Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 03, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | RVUE HOLDINGS, INC. | ||
Entity Trading Symbol | rvue | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,455,206 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 193,900,925 | ||
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 | $ 3,724,652 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 67,069 | $ 418,803 |
Accounts receivable net of allowance of nil in 2015 and 2014 | 21,390 | 332,563 |
Prepaid expenses | 30,700 | 70,101 |
Total current assets | 119,159 | 821,467 |
Property and equipment, net | 14 | 662 |
Software development costs, net | 123,525 | 136,717 |
Deposits | 3,239 | 3,180 |
Total Assets | 245,937 | 962,026 |
Current liabilities: | ||
Accounts payable | 71,792 | 168,591 |
Accrued expenses | 33,231 | 204,821 |
Interest payable | 9,339 | 0 |
Note payable | 11,710 | 0 |
Convertible notes | 144,293 | 0 |
Derivative liability | 123,855 | 0 |
Deferred revenue | 10,500 | 10,500 |
Total current liabilities | $ 404,720 | $ 383,912 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized; none issued or outstanding | $ 0 | $ 0 |
Common stock, $0.001 par value per share; 240,000,000 shares authorized at December 31, 2015 and 2014, respectively 173,507,292 and 140,872,727 shares issued and outstanding at December 31, 2015 and 2014, respectively | 173,507 | 140,873 |
Additional paid-in capital | 13,740,269 | 13,105,717 |
Accumulated deficit | (14,072,559) | (12,668,476) |
Total stockholders' equity (deficit) | (158,783) | 578,114 |
Total liabilities and stockholders' equity | $ 245,937 | $ 962,026 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 240,000,000 | 240,000,000 |
Common Stock, shares issued | 173,507,292 | 140,872,727 |
Common Stock, shares outstanding | 173,507,292 | 140,872,727 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | ||
rVue fees | $ 973,589 | $ 1,141,003 |
Network | 126,000 | 130,425 |
Total revenues | 1,099,589 | 1,271,428 |
Costs and expenses | ||
Cost of revenue | 880,159 | 974,779 |
Selling, general and administrative expenses | 1,395,306 | 1,376,248 |
Depreciation and amortization | 138,206 | 91,493 |
Interest expense | 81,110 | 0 |
Change in fair value of derivative instruments | 22,616 | 0 |
Other income | (13,725) | (249,459) |
Total Costs and expenses | 2,503,672 | 2,193,061 |
Loss before provision for income taxes | (1,404,083) | (921,633) |
Provision for income taxes | 0 | 0 |
Net loss | $ (1,404,083) | $ (921,633) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) |
Shares used in computing net loss per share: Basic and diluted | 144,429,639 | 137,638,146 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Jan. 01, 2014 | 0 | 0 | 132,221,476 | 132,222 | 12,418,899 | (11,746,843) | 804,278 |
Shares Issued for Services | 0 | 0 | 1,198,871 | 1,199 | 112,201 | 0 | 113,400 |
Stock based compensation expense | $ 0 | $ 0 | $ 57,069 | $ 0 | $ 57,069 | ||
Shares Issued | 0 | 0 | 7,452,380 | 7,452 | 517,548 | 0 | 525,000 |
Net loss | $ 0 | $ 0 | $ 0 | $ (921,633) | $ (921,633) | ||
Balance at Dec. 31, 2014 | 0 | 0 | 140,872,727 | 140,873 | 13,105,717 | (12,668,476) | 578,144 |
Shares Issued for Services | 0 | 0 | 1,016,129 | 1,016 | 39,629 | 0 | 40,645 |
Stock based compensation expense | $ 0 | $ 0 | $ 61,541 | $ 0 | $ 61,541 | ||
Shares Issued | 0 | 0 | 31,618,436 | 31,618 | 533,382 | 0 | 565,000 |
Net loss | $ 0 | $ 0 | $ 0 | $ (1,404,083) | $ (1,404,083) | ||
Balance at Dec. 31, 2015 | 0 | 0 | 173,507,292 | 173,507 | 13,740,269 | (14,072,559) | (158,783) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | ||
Net loss | $ (1,404,083) | $ (921,633) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 138,206 | 91,493 |
Impairment charge | 18,506 | 0 |
Non-cash interest | 70,532 | 0 |
Stock-based compensation expense | 61,541 | 57,069 |
Common stock issued for services | 85,645 | 15,000 |
Change in fair value of derivative instruments | 22,616 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 311,174 | (207,571) |
Prepaid expenses | 53,241 | (14,245) |
Accounts payable | (96,799) | 78,470 |
Accrued expenses | (171,590) | 102,838 |
Deferred revenue | 0 | 10,500 |
Accrued interest payable | 9,339 | 0 |
Cash used in operating activities | (901,672) | (788,079) |
Investing activities | ||
Payments for property, equipment and software development | (142,873) | (145,207) |
Changes in deposits | (59) | 7,500 |
Cash used in investing activities | (142,932) | (137,707) |
Financing activities | ||
Proceeds from issuance of Common Stock | 565,000 | 500,000 |
Proceeds from convertible notes | 175,000 | 0 |
Payments on debt | (47,130) | 0 |
Cash provided by financing activities | 692,870 | 500,000 |
Decrease in cash | (351,734) | (425,786) |
Cash, beginning of year | 418,803 | 844,589 |
Cash, end of year | $ 67,069 | $ 418,803 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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. 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. Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires entities to present debt issuance costs as a direct adjustment to the carrying value of the debt instead of as an asset. ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and early adoption is permitted. The Company adopted ASU 2015-03 as of December 31, 2015. The adoption of ASU 2015-03 did not have an impact on the consolidated balance sheet as of December 31, 2014. Derivative Instruments In July 2015 we entered into two Promissory Note Purchase Agreements and issued notes which are convertible into shares of our common stock that have conversion features which are embedded derivatives as defined in FASB Accounting Standards Codification (ASC) 815. Derivative financial instruments are initially measured at their fair value and then are re-valued at each reporting date, with changes in fair value reported as charges or credits to income. Embedded derivatives that are not clearly and closely related to the host contract (the notes) are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determined the fair value of the embedded derivative based on available market data using a binomial lattice valuation model, giving consideration to all of the rights and obligations of the instrument. 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. 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, IOs 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. We also use the provisions of ASC 505-50, Equity Based Payments to Non-Employees, to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50. Further information regarding stock-based compensation can be found in Note 11, 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 12, 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. The carrying value of convertible notes approximated their fair value based on the recentness of the transaction. At December 31, 2015 the embedded derivative liability is reported at fair value calculated using a binomial lattice model. Advertising and Marketing Expenses We expense advertising and marketing costs in the period in which they are incurred. For the years ended December 31, 2015 and 2014 advertising and marketing expenses totaled $123,643 and $83,875, respectively. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2015 | |
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 $14,072,559 at December 31, 2015. 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. Managements plans in order to meet our operating cash flow requirements includes 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, 2015 | |
Schedule of 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, 2015 and 2014, 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, 2015 and 2014. 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 of the derivative securities. The following table sets forth the computation of basic and diluted loss per common share: Year Ended December 31, 2015 2014 Numerator: Net loss $ (1,404,083) $ (921,633) Denominator: Weighted-average shares outstanding 144,429,639 137,638,146 Effect of dilutive securities (1) - - Weighted-average diluted shares 144,429,639 137,638,146 Basic and diluted loss per share $ (0.01) $ (0.01) (1) The following stock options, warrants outstanding and convertible notes as of December 31, 2015 and 2014 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive: 2015 2014 Stock options 1,606,000 - Warrants - 82,020 Convertible Notes 6,703,700 - 8,309,700 82,020 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments | |
Financial Instruments | Note 4 - Financial Instruments 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 two of our customers accounted for 100% of accounts receivable as of December 31, 2015. Accounts receivable from three of our customers accounted for 99.4% of accounts receivable as of December 31, 2014. We had no allowance for doubtful accounts at December 31, 2015 and 2014. There were no bad debt expenses for the years ended December 31, 2015 and 2014. See Note 15 Concentrations for additional information. Note 5 Property and Equipment Estimated Useful Lives (Years) 2015 2014 Computers and software 2-5 $ 91,083 $ 91,083 Equipment 3 22,977 22,977 114,060 114,060 Less accumulated depreciation and amortization (114,046) (113,398) Property and equipment, net $ 14 $ 662 Depreciation expense was $648 and $2,403 for the years ended December 31, 2015 and 2014, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Property and Equipment | Note 5 Property and Equipment Estimated Useful Lives (Years) 2015 2014 Computers and software 2-5 $ 91,083 $ 91,083 Equipment 3 22,977 22,977 114,060 114,060 Less accumulated depreciation and amortization (114,046) (113,398) Property and equipment, net $ 14 $ 662 Depreciation expense was $648 and $2,403 for the years ended December 31, 2015 and 2014, respectively. |
Software Development Costs
Software Development Costs | 12 Months Ended |
Dec. 31, 2015 | |
Software Development Costs | |
Software Development Costs | Note 6 Software Development Costs Estimated Useful Lives (Years) 2015 2014 Software development costs 18 $ 1,418,287 $ 1,293,920 Less accumulated amortization (1,294,762) (1,157,203) Software development costs, net $ 123,525 $ 136,717 Amortization expense was $137,558 and $89,090 for the years ended December 31, 2015 and 2014, respectively. During 2015, the Company recognized an impairment charge of $18,506 relating to the software development costs that were not planned to be utilized by the Company. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | |
Accrued Expenses | Note 7 Accrued Expenses 2015 2014 Personnel costs $ 11,407 $ 9,497 Professional fees 12,000 - Network costs 324 166,211 Other 9,500 29,113 $ 33,231 $ 204,821 |
Convertible Note Financing
Convertible Note Financing | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Note Financing | |
Convertible Note Financing | Note 8 Convertible Note Financing Typenex Convertible Note Financing On July 8, 2015 (the Closing Date), the Company entered into a Securities Purchase Agreement dated July 7, 2015 but effective July 8, 2015 (the Typenex SPA) with Typenex Co-Investment, LLC (Typenex). Pursuant to the Typenex SPA, the Company issued to Typenex a convertible promissory note (the Typenex Note) in the principal amount of $252,500, deliverable in four tranches as described below. The Typenex Note has a term of 17 months, an interest rate of 10% per annum and an original issue discount (OID) of $22,500. The commitment to the Company from the Typenex Note were $225,000, in the form of: (a) an initial tranche of $75,000 in cash (gross proceeds of $87,500, less $7,500 in OID and $5,000 in expense reimbursements), and a (b) future commitment of three promissory notes of $55,000 each (each consisting of $55,000 in gross proceeds, less $5,000 in OID (the Investor Notes)). Typenex may elect, in its sole discretion, to fund one or more of the Investor Notes. Absent such an election by Typenex, the Investor Notes will not result in cash proceeds to, or an obligation to repay on the part of, the Company. Beginning on the date that is six (6) months after the Closing Date and on the same day of each month thereafter until the maturity date of the Typenex Note, so long as any amount is outstanding thereunder, the Company is required to pay to Typenex installments of principal equal to $21,041 (or such lesser principal amount as is then outstanding), plus the sum of any accrued and unpaid interest. Payments of each installment amount may be made in cash. Alternatively, Typenex or the Company may elect to convert an installment amount into Common Stock as described below. Beginning six (6) months after the Closing Date, Typenex may convert the balance of the Typenex Note, or any installment or portion thereof, utilizing the conversion price calculation set forth below. Generally, the Lender Conversion Price shall be $0.08. However, in the event that the Companys market capitalization falls below $3,000,000 at any time, then in such event (a) the conversion price for all lender conversions occurring after the first date of such occurrence shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable date of conversion. The Market Price is calculated by applying a discount of 30% to the average of the three (3) lowest closing bid prices during the twenty (20) trading days immediately preceding the applicable conversion. The Company may also elect to make payment of installments in the form of equity, subject to the terms and conditions of the Typenex Note. Carebourn Convertible Note Financing On July 30, 2015 (the Closing Date), the Company entered into a Securities Purchase Agreement dated July 30, 2015 (the Carebourn SPA) with Carebourn Capital, L.P. (Carebourn). Pursuant to the Carebourn SPA, the Company issued to Carebourn a convertible promissory note (the Carebourn Note) in the principal amount of $115,000. The Carebourn Note has a term of 9 months and an interest rate of 10% per annum. The net proceeds to the Company from the Carebourn Note were $100,000, consisting of gross proceeds of $115,000, less $10,000 in OID and $5,000 in expense reimbursements. The entire principal balance of the Carebourn Note, together with all accrued interest, is due and payable on April 30, 2016. Beginning on the date that is ninety (90) days after the Closing Date, so long as any amount is outstanding under the Carebourn Note, Carebourn may convert all or any portion of the balance of the Carebourn Note into shares of the Companys common stock Generally, the conversion price will be calculated by applying a discount of 40% to the average of the three (3) lowest closing bid prices for the common stock during the twenty (20) trading days immediately preceding the applicable conversion. Carebourn is generally prohibited from acquiring more than 4.99% of the Companys outstanding shares pursuant to the Carebourn Note. Derivatives The Typenex Note and the Carebourn Note described above have conversion features which are embedded derivatives as defined in FASB ASC 815. The key factors in this analysis included: (i) determining that the conversion features met the definition of a derivative, and (ii) that a scope exception was not applicable to the Company, as the conversion features were not considered indexed to the Companys own stock, due to the various potential adjustments to the conversion price. Derivative financial instruments are initially measured at their fair value and then are re-valued at each reporting date, with changes in fair value reported as charges or credits to income. At inception, we valued the derivative instruments in the Typenex and Carebourn notes at $25,370 and $75,869, respectively. At December 31, 2015, we valued the derivative instruments at $123,855, recognizing a $22,616 change in fair value. We determined the fair value of the two embedded conversion features based on available data using a binomial lattice valuation model given all the rights and obligations of the instruments. The initial fair value of the derivative was recorded as a reduction of the Typenex and Carebourn notes. The effective interest rate of the Typenex and Carebourn notes were 78% and 238%, respectively. This original issue discount will be amortized as interest expense over the term of the Notes. At December 31, 2015, the Notes are carried as follows: December 31, 2015 Principal $ 202,500 Original issue discount and debt issuance costs (27,500) Derivative liability at inception (101,239) Amortization of discount on notes 70,532 $ 144,293 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measures and Disclosures: | |
Fair Value Measurements | Note 9 Fair Value Measurements Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable: Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable directly or indirectly. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. We are responsible for the valuation process and as part of this process we used data from an outside source to establish fair value. We performed due diligence to understand the inputs used or how the data was calculated or derived, and we corroborated the reasonableness of external inputs in the valuation process. 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. Assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and December 31, 2014 were as follows: Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1) Significant Other Observable Inputs (Level 2) SignificantUnobservableInputs(Level 3) Total December 31, 2015 Liabilities: Derivative liability $ - $ - $ 123,855 $ 123,855 December 31, 2014 Liabilities: Derivative liability $ - $ - $ - $ - The fair value of the derivative liability, classified as Level 3, utilized a simulation analysis using a binomial lattice model and other unobservable inputs (Note 8). Rollforward of Level 3 Net Liability The table below sets forth a summary of changes in the fair value of the Companys Level 3 liabilities for the year ended December 31, 2015: Balance, January 1, 2015 $ - Issuances 101,239 Settlements - Realized and unrealized (gains) losses included in earnings 22,616 Transfers into or out of level 3 - Balance, December 31, 2015 $ 123,855 The Typenex Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows: December 31 2015 Closing share price $ 0.0384 Conversion price $ 0.0800 Risk free rate 0. 673% Expected volatility 75% Dividend yield 0% Expected life 0. 94 years Lattice steps 244 Conversion rest price 0.0211 Base conversion factor 70% Conversion factor trigger $ 0.0200 Interest rate on note 10% The Carebourn Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows: December 31 2015 Closing share price $ 0.0384 Conversion price $ 0.0800 Risk free rate 0.486% Expected volatility 75% Dividend yield 0% Expected life 0.33 years Lattice steps 86 Variable conversion factor 60% Conversion factor trigger $ 0.0200 Interest rate on note 10% |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies {1} | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Lease Commitments In 2014, we leased office space with approximately 140 square feet at a rate of $1,300 per 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 occupied approximately 2,700 square feet of office space from Real Capital, LLC under a lease contract that expired 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. In October, 2015, we moved our corporate headquarters to Oakbrook Terrace, IL, where we sub-lease approximately 3,109 square feet of office space from Midwest Disability P.A. at a rate of approximately $3,239 per month thru October 31, 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, 2015 are as follows: Year ending December 31, 2016 $ 32,835 Total future minimum payments $ 32,835 Rent expense was $38,407 and $46,989 for the years ended December 31, 2015 and 2014, 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, we 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 resulted in the Company issuing additional shares to the consultant if the share price in May 2015 falls below the share price at issuance. In October 2015, rVue issued consultant 1,016,129 shares as final payment under this agreement. Total expense recognized in the consolidated financial statements under the contract was $89,032 and $31,613 for the years ended December 31, 2015 and 2014, respectively. 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, 2015 or 2014. 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 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. On January 5, 2016 a judge in the Circuit Court of the 17th Judicial District in Broward County, Florida rescinded the Placement Agent Agreement entered into by Viewpoint Securities and rVue Holdings and awarded rVue attorney fees and costs of $31,715 from Viewpoint Securities. On June 4, 2014, we 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. We 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 resulting in the Company receiving $249,459 in 2014. To the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business, financial condition and operating results. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity and Stock Based Compensation | |
Stockholders' Equity and Stock Based Compensation | Note 11 - 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 173,507,292 and 140,872,727 shares were issued and outstanding at December 31, 2015 and 2014, 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 $ 1.00 December 2010 December 2022 Series B Investor Relations Services 50,000 $ 0.37 May 2011 May 2016 Series B Investment Banking Services 1,000,000 $ 0.35 June 2011 June 2016 Series C Convertible Debt 3,057,666 $ 0.20 January 2012 January 2017 Series C Convertible Debt 750,000 $ 0.20 May 2012 May 2017 Series C Convertible Debt 500,000 $ 0.20 July 2012 July 2017 Series D Investment Banking Services 450,000 $ 0.07 January 2013 January 2023 No warrants were issued in 2015 or 2014. Stock Incentive Plans 2010 rVue Holdings Equity Incentive Plan The 2010 rVue Holdings Equity Incentive Plan (the Plan) has reserved 23,000,000 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, 2015: Grant Date Number Exercise Price Fair Value Period over which compensation expense is recognized January 12, 2015 850,000 $ 0.10 $ 63,251 36 months August 6, 2015 9,750,000 0.04 264,605 36 months October 22, 2015 3,250,000 0.03 88,009 36 months December 3, 2015 2,750,000 0.04 89,033 36 months December 15, 2015 2,000,000 0.04 72,416 36 months December 16, 2015 1,000,000 0.06 54,311 36 months The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted during 2015: 2015 Expected life (years) 6.5 Expected volatility 128.3% Risk-free interest rate 2.1% Dividend yield 0.0% Weighted-average estimated fair value of options granted during the year $ 0.04 Stock-based compensation cost for stock options is estimated at the grant date based on the fair-value as calculated by the Black-Scholes-Merton (BSM) option-pricing model. The BSM option-pricing model incorporates various assumptions including expected volatility, expected life and interest rates. 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 was based on the historical volatility of comparable companies average historical volatility. Beginning in October 2015, our computation of expected volatility is based on the companys 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, 2015 2014 Selling, general and administrative expenses $ 61,541 $ 57,069 $ 61,541 $ 57,069 As of December 31, 2015, $304,322 of total unrecognized compensation expense related to stock based awards is expected to be recognized over a weighted average period of 2.35 years. Stock Option Activity The following table summarizes the activities for our options for the year ended December 31, 2015: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding on January 1, 2014 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 - Granted 19,600,000 $ 0.04 Exercised - - Forfeited (1,800,000) $ 0.12 Expired - - Outstanding on December 31, 2015 20,140,000 $ 0.05 9.50 .01 Exercisable at December 31, 2015 1,033,332 $ 0.21 5.06 - Expected to vest after December 31, 2015 19,106,668 $ 0.02 9.79 - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $.04 of our common stock on December 31, 2015. The aggregate intrinsic value includes the effect of stock options that have a $32,500 intrinsic value. The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2015: 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 4.45 $ 0.20 670,000 $ 0.20 $0.30 200,000 4.98 $ 0.30 200,000 $ 0.30 $0.14 170,000 7.59 $ 0.14 113,332 $ 0.14 $0.10 50,000 7.84 $ 0.10 50,000 $ 0.10 $0.10 300,000 9.04 $ 0.10 - $ 0.10 $0.03 3,250,000 9.82 $ 0.03 - $ 0.03 $0.04 14,500,000 9.73 $ 0.04 - $ 0.04 $0.06 1,000,000 9.97 $ 0.06 - $ 0.06 20,140,000 9.50 $ 0.05 1,033,332 $ 0.21 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 Companys 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. The Company entered into a new employment agreement with Mark Pacchini, our CEO, on August 4, 2015. The agreement term is three years and includes mandatory bonuses payable in stock options if specific revenue goals are achieved in the Companys fiscal year. The revenue goals for this agreement remained the same as those set forth in Mr. Pacchinis previous employment agreement dated as of the January 1, 2014 which was replaced by the August 4, In December 2015, the Company granted in aggregate 3,000,000 stock options to a salesperson and two sales representatives that vest upon the salesperson and sales representatives achieving certain performance conditions. The Company recognizes compensation expense for options granted to employees which vest upon achievement of the performance condition, over the requisite service period if it is probable that the performance condition will be satisfied. The Company recognizes compensation expense for options granted to non-employees which vest upon achievement of the performance condition, prior to measurement date at the current lowest aggregated fair value at each financial reporting date. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 12 - Income Taxes The provision for income taxes for the years ended December 31, 2015 and 2014 consisted of the following: 2015 2014 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, 2015 and 2014, 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, 2015 and 2014, the significant components of our deferred tax assets and liabilities were as follows: 2015 2014 Net operating loss $ 4,372,608 $ 3,915,262 Stock option expense 64,463 80,205 Accrued expenses 12,505 70,489 Capitalized software 37,262 33,465 Net deferred tax asset 4,486,838 4,099,421 Less: Valuation Allowance (4,486,838) (4,099,421) 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, 2015 and 2014, is as follows: 2015 2014 Federal tax benefit, at statutory rate of 34% (477,388) (313,355) State income taxes (50,547) (33,179) Meals and entertainment 903 926 Stock options 192,704 (129,114) Change in valuation allowance 334,328 474,722 Provision for income taxes - - At December 31, 2015, we had federal net operating loss carry forwards of approximately $11,626,491 will expire beginning in 2030. Based upon the change in ownership rules under Internal Revenue Code Section 382, our net operating loss carry forwards are limited as to the amount of use in any particular year as a result of a more than 50% ownership change during the year ended December 31, 2012. Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the Consolidated Statements of Operations. As of January 1, 2014, we had no unrecognized tax benefits, or any tax related interest of penalties. There were no changes in our unrecognized tax benefits during the year ended December 31, 2015. We did not recognize any interest or penalties during 2015 or 2014 related to unrecognized tax benefits. Tax years from 2012 through 2015 remain subject to examination by major tax jurisdictions. |
Other Income
Other Income | 12 Months Ended |
Dec. 31, 2015 | |
Other Income {1} | |
Other Income | Note 13- 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. In November of 2015, rVue received $13,725 as a settlement for a portion of the legal fees paid in the Mullarkey complaint. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | Note 14- Related Party Transactions In 2015, the Company issued 20,769,231 shares of common stock to Acorn for $270,000. 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, 2015 | |
Concentrations | |
Concentrations | Note 15 - 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. 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, 2015, three customers accounted for 51.6%, 17.5% and 12.9% of total revenues. For the year ended December 31, 2014, three customers accounted for 54.1%, 19.9% and 10.1% of total revenues. |
Supplemental Non-Cash Informati
Supplemental Non-Cash Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Non-Cash Information | |
Supplemental Non-Cash Information | Note 16 Supplemental Non-Cash Information In 2014, the Company issued common stock totaling $42,000 to a vendor 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 $45,000 of stock to a consultant for services performed. In 2015, the Company recognized debt discounts and debt issuance costs of $26,807 related to the issuance of the convertible notes. In addition, the Company entered into a $57,600 financing agreement for directors and officers insurance. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events: | |
Subsequent Events | Note 17 - Subsequent Events In preparing these consolidated financial statements, we have evaluated events and transactions for potential recognition or disclosure through the date of filing. On January 26, 2016 the Company entered into a subscription agreement with Acorn. Under the agreement, the Company has the right, but not the obligation, to issue shares of common stock to Acorn, up to $90,000 per month over a period of twelve (12) months, for a total of $1,080,000, if the Company certifies in writing to Acorn that it has an operational need for such funds (Regular Purchases). In addition, the Company has the right, but not the obligation, to issue additional shares of common stock to Acorn up $396,100 in the aggregate, for use in retiring the Companys current convertible financings (Take-Out Purchases). Acorn also has the option to purchase any such shares not required to be purchased by the Company, in all cases with a price per share for Regular Purchases of $0.013 per share, and a price per share for Take-Out Purchases of $0.011 per share. Acorns option to make the Regular Purchases is any time commencing on November 1, 2016 until October 31, 2020 and option to make Take-Out Purchases is any time commencing on January 1, 2017 until September 30, 2020. To date Acorn has made regular purchases of 27,692,308 shares and the Company has received $360,000 for those such shares. The Company elected to exercise the Borrower Offset Right under the agreement with Typenex to cancel the three Investor Notes of $50,000 each. This enabled the Company to deduct and offset the $150,000 owed under the Investor Notes. In January and February 2016, the Company elected to issue 8,870,556 shares to Typenex as a scheduled payment of $50,630 under their convertible note financing agreement. In February 2016 Carebourn elected to convert $29,210 of their convertible note with the Company for 4,600,000 shares of the Company stock. As a result of the voluntary issuances of stock subsequent to December 31, 2015, the number of the Companys authorized shares is insufficient to satisfy the maximum number of shares that the Company could be required to settle under all other contracts. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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, Policy | 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. |
Debt Issuance Costs, Policy | Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires entities to present debt issuance costs as a direct adjustment to the carrying value of the debt instead of as an asset. ASU 2015-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, and early adoption is permitted. The Company adopted ASU 2015-03 as of December 31, 2015. The adoption of ASU 2015-03 did not have an impact on the consolidated balance sheet as of December 31, 2014. |
Derivative Instruments, Policy | Derivative Instruments In July 2015 we entered into two Promissory Note Purchase Agreements and issued notes which are convertible into shares of our common stock that have conversion features which are embedded derivatives as defined in FASB Accounting Standards Codification (ASC) 815. Derivative financial instruments are initially measured at their fair value and then are re-valued at each reporting date, with changes in fair value reported as charges or credits to income. Embedded derivatives that are not clearly and closely related to the host contract (the notes) are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determined the fair value of the embedded derivative based on available market data using a binomial lattice valuation model, giving consideration to all of the rights and obligations of the instrument. |
Software Development Costs, Policy | 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. |
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, IOs 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, Policy | 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. We also use the provisions of ASC 505-50, Equity Based Payments to Non-Employees, to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50. Further information regarding stock-based compensation can be found in Note 11, Stockholders Equity and Stock Based Compensation. |
Income Taxes, 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 12, 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. The carrying value of convertible notes approximated their fair value based on the recentness of the transaction. At December 31, 2015 the embedded derivative liability is reported at fair value calculated using a binomial lattice model. |
Advertising and Marketing Expenses, Policy | Advertising and Marketing Expenses We expense advertising and marketing costs in the period in which they are incurred. For the years ended December 31, 2015 and 2014 advertising and marketing expenses totaled $123,643 and $83,875, respectively. |
Schedule of Loss Per Common Sha
Schedule of Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Loss Per Common Share | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following stock options, warrants outstanding and convertible notes as of December 31, 2015 and 2014 were not included in the computation of dilutive loss per share because the net effect would have been anti-dilutive: 2015 2014 Stock options 1,606,000 - Warrants - 82,020 Convertible Notes 6,703,700 - 8,309,700 82,020 |
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, 2015 2014 Numerator: Net loss $ (1,404,083) $ (921,633) Denominator: Weighted-average shares outstanding 144,429,639 137,638,146 Effect of dilutive securities (1) - - Weighted-average diluted shares 144,429,639 137,638,146 Basic and diluted loss per share $ (0.01) $ (0.01) |
Schedule of Property and Equipm
Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Property and Equipment | |
Schedule of Property and Equipment | Estimated Useful Lives (Years) 2015 2014 Computers and software 2-5 $ 91,083 $ 91,083 Equipment 3 22,977 22,977 114,060 114,060 Less accumulated depreciation and amortization (114,046) (113,398) Property and equipment, net $ 14 $ 662 |
Schedule of Software Developmen
Schedule of Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Software Development Costs (Tables): | |
Schedule of Software Development Costs (Tables) | Estimated Useful Lives (Years) 2015 2014 Software development costs 18 $ 1,418,287 $ 1,293,920 Less accumulated amortization (1,294,762) (1,157,203) Software development costs, net $ 123,525 $ 136,717 |
Schedule of Accrued Expenses (T
Schedule of Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Accrued Expenses | |
Schedule of Accrued Expenses | 2015 2014 Personnel costs $ 11,407 $ 9,497 Professional fees 12,000 - Network costs 324 166,211 Other 9,500 29,113 $ 33,231 $ 204,821 |
Schedule of Convertible Note Fi
Schedule of Convertible Note Financing (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Convertible Note Financing | |
Schedule of Convertible Note Financing | The initial fair value of the derivative was recorded as a reduction of the Typenex and Carebourn notes. The effective interest rate of the Typenex and Carebourn notes were 78% and 238%, respectively. This original issue discount will be amortized as interest expense over the term of the Notes. At December 31, 2015, the Notes are carried as follows: December 31, 2015 Principal $ 202,500 Original issue discount and debt issuance costs (27,500) Derivative liability at inception (101,239) Amortization of discount on notes 70,532 $ 144,293 |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Fair Value Measurements | |
Schedule of Assets and Liabilities measured at a fair value | Assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and December 31, 2014 were as follows: Quoted Pricesin ActiveMarkets forIdenticalInstruments(Level 1) Significant Other Observable Inputs (Level 2) SignificantUnobservableInputs(Level 3) Total December 31, 2015 Liabilities: Derivative liability $ - $ - $ 123,855 $ 123,855 December 31, 2014 Liabilities: Derivative liability $ - $ - $ - $ - |
Schedule of Summary of Changes in the fair value of the Company's Level 3 liabilities | The table below sets forth a summary of changes in the fair value of the Companys Level 3 liabilities for the year ended December 31, 2015: Balance, January 1, 2015 $ - Issuances 101,239 Settlements - Realized and unrealized (gains) losses included in earnings 22,616 Transfers into or out of level 3 - Balance, December 31, 2015 $ 123,855 |
Schedule of Binomial model used to measure derivative liability of the notes at fair value | The Typenex Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows: December 31 2015 Closing share price $ 0.0384 Conversion price $ 0.0800 Risk free rate 0. 673% Expected volatility 75% Dividend yield 0% Expected life 0. 94 years Lattice steps 244 Conversion rest price 0.0211 Base conversion factor 70% Conversion factor trigger $ 0.0200 Interest rate on note 10% The Carebourn Note derivative liability has been measured at fair value at December 31, 2015 using a binomial model. The inputs into the binomial model are as follows: December 31 2015 Closing share price $ 0.0384 Conversion price $ 0.0800 Risk free rate 0.486% Expected volatility 75% Dividend yield 0% Expected life 0.33 years Lattice steps 86 Variable conversion factor 60% Conversion factor trigger $ 0.0200 Interest rate on note 10% |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Future Minimum Lease Payments | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under these non-cancellable leases at December 31, 2015 are as follows: Year ending December 31, 2016 $ 32,835 Total future minimum payments $ 32,835 |
Schedule of Stock Based Compens
Schedule of Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Stock Based Compensation | |
Summary of Stock option (Tables) | The following table summarizes the activities for our options for the year ended December 31, 2015: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding on January 1, 2014 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 - Granted 19,600,000 $ 0.04 Exercised - - Forfeited (1,800,000) $ 0.12 Expired - - Outstanding on December 31, 2015 20,140,000 $ 0.05 9.50 .01 Exercisable at December 31, 2015 1,033,332 $ 0.21 5.06 - Expected to vest after December 31, 2015 19,106,668 $ 0.02 9.79 - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $.04 of our common stock on December 31, 2015. The aggregate intrinsic value includes the effect of stock options that have a $32,500 intrinsic value. The following table summarized additional information regarding outstanding and exercisable stock options at December 31, 2015: 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 4.45 $ 0.20 670,000 $ 0.20 $0.30 200,000 4.98 $ 0.30 200,000 $ 0.30 $0.14 170,000 7.59 $ 0.14 113,332 $ 0.14 $0.10 50,000 7.84 $ 0.10 50,000 $ 0.10 $0.10 300,000 9.04 $ 0.10 - $ 0.10 $0.03 3,250,000 9.82 $ 0.03 - $ 0.03 $0.04 14,500,000 9.73 $ 0.04 - $ 0.04 $0.06 1,000,000 9.97 $ 0.06 - $ 0.06 20,140,000 9.50 $ 0.05 1,033,332 $ 0.21 |
Schedule of Stock-based compensation expense included in our Consolidated Statements of Operations | Stock-based compensation expense included in our Consolidated Statements of Operations is as follows: Year Ended December 31, 2015 2014 Selling, general and administrative expenses $ 61,541 $ 57,069 $ 61,541 $ 57,069 |
Schedule of Stockholders' Equity Note, Warrants or Rights | 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 $ 1.00 December 2010 December 2022 Series B Investor Relations Services 50,000 $ 0.37 May 2011 May 2016 Series B Investment Banking Services 1,000,000 $ 0.35 June 2011 June 2016 Series C Convertible Debt 3,057,666 $ 0.20 January 2012 January 2017 Series C Convertible Debt 750,000 $ 0.20 May 2012 May 2017 Series C Convertible Debt 500,000 $ 0.20 July 2012 July 2017 Series D Investment Banking Services 450,000 $ 0.07 January 2013 January 2023 No warrants were issued in 2015 or 2014. |
Schedule of Stock Incentive Plans | No option grants were issued during 2014. The following table summarizes options granted in the year ended December 31, 2015: Grant Date Number Exercise Price Fair Value Period over which compensation expense is recognized January 12, 2015 850,000 $ 0.10 $ 63,251 36 months August 6, 2015 9,750,000 0.04 264,605 36 months October 22, 2015 3,250,000 0.03 88,009 36 months December 3, 2015 2,750,000 0.04 89,033 36 months December 15, 2015 2,000,000 0.04 72,416 36 months December 16, 2015 1,000,000 0.06 54,311 36 months The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted during 2015: 2015 Expected life (years) 6.5 Expected volatility 128.3% Risk-free interest rate 2.1% Dividend yield 0.0% Weighted-average estimated fair value of options granted during the year $ 0.04 |
Schedule of Income Tax Expense
Schedule of Income Tax Expense Benefit (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Income Tax Expense Benefit (Tables): | |
Schedule of Provision for income taxes | The provision for income taxes for the years ended December 31, 2015 and 2014 consisted of the following: 2015 2014 Current tax expense Federal $ - $ - State - - Total current taxes - - Deferred taxes: Federal - - State - - Total deferred taxes - - Provision for income taxes $ - $ - |
Schedule of Significant components of deferred tax assets and liabilities | At December 31, 2015 and 2014, the significant components of our deferred tax assets and liabilities were as follows: 2015 2014 Net operating loss $ 4,372,608 $ 3,915,262 Stock option expense 64,463 80,205 Accrued expenses 12,505 70,489 Capitalized software 37,262 33,465 Net deferred tax asset 4,486,838 4,099,421 Less: Valuation Allowance (4,486,838) (4,099,421) Net deferred taxes $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | 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, 2015 and 2014, is as follows: 2015 2014 Federal tax benefit, at statutory rate of 34% (477,388) (313,355) State income taxes (50,547) (33,179) Meals and entertainment 903 926 Stock options 192,704 (129,114) Change in valuation allowance 334,328 474,722 Provision for income taxes - - |
Going Concern (Details)
Going Concern (Details) | Dec. 31, 2015USD ($) |
Going Concern Details | |
Accumulated deficit | $ 14,072,559 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | ||
Net loss | $ (1,404,083) | $ (921,633) |
Denominator: | ||
Weighted-average shares outstanding | 144,429,639 | 137,638,146 |
Effect of dilutive securities: (1) | $ 0 | $ 0 |
Weighted-average diluted shares | 144,429,639 | 137,638,146 |
Basic and diluted loss per share | $ (0.01) | $ (0.01) |
Stock options and warrants outs
Stock options and warrants outstanding not included in the computation of dilutive loss per share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options and warrants outstanding not included in the computation of dilutive loss per share Details | ||
Stock options | 1,606,000 | 0 |
Warrants | 0 | 82,020 |
Convertible Notes | $ 6,703,700 | $ 0 |
Total Stock options and Warrants | 8,309,700 | 82,020 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Property and Equipment Details | ||
Computers and software | $ 91,083 | $ 91,083 |
Equipment | 22,977 | 22,977 |
Property and equipment gross | 114,060 | 114,060 |
Less accumulated depreciation and amortization | (114,046) | (113,398) |
Property and equipment, net | $ 14 | $ 662 |
Property and Equipment estimate
Property and Equipment estimated useful life (Years) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment estimated useful life: | |
Computers and software estimated useful life (Years) | 2 to 5 years |
Equipment estimated useful life (Years) | 3 years |
Software development estimated useful life (Months) | 18 months |
Depreciation expense (Details)
Depreciation expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Depreciation expense during the period: | ||
Depreciation expense | $ 648 | $ 2,403 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Software Development Costs: | ||
Software development costs Gross | $ 1,418,287 | $ 1,293,920 |
Less accumulated amortization | $ (1,294,762) | $ (1,157,203) |
Amortization expense (Details)
Amortization expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortization expense: | ||
Amortization expense | $ 137,558 | $ 89,090 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses: | ||
Personnel costs | $ 11,407 | $ 9,497 |
Professional Fees | 12,000 | 0 |
Network costs | 324 | 166,211 |
Other | 9,500 | 29,113 |
Accrued expenses | $ 33,231 | $ 204,821 |
Typenex Convertible Note Financ
Typenex Convertible Note Financing (Details) | Jul. 30, 2015USD ($) | Jul. 08, 2015USD ($) |
Typenex Convertible Note Financing Details | ||
Principal amount of convertible promissory note issued to Typenex | $ 252,500 | |
Term of Typenex Note in months | 17 | |
Interest rate per annum | 10.00% | |
Original issue discount | $ 22,500 | |
Net proceeds to the Company | 225,000 | |
Initial tranche in cash | 75,000 | |
Gross proceeds | $ 115,000 | 87,500 |
Original issue discount | 7,500 | |
Expense reimbursements | 5,000 | |
Value of each of 3 promissory notes | 55,000 | |
Gross proceeds | 55,000 | |
Original issue discount | 5,000 | |
Required to pay Typenex installments principal | 21,041 | |
Market capitalization falls below | $ 3,000,000 | |
Percent of discount applied to calculate market price | 30.00% |
Carebourn Convertible Note Fina
Carebourn Convertible Note Financing (Details) | Jul. 30, 2015USD ($) |
Carebourn Convertible Note Financing Details | |
Principal amount of convertible promissory note issued to Carebourn | $ 115,000 |
Term of Carebourn Note in months | 9 |
Interest rate per annum | 10.00% |
Net proceeds to the Company | $ 100,000 |
Gross proceeds | 115,000 |
Original issue discount | 10,000 |
Expense reimbursements | $ 5,000 |
Percent of discount applied to calculate conversion price | 40.00% |
Carebourn prohibited from acquiring more than of the Company's outstanding shares | 4.99% |
Convertible Note Financing - De
Convertible Note Financing - Derivatives (Details) - USD ($) | Dec. 31, 2015 | Jul. 30, 2015 | Jul. 08, 2015 |
Convertible Note Financing - Derivatives Details | |||
Embedded derivative conversion feature for Typenex Note | $ 25,370 | ||
Embedded derivative conversion feature for Carebourn Note | $ 75,869 | ||
Derivative instruments valued at | $ 123,855 | ||
Change in fair value derivative instruments | $ 22,616 |
Typenex Note and Carebourn Note
Typenex Note and Carebourn Note Amortized (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Typenex Note and Carebourn Note Amortized Details | |
Principal | $ 202,500 |
Original issue discount and debt issuance costs | (27,500) |
Derivative liability at inception | (101,239) |
Amortization of discount on notes | 70,532 |
Total discount on the Typenex Note and Carebourn Note | $ 144,293 |
Typenex Note derivative liabili
Typenex Note derivative liability measured at fair value using a binomial model (Details) | Dec. 31, 2015$ / shares |
Typenex Note derivative liability measured at fair value using a binomial model Details | |
Closing share price | $ 0.0384 |
Conversion price | $ 0.0800 |
Risk free rate | 0.673% |
Expected volatility | 75.00% |
Dividend yield | 0.00% |
Expected life (Years) | 0.94 |
Lattice steps | 244 |
Conversion rest price | $ 0.0211 |
Base conversion factor | 70.00% |
Conversion factor trigger | $ 0.0200 |
Interest rate on note | 10.00% |
Carebourn Note derivative liabi
Carebourn Note derivative liability measured at fair value using a binomial model (Details) | Dec. 31, 2015$ / shares |
Carebourn Note derivative liability measured at fair value using a binomial model Details | |
Closing share price. | $ 0.0384 |
Conversion price. | $ 0.0800 |
Risk free rate: | 0.49% |
Expected volatility: | 75.00% |
Dividend yield: | 0.00% |
Expected life (in years) | 0.33 |
Lattice steps | 86 |
Variable conversion factor: | 60.00% |
Conversion factor trigger: | $ 0.0200 |
Interest rate on note: | 10.00% |
Assets and liabilities measured
Assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Liabilities: | ||
Derivative liability Level 1 | $ 0 | $ 0 |
Liabilities: | ||
Derivative liability Level 2 | 0 | 0 |
Liabilities: | ||
Derivative liability Level 3 | 123,855 | 0 |
Liabilities: | ||
Total Derivative Liability | $ 123,855 | $ 0 |
Summary of changes in the fair
Summary of changes in the fair value of the Company's Level 3 liabilities (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Summary of changes in the fair value of the Company's Level 3 liabilities: | |
Balance, changes in the fair value January 1, 2015 | $ 0 |
Issuances | 101,239 |
Settlements | 0 |
Realized and unrealized (gains) losses included in earnings | 22,616 |
Transfers into out of level 3 | 0 |
Balance, changes in the fair value December 31, 2015 | $ 123,855 |
Stock authorized and outstandin
Stock authorized and outstanding (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Stock authorized and outstanding | ||
Shares of authorized preferred stock issuable | 10,000,000 | 10,000,000 |
Par value of preferred stock issuable | $ 0.001 | $ 0.001 |
Shares of authorized common stock issuable | 240,000,000 | 240,000,000 |
Par value of common stock issuable | $ 0.001 | $ 0.001 |
Shares of Common Stock issued | 173,507,292 | 140,872,727 |
Shares of Common Stock outstanding | 173,507,292 | 140,872,727 |
Common Stock Warrants (Details)
Common Stock Warrants (Details) - shares | Jan. 31, 2013 | Jul. 31, 2012 | May. 31, 2012 | Jan. 31, 2012 | Jun. 30, 2011 | May. 31, 2011 | Dec. 31, 2010 |
Common Stock Warrants | |||||||
Series A warrants issued under Private Placement at an exercise price 1.00 | 8,624,995 | ||||||
Series B warrants issued under Investor Relations Services at an exercise price 0.37 | 50,000 | ||||||
Series B warrants issued under Investment Banking Services at an exercise price 0.35 | 1,000,000 | ||||||
Series C warrants issued under Convertible Debt at an exercise price 0.20 | 500,000 | 750,000 | 3,057,666 | ||||
Series D warrants issued under Investment Banking Services at an exercise price 0.07 | 450,000 |
2010 rVue Holdings Equity Incen
2010 rVue Holdings Equity Incentive Plan (Details) | Dec. 31, 2015shares | Dec. 16, 2015USD ($)$ / sharesshares | Dec. 15, 2015USD ($)$ / sharesshares | Dec. 03, 2015USD ($)$ / sharesshares | Oct. 22, 2015USD ($)$ / sharesshares | Aug. 06, 2015USD ($)$ / sharesshares | Jan. 12, 2015USD ($)$ / sharesshares |
2010 rVue Holdings Equity Incentive Plan | |||||||
Number of stock options granted | 1,000,000 | 2,000,000 | 2,750,000 | 3,250,000 | 9,750,000 | 850,000 | |
Exercise Price of stock options granted | $ / shares | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.03 | $ 0.04 | $ 0.10 | |
Fair Value of stock options granted | $ | $ 54,311 | $ 72,416 | $ 89,033 | $ 88,009 | $ 264,605 | $ 63,251 | |
Period over which compensation expense is recognized | 36 | 36 | 36 | 36 | 36 | 36 | |
Number of shares reserved 2010 rVue Holdings Equity Incentive Plan | 23,000,000 |
Weighted-average assumptions us
Weighted-average assumptions used to estimate the fair value of stock options granted (Details) | 12 Months Ended |
Dec. 31, 2015$ / shares | |
Weighted-average assumptions used to estimate the fair value of stock options granted | |
Expected life (years) | 6.5 |
Expected volatility | 128.30% |
Risk-free interest rate | 2.10% |
Dividend yield | 0.00% |
Weighted-average estimated fair value of options granted during the year | $ 0.04 |
Summary of Stock Option activit
Summary of Stock Option activity (Details) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares | Jan. 01, 2014$ / sharesshares |
Number of Options | |||
Outstanding Options | 20,140,000 | 2,340,000 | 2,640,000 |
Granted | 19,600,000 | ||
Exercised | 0 | ||
Forfeited | (1,800,000) | (300,000) | |
Expired | 0 | ||
Exercisable | 1,033,332 | ||
Expected to vest | 19,106,668 | ||
Weighted Average Exercise Price Per Share - Options | |||
Weighted Average Exercise Price Per Share - Outstanding Options | $ / shares | $ 0.05 | $ 0.16 | $ 0.17 |
Weighted Average Exercise Price Per Share - Forfeited | $ / shares | 0.12 | $ 0.25 | |
Weighted Average Exercise Price Per Share - Granted | $ / shares | $ 0.04 | ||
Weighted Average Exercise Price Per Share - Exercisable | $ / shares | 0.21 | ||
Weighted Average Exercise Price Per Share - Expected to vest | $ / shares | $ 0.02 | ||
Weighted Average Remaining Contractual Term - Options | |||
Weighted Average Remaining Contractual Term - Outstanding Options | 9.50 | 7.55 | 8.41 |
Weighted Average Remaining Contractual Term - Exercisable | 5.06 | ||
Weighted Average Remaining Contractual Term - Expected to vest | 9.79 | ||
Aggregate Intrinsic Value - Options | |||
Aggregate Intrinsic Value - Outstanding Options | $ | $ 0.01 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Stock-Based Compensation: | ||
Stock-based compensation expense included in our Consolidated Statements of Operations | $ 61,541 | $ 57,069 |
Total unrecognized compensation cost related to stock options outstanding | 304,322 | |
The aggregate intrinsic value of stock options | $ 32,500 | |
Company granted in aggregate stock options to a salesperson and two sales representatives | 3,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Oct. 26, 2015shares | Dec. 31, 2014USD ($) | Nov. 01, 2014shares |
Other Off-Balance Sheet Commitments: | |||
Leased office space at a rate of approximately per month | $ 3,100 | ||
Lease payments increasing through September 30, 2014 to September 30, 2015 | $ 3,193 | ||
Sub-lease approximately 3,109 square feet of office space from Midwest Disability P.A per month thru October 31, 2015 | 3,239 | ||
Contract with Consultant: | |||
Shares of common stock issued as compensation to consultant | shares | 1,016,529 | 483,871 |
Future minimum lease payments u
Future minimum lease payments under these non-cancellable leases (Details) | Dec. 31, 2015USD ($) |
Future minimum lease payments under these non-cancellable leases Details | |
Future minimum lease payments Year ending December 31, 2016 | $ 32,835 |
Total future minimum payments | $ 32,835 |
Provision for income taxes (Det
Provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current tax expense | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Total current taxes | 0 | 0 |
Deferred taxes: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total deferred taxes | 0 | 0 |
Provision for income taxes | $ 0 | $ 0 |
Significant components of our d
Significant components of our deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Significant components of our deferred tax assets and liabilities details | ||
Net operating loss | $ 4,372,608 | $ 3,915,262 |
Stock option expense. | 64,463 | 80,205 |
Accrued expenses. | 12,505 | 70,489 |
Capitalized software | 37,262 | 33,465 |
Net deferred tax asset | 4,486,838 | 4,099,421 |
Less: Valuation Allowance | (4,486,838) | (4,099,421) |
Net deferred taxes | $ 0 | $ 0 |
Reconciliation of the provision
Reconciliation of the provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the provision for income taxes Details | ||
Federal tax benefit, at statutory rate of 34% | $ (477,388) | $ (313,355) |
State income taxes | (50,547) | (33,179) |
Meals and entertainment | 903 | 926 |
Stock options | 192,704 | (129,114) |
Change in valuation allowance | 334,328 | 474,722 |
Provision for income taxes | $ 0 | $ 0 |
Other income (Details)
Other income (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 |
Other income details | ||
CNA approved the claim for employee theft in the amount | $ 0 | $ 249,459 |
Received as a settlement for a portion of the legal fees paid in the Mullarkey complaint | $ 13,725 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transactions Details | ||
Issued shares of common stock to Acorn | 20,769,231 | |
Issued shares of common stock to Acorn value | $ 270,000 | |
Sales to a customer that the Company's chief executive officer is a board member | $ 9,907 |
Concentrations of Revenues (Det
Concentrations of Revenues (Details) | Dec. 31, 2015 | Dec. 31, 2014 |
Concentrations of Revenues details | ||
Customer one accounted for total revenues (percent) | 51.60% | 54.10% |
Customer two accounted for total revenues (percent) | 17.50% | 19.90% |
Customer three accounted for total revenues (percent) | 12.90% | 10.10% |
Supplemental Non-Cash Informa65
Supplemental Non-Cash Information (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Supplemental Non-Cash Information Details | ||
Issued common stock totaling to a vendor for accounting services performed in 2013 | $ 42,000 | |
Issued common stock totaling in the settlement of a law suit | 11,400 | |
Value of prepaid consulting services that was paid via the issuance of common stock | $ 60,000 | |
Issued stock to a consultant for services performed | $ 45,000 | |
Recognized debt discounts and debt issuance costs to the issuance of the convertible notes | 26,807 | |
Financing agreement for the Company's annual directors and officers insurance, value. | $ 57,600 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 29, 2016 | Jan. 26, 2016 | Dec. 31, 2015 |
Subsequent Events details | |||
Subscription agreement with Acorn to issue shares of common stock per month over a period of twelve months | $ 1,080,000 | ||
Issue additional shares of common stock to Acorn | $ 396,100 | ||
To date Acorn has made regular purchases | 27,692,308 | ||
To date Acorn has made regular purchases Company has received for shares | $ 360,000 | ||
Typenex to cancel the three Investor Notes of each | 50,000 | ||
Company to deduct and offset the owed under the Investor Notes | $ 150,000 | ||
Company elected to issue to Typenex shares in January and February 2016 | 8,870,556 | ||
Company elected to issue to Typenex as a scheduled payment shares in January and February 2016 | $ 50,630 | ||
Carebourn elected to convert shares of the Company stock | 4,600,000 | ||
Carebourn elected to convert shares of the Company stock value | $ 29,210 |