Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 12, 2015 | Sep. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | RVUE HOLDINGS, INC. | ||
Entity Trading Symbol | RVUE | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1455206 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 141,944,156 | ||
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 | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $8,072,622 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash | $418,803 | $844,589 |
Accounts receivable net of allowance of nil in 2014 and 2013 | 332,563 | 124,993 |
Prepaid expenses | 70,101 | 10,856 |
Total current assets | 821,467 | 980,438 |
Property and equipment, net | 662 | 3,065 |
Software development costs | 136,717 | 80,600 |
Deposits | 3,180 | 10,680 |
Total Assets | 962,026 | 1,074,783 |
Current liabilities: | ||
Accounts payable | 168,591 | 132,121 |
Accrued expenses | 204,821 | 113,384 |
Subscription investment payable | 25,000 | |
Deferred revenue | 10,500 | |
Total current liabilities | 383,912 | 270,505 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; none issued or outstanding | 0 | |
Common stock, $0.001 par value per share; 240,000,000 shares authorized at December 31, 2014 and 2013, respectively 140,872,727and 132,221,476 shares issued and outstanding at December 31, 2014 and 2013, respectively | 140,873 | 132,222 |
Additional paid-in capital | 13,105,717 | 12,418,899 |
Accumulated deficit | -12,668,476 | -11,746,843 |
Total stockholders' equity | 578,114 | 804,278 |
Total Liabilities and Stockholders' Equity | $962,026 | $1,074,783 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARANTHETICALS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Parentheticals | ||
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 240,000,000 | 240,000,000 |
Common Stock, shares issued | 140,872,727 | 132,221,476 |
Common Stock, shares outstanding | 140,872,727 | 132,221,476 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
rVue fees | $1,141,003 | $508,406 |
Network | 130,425 | 166,000 |
Total revenues | 1,271,428 | 674,406 |
Costs and expenses | ||
Cost of revenue | 974,779 | 387,565 |
Selling, general and administrative expenses | 1,376,248 | 2,377,192 |
Depreciation and amortization | 91,493 | 39,815 |
Interest income | -306 | |
Other income | -249,459 | |
Total Costs and Operating Expenses | 2,193,061 | 2,804,266 |
Loss before provision for income taxes | -921,633 | -2,129,860 |
Provision for income taxes | 0 | |
Net loss | ($921,633) | ($2,129,860) |
Net loss per common share - basic and diluted | ($0.01) | ($0.02) |
Shares used in computing net loss per share Basic and diluted | 137,638,146 | 115,985,296 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||
Balance at Jan. 01, 2013 | 0 | 100,691,954 | 100,692 | 9,802,786 | -9,616,983 | -286,495 | |
Shares Issued for Services | 0 | 2,786,666 | 2,786 | 348,131 | 350,918 | ||
Stock based compensation expense | $4,400,000 | $4,400 | $770,825 | $775,225 | |||
Net loss | -2,129,860 | -2,129,860 | |||||
Shares Issued at Dec. 31, 2013 | 24,342,856 | 24,342 | 1,497,157 | 1,521,500 | |||
Balance at Dec. 31, 2013 | 132,221,476 | 132,222 | 12,418,899 | -11,746,843 | 804,278 | ||
Shares Issued for Services | 0 | 1,198,871 | 1,199 | 112,201 | 113,400 | ||
Stock based compensation expense | 57,069 | 57,069 | |||||
Shares Issued | 7,452,380 | 7,452 | 517,548 | 525,000 | |||
Net loss | ($921,633) | ($921,633) | |||||
Balance at Dec. 31, 2014 | 0 | 140,872,727 | 140,873 | 13,105,717 | -12,668,476 | 578,144 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | ||
Net loss | ($921,633) | ($2,129,860) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 91,493 | 39,815 |
Stock-based compensation expense | 57,069 | 775,225 |
Common stock issued for services | 15,000 | 167,500 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -207,571 | 38,081 |
Prepaid expenses | -14,245 | 45,525 |
Accounts payable | 78,470 | -22,479 |
Accrued expenses | 102,838 | -162,047 |
Deferred revenue | 10,500 | -11,975 |
Cash used in operating activities | -788,079 | -1,260,215 |
Investing activities | ||
Payments for property, equipment and software development | -145,207 | -91,700 |
Changes in deposits | 7,500 | 2,830 |
Cash used in investing activities | -137,707 | -88,870 |
Financing activities | ||
Proceeds from issuance of Common Stock | 500,000 | 1,320,500 |
Investment subscription received | 25,000 | |
Cash provided by financing activities | 500,000 | 1,345,500 |
Decrease in cash | -425,786 | -3,585 |
Cash, beginning of year | 844,589 | 848,174 |
Cash, end of year | $418,803 | $844,589 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies |
rVue Holdings, Inc., formerly known as Rivulet International, Inc. (“We”, “rVue” or the “Company”), was incorporated in the State of Nevada on November 12, 2008. We are an advertising technology company that has developed and operates an integrated advertising exchange and digital distribution platform for the Digital Out-of-Home (“DPBM”) industry. Prior to May 13, 2010, we were a shell company in the development stage, had no revenue, and our efforts were devoted to entering the automobile export business. | |
On March 29, 2010, we filed an Amended and Restated Articles of Incorporation to, among other things: (1) change our name from “Rivulet International, Inc.” to “rVue Holdings, Inc.”; and (2) increase the number of our authorized shares of capital stock from 75,000,000 shares to 150,000,000 shares, divided into two classes: 140,000,000 shares of common stock, par value $.001 per share, and 10,000,000 shares of preferred stock, par value $.001 per share. | |
On May 13, 2010, we acquired all of the issued and outstanding capital stock and the business of rVue, Inc., a Delaware corporation ("rVue, Inc.") from Argo Digital Solutions, Inc., a Delaware corporation ("Argo"), as well as any and all assets related to the rVue business held by Argo, pursuant to an asset purchase agreement, dated as of May 13, 2010. We disposed of our pre-transaction assets and liabilities and succeeded to the business of rVue as our sole line of business. rVue, Inc., which began operations on September 15, 2009, became the accounting acquirer of the Company for financial statement purposes. | |
Basis of Presentation and Preparation | |
The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. | |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, fair values of financial instruments, useful lives of capitalized software developments costs and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |
Cash and Cash Equivalents | |
We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. | |
Accounts Receivable | |
We record accounts receivable at the invoiced amount and we do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. | |
Property and Equipment | |
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. Depreciation for equipment commences once it is placed in service and depreciation for leasehold improvements, if any, commences once they are ready for their intended use and are amortized over their estimated useful lives, or the term of the lease, whichever is shorter. Maintenance and repair costs are expensed as incurred. | |
Software Development Costs | |
We capitalize costs incurred for the production of computer software that generates the functionality of our demand-side platform (“DSP”). Capitalized software development costs typically include direct labor and related overhead for software which we produce, as well as the cost of software purchased from third parties. Costs incurred for a product prior to the determination that the product is technologically feasible (i.e. research and development costs), as well as maintenance costs for established products, are expensed as incurred. Once technological feasibility has been established, development costs are capitalized until the software has completed testing and is released for use by the public. We also capitalize eligible costs to acquire or develop internal-use software (such as billing and accounting) that are incurred subsequent to the preliminary project stage. | |
Revenue Recognition | |
Our revenues are derived from advertising campaigns placed through rVue, the maintenance of certain private networks, and the production and distribution of network programming. Revenue is recognized as follows: | |
Advertising revenue is recognized in the period in which the advertising impressions occur. Revenue arrangements are evidenced by a fully executed insertion order (“IO”). Generally, IO’s state the number and type of advertising impressions (cost-per-thousand) to be delivered, the agreed upon rate for each delivered impression, and a fixed period of time for delivery. | |
In the normal course of business, the Company frequently contracts with advertising agencies on behalf of their advertiser clients. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. While none of the factors identified in this guidance is individually considered presumptive or determinative, because the Company is the primary obligator and is responsible for (i) fulfilling the advertisement delivery, (ii) establishing the selling prices for delivery of the advertisements, and (iii) performing all billing and collection activities including retaining credit risk, the Company acts as the principal in these arrangements and therefore reports revenue and costs incurred on a gross basis. | |
Revenue from the maintenance of private networks, and the production and distribution of network programming content, either under contract or on a piece by piece or monthly basis, is recognized ratably over the term of the related service period if the fees are fixed and determinable, delivery has occurred and collection is probable. | |
We record deferred revenue when we receive payment in advance of the performance of services. | |
Stock Based Compensation | |
We have elected to use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair value of stock options on the grant dates. We recognize stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. We will recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law. Further information regarding stock-based compensation can be found in Note 9, “Stockholders’ Equity and Stock Based Compensation”. | |
Income Taxes | |
We recognize income taxes under the liability method. We recognize deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. We recognize the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured to determine the actual amount of benefit to recognize in our financial statements. See Note 10, “Income Taxes” for additional information. | |
Fair Value Measurements | |
The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their generally short maturities. | |
Advertising and Marketing Expenses | |
We expense advertising and marketing costs in the period in which they are incurred. For the years ended December 31, 2014 and 2013 advertising and marketing expenses totaled $83,874 and $83,546, respectively. | |
Going_Concern
Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Going Concern | |
Going Concern | Note 2 – Going Concern |
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have sustained losses and experienced negative cash flows from operations since inception, and have an accumulated deficit of $12,668,476 at December 31, 2014. These factors raise substantial doubt about our ability to continue to operate in the normal course of business. We have funded our activities to date almost exclusively from equity and debt financings. | |
We will continue to require substantial funds to continue development of our core business. Management’s plans in order to meet our operating cash flow requirements will include financing activities such as private placements of common stock and the continued establishment of strategic relationships which we expect will lead to the generation of additional revenue opportunities. | |
While we believe that we should be successful in obtaining the necessary financing to fund our operations, there are no assurances that such additional funding will be achieved or that we will succeed in our future operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. | |
Loss_Per_Common_Share
Loss Per Common Share | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Loss Per Common Share | |||||||
Loss Per Common Share | Note 3 - Loss Per Common Share | ||||||
Basic and diluted loss per common share is computed by dividing the loss by the weighted average number of common shares outstanding for the period. Since we incurred losses attributable to common stockholders during the years ended December 31, 2014 and 2013, diluted loss per common share has not been computed by giving effect to all potentially dilutive common shares that were outstanding during the years ended December 31, 2014 and 2013. Dilutive common shares consist of incremental shares issuable upon the exercise of stock options and warrants to the extent that the average fair value of our common stock for each period is greater than the exercise price. | |||||||
The following table sets forth the computation of basic and diluted loss per common share: | |||||||
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Numerator: | |||||||
Net loss | $ | -921,633 | $ | -2,129,860 | |||
Denominator: | |||||||
Weighted-average shares outstanding | 137,638,146 | 115,985,296 | |||||
Effect of dilutive securities(1) | - | - | |||||
Weighted-average diluted shares | 137,638,146 | 115,985,296 | |||||
Basic and diluted loss per share | $ | -0.01 | $ | -0.02 | |||
-1 | |||||||
The following stock options, warrants outstanding and convertible notes as of December 31, 2014 and 2013 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive: | |||||||
2014 | 2013 | ||||||
Stock options | - | 41,562 | |||||
Warrants | $ | 82,020 | $ | 167,062 | |||
82,020 | 2,086,244 |
Financial_Instruments
Financial Instruments | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Financial Instruments | |||||||
Financial Instruments | Note 4 - Financial Instruments | ||||||
Cash | |||||||
The following table summarizes the fair value of our cash at December 31, 2014 and 2013: | |||||||
2014 | 2013 | ||||||
Cash | $ | 418,803 | $ | 844,589 | |||
Total cash | 418,803 | 844,589 | |||||
Accounts Receivable | |||||||
We sell our services directly to our customers. We generally do not require collateral from our customers; however, we will require collateral in certain instances to limit credit risk. Accounts receivable from three of our customers accounted for 99.4% of accounts receivable as of December 31, 2014. Accounts receivable from three of our customers accounted for 80.9% of accounts receivable as of December 31, 2013. We had no allowance for doubtful accounts at December 31, 2014 and 2013. There were no bad debt expenses for the years ended December 31, 2014 and 2013. See Note 13 “Concentrations” for additional information. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment: | |||||||||
Property and Equipment Disclosure | Note 5 – Property and Equipment | ||||||||
Estimated Useful Lives (Years) | 2014 | 2013 | |||||||
Computers and software | 5-Feb | $ | 91,083 | $ | 91,083 | ||||
Equipment | 3 | 22,977 | 22,977 | ||||||
114,060 | 114,060 | ||||||||
Less accumulated depreciation and amortization | -113,398 | -110,995 | |||||||
Property and equipment, net | $ | 662 | $ | 3,065 | |||||
Depreciation expense was $2,403 and $9,992 for the years ended December 31, 2014 and 2013, respectively |
Software_Development_Costs
Software Development Costs | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Software Development Costs | |||||||||
Software Development Costs | Note 6 – Software Development Costs | ||||||||
Estimated Useful Lives (Years) | 2014 | 2013 | |||||||
Software development costs | 18 | $ | 1,293,920 | $ | 1,148,713 | ||||
Less accumulated amortization | -1,157,203 | -1,068,113 | |||||||
Software development costs, net | 136,717 | 80,600 | |||||||
Amortization expense was $89,090 and $29,823 for the years ended December 31, 2014 and 2013, respectively. | |||||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Accrued Expenses | |||||||
Accrued Expenses | Note 7 – Accrued Expenses | ||||||
2014 | 2013 | ||||||
Personnel costs | 9,497 | 18,966 | |||||
Professional fees | $ | - | $ | 39,000 | |||
Network costs | 166,211 | 37,917 | |||||
Other | 29,113 | 17,500 | |||||
$ | 204,821 | $ | 113,383 | ||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies {1} | ||||
Commitments and Contingencies | Note 8 - Commitments and Contingencies | |||
Lease Commitments | ||||
We leased our Ft. Lauderdale office space for our corporate headquarters and technology group under a non-cancelable operating lease which expired June 30, 2013. On July 1, 2013 we moved to a smaller space in Fort Lauderdale - approximately 600 square feet – which we leased at a rate of approximately $2,200 a month. On November 1, 2013 we moved to a smaller space – approximately 140 square feet within the same facility – which we leased at a rate of approximately $1,300 a month. We closed our Fort Lauderdale office in the third quarter of 2014. | ||||
On October 4, 2013 we moved our corporate headquarters to Elmhurst, IL, where we occupy approximately 2,700 square feet of office space from Real Capital, LLC under a lease contract that expires on September 30, 2015 at a rate of approximately $3,100 a month thru September 30, 2014 and then increased to $3,193 thru September 30, 2015. This facility accommodates our principal sales, marketing, operations, finance and administrative activities. | ||||
Future minimum lease payments under these non-cancellable leases at December 31, 2014 are as follows: | ||||
Year ending December 31, | ||||
2015 | $ | 28,737 | ||
Total future minimum payments | $ | 28,737 | ||
Rent expense was $46,989 and $58,898 for the years ended December 31, 2014 and 2013, respectively. | ||||
Contracts with Customers | ||||
In the normal course of business we enter into contracts with customers, which outline the terms of the relationship. The terms include, among other things, the method of computing our revenue, the quantity, type and specifications of services, software and products to be provided and penalties we would incur in the case of not performing. The period of the contracts is defined either by project or time. | ||||
Contract with Consultant | ||||
In November 2014, rVue entered into an eight month consulting agreement that compensated the consultant with 483,871 shares of rVue common stock. The agreement requires rVue to provide price protection on the shares which may result in the Company issuing additional shares to the consultant if the share price in May 2015 falls below the share price at issuance. | ||||
Retirement Plan | ||||
We have a 401(k) plan that covers all eligible employees. We are not required to contribute to the plan, and we did not make any employer contributions during the years ended December 31, 2014 or 2013. | ||||
Legal Matters | ||||
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. | ||||
On or about September 14, 2012, Casville Investments, Ltd, MBC Investment, SA, and Watkins International, Ltd., shareholders of Argo Digital Solutions, Inc., asserted claims individually and derivatively on behalf of Argo against the Company, Jason M. Kates, Richard J. Sullivan, David A. Loppert, World Capital Markets, Inc., and Solutions, Inc. in the United States District Court for the Southern District of New York. The plaintiffs alleged that they were injured as a result of the alleged mismanagement of Argo and the May 2010 asset purchase transaction between Argo, rVue, Inc. and the Company. At all times, we denied any wrongdoing. This case was subsequently transferred to the United States District Court for the Southern District of Florida. Following the transfer, the parties entered into a Settlement Agreement whereby all parties acknowledged and agreed that the consideration exchanged in connection therewith was being exchanged solely to avoid the costs of further litigation and that same was not an acknowledgment or admission of any wrongdoing on the part of the Company or any other party. The material terms of the Settlement Agreement included the transfer of cash and common stock of the Company from various defendants, including the Company, to the plaintiffs to be distributed in accordance with the terms of Settlement Agreement. In exchange for that transfer, the plaintiffs agreed to voluntarily dismiss all claims asserted against the defendants, including those asserted against the Company, with prejudice, as well as exchange of mutual general releases with all of the defendants. With respect to the Company’s portion of the funds and common stock transferred, the Company transferred a total of $20,000 and 190,000 shares of common stock to the plaintiffs. The Settlement Agreement was subject to the approval of the Court. On May 5, 2014, following the Court’s approval of the Settlement Agreement, the Court entered the Final Order of Dismissal with Prejudice, dismissing the claims asserted with prejudice and closing the case. | ||||
On or about March 8, 2011, Viewpoint Securities, Inc. commenced an action in the Circuit Court of the 17th Judicial District in Broward County, Florida, alleging that we owe them a placement agent fee of $210,000 and warrants to purchase 175,167 shares of our common stock for purported services rendered in connection with our December 2010 private placement. On July 29, 2011, we answered their Second Amended Complaint and asserted various defenses to the claims asserted therein. Additionally, we filed a Counterclaim for rescission of the Agreement. On January 9, 2012, Viewpoint filed an amended answer to our counterclaim. We believe the case is without merit and are vigorously defending ourselves in connection therewith. In the opinion of management, we do not believe that we have a probable liability related to this legal proceeding that would materially adversely affect our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. If we fail to prevail in this legal matter, the operating results of a particular reporting period could be materially adversely affected. | ||||
Stockholders_Equity_and_Stock_
Stockholders' Equity and Stock Based Compensation | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stockholders' Equity and Stock Based Compensation | ||||||||||||||
Stockholders' Equity and Stock Based Compensation | Note 9 - Stockholders’ Equity and Stock Based Compensation | |||||||||||||
Preferred Stock | ||||||||||||||
We have 10,000,000 shares of authorized preferred stock, $0.001 par value, none of which is issued or outstanding. Under the terms of our Restated Articles of Incorporation, our board of directors is authorized to determine or alter the rights, preferences, privileges and restrictions of our authorized but unissued shares of preferred stock. | ||||||||||||||
Common Stock | ||||||||||||||
We have 240,000,000 shares of authorized common stock, $0.001 par value, of which 140,872,727 and 132,221,476 shares were issued and outstanding at December 31, 2014 and 2013, respectively . All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of our directors. | ||||||||||||||
Common Stock Warrants | ||||||||||||||
We have issued warrants, all of which are fully vested and available for exercise, as follows: | ||||||||||||||
Class of Warrant | Issued in connection with or for | Number | Exercise Price | Date of Issue | Date of Expiration | |||||||||
Series A | Private Placement | 8,624,995 | $ | 1 | Dec-10 | Dec-22 | ||||||||
Series B | Investor Relations Services | 50,000 | $ | 0.37 | May-11 | May-16 | ||||||||
Series B | Investment Banking Services | 1,000,000 | $ | 0.35 | Jun-11 | Jun-16 | ||||||||
Series C | Convertible Debt | 3,057,666 | $ | 0.2 | Jan-12 | Jan-17 | ||||||||
Series C | Convertible Debt | 750,000 | $ | 0.2 | May-12 | May-17 | ||||||||
Series C | Convertible Debt | 500,000 | $ | 0.2 | Jul-12 | Jul-17 | ||||||||
Series D | Investment Banking Services | 450,000 | $ | 0.07 | Jan-13 | Jan-23 | ||||||||
The valuation of the warrants utilized the following assumptions in the BSM option-pricing model: | ||||||||||||||
Class of Warrant | Fair Value | Dividend Yield | Volatility | Contractual Lives (Yrs.) | Risk-Free Rate | Date of the Assumptions | ||||||||
Series D | $ | 23,477 | 0.00% | 95.08% | 10 | 1.90% | 2-Jan-13 | |||||||
The weighted average fair value of warrants issued during the year ended December 31, 2013 was $0.685. No warrants were issued in 2014. | ||||||||||||||
Our computation of expected volatility is based on the historical volatility of comparable companies’ average historical volatility. The interest rate is based on the U.S. Treasury Yield curve in effect at the time of grant. We do not expect to pay dividends. | ||||||||||||||
Stock Incentive Plans | ||||||||||||||
2010 rVue Holdings Equity Incentive Plan | ||||||||||||||
The 2010 rVue Holdings Equity Incentive Plan (the “Plan”) has reserved 8,000,000 shares of our common stock for issuance pursuant to awards under the Plan. The Plan is intended as an incentive, to retain in the employ of and as directors, our officers, employees, consultants and advisors, and to attract new officers, employees, directors, consultants and advisors whose services are considered valuable, to encourage the sense of proprietorship and to stimulate the active interest of such persons in the development and financial success of the Company and its subsidiaries. | ||||||||||||||
No option grants were issued during 2014. The following table summarizes options granted in the year ended December 31, 2013: | ||||||||||||||
Grant Date | Number | Exercise Price | Fair Value | Period over which compensation expense is recognized | ||||||||||
2-Aug-13 | 1,056,000 | $ | 0.14 | $ | 137,749 | 36 months | ||||||||
31-Oct-13 | 50,000 | 0.1 | 4,168 | 1 months | ||||||||||
19-Dec-13 | 500,000 | 0.1 | 40,026 | 24 months | ||||||||||
The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted during 2013: | ||||||||||||||
2013 | ||||||||||||||
Expected life (years) | 10 | |||||||||||||
Expected volatility | 100.70% | |||||||||||||
Risk-free interest rate | 2.80% | |||||||||||||
Dividend yield | 0.00% | |||||||||||||
Weighted-average estimated fair value of options granted during the year | $ | 0.25 | ||||||||||||
Our computation of expected life is determined based on the simplified method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. Our computation of expected volatility is based on the historical volatility of comparable companies’ average historical volatility. The interest rate is based on the U.S. Treasury Yield curve in effect at the time of grant. We do not expect to pay dividends. While we believe these estimates are reasonable, the estimated compensation expense would increase if the expected life was increased or a higher expected volatility was used. | ||||||||||||||
Stock-based compensation expense included in our Consolidated Statements of Operations is as follows: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Selling, general and administrative expenses | $ | 57,069 | $ | 811,475 | ||||||||||
$ | 57,069 | $ | 811,475 | |||||||||||
On March 29, 2013, the Board approved payment of 4.4 million shares to Michael Mullarkey, a director at the time, as compensation for serving as CEO and CFO after the prior CEO and CFO both left the Company in 2012. Mr. Mullarkey held those temporary positions until April 11, 2013, when a CEO was appointed. Mr. Mullarkey resigned from the Company’s board of directors effective May 31, 2013. The share award was contingent upon the accomplishment of certain objectives set by the board of directors. The objectives were deemed to be accomplished and the resulting expense of $748,000 was recorded during 2013. | ||||||||||||||
The Company issued an aggregate of 1,066,667 shares to officers and directors in lieu of cash compensation resulting in additional director fee expense of $78,333 in 2013. | ||||||||||||||
Stock Option Activity | ||||||||||||||
The following table summarizes the activities for our options for the year ended December 31, 2014: | ||||||||||||||
Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||
Outstanding at December 31, 2012 | 2,326,667 | $ | 0.24 | 7.8 | ||||||||||
Granted | 1,606,000 | $ | 0.12 | |||||||||||
Exercised | - | - | ||||||||||||
Forfeited | -1,292,667 | $ | 0.23 | |||||||||||
Expired | - | - | ||||||||||||
Outstanding on December 31, 2013 | 2,640,000 | $ | 0.17 | 8.41 | ||||||||||
Granted | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | -300,000 | $ | 0.25 | |||||||||||
Expired | - | - | ||||||||||||
Outstanding on December 31, 2014 | 2,340,000 | $ | 0.16 | 7.55 | ||||||||||
Exercisable at December 31, 2014 | 1,476,669 | $ | 0.18 | 6.66 | ||||||||||
Expected to vest after December 31, 2014 | 863,331 | $ | 0.13 | 9.24 | ||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $.10 of our common stock on December 31, 2014. The aggregate intrinsic value excludes the effect of stock options that have a zero or negative intrinsic value. | ||||||||||||||
The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2014: | ||||||||||||||
Outstanding Stock Options | Exercisable Stock Options | |||||||||||||
Exercise Prices | Shares | Weighted-Average Remaining Contractual Life (years) | Weighted-Average Exercise Price Per Share | Shares | Weighted-Average Exercise Price Per Share | |||||||||
$0.20 | 670,000 | 5.45 | $ | 0.2 | 670,000 | $ | 0.2 | |||||||
$0.30 | 200,000 | 5.98 | $ | 0.3 | 200,000 | $ | 0.3 | |||||||
$0.14 | 920,000 | 8.59 | $ | 0.14 | 306,669 | $ | 0.14 | |||||||
$0.10 | 550,000 | 8.96 | $ | 0.1 | 300,000 | $ | 0.1 | |||||||
2,340,000 | 7.55 | $ | 0.16 | 1,476,669 | $ | 0.18 | ||||||||
Restricted Stock | ||||||||||||||
In July 2012, the Company entered into a consulting agreement with the previous chief executive officer and shareholder for continued business and technical development services. Under the consulting agreement, the Company was obligated to grant 500,000 shares of restricted stock which vested in twelve months beginning on the first month anniversary of the date of the grant. Compensation expense equal to the market value of the stock on the vesting date was recorded. Compensation expense recognized relating to the restricted stock grant was $50,750 for the year ending December 31, 2013. | ||||||||||||||
The Company entered into an employment agreement with Mark Pacchini, our CEO and acting CFO, on July 1, 2013. The agreement term is three years and includes mandatory bonuses payable in the Company’s common stock if specific revenue targets are achieved in a twelve month calendar year. On January 1, 2014, the revenue targets for this employment agreement were amended. As of December 31, 2014 the required revenue targets in the agreement were not achieved. As a result, there was no stock based compensation expense recognized related to this agreement. | ||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Income Taxes | |||||||
Income Taxes | Note 10 - Income Taxes | ||||||
The provision for income taxes for the years ended December 31, 2014 and 2013 consisted of the following: | |||||||
2014 | 2013 | ||||||
Current tax expense | |||||||
Federal | $ | - | $ | - | |||
State | - | - | |||||
Total current taxes | - | - | |||||
Deferred taxes: | |||||||
Federal | - | - | |||||
State | - | - | |||||
Total deferred taxes | - | - | |||||
Provision for income taxes | $ | - | $ | - | |||
We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax loss carry forwards. We have established a valuation allowance to reflect the likelihood of realization of deferred tax assets. There is no income tax benefit for the losses for the years ended December 31, 2014 and 2013, since management has determined that the realization of the net deferred tax asset is not more likely than not to be realized and has created a valuation allowance for the entire amount of such benefit. | |||||||
At December 31, 2014 and 2013, the significant components of our deferred tax assets and liabilities were as follows: | |||||||
2014 | 2013 | ||||||
Net operating loss | $ | 3,915,262 | $ | 3,443,689 | |||
Stock option expense | 80,205 | 73,939 | |||||
Accrued expenses | 70,489 | 21,813 | |||||
Capitalized software | 33,465 | 85,258 | |||||
Net deferred tax asset | 4,099,421 | 3,624,699 | |||||
Less: Valuation Allowance | -4,099,421 | -3,624,699 | |||||
Net deferred taxes | $ | - | $ | - | |||
A reconciliation of the provision for income taxes, with the amount computed by applying the federal statutory income tax rate to income before provision for income taxes for the years ended December 31, 2014 and 2013, is as follows: | |||||||
2014 | 2013 | ||||||
Federal tax benefit, at statutory rate of 34% | $ | -313,355 | $ | -724,152 | |||
State income taxes | -33,179 | -76,675 | |||||
Meals and entertainment | 926 | 1,381 | |||||
Non-deductible financing costs | - | - | |||||
Stock options | -129,114 | -43,938 | |||||
Change in valuation allowance | 474,722 | 843,384 | |||||
Provision for income taxes | $ | - | $ | - | |||
Other_Income
Other Income | 12 Months Ended |
Dec. 31, 2014 | |
Other Income {1} | |
Other Income | Note 11- Other income |
On June 4, 2014, rVue, Inc. filed suit against former rVue director and officer Michael Mullarkey, who left the company on May 31, 2013. The complaint alleged claims of fraud, constructive fraud and conversion. rVue also submitted a claim for employee theft to its insurer, CNA, for the amount misappropriated by Mr. Mullarkey. In November, 2014, CNA approved the claim for employee theft in the amount of $249,459. rVue received $249,459 in November 2014 and recorded the amount as other income |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions | |
Related Party Transactions | Note 12- Related Party Transactions |
We paid consulting fees of $748,000 during the year ended December 31, 2013 to a consultant who was appointed by our board of directors in December 2010. The director was appointed interim chief executive officer in April 2012 and resigned from such position on April 11, 2013. | |
In July 2012, the Company entered into a one year consulting agreement with the previous chief executive officer and shareholder for continued business and technical development services. Under the consulting agreement, the Company was obligated to pay $9,000 per month and grant 500,000 shares of restricted stock which vests in twelve months beginning on the first month anniversary of the date of the grant. We expensed consulting fees of $54,000 under the consulting agreement during 2013. In 2013, the Company issued 500,000 shares of common stock to the former CEO of the Company for consulting services he performed subsequent to leaving the Company. | |
On November 22, 2013, we sold 9,285,174 shares of Common Stock to Acorn for an aggregate cash purchase price of $650,000. The shares were issued to Acorn without registration in reliance upon the exemption provided by Section 4 (a) (2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving a public offering. | |
In 2014, the Company had sales of $9,907 to a customer that the Company's chief executive officer is a board member |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2014 | |
Concentrations | |
Concentrations | Note 13 - Concentrations |
Concentrations of Credit Risk | |
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and accounts receivable. | |
We maintain deposit balances at a financial institution that, from time to time, may exceed federally insured limits. As of December 31, 2014, the Company had deposits in excess of federally insured limits. The Company maintains this balance with a high quality financial institution, which the Company believes limits this risk. | |
Concentrations of Revenues | |
For the year ended December 31, 2014, three customers accounted for 54.1%, 19.9% and 10.1% of total revenues. For the year ended December 31, 2013, three customers accounted for 48.9%, 21.6%, and 10.3% of total revenues |
Supplemental_NonCash_Informati
Supplemental Non-Cash Information | 12 Months Ended |
Dec. 31, 2014 | |
Supplemental Non-Cash Information | |
Supplemental Non-Cash Information | Note 14 – Supplemental Non-Cash Information |
In 2014, the Company issued common stock totaling $42,000 to Ken Dvorak for accounting services performed in 2013 and issued common stock totaling $11,400 in the settlement of a law suit. In 2014, the Company issued $60,000 of common stock to a consultant for services to be performed over an eight month period. At December 31, 2014 $45,000 was included in prepaid expenses. | |
The Company issued 700,000 shares of common stock and 450,000 warrants to purchase common stock for fees associated with the equity raised in 2013. Also, the Company issued 500,000 shares of common stock to the former CEO of the Company for consulting services he performed subsequent to leaving the Company. Additionally, in 2013, the Company reversed the accrued director fees balance of $81,667 upon the issuance of shares to officers and directors in lieu of accrued cash compensation. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events: | |
Subsequent Events | Note 15 - Subsequent Events |
In preparing these consolidated financial statements, we have evaluated events and transactions for potential recognition or disclosure through the date of filing. The Company issued 1,071,429 shares of Common Stock between January 1 and February 12, 2015 in exchange for cash of $75,000. On January 12, 2015, 850,000 stock options were granted to current employees and a contractor of the Company. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation |
The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. | |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, fair values of financial instruments, useful lives of capitalized software developments costs and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents |
We consider all highly liquid investments with original maturities of three months or less to be cash equivalents | |
Accounts Receivable | Accounts Receivable |
We record accounts receivable at the invoiced amount and we do not charge interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review the accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. | |
Property and Equipment, Policy | Property and Equipment |
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally two to five years. Depreciation for equipment commences once it is placed in service and depreciation for leasehold improvements, if any, commences once they are ready for their intended use and are amortized over their estimated useful lives, or the term of the lease, whichever is shorter. Maintenance and repair costs are expensed as incurred. | |
Software Development Costs | Software Development Costs |
We capitalize costs incurred for the production of computer software that generates the functionality of our demand-side platform (“DSP”). Capitalized software development costs typically include direct labor and related overhead for software which we produce, as well as the cost of software purchased from third parties. Costs incurred for a product prior to the determination that the product is technologically feasible (i.e. research and development costs), as well as maintenance costs for established products, are expensed as incurred. Once technological feasibility has been established, development costs are capitalized until the software has completed testing and is released for use by the public. We also capitalize eligible costs to acquire or develop internal-use software (such as billing and accounting) that are incurred subsequent to the preliminary project stage. | |
Revenue Recognition, Policy | Revenue Recognition |
Our revenues are derived from advertising campaigns placed through rVue, the maintenance of certain private networks, and the production and distribution of network programming. Revenue is recognized as follows: | |
Advertising revenue is recognized in the period in which the advertising impressions occur. Revenue arrangements are evidenced by a fully executed insertion order (“IO”). Generally, IO’s state the number and type of advertising impressions (cost-per-thousand) to be delivered, the agreed upon rate for each delivered impression, and a fixed period of time for delivery. | |
In the normal course of business, the Company frequently contracts with advertising agencies on behalf of their advertiser clients. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. While none of the factors identified in this guidance is individually considered presumptive or determinative, because the Company is the primary obligator and is responsible for (i) fulfilling the advertisement delivery, (ii) establishing the selling prices for delivery of the advertisements, and (iii) performing all billing and collection activities including retaining credit risk, the Company acts as the principal in these arrangements and therefore reports revenue and costs incurred on a gross basis. | |
Revenue from the maintenance of private networks, and the production and distribution of network programming content, either under contract or on a piece by piece or monthly basis, is recognized ratably over the term of the related service period if the fees are fixed and determinable, delivery has occurred and collection is probable. | |
We record deferred revenue when we receive payment in advance of the performance of services. | |
Stock Based Compensation | Stock Based Compensation |
We have elected to use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair value of stock options on the grant dates. We recognize stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. We will recognize a benefit from stock-based compensation in equity if an incremental tax benefit is realized by following the ordering provisions of the tax law. Further information regarding stock-based compensation can be found in Note 9, “Stockholders’ Equity and Stock Based Compensation | |
Income Tax, Policy | Income Taxes |
We recognize income taxes under the liability method. We recognize deferred income taxes for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which differences are expected to reverse. We recognize the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured to determine the actual amount of benefit to recognize in our financial statements. See Note 10, “Income Taxes” for additional information. | |
Fair Value Measurements, Policy | Fair Value Measurements |
The carrying amounts of our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their generally short maturities. | |
Advertising and Marketing Expenses | Advertising and Marketing Expenses |
We expense advertising and marketing costs in the period in which they are incurred. For the years ended December 31, 2014 and 2013 advertising and marketing expenses totaled $83,874 and $83,546, respectively. | |
Schedule_of_Loss_per_common_sh
Schedule of Loss per common share (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Schedule of Loss per common share | |||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted loss per common share: | ||||||
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Numerator: | |||||||
Net loss | $ | -921,633 | $ | -2,129,860 | |||
Denominator: | |||||||
Weighted-average shares outstanding | 137,638,146 | 115,985,296 | |||||
Effect of dilutive securities(1) | - | - | |||||
Weighted-average diluted shares | 137,638,146 | 115,985,296 | |||||
Basic and diluted loss per share | $ | -0.01 | $ | -0.02 | |||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | (1) The following stock options, warrants outstanding and convertible notes as of December 31, 2014 and 2013 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive: | ||||||
2014 | 2013 | ||||||
Stock options | - | 41,562 | |||||
Warrants | $ | 82,020 | $ | 167,062 | |||
82,020 | 2,086,244 |
Shedule_of_Cash_and_Cash_Equiv
Shedule of Cash and Cash Equivalents (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Shedule of Cash and Cash Equivalents | |||||||
Cash, Cash Equivalents and Investments (Tables) | The following table summarizes the fair value of our cash at December 31, 2014 and 2013: | ||||||
2014 | 2013 | ||||||
Cash | $ | 418,803 | $ | 844,589 | |||
Total cash | 418,803 | 844,589 | |||||
Shedule_of_Property_and_Equipm
Shedule of Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Shedule of Property and Equipment | |||||||||
Property and Equipment (Tables) | |||||||||
Estimated Useful Lives (Years) | 2014 | 2013 | |||||||
Computers and software | 5-Feb | $ | 91,083 | $ | 91,083 | ||||
Equipment | 3 | 22,977 | 22,977 | ||||||
114,060 | 114,060 | ||||||||
Less accumulated depreciation and amortization | -113,398 | -110,995 | |||||||
Property and equipment, net | $ | 662 | $ | 3,065 | |||||
Schedule_of_Software_developme
Schedule of Software development costs (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Schedule of Software development costs | |||||||||
Schedule of Development Wells Drilled | Estimated Useful Lives (Years) | 2014 | 2013 | ||||||
Software development costs | 18 | $ | 1,293,920 | $ | 1,148,713 | ||||
Less accumulated amortization | -1,157,203 | -1,068,113 | |||||||
Software development costs, net | 136,717 | 80,600 | |||||||
Schedule_of_Accured_Expenses_T
Schedule of Accured Expenses (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Schedule of Accured Expenses (Tables): | |||||||
Schedule of Accrued Liabilities | 2014 | 2013 | |||||
Personnel costs | 9,497 | 18,966 | |||||
Professional fees | $ | - | $ | 39,000 | |||
Network costs | 166,211 | 37,917 | |||||
Other | 29,113 | 17,500 | |||||
$ | 204,821 | $ | 113,383 | ||||
Schedule_of_Commitments_and_Co
Schedule of Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Schedule of Commitments and Contingencies (Tables): | ||||
Schedule of Commitments and Contingencies (Tables) | Future minimum lease payments under these non-cancellable leases at December 31, 2014 are as follows: | |||
Year ending December 31, | ||||
2015 | $ | 28,737 | ||
Total future minimum payments | $ | 28,737 |
Schedule_of_Stockholders_Equit
Schedule of Stockholders' Equity and Stock Based Compensation (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of stock option (Tables) | ||||||||||||||
Schedule of Common Stock Warrants available for exercise | We have issued warrants, all of which are fully vested and available for exercise, as follows: | |||||||||||||
Class of Warrant | Issued in connection with or for | Number | Exercise Price | Date of Issue | Date of Expiration | |||||||||
Series A | Private Placement | 8,624,995 | $ | 1 | Dec-10 | Dec-22 | ||||||||
Series B | Investor Relations Services | 50,000 | $ | 0.37 | May-11 | May-16 | ||||||||
Series B | Investment Banking Services | 1,000,000 | $ | 0.35 | Jun-11 | Jun-16 | ||||||||
Series C | Convertible Debt | 3,057,666 | $ | 0.2 | Jan-12 | Jan-17 | ||||||||
Series C | Convertible Debt | 750,000 | $ | 0.2 | May-12 | May-17 | ||||||||
Series C | Convertible Debt | 500,000 | $ | 0.2 | Jul-12 | Jul-17 | ||||||||
Series D | Investment Banking Services | 450,000 | $ | 0.07 | Jan-13 | Jan-23 | ||||||||
Schedule of Warrants Option-Pricing model | ||||||||||||||
The valuation of the warrants utilized the following assumptions in the BSM option-pricing model: | ||||||||||||||
Class of Warrant | Fair Value | Dividend Yield | Volatility | Contractual Lives (Yrs.) | Risk-Free Rate | Date of the Assumptions | ||||||||
Series D | $ | 23,477 | 0.00% | 95.08% | 10 | 1.90% | 2-Jan-13 | |||||||
Schedule of Options granted | The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2014: | |||||||||||||
Outstanding Stock Options | Exercisable Stock Options | |||||||||||||
Exercise Prices | Shares | Weighted-Average Remaining Contractual Life (years) | Weighted-Average Exercise Price Per Share | Shares | Weighted-Average Exercise Price Per Share | |||||||||
$0.20 | 670,000 | 5.45 | $ | 0.2 | 670,000 | $ | 0.2 | |||||||
$0.30 | 200,000 | 5.98 | $ | 0.3 | 200,000 | $ | 0.3 | |||||||
$0.14 | 920,000 | 8.59 | $ | 0.14 | 306,669 | $ | 0.14 | |||||||
$0.10 | 550,000 | 8.96 | $ | 0.1 | 300,000 | $ | 0.1 | |||||||
2,340,000 | 7.55 | $ | 0.16 | 1,476,669 | $ | 0.18 | ||||||||
Schedule of weighted average assumptions stock options | fair value of stock options granted during 2013: | |||||||||||||
2013 | ||||||||||||||
Expected life (years) | 10 | |||||||||||||
Expected volatility | 100.70% | |||||||||||||
Risk-free interest rate | 2.80% | |||||||||||||
Dividend yield | 0.00% | |||||||||||||
Weighted-average estimated fair value of options granted during the year | $ | 0.25 | ||||||||||||
Schedule of Share-based Compensation expense | Stock-based compensation expense included in our Consolidated Statements of Operations is as follows: | |||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Selling, general and administrative expenses | $ | 57,069 | $ | 811,475 | ||||||||||
$ | 57,069 | $ | 811,475 | |||||||||||
Summary of stock option activity | The following table summarizes the activities for our options for the year ended December 31, 2014: | |||||||||||||
Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||
Outstanding at December 31, 2012 | 2,326,667 | $ | 0.24 | 7.8 | ||||||||||
Granted | 1,606,000 | $ | 0.12 | |||||||||||
Exercised | - | - | ||||||||||||
Forfeited | -1,292,667 | $ | 0.23 | |||||||||||
Expired | - | - | ||||||||||||
Outstanding on December 31, 2013 | 2,640,000 | $ | 0.17 | 8.41 | ||||||||||
Granted | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | -300,000 | $ | 0.25 | |||||||||||
Expired | - | - | ||||||||||||
Outstanding on December 31, 2014 | 2,340,000 | $ | 0.16 | 7.55 | ||||||||||
Exercisable at December 31, 2014 | 1,476,669 | $ | 0.18 | 6.66 | ||||||||||
Expected to vest after December 31, 2014 | 863,331 | $ | 0.13 | 9.24 | ||||||||||
Schedule of outstanding and exercisable stock options | The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2014: | |||||||||||||
Outstanding Stock Options | Exercisable Stock Options | |||||||||||||
Exercise Prices | Shares | Weighted-Average Remaining Contractual Life (years) | Weighted-Average Exercise Price Per Share | Shares | Weighted-Average Exercise Price Per Share | |||||||||
$0.20 | 670,000 | 5.45 | $ | 0.2 | 670,000 | $ | 0.2 | |||||||
$0.30 | 200,000 | 5.98 | $ | 0.3 | 200,000 | $ | 0.3 | |||||||
$0.14 | 920,000 | 8.59 | $ | 0.14 | 306,669 | $ | 0.14 | |||||||
$0.10 | 550,000 | 8.96 | $ | 0.1 | 300,000 | $ | 0.1 | |||||||
2,340,000 | 7.55 | $ | 0.16 | 1,476,669 | $ | 0.18 |
Schedule_of_Income_Taxes_Table
Schedule of Income Taxes (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Schedule of Income Taxes (Tables): | |||||||
Schedule of Provision for Income Taxes | The provision for income taxes for the years ended December 31, 2014 and 2013 consisted of the following: | ||||||
2014 | 2013 | ||||||
Current tax expense | |||||||
Federal | $ | - | $ | - | |||
State | - | - | |||||
Total current taxes | - | - | |||||
Deferred taxes: | |||||||
Federal | - | - | |||||
State | - | - | |||||
Total deferred taxes | - | - | |||||
Provision for income taxes | $ | - | $ | - | |||
Schedule of Deferred Tax Assets and Liabilities | At December 31, 2014 and 2013, the significant components of our deferred tax assets and liabilities were as follows: | ||||||
2014 | 2013 | ||||||
Net operating loss | $ | 3,915,262 | $ | 3,443,689 | |||
Stock option expense | 80,205 | 73,939 | |||||
Accrued expenses | 70,489 | 21,813 | |||||
Capitalized software | 33,465 | 85,258 | |||||
Net deferred tax asset | 4,099,421 | 3,624,699 | |||||
Less: Valuation Allowance | -4,099,421 | -3,624,699 | |||||
Net deferred taxes | $ | - | $ | - | |||
Schedule of reconciliation of the provision for income taxes | A reconciliation of the provision for income taxes, with the amount computed by applying the federal statutory income tax rate to income before provision for income taxes for the years ended December 31, 2014 and 2013, is as follows: | ||||||
2014 | 2013 | ||||||
Federal tax benefit, at statutory rate of 34% | $ | -313,355 | $ | -724,152 | |||
State income taxes | -33,179 | -76,675 | |||||
Meals and entertainment | 926 | 1,381 | |||||
Non-deductible financing costs | - | - | |||||
Stock options | -129,114 | -43,938 | |||||
Change in valuation allowance | 474,722 | 843,384 | |||||
Provision for income taxes | $ | - | $ | - | |||
Capital_Stock_Details
Capital Stock (Details) (USD $) | Mar. 29, 2010 |
Capital Stock | |
Increase the number of authorized shares of capital stock | 150,000,000 |
Shares of common stock | 140,000,000 |
Par value of common stock | $0.00 |
Shares of preferred stock | 10,000,000 |
Par value of preferred stock | $0.00 |
Advertising_and_Marketing_Expe
Advertising and Marketing Expenses (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Advertising and Marketing Expenses {1} | ||
Total Advertising and Marketing Expenses | $83,874 | $83,546 |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | Dec. 31, 2014 |
GOING CONCERN DETAILS | |
Accumulated deficit | $12,668,476 |
LOSS_PER_COMMON_SHARE_Details
LOSS PER COMMON SHARE (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | ||
Net loss | ($921,633) | ($2,129,860) |
Denominator: | ||
Weighted-average shares outstanding | 137,638,146 | 115,985,296 |
Effect of dilutive securities(1) | 0 | |
Weighted-average diluted shares | 137,638,146 | 115,985,296 |
Basic and diluted loss per share | ($0.01) | ($0.02) |
Stock_options_warrants_and_con
Stock options, warrants and convertible notes outstanding (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stock options, warrants and convertible notes outstanding | ||
Stock options | 41,562 | |
Warrants | 82,020 | 167,062 |
convertible notes | $82,020 | $2,086,244 |
Cash_and_Cash_Equivalents_Deta
Cash and Cash Equivalents (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and Cash Equivalents Details | ||
Cash | $418,803 | $844,589 |
Total cash | $418,803 | $844,589 |
Accounts_Receivable_Details
Accounts Receivable (Details) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts Receivable: | ||
Accounts receivable from one customer accounted for (percent) | 93.20% | |
Accounts receivable from three customer accounted for (percent) | 80.90% |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property and Equipment (Details) | ||
Computers and software | $91,083 | $91,083 |
Equipment | 22,977 | 22,977 |
Gross Property and Equipment | 114,060 | 114,060 |
Less accumulated depreciation and amortization | -113,398 | -110,995 |
Property and equipment, net | $662 | $3,065 |
Assets_estimated_useful_life_Y
Assets estimated useful life (Years) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Assets estimated useful life | |
Computers and software estimated useful life (Years) | 2 to 5 years |
Furniture and equipment estimated useful life (Years) | 3 years |
Software development costs estimated useful life (Years) | 18 years |
Depreciation_expense_Details
Depreciation expense (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Depreciation expense during the period: | ||
Depreciation expense | $2,403 | $9,992 |
Software_Development_Costs_Det
Software Development Costs (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Software Development Costs: | ||
Software development costs | $1,293,920 | $1,148,713 |
Less accumulated amortization | -1,157,203 | -1,068,113 |
Software development costs, net | $136,717 | $80,600 |
Amortization_expense_Details
Amortization expense (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Amortization expense: | ||
Amortization expense | $89,090 | $29,823 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued Expenses: | ||
Personnel costs | $9,497 | $18,966 |
Professional fees | 39,000 | |
Network costs | 166,211 | 37,917 |
Other | 29,113 | 17,500 |
Total Accrued Expenses | $204,821 | $113,383 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2014 | Nov. 30, 2014 | 5-May-14 | Oct. 04, 2013 | Jul. 01, 2013 | Sep. 14, 2012 | Mar. 08, 2011 |
Lease Commitments | |||||||
Smaller space of 600 square feet leased at a rate per month | $2,200 | ||||||
Smaller space of 140 square feet leased at a rate per month | 1,300 | ||||||
Company occupied 2,700 square feet of office space from Real Capital, LLC leased at a rate per month | 3,100 | ||||||
Increased in lease at a rate per month | 3,193 | ||||||
Contract with Consultant | |||||||
Compensated the consultant with shares of common stock | 483,871 | ||||||
Legal Matters | |||||||
Company transferred funds | 20,000 | ||||||
Company transferred shares of common stock to the plaintiffs | 190,000 | ||||||
Agent fee | 210,000 | ||||||
Warrants to purchase shares of our common stock | 175,167 | ||||||
Future minimum lease payments | |||||||
Future minimum lease payments for year ending December 31,2015 | 28,737 | ||||||
Total future minimum payments | $28,737 |
Rent_Details
Rent (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Rent | ||
Rent expense | $46,989 | $58,898 |
Shareholders_Details
Shareholders (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred Stock | ||
Authorized shares of Preferred Stock | 10,000,000 | |
preferred stock per share value | $0.00 | |
Common Stock | ||
Authorized shares of Common Stock | 240,000,000 | |
Common stock per share value | $0.00 | |
Shares issued of Common Stock | 140,872,727 | 132,221,476 |
Shares outstanding of Common Stock | 140,872,727 | 132,221,476 |
Common_Stock_Warrants_Details
Common Stock Warrants (Details) | Dec. 31, 2014 |
Common Stock Warrants | |
Series A Warrant Issued for Private Placement in December 2010 expiring in December 2022 with an exercise price 1.00 | 8,624,995 |
Series B Warrant Issued for Investor Relations Services in May 2011 expiring in May 2016 with an exercise price 0.37 | 50,000 |
Series B Warrant Issued for Investment Banking Services in June 2011 expiring in June 2016 with an exercise price 0.35 | 1,000,000 |
Series C Warrant Issued for Convertible Debt in January 2012 expiring in January 2017 with an exercise price 0.20 | 3,057,666 |
Series C Warrant Issued for Convertible Debt in May 2012 expiring in May 2017 with an exercise price 0.20 | 750,000 |
Series C Warrant Issued for Convertible Debt in July 2012 expiring in July 2017 with an exercise price 0.20 | 500,000 |
Series D Warrant Issued for Investment Banking Services in January 2013 expiring in January 2023 with an exercise price 0.07 | 450,000 |
Valuation_of_the_warrants_util
Valuation of the warrants utilized the following assumptions in the BSM option-pricing model (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Value of series D warrants of date of the assumptions January 2, 2013 | |
Fair Value of warrants | $23,477 |
Dividend Yield rate of warrants | 0.00% |
Volatility rate of warrants | 95.08% |
Contractual Lives of warrants in years | 10 |
Risk-Free Rate of warrants | 1.90% |
Weighted average fair value of warrants issued | 0.685 |
Equity_Incentive_Plan_Options_
Equity Incentive Plan Options granted (Details) (USD $) | Dec. 31, 2014 | Dec. 19, 2013 | Oct. 31, 2013 | Aug. 02, 2013 |
Equity Incentive Plan Options granted | ||||
Shares of common stock reserved for issuance pursuant to awards under the Plan | 8,000,000 | |||
Options granted in number | $500,000 | $50,000 | $1,056,000 | |
Exercise Price of options granted | $0.10 | $0.10 | $0.14 | |
Fair Value of options granted | $40,026 | $4,168 | $137,749 | |
Options granted period in months | 24 | 1 | 36 |
Weightedaverage_assumptions_us
Weighted-average assumptions used to estimate the fair value of stock options granted (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Weighted-average assumptions used to estimate the fair value of stock options granted | |
Expected life of options (years) | 10 |
Expected volatility rate of options | 1.01% |
Risk-free interest rate of options | 0.028 |
Dividend yield rate of options | 0.00% |
Weighted-average estimated fair value of options granted during the year | 0.25 |
Stockbased_compensation_expens
Stock-based compensation expense (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stock-based compensation expense {1} | ||
Selling, general and administrative expenses | $57,069 | $811,475 |
Total Selling, general and administrative expenses | 57,069 | 811,475 |
Resulting expense | 748,000 | |
Company issued an aggregate shares to officers and directors in lieu of cash | 1,066,667 | |
Compensation resulting in additional director fee expense | $78,333 |
Stock_Option_Activity_Details
Stock Option Activity (Details) | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining contractual Term | Aggregate Intrinsic Value |
Outstanding Stock Option at Jan. 01, 2013 | 2,326,667 | 0.24 | 7.8 | 0 |
Granted | 1,606,000 | 0.12 | 0 | |
Exercised | 0 | |||
Forfeited | -1,292,667 | 0.23 | 0 | |
Expired | 0 | |||
Outstanding Stock Option at Dec. 31, 2013 | 2,640,000 | 0.17 | 8.4 | 0 |
Granted | 0 | |||
Exercised | 0 | |||
Forfeited | -300,000 | 0.25 | 0 | |
Expired | 0 | |||
Exercisable at at Dec. 31, 2014 | 1,476,669 | 0.18 | 6.7 | 0 |
Expected to vest after at Dec. 31, 2014 | 863,331 | 0.13 | 9.2 | 0 |
Outstanding Stock Option at Dec. 31, 2014 | 2,340,000 | 0.16 | 7.6 | 0 |
Summary_of_outstanding_and_exe
Summary of outstanding and exercisable stock options (Details) | Outstanding Shares | Outstanding Weighted-Average Remaining Contractual Life (years) | Outstanding Weighted-Average Exercise Price Per Share | Exercisable Shares | Exercisable Weighted-Average Exercise Price Per Share |
Outstanding and exercisable stock options at Dec. 31, 2013 | 0 | ||||
Outstanding and exercisable stock options of exercise price 0.20 | 670,000 | 5.45 | 0.2 | 670,000 | 0.2 |
Outstanding and exercisable stock options of exercise price 0.30 | 200,000 | 5.98 | 0.3 | 200,000 | 0.3 |
Outstanding and exercisable stock options of exercise price 0.14 | 920,000 | 8.59 | 0.14 | 306,669 | 0.14 |
Outstanding and exercisable stock options of exercise price 0.10 | 550,000 | 8.96 | 0.1 | 300,000 | 0.1 |
Outstanding and exercisable stock options at Dec. 31, 2014 | 2,340,000 | 7.55 | 0.16 | 1,476,669 | 0.18 |
Provision_for_income_taxes_Det
Provision for income taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Current tax expense | ||
Federal current tax expense | $0 | $0 |
State current tax expense | 0 | |
Total current taxes | 0 | |
Deferred taxes: | ||
Federal deferred taxes | 0 | |
State deferred taxes | 0 | |
Total deferred taxes | 0 | |
Provision for income taxes | $0 |
Deferred_tax_assets_and_liabil
Deferred tax assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets and liabilities | ||
Net operating loss | $3,915,262 | $3,443,689 |
Stock option expense | 80,205 | 73,939 |
Accrued expenses | 70,489 | 21,813 |
Capitalized software | 33,465 | 85,258 |
Net deferred tax asset | 4,099,421 | 3,624,699 |
Less: Valuation Allowance | -4,099,421 | -3,624,699 |
Net deferred taxes | $0 |
Income_tax_benefit_Details
Income tax benefit (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income tax benefit | ||
Federal tax benefit, at statutory rate of 34% | ($313,355) | ($724,152) |
State income taxes | -33,179 | -76,675 |
Meals and entertainment | 926 | 1,381 |
Non-deductible financing costs | 0 | |
Stock options | -129,114 | -43,938 |
Change in valuation allowance | 474,722 | 843,384 |
Provision for income taxes | 0 | |
Net operating loss carry forwards | ||
Federal net operating loss carry forwards | $10,396,051 |
Other_income_Details
Other income (Details) (USD $) | Nov. 30, 2014 |
Other income {1} | |
CNA approved the claim for employee theft amount | $249,459 |
RVue received amount | $249,459 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 22, 2013 | Jul. 31, 2012 |
Related Party Transactions {2} | ||||
Consulting fees paid | $748,000 | |||
Company was obligated to pay per month under consulting agreement | 9,000 | |||
Grant shares of restricted stock | 500,000 | |||
Consulting fees expensed under consulting agreement | 54,000 | |||
Company issued shares of common stock to the former CEO | 500,000 | |||
Company sold shares of common stock to Acom | 9,285,174 | |||
Cash purchase price | 650,000 | |||
Company had sales to a customer | $9,907 |
Concentrations_of_Revenues_Det
Concentrations of Revenues (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Concentrations of Revenues | ||
First customer accounted | 54.10% | 48.90% |
Second customer accounted | 19.90% | 21.60% |
Third customer accounted | 10.10% | 10.30% |
Recovered_Sheet1
SUPPLEMENTAL NON-CASH INFORMATION (DETAILS) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Supplemental Non-Cash Information {2} | ||
Company issued common stock total to Ken Dvorak | 42,000 | |
Issued common stock total in the settlement of a law suit | 11,400 | |
Company issued common stock to a consultant for services | 60,000 | |
Company issued shares of common stock | 700,000 | |
Warrants to purchase common stock for fees | $450,000 | |
Company issued shares of common stock to the former CEO of the Company for consulting services | 500,000 | |
Company reversed the accrued director fees | $81,667 |
Subsequent_Transactions_Detail
Subsequent Transactions (Details) (USD $) | Jan. 12, 2015 | Dec. 31, 2014 |
Subsequent Transactions (Details) | ||
Company issued shares of Common Stock between January 1 and February 12, 2015 | 1,071,429 | |
Common Stock in exchange for cash | $75,000 | |
Stock options were granted to current employees and a contractor | $850,000 |