
Organization of the Company a26
Organization of the Company and Significant Accounting Policies: Inventory Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Inventory Policy | Inventory Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost or market. The Company records a write-down for inventories which have become obsolete or are in excess of anticipated demand or net realizable value. The Company periodically performs a detailed inventory review that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If actual demand or market conditions for the CompanyÂ’s products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the CompanyÂ’s inventory, additional inventory write-downs may be required. In the fourth quarter of 2015, managementÂ’s review determined that the carrying value of inventory included items that were obsolete or would never be used by the Company. In this respect, equipment in inventory with a total cost of $103,307 was written off and a loss recorded. |
Organization of the Company a27
Organization of the Company and Significant Accounting Policies: Property and Equipment Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Property and Equipment Policy | Property and equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts. Replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: Computer Software 3 years Computer Equipment 5 years Office furniture and equipment 7 years |
Organization of the Company a28
Organization of the Company and Significant Accounting Policies: Long-lived Assets Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Long-lived Assets Policy | Long-lived assets The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” “ASC Topic 360-10-05” requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company recorded an impairment to its intellectual property for the year ended December 31, 2015 as further discussed in Note 6. |
Organization of the Company a29
Organization of the Company and Significant Accounting Policies: Goodwill Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Goodwill Policy | Goodwill The Company accounts for goodwill in accordance with ASC Topic 805-30-25, “Accounting for Business Combinations” (“ASC Topic 805-30”) and “Accounting for Goodwill - Subsequent Measurement” (“ASC Topic 350-20-35”). ASC Topic 805-30 requires that the acquirer shall recognize goodwill as of the acquisition date as the excess of the fair value of the consideration transferred over the fair value of the net acquisition-date amounts of the identifiable assets and liabilities assumed. ASC Topic 350-20-35 requires that goodwill acquired in a purchase and determined to have an indefinite useful life is not amortized, but instead tested for impairment annually or more frequently when events or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. The Company’s annual goodwill impairment testing date is December 31 of each year. The Company first assesses qualitative factors to determine whether it’s necessary to perform the two-step goodwill impairment test. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the qualitative assessment results in an indication that it’s more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative assessment must be performed. Management has determined that the Company has one reporting unit for purposes of testing goodwill. The quantitative analysis involves estimating the fair value of its reporting unit utilizing a combination of valuation methods including market capitalization, the income approach and cash flows. Income and cash flow forecasts were used in the evaluation of goodwill based on management’s estimate of future performance. If goodwill is determined to be impaired as a result of this analysis, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value. The Company recorded impairment to its goodwill for each of the years ended December 31, 2015 and December 31, 2014 as further discussed in Note 8. |
Organization of the Company a30
Organization of the Company and Significant Accounting Policies: Capitalized Software Development Costs Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Capitalized Software Development Costs Policy | Capitalized software development costs The Company capitalizes software development costs subsequent to establishing technological feasibility of a software application. Capitalized software development costs represent the costs associated with the development of the CompanyÂ’s software applications used to generate revenue from our customers. Amortization of such costs is recorded on a software application-by-application basis, based on the greater of the proportion of current year sales to the total of current and estimated future sales for the applications or the straight-line method over the remaining estimated useful life of the software application. The Company continually evaluates the recoverability of capitalized software costs and will charge to operations amounts that are deemed unrecoverable for projects it abandons. |
Organization of the Company a31
Organization of the Company and Significant Accounting Policies: Stock-based Compensation, Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Stock-based Compensation, Policy | Stock-based compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” (“ASC 505-50”) Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on compensation under ASC 505-50, In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. |
Organization of the Company a32
Organization of the Company and Significant Accounting Policies: Loss Per Share Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Loss Per Share Policy | Loss per share The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of December 31, 2015 that have been excluded from the computation of diluted net loss per share amounted to 3,440,000 shares and include 600,000 warrants and 2,840,000 options. Of the 2,840,000 potential common shares at December 31, 2015, 1,245,833 had not vested. Potential common shares as of December 31, 2014 that have been excluded from the computation of diluted net loss per share amounted to 3,710,834 shares and include 250,000 warrants and 3,460,834 options. Of the 3,460,834 potential common shares at December 31, 2014, 1,342,500 had not vested. |
Organization of the Company a33
Organization of the Company and Significant Accounting Policies: Income Taxes Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Income Taxes Policy | Income taxes The Company accounts for its income taxes under the provisions of “Income Taxes” (“ASC 740”). The method of accounting for income taxes under ASC 740 is the asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. |
Organization of the Company a34
Organization of the Company and Significant Accounting Policies: Fair Value of Financial Instruments Policy (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Fair Value of Financial Instruments Policy | Fair value of financial instruments We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the Company while unobservable inputs are generally developed internally, utilizing management’s estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: Level 1 - Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 - Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. Level 3 -Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability. If the only observable inputs are from inactive markets or for transactions which the Company evaluates as “distressed”, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Due to the short-term nature of our financial assets and liabilities, we consider their carrying amounts to approximate fair value. |
Organization of the Company a35
Organization of the Company and Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Standards The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. In August 2014, The FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40).” (“ASU 2014-15”) provides guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern. In doing so, management will need to perform an evaluation at each interim and annual reporting period to determine whether or not there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If these conditions exist, the entity should evaluate whether the doubt is mitigated by management’s plans or events and should make such required disclosures. This guidance will be effective for the Company for its interim reporting for the quarter ended March 31, 2017. |
Organization of the Company a36
Organization of the Company and Significant Accounting Policies: Property and Equipment Policy: Property and equipment estimated useful lives (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Property and equipment estimated useful lives | Computer Software 3 years Computer Equipment 5 years Office furniture and equipment 7 years |
Accounts Receivable Disclosure_
Accounts Receivable Disclosure: Schedule of Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Accounts Receivable | December 31, December 31, 2015 2014 Due from customers and vendors $ 26,773 $ 93,643 Due from sale of residual assets 78,323 -- Less allowance for bad debts -- (11,250) Total accounts receivable, net $ 105,096 $ 82,393 |
Prepaid Expenses and Deposits38
Prepaid Expenses and Deposits Disclosure: Schedule of Prepaid Expenses and Deposits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Prepaid Expenses and Deposits | December 31, December 31, 2015 2014 Prepaid insurance $ 44,275 $ 42,167 Prepaid license and trademark fees 1,610,000 -- Prepaid consulting fees 129,751 37,042 Other prepaid expenses 5,521 8,219 Deposits -- 3,382 Total prepaid expenses and deposits $ 1,789,547 $ 90,810 |
Property and Equipment Disclo39
Property and Equipment Disclosure: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Property and Equipment | December 31, December 31, 2015 2014 Office furniture & equipment $ 31,847 $ 32,895 Less: accumulated depreciation (14,926) (10,750) Total fixed assets, net $ 16,921 $ 22,145 |
Other Intangible Assets Discl40
Other Intangible Assets Disclosure: Schedule of Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Intangible Assets | December 31, 2015 Gross Accumulated Amortization December 31, 2015 Net Capitalized software costs $ 2,048,998 $ (763,684) $ 1,285,314 License agreements and contracts 75,000 -- 75,000 Domain names 85,000 (22,564) 62,436 Total intellectual property, net $ 2,208,998 $ (786,248) $ 1,422,750 December 31, 2014 Gross Accumulated Amortization December 31, 2014 Net Capitalized software costs $ 2,182,640 $ (582,017) $ 1,600,623 License agreements and contracts 69,808 (69,808) -- Domain names 85,000 (11,887) 73,113 Total intellectual property, net $ 2,337,448 $ (663,712) $ 1,673,736 |
Goodwill Disclosure_ Schedule o
Goodwill Disclosure: Schedule of Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Goodwill | December 31, December 31, 2015 2014 Goodwill $ 5,976,198 $ 5,976,198 Less: accumulated impairment loss (1,339,986) (669,993) Total goodwill, net $ 4,636,212 $ 5,306,205 |
Warrants and Options Disclosu42
Warrants and Options Disclosure: Schedule of Stock Options, Valuation Assumptions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Stock Options, Valuation Assumptions | 2015 2014 2013 Dividend yield 0.00% 0.00% 0.00% Expected volatility 94.42% to 188.60% 76.71% to 86.26% 63.64% to 72.80% Risk free interest rate 1.43% to 1.74% 1.49% to 1.78% 0.77% to 1.66% Expected term, in years 6.0 6.0 5.5 to 6.0 |
Warrants and Options Disclosu43
Warrants and Options Disclosure: Schedule of Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Stock Warrants | Number of Warrants and Options Weighted- Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2013 2,976,000 Granted 2,392,500 - Exercised - - Forfeited/Cancelled (1,657,666) - Outstanding at December 31, 2014 3,710,834 $ 0.534 7.09 Exercisable at December 31, 2014 2,368,334 $ 0.553 6.33 Outstanding at December 31, 2014 3,710,834 Granted 1,191,250 - Exercised - - Forfeited/Cancelled (1,462,084) - Outstanding at December 31, 2015 3,590,000 $ 0.442 7.38 Exercisable at December 31, 2015 2,194,167 $ 0.557 6.15 |
Business Acquisitions Disclos44
Business Acquisitions Disclosure: Schedule of Business Acquisitions Consideration (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Business Acquisitions Consideration | Fair Value of Consideration Transferred Cash paid to Yowza!!, net of cash acquired $ 500,000 Fair value of Company's shares issued 3,004,860 Cash paid to extinguish debt, net of cash acquired (13,632) $ 3,491,228 |
Business Acquisitions Disclos45
Business Acquisitions Disclosure: Allocation of purchase price (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Allocation of purchase price | Net assets acquired: Cash $ 1,368 Accounts receivable 2,928 Software development costs 200,000 Trademarks 10,000 Net liabilities assumed: Accounts payable (15,000) Goodwill 3,291,932 Total purchase price $ 3,491,228 |
Income Taxes Disclosures_ Sched
Income Taxes Disclosures: Schedule of Deferred Tax Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets | For the periods ended December 31, 2015 2014 Book loss for the year $ (3,859,697) $ (8,922,022) Adjustments: Amortization 33,638 37,376 Impairment charges 1,212,763 739,801 Non-deductible stock compensation 1,249,590 1,594,245 Tax loss for the year $ (1,363,707) $ (6,550,600) Estimated effective tax rate 35% 35% Deferred tax asset $ (477,297) $ (2,292,710) |
Income Taxes Disclosures_ Sch47
Income Taxes Disclosures: Schedule of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Income Tax Expense (Benefit) | For the period ended December 31, 2015 2014 Deferred tax asset $ (477,297) $ (2,292,710) Valuation allowance 477,297 2,292,710 Current taxes payable -- -- Income tax expense $ -- $ -- |
Organization of the Company a48
Organization of the Company and Significant Accounting Policies: Inventory Policy (Details) | Dec. 31, 2015USD ($) |
Details | |
Written off | $ 103,307 |
Organization of the Company a49
Organization of the Company and Significant Accounting Policies: Property and Equipment Policy: Property and equipment estimated useful lives (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Software and Software Development Costs | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment, Useful Life | 7 years |
Organization of the Company a50
Organization of the Company and Significant Accounting Policies: Loss Per Share Policy (Details) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Potential common shares excluded from the computation of diluted earnings per share | 3,440,000 | 3,710,834 |
Going Concern (Details)
Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Net loss incurred | $ 3,859,698 | $ 8,922,022 |
Accumulated deficit at end of period | $ 19,112,115 | $ 15,252,417 |
Accounts Receivable Disclosur52
Accounts Receivable Disclosure: Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for bad debts | $ (11,250) | |
Accounts receivable, net | $ 105,096 | 82,393 |
Due from customers and vendors | ||
Accounts receivable, gross | 26,773 | $ 93,643 |
Due from sale of residual assets | ||
Accounts receivable, gross | $ 78,323 |
Prepaid Expenses and Deposits53
Prepaid Expenses and Deposits Disclosure: Schedule of Prepaid Expenses and Deposits (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid expenses and other assets | $ 1,789,547 | $ 90,810 |
Prepaid insurances | ||
Prepaid expenses and other assets | 44,275 | 42,167 |
Prepaid license and trademark fees | ||
Prepaid expenses and other assets | 1,610,000 | |
Prepaid consulting fees | ||
Prepaid expenses and other assets | 129,751 | 37,042 |
Other prepaid expenses | ||
Prepaid expenses and other assets | $ 5,521 | 8,219 |
Deposits made | ||
Prepaid expenses and other assets | $ 3,382 |
Prepaid Expenses and Deposits54
Prepaid Expenses and Deposits Disclosure (Details) | May. 26, 2015shares |
Loyalty Program Operator | |
Unregistered common shares payable | 3,000,000 |
Bundled Package | |
Unregistered common shares payable | 4,000,000 |
Property and Equipment Disclo55
Property and Equipment Disclosure: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Office furniture & equipment | $ 31,847 | $ 32,895 |
Less, accumulated depreciation | (14,926) | (10,750) |
Total property and equipment, net | $ 16,921 | $ 22,145 |
Property and Equipment Disclo56
Property and Equipment Disclosure (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Depreciation expense | $ 5,225 | $ 5,225 |
Other Intangible Assets Discl57
Other Intangible Assets Disclosure: Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible assets, gross | $ 2,208,998 | $ 2,337,448 |
Accumulated amortization of intangible assets | (786,248) | (663,712) |
Intangible assets, net | 1,422,750 | 1,673,736 |
Capitalized software costs | ||
Intangible assets, gross | 2,048,998 | 2,182,640 |
Accumulated amortization of intangible assets | (763,684) | (582,017) |
Intangible assets, net | 1,285,314 | 1,600,623 |
License agreements and contracts | ||
Intangible assets, gross | 75,000 | 69,808 |
Accumulated amortization of intangible assets | (69,808) | |
Intangible assets, net | 75,000 | |
Domain names | ||
Intangible assets, gross | 85,000 | 85,000 |
Accumulated amortization of intangible assets | (22,564) | (11,887) |
Intangible assets, net | $ 62,436 | $ 73,113 |
Residual Contracts Disclosure (
Residual Contracts Disclosure (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from sale of assets | $ 678,366 | |
Due from sale of residual assets | ||
Accounts receivable, gross | 78,323 | |
PSI residual income stream | ||
Amortization expense | 61,385 | $ 147,324 |
Proceeds from sale of assets | $ 373,124 |
Goodwill Disclosure_ Schedule59
Goodwill Disclosure: Schedule of Goodwill (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Goodwill, gross | $ 5,976,198 | $ 5,976,198 |
(Less) accumulated impairment loss on goodwill | (1,339,986) | (669,993) |
Goodwill, net | $ 4,636,212 | $ 5,306,205 |
Notes Payable - Related Party60
Notes Payable - Related Party, Disclosure (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest expense - related party | $ 55 | $ 1,994 |
Promissory Grid Note | ||
Debt discount attributed to note | $ 28,349 | |
Director of the Company | ||
Debt discount attributed to note | 110 | |
Note payable recorded | $ 100,000 |
Stockholders' Equity Disclosu61
Stockholders' Equity Disclosure (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common stock authorized to be issued | 300,000,000 | 300,000,000 | |
Par value of common stock | $ 0.001 | $ 0.001 | |
Value of stock issued for purchase of assets | $ 75,000 | $ 3,004,860 | |
Common stock issued for cash | 2,722,221 | 3,790,000 | |
Value of stock issued for services | 2,622,128 | $ 2,921,471 | |
Value of stock issued for compensation | $ 69,290 | $ 863,250 | |
Asset acquisition - Yowza!! | |||
Common stock issued in purchase of assets | 1,642,000 | ||
Value of stock issued for purchase of assets | $ 3,004,860 | ||
Stock to various individuals and companies for services | |||
Common stock issued for services | 1,253,353 | ||
Stock for Accrued Legal Fees | |||
Common stock issued for services | 602,958 | ||
Value of stock issued for services | $ 816,524 | ||
Stock for Chief Executive Officer | |||
Common stock issued for compensation | 338,000 | ||
Value of stock issued for compensation | $ 680,700 | ||
Stock for Chief Financial Officer | |||
Common stock issued for compensation | 20,000 | ||
Value of stock issued for compensation | $ 29,000 | ||
Stock for Employee compensation | |||
Common stock issued for services | 153,550 | ||
Common stock issued for compensation | 350,000 | 155,000 | |
Value of stock issued for compensation | $ 156,500 | $ 153,550 | |
Stock to Directors for services compensation | |||
Common stock issued for services | 10,941,217 | ||
Value of stock issued for services | $ 1,477,064 | ||
Common stock issued for compensation | 680,000 |
Warrants and Options Disclosu62
Warrants and Options Disclosure (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Authorized amount of common stock under 2012 Stock Option Plan | 6,000,000 | ||
Number of warrants and options granted in period | 1,191,250 | 2,392,500 | |
Options to officers, employees and directions | |||
Number of warrants and options granted in period | 3,006,000 | 322,000 | |
Option exercise price | $ 0.50 | $ 0.50 | |
Options to employees | |||
Number of warrants and options granted in period | 91,250 | ||
Option exercise price | $ 0.50 | ||
Options to directors | |||
Number of warrants and options granted in period | 750,000 | ||
Option exercise price | $ 0.13 |
Warrants and Options Disclosu63
Warrants and Options Disclosure: Schedule of Stock Warrants (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Details | |||
Number of warrants and options outstanding | 3,590,000 | 3,710,834 | 2,976,000 |
Number of warrants and options granted in period | 1,191,250 | 2,392,500 | |
Number of warrants and options cancelled during the period | (1,462,084) | (1,657,666) | |
Weighted average exercise price (outstanding) | $ 0.442 | $ 0.534 | |
Number of warrants and options exercisable | 2,194,167 | 2,368,334 | |
Weighted average exercise price (exercisable) | $ 0.557 | $ 0.553 |
Business Acquisitions Disclos64
Business Acquisitions Disclosure (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Oct. 07, 2013 | Mar. 20, 2013 | Dec. 31, 2012 | |
ParallelMember | ||||
Authorized issuance of common stock | 538,570 | |||
ParallelIndemnificationEscrowMember | ||||
Amount of shares to be issued held in escrow | 53,857 | |||
ParallelDeferredConsentEscrowMember | ||||
Amount of shares to be issued held in escrow | 100,000 | |||
MenetworkMember | ||||
Authorized issuance of common stock | 750,000 | 2,750,000 | ||
Amount of shares to be issued held in escrow | 350,000 | |||
Catalyst | ||||
Fair value of consideration transferred | $ 75,000 |
Business Acquisitions Disclos65
Business Acquisitions Disclosure: Schedule of Business Acquisitions Consideration (Details) - Yowza | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Cash paid for acquisition, net | $ 500,000 |
Fair value of shares issued | 3,004,860 |
Cash paid to extinguish debt, net | (13,632) |
Fair value of consideration transferred | $ 3,491,228 |
Income Taxes Disclosures_ Sch66
Income Taxes Disclosures: Schedule of Deferred Tax Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Book loss for the year | $ 3,859,697 | $ 8,922,022 |
Tax loss for the year | $ (1,363,707) | $ (6,550,600) |
Estimated effective tax rate | 35.00% | 35.00% |
Deferred tax assets | $ 477,297 | $ 2,292,710 |
Adjustment for Amortization | ||
Allowable credits | 33,638 | 37,376 |
Adjustment for Impairment Charges | ||
Allowable credits | 1,212,763 | 739,801 |
Adjustment for Compensation | ||
Allowable credits | $ 1,249,590 | $ 1,594,245 |
Income Taxes Disclosures_ Sch67
Income Taxes Disclosures: Schedule of Income Tax Expense (Benefit) (Details) | Dec. 31, 2015USD ($) |
Details | |
*Valuation allowance on deferred tax assets | $ 477,297 |
Income Taxes Disclosures (Detai
Income Taxes Disclosures (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Estimated corporate federal net operating loss | $ 6,669,766 | $ 5,336,059 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | 1 Months Ended | 12 Months Ended | |
Mar. 30, 2016 | Dec. 31, 2014 | May. 26, 2015 | |
Return of restricted common stock | 6,500,000 | ||
Common stock issued for cash | 2,722,221 | 3,790,000 | |
Stock to Directors for services compensation | |||
Common stock issued for compensation | 680,000 |