Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2013 | Oct. 04, 2013 | |
Document Information [Line Items] | ||
Entity Registrant Name | RVUE HOLDINGS, INC. | |
Entity Central Index Key | 1455206 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | RVUE | |
Entity Common Stock, Shares Outstanding | 117,378,620 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Jun-13 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2013 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Assets | ||
Cash and cash equivalents | $410,790 | $848,174 |
Accounts receivable | 82,115 | 163,074 |
Prepaid expenses | 27,602 | 56,380 |
Total current assets | 520,507 | 1,067,628 |
Property and equipment, net | 5,167 | 8,548 |
Software development costs | 26,080 | 23,232 |
Deposits | 15,610 | 13,510 |
Assets | 567,364 | 1,112,918 |
Liabilities and Stockholders' Equity | ||
Accounts payable | 122,164 | 154,600 |
Accrued expenses | 348,724 | 389,848 |
Subscription investment payable | 0 | 270,000 |
Deferred revenue | 11,975 | 11,975 |
Total current liabilities | 482,863 | 826,423 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
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; 140,000,000 shares authorized at June 30, 2013 and December 31, 2012; 115,928,620 issued and outstanding at June 30,2013 and 100,691,954 at December 31, 2012 | 115,929 | 100,692 |
Additional paid-in capital | 11,178,549 | 9,802,786 |
Accumulated deficit | -11,209,977 | -9,616,983 |
Total stockholders' equity | 84,501 | 286,495 |
Liabilities and Stockholders' Equity | $567,364 | $1,112,918 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 140,000,000 | 140,000,000 |
Common stock, shares issued | 115,928,620 | 100,691,954 |
Common stock, shares outstanding | 115,928,620 | 100,691,954 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
Revenue | ||||
rVue advertising revenue | $167,040 | $11,510 | $246,329 | $27,829 |
Network | 35,925 | 95,925 | 94,150 | 211,094 |
Revenues | 202,965 | 107,435 | 340,479 | 238,923 |
Costs and expenses | ||||
Cost of revenue | 120,683 | 15,051 | 185,526 | 71,260 |
Selling, general and administrative expenses | 413,583 | 528,291 | 1,724,713 | 1,456,138 |
Depreciation and amortization | 10,075 | 172,021 | 23,548 | 295,689 |
Interest income | -90 | -34 | -314 | -170 |
Interest expense | 0 | 351,344 | 0 | 647,827 |
Change in fair value of derivative | 0 | -896,719 | 0 | -453,008 |
Loss on early extinguishment of debt | 0 | 0 | 0 | 17,456 |
Operating Expenses | 544,251 | 169,954 | 1,933,473 | 2,035,192 |
Loss before provision for income taxes | -341,286 | -62,519 | -1,592,994 | -1,796,269 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | ($341,286) | ($62,519) | ($1,592,994) | ($1,796,269) |
Net loss per common share - basic and diluted (in dollars per share) | $0 | $0 | ($0.01) | ($0.05) |
Shares used in computing net loss per share: | ||||
Basic and diluted (in shares) | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2012 | $286,495 | $0 | $100,692 | $9,802,786 | ($9,616,983) |
Balance (in shares) at Dec. 31, 2012 | 0 | 100,691,954 | |||
Common stock issued for compensation and services | 873,500 | 0 | 5,237 | 868,263 | 0 |
Common stock issued for compensation and services (in shares) | 0 | 5,236,666 | |||
Common stock issued | 517,500 | 0 | 10,000 | 507,500 | 0 |
Common stock issued (in shares) | 0 | 10,000,000 | |||
Net loss | -1,592,994 | 0 | 0 | 0 | -1,592,994 |
Balance at Jun. 30, 2013 | $84,501 | $0 | $115,929 | $11,178,549 | ($11,209,977) |
Balance (in shares) at Jun. 30, 2013 | 0 | 115,928,620 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Operating activities | ||
Net loss | ($1,592,994) | ($1,796,269) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 23,548 | 295,689 |
Stock-based compensation expense | 748,000 | 22,001 |
Common stock issued for services | 40,833 | 38,000 |
Convertible loan interest | 0 | 647,705 |
Change in fair value of derivative instruments | 0 | -453,008 |
Loss on early extinguishment of debt | 0 | 17,456 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 80,959 | 40,623 |
Prepaid expenses | 28,778 | 95,438 |
Accounts payable | -32,436 | -35,553 |
Accrued expenses | -25,457 | 23,533 |
Cash used in operating activities | -728,769 | -1,104,284 |
Investing activities | ||
Payments for property, equipment and software development | -23,015 | -96,968 |
Change in deposits | -2,100 | -100 |
Cash used in investing activities | -25,115 | -97,068 |
Financing activities | ||
Proceeds from convertible notes | 0 | 1,235,000 |
Proceeds from the issuance of common stock | 316,500 | 0 |
Cash provided by financing activities | 316,500 | 1,235,000 |
Increase (decrease) in cash and cash equivalents | -437,384 | 33,648 |
Cash and cash equivalents, beginning of period | 848,174 | 19,917 |
Cash and cash equivalents, end of period | $410,790 | $53,565 |
SUMMARY_OF_SIGNIGICANT_ACCOUNT
SUMMARY OF SIGNIGICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | |
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 – rVue – for the Digital Out-of-Home (“DOOH”) industry. | |
Basis of Presentation and Preparation | |
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“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 development 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. In the opinion of the Company’s management, all adjustments (including normal recurring adjustments) considered necessary to present fairly the unaudited condensed consolidated financial statements have been made. | |
The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the year ended December 31, 2012, included in our Annual Report on Form 10-K (the “2012 Form 10-K”). | |
The unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the entire year. | |
Going_Concern
Going Concern | 6 Months Ended |
Jun. 30, 2013 | |
Going Concern [Abstract] | |
Going Concern [Text Block] | 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 $11,209,977 at June 30, 2013. 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 help meet our operating cash flow requirements include (i) financing activities such as private placements of common stock, and issuances of debt and convertible debt instruments, (ii) staff reductions, (iii) a hiring and expansion freeze, and (iv) the establishment of strategic relationships which we believe 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 | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||
Earnings Per Share [Text Block] | 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 the Company incurred losses attributable to common stockholders during the three and six months ended June 30, 2013 and 2012, diluted loss per common share has not been computed by giving effect to all potentially dilutive common shares that were outstanding during the three and six months ended June 30, 2013 and 2012 since this would have an anti-dilutive effect. Additionally, in 2012, dilutive shares included shares issuable upon conversion of convertible notes payable. | ||||||||||||||
The following table sets forth the computation of basic and diluted loss per common share: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -341,286 | $ | -62,519 | $ | -1,592,994 | $ | -1,796,269 | ||||||
Denominator: | ||||||||||||||
Weighted-average shares outstanding | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 | ||||||||||
Effect of dilutive securities | - | - | - | - | ||||||||||
Weighted-average diluted shares | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 | ||||||||||
Basic and diluted loss per share | $ | 0 | $ | 0 | $ | -0.01 | $ | -0.05 | ||||||
Financial_Instruments
Financial Instruments | 6 Months Ended | |||||||
Jun. 30, 2013 | ||||||||
Investments, All Other Investments [Abstract] | ||||||||
Financial Instruments Disclosure [Text Block] | Note 4 – Financial Instruments | |||||||
Cash and cash equivalents | ||||||||
The following table summarizes the fair value of the Company’s cash and cash equivalents as of June 30, 2013 and December 31, 2012: | ||||||||
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
Cash | $ | 86,924 | $ | 17,193 | ||||
Cash equivalents - money market funds | 323,866 | 830,981 | ||||||
Total cash and cash equivalents | $ | 410,790 | $ | 848,174 | ||||
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 one of our customers accounted for 93.5% of total accounts receivable at June 30, 2013, and accounts receivable from one of our customers accounted for 85.5 % of total accounts receivable at December 31, 2012. We had no allowance for doubtful accounts at either June 30, 2013 or at December 31, 2012. | ||||||||
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Fair Value Disclosures [Text Block] | Note 5 – 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. | ||||||||||||||
Assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 were as follows: | ||||||||||||||
Quoted | Significant | Significant | Total | |||||||||||
Prices in | Other | Unobservable | ||||||||||||
Active | Observable | Inputs | ||||||||||||
Markets for | Inputs | (Level 3) | ||||||||||||
Identical | (Level 2) | |||||||||||||
Instruments | ||||||||||||||
(Level 1) | ||||||||||||||
30-Jun-13 | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents - money market funds | $ | 323,866 | $ | - | $ | - | $ | 323,866 | ||||||
31-Dec-12 | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents - money market funds | $ | 830,981 | $ | - | $ | - | $ | 830,981 | ||||||
The fair value of the money market funds, classified as Level 1, utilized quoted prices in active markets. The Company had no Level 2 and Level 3 assets or liabilities at June 30, 2013 and December 31, 2012. | ||||||||||||||
The Company had level 3 derivative liabilities at June 30, 2012 as a result of a conversion feature contained in a Promissory Note Agreement, as well as related stock warrants. These transactions are more fully described in Note 9 of the Company’s annual report on Form 10-K filed for the year ended December 31, 2012. | ||||||||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the three month period ended June 30, 2012: | ||||||||||||||
Balance, April 1, 2012 | $ | 1,659,438 | ||||||||||||
Issuances | 167,400 | |||||||||||||
Settlements | -446,419 | |||||||||||||
Realized and unrealized (gains) losses included in earnings | -896,719 | |||||||||||||
Balance at June 30, 2012 | 483,700 | |||||||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the six month period ended June 30, 2012: | ||||||||||||||
Balance, January 1, 2012 | $ | 100,900 | ||||||||||||
Issuances | 1,282,227 | |||||||||||||
Settlements | -523,119 | |||||||||||||
Realized and unrealized (gains) losses included in earnings | -376,308 | |||||||||||||
Balance at June 30, 2012 | 483,700 | |||||||||||||
Condensed_Consolidated_Financi
Condensed Consolidated Financial Statement Details | 6 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Condensed Consolidated Financial Statement Details [Abstract] | |||||||||||
Condensed Consolidated Financial Statement Details [Text Block] | Note 6 – Condensed Consolidated Financial Statement Details | ||||||||||
The following tables show the Company’s condensed consolidated financial statement details as of June 30, 2013 and December 31, 2012: | |||||||||||
Prepaid expenses | June 30, 2013 | December 31, | |||||||||
2012 | |||||||||||
Insurance | $ | 13,972 | $ | 16,978 | |||||||
Licenses and subscriptions | 10,938 | 13,332 | |||||||||
Prepaid Rent | 2,332 | 12,964 | |||||||||
Services | - | 12,500 | |||||||||
Other | 360 | 606 | |||||||||
$ | 27,602 | $ | 56,380 | ||||||||
Property and Equipment | Estimated | June 30, | December 31, | ||||||||
Useful Lives | |||||||||||
(Years) | 2013 | 2012 | |||||||||
Computers and software | 5-Feb | $ | 91,083 | $ | 86,977 | ||||||
Furniture and equipment | 3 | 22,977 | 22,573 | ||||||||
Gross property and equipment | 114,060 | 109,550 | |||||||||
Less accumulated depreciation | -108,893 | -101,002 | |||||||||
Net property and equipment | $ | 5,167 | $ | 8,548 | |||||||
Depreciation expense was $7,891 and $ 18,874 for the six months ended June 30, 2013 and 2012, respectively. | |||||||||||
Software Development Costs | Estimated | June 30, | December 31, | ||||||||
Useful Lives | |||||||||||
(Months) | 2013 | 2012 | |||||||||
Software development costs | 18 | $ | 1,080,028 | $ | 1,061,522 | ||||||
Less accumulated amortization | -1,053,948 | -1,038,290 | |||||||||
Net software development costs | $ | 26,080 | $ | 23,232 | |||||||
Amortization expense was $15,658 and $ 245,982 for the six months ended June 30, 2013 and 2012, respectively. | |||||||||||
Accrued Expenses | December 31, | ||||||||||
June 30, 2013 | 2012 | ||||||||||
Investor relations fees | $ | - | $ | 5,600 | |||||||
Personnel costs | 15,938 | 52,191 | |||||||||
Directors fees | 38,750 | 144,667 | |||||||||
Professional fees | 114,225 | 69,724 | |||||||||
Deferred rent | - | 8,682 | |||||||||
Network costs | 15,980 | 44,209 | |||||||||
Stock issuance costs | 69,000 | - | |||||||||
Other | 24,831 | 37,275 | |||||||||
Consulting fees | 70,000 | 27,500 | |||||||||
$ | 348,724 | $ | 389,848 | ||||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2013 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Note 7 - Income Taxes |
There is no income tax benefit for the losses for the six-month period ended June 30, 2013 and 2012, 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. | |
Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. At December 31, 2012, we had no unrecognized tax benefits, or any tax related interest or penalties. There were no changes in unrecognized tax benefits during the period ended June 30, 2013. We did not recognize any interest or penalties during 2012 related to unrecognized tax benefits, or through the period ended June 30, 2013. | |
Stockholders_Equity_and_Stock_
Stockholders' Equity and Stock Based Compensation | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Equity [Abstract] | ||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] | Note 8 - Stockholders’ Equity and Stock Based Compensation | |||||||||||||
Equity Awards | ||||||||||||||
Stock Option Activity | ||||||||||||||
A summary of the Company’s stock option activity for the six month period ended June 30, 2013 is as follows: | ||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||
Options | Average | Average | Intrinsic | |||||||||||
Exercise | Remaining | Value | ||||||||||||
Price Per | Contractual | |||||||||||||
Share | Term | |||||||||||||
Balance at December 31, 2012 | 2,326,667 | $ | 0.24 | 7.8 | - | |||||||||
Options granted | - | - | ||||||||||||
Options exercised | - | - | ||||||||||||
Options forfeited | -1,051,667 | $ | 0.23 | |||||||||||
Balance at June 30, 2013 | 1,275,000 | $ | 0.25 | 7.02 | $ | - | ||||||||
Exercisable at June 30, 2013 | 1,275,000 | $ | 0.25 | 7.02 | $ | - | ||||||||
Expected to vest after June 30, 2013 | - | $ | $ | - | ||||||||||
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable. The aggregate intrinsic value excludes the effect of stock options that have a zero or negative intrinsic value. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
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. The Company’s computation of expected life is determined based on the simplified method as the Company does 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. The interest rate is based on the U.S. Treasury Yield curve in effect at the time of grant. The Company’s computation of expected volatility is based on comparable companies’ average historical volatility. The Company does not expect to pay dividends. While the Company believes these estimates are reasonable, the estimated compensation expense would increase if the expected life was increased or a higher expected volatility was used. The Company recognizes stock-based compensation cost as expense on a straight-line basis over the requisite service period. | ||||||||||||||
We did not grant any options during the six-month period ended June 30, 2013 or 2012. | ||||||||||||||
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 accomplishment of the objectives was determined in the first quarter of 2013, and the resulting expense of $ 748,000 was recorded during the three months ended March 31, 2013. | ||||||||||||||
In addition, the Company issued an aggregate of 816,667 shares to officers and directors in lieu of cash compensation resulting in additional director fee expense of $ 40,833 during the three months ended March 31, 2013. | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 9 – Commitments and Contingencies |
Other Off-Balance Sheet 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 – under a 12 month lease at a rate of approximately $2,200 a month. | |
Our corporate headquarters are now located in Franklin Park, IL, where we occupy approximately 1,700 square feet of office space from Cortina, Inc. Cortina, which is owned by a friend of a former director, is letting us utilize the unoccupied space at no charge. This facility accommodates our principal sales, marketing, operations, finance and administrative activities. We will be moving our corporate headquarters to a new facility in October to a location in the Chicago area. | |
Contingencies | |
We are subject to certain legal proceedings that have not been adjudicated, which are discussed in Part II, Item 1 of this Form 10-Q under the heading “Legal Proceedings”. In the opinion of management, the Company does not have probable liability related to these legal proceedings 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 any of these legal matters, the operating results of a particular reporting period could be materially adversely affected. | |
Related_Party_Transactions_and
Related Party Transactions and Certain Other Transactions | 6 Months Ended |
Jun. 30, 2013 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 10 - Related Party Transactions and Certain Other Transactions |
In March 2011, we entered into a Consulting/Services Agreement to facilitate the marketing and promotion of direct TV advertised products with Acorn, an entity that is wholly owned by Robert Roche, a stockholder and director of ours who beneficially owns approximately 35 % of our outstanding shares of Common Stock as of September 30, 2013. We did not record any significant revenue under this contract in either of the six-month periods ended June 30, 2013 or 2012. | |
We paid consulting fees of $ 48,000 during the year ended December 31, 2012 to a consultant who was appointed by our board of directors. | |
In January 2012, in connection with the sale of the promissory notes, we agreed to reimburse an investor (the “Lead Investor”) $ 65,000 for costs and expenses incurred by it (including, without limitation, legal and administrative fees) payable in cash or shares of our Common Stock at our election. On February 8, 2012, we issued 325,000 shares of our Common Stock to the Lead Investor as payment. Robert Roche, who is the sole stockholder of Acorn, is the grantor of the trust that controls the majority member of the Lead Investor. His sister is the manager of both the Lead Investor and the majority member of the Lead Investor. Mr. Roche disclaims any beneficial ownership of securities held by the Lead Investor as he does not have voting or dispositive powers over such securities. In addition another one of our directors is a minority member of the Lead Investor. | |
Supplemental_NonCash_Informati
Supplemental Non-Cash Information | 6 Months Ended |
Jun. 30, 2013 | |
Supplemental Non Cash Information [Abstract] | |
Supplemental Non Cash Information [Text Block] | Note 11 – Supplemental Non-Cash Information |
During the six months ended June 30, 2013, the Company accrued for fees associated with the equity raised in 2013 which will be paid in the future issuance of common stock totaling $ 42,000 and issuance of warrants totaling $ 27,000. 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 cash compensation. | |
During the six months ended June 30, 2012, the Company modified the warrants resulting in a reclassification of the derivative warrant liability to equity totaling $446,419. Additionally during the six months ended June 30, 2012, the Company paid debt issuance costs of $95,000 by issuing 475,000 shares of its stock. | |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2013 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 12 – 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 August 2, 2013, the Company issued 1,056,000 stock options to employees of the Company. On August 7, 2013, the Company issued 450,000 stock warrants for fees associated with the equity raised in 2013. On August 13, 2013, the Company issued 700,000 shares of common stock for fees associated with the equity raised in 2013 and 250,000 shares to a Director. On September 6, 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. | |
SUMMARY_OF_SINGIFICANT_ACCOUNT
SUMMARY OF SINGIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Preparation |
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“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 development 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. In the opinion of the Company’s management, all adjustments (including normal recurring adjustments) considered necessary to present fairly the unaudited condensed consolidated financial statements have been made. | |
The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the year ended December 31, 2012, included in our Annual Report on Form 10-K (the “2012 Form 10-K”). | |
The unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the entire year. | |
Loss_Per_Common_Share_Tables
Loss Per Common Share (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted loss per common share: | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -341,286 | $ | -62,519 | $ | -1,592,994 | $ | -1,796,269 | ||||||
Denominator: | ||||||||||||||
Weighted-average shares outstanding | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 | ||||||||||
Effect of dilutive securities | - | - | - | - | ||||||||||
Weighted-average diluted shares | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 | ||||||||||
Basic and diluted loss per share | $ | 0 | $ | 0 | $ | -0.01 | $ | -0.05 | ||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 6 Months Ended | |||||||
Jun. 30, 2013 | ||||||||
Fair Value Disclosures [Abstract] | ||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following table summarizes the fair value of the Company’s cash and cash equivalents as of June 30, 2013 and December 31, 2012: | |||||||
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
Cash | $ | 86,924 | $ | 17,193 | ||||
Cash equivalents - money market funds | 323,866 | 830,981 | ||||||
Total cash and cash equivalents | $ | 410,790 | $ | 848,174 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 were as follows: | |||||||||||||
Quoted | Significant | Significant | Total | |||||||||||
Prices in | Other | Unobservable | ||||||||||||
Active | Observable | Inputs | ||||||||||||
Markets for | Inputs | (Level 3) | ||||||||||||
Identical | (Level 2) | |||||||||||||
Instruments | ||||||||||||||
(Level 1) | ||||||||||||||
30-Jun-13 | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents - money market funds | $ | 323,866 | $ | - | $ | - | $ | 323,866 | ||||||
31-Dec-12 | ||||||||||||||
Assets: | ||||||||||||||
Cash equivalents - money market funds | $ | 830,981 | $ | - | $ | - | $ | 830,981 | ||||||
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the three month period ended June 30, 2012: | |||||||||||||
Balance, April 1, 2012 | $ | 1,659,438 | ||||||||||||
Issuances | 167,400 | |||||||||||||
Settlements | -446,419 | |||||||||||||
Realized and unrealized (gains) losses included in earnings | -896,719 | |||||||||||||
Balance at June 30, 2012 | 483,700 | |||||||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the six month period ended June 30, 2012: | ||||||||||||||
Balance, January 1, 2012 | $ | 100,900 | ||||||||||||
Issuances | 1,282,227 | |||||||||||||
Settlements | -523,119 | |||||||||||||
Realized and unrealized (gains) losses included in earnings | -376,308 | |||||||||||||
Balance at June 30, 2012 | 483,700 | |||||||||||||
Condensed_Consolidated_Financi1
Condensed Consolidated Financial Statement Details (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Condensed Consolidated Financial Statement Details [Abstract] | |||||||||||
Condensed Consolidated Financial Statement Details [Table Text Block] | The following tables show the Company’s condensed consolidated financial statement details as of June 30, 2013 and December 31, 2012: | ||||||||||
Prepaid expenses | June 30, 2013 | December 31, | |||||||||
2012 | |||||||||||
Insurance | $ | 13,972 | $ | 16,978 | |||||||
Licenses and subscriptions | 10,938 | 13,332 | |||||||||
Prepaid Rent | 2,332 | 12,964 | |||||||||
Services | - | 12,500 | |||||||||
Other | 360 | 606 | |||||||||
$ | 27,602 | $ | 56,380 | ||||||||
Property and Equipment | Estimated | June 30, | December 31, | ||||||||
Useful Lives | |||||||||||
(Years) | 2013 | 2012 | |||||||||
Computers and software | 5-Feb | $ | 91,083 | $ | 86,977 | ||||||
Furniture and equipment | 3 | 22,977 | 22,573 | ||||||||
Gross property and equipment | 114,060 | 109,550 | |||||||||
Less accumulated depreciation | -108,893 | -101,002 | |||||||||
Net property and equipment | $ | 5,167 | $ | 8,548 | |||||||
Depreciation expense was $7,891 and $ 18,874 for the six months ended June 30, 2013 and 2012, respectively. | |||||||||||
Software Development Costs | Estimated | June 30, | December 31, | ||||||||
Useful Lives | |||||||||||
(Months) | 2013 | 2012 | |||||||||
Software development costs | 18 | $ | 1,080,028 | $ | 1,061,522 | ||||||
Less accumulated amortization | -1,053,948 | -1,038,290 | |||||||||
Net software development costs | $ | 26,080 | $ | 23,232 | |||||||
Amortization expense was $15,658 and $ 245,982 for the six months ended June 30, 2013 and 2012, respectively. | |||||||||||
Accrued Expenses | December 31, | ||||||||||
June 30, 2013 | 2012 | ||||||||||
Investor relations fees | $ | - | $ | 5,600 | |||||||
Personnel costs | 15,938 | 52,191 | |||||||||
Directors fees | 38,750 | 144,667 | |||||||||
Professional fees | 114,225 | 69,724 | |||||||||
Deferred rent | - | 8,682 | |||||||||
Network costs | 15,980 | 44,209 | |||||||||
Stock issuance costs | 69,000 | - | |||||||||
Other | 24,831 | 37,275 | |||||||||
Consulting fees | 70,000 | 27,500 | |||||||||
$ | 348,724 | $ | 389,848 | ||||||||
Stockholders_Equity_and_Stock_1
Stockholders' Equity and Stock Based Compensation (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2013 | ||||||||||||||
Equity [Abstract] | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the Company’s stock option activity for the six month period ended June 30, 2013 is as follows: | |||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||
Options | Average | Average | Intrinsic | |||||||||||
Exercise | Remaining | Value | ||||||||||||
Price Per | Contractual | |||||||||||||
Share | Term | |||||||||||||
Balance at December 31, 2012 | 2,326,667 | $ | 0.24 | 7.8 | - | |||||||||
Options granted | - | - | ||||||||||||
Options exercised | - | - | ||||||||||||
Options forfeited | -1,051,667 | $ | 0.23 | |||||||||||
Balance at June 30, 2013 | 1,275,000 | $ | 0.25 | 7.02 | $ | - | ||||||||
Exercisable at June 30, 2013 | 1,275,000 | $ | 0.25 | 7.02 | $ | - | ||||||||
Expected to vest after June 30, 2013 | - | $ | $ | - | ||||||||||
Going_Concern_Details_Textual
Going Concern (Details Textual) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Accumulated deficit | ($11,209,977) | ($9,616,983) |
Loss_Per_Common_Share_Details
Loss Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
Numerator: | ||||
Net loss | ($341,286) | ($62,519) | ($1,592,994) | ($1,796,269) |
Denominator: | ||||
Weighted-average shares outstanding | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 |
Effect of dilutive securities | 0 | 0 | 0 | 0 |
Weighted-average diluted shares (in shares) | 115,488,620 | 38,171,099 | 112,244,805 | 37,917,448 |
Basic and diluted loss per share (in dollars per share) | $0 | $0 | ($0.01) | ($0.05) |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Cash and cash equivalents | $410,790 | $848,174 |
Cash [Member] | ||
Cash and cash equivalents | 86,924 | 17,193 |
Cash Equivalents [Member] | ||
Cash and cash equivalents | $323,866 | $830,981 |
Financial_Instruments_Details_
Financial Instruments (Details Textual) (Customer One [Member]) | Jun. 30, 2013 | Dec. 31, 2012 |
Customer One [Member] | ||
Entity Wide Accounts Receivable Major Customer Percentage | 93.50% | 85.50% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
Assets: | ||||
Cash equivalents - money market funds | $410,790 | $848,174 | $53,565 | $19,917 |
Money Market Funds [Member] | ||||
Assets: | ||||
Cash equivalents - money market funds | 323,866 | 830,981 | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Assets: | ||||
Cash equivalents - money market funds | 323,866 | 830,981 | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Assets: | ||||
Cash equivalents - money market funds | 0 | 0 | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Assets: | ||||
Cash equivalents - money market funds | $0 | $0 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2012 | Jun. 30, 2012 | |
Balance | $1,659,438 | $100,900 |
Issuances | 167,400 | 1,282,227 |
Settlements | -446,419 | -523,119 |
Realized and unrealized (gains) losses included in earnings | -896,719 | -376,308 |
Balance | $483,700 | $483,700 |
Condensed_Consolidated_Financi2
Condensed Consolidated Financial Statement Details (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2012 | |
Prepaid expenses | ||
Insurance | $13,972 | $16,978 |
Licenses and subscriptions | 10,938 | 13,332 |
Prepaid Rent | 2,332 | 12,964 |
Services | 0 | 12,500 |
Other | 360 | 606 |
Prepaid Expenses | 27,602 | 56,380 |
Property and Equipment | ||
Computers and software | 91,083 | 86,977 |
Furniture and equipment | 22,977 | 22,573 |
Gross property and equipment | 114,060 | 109,550 |
Less accumulated depreciation | -108,893 | -101,002 |
Estimated Useful Lives, Furniture and equipment | 3 years | |
Net property and equipment | 5,167 | 8,548 |
Software Development Costs | ||
Software development costs | 1,080,028 | 1,061,522 |
Less accumulated amortization | -1,053,948 | -1,038,290 |
Net software development costs | 26,080 | 23,232 |
Estimated Useful Lives, Software | 18 months | |
Accrued Expenses | ||
Investor relations fees | 0 | 5,600 |
Personnel costs | 15,938 | 52,191 |
Directors fees | 38,750 | 144,667 |
Professional fees | 114,225 | 69,724 |
Deferred rent | 0 | 8,682 |
Network costs | 15,980 | 44,209 |
Stock issuance costs | 69,000 | 0 |
Other | 24,831 | 37,275 |
Consulting fees | 70,000 | 27,500 |
Accrued Expenses | $348,724 | $389,848 |
Maximum [Member] | ||
Property and Equipment | ||
Computer and Software Useful Life | 5 years | |
Minimum [Member] | ||
Property and Equipment | ||
Computer and Software Useful Life | 2 years |
Condensed_Consolidated_Financi3
Condensed Consolidated Financial Statement Details (Details Textual) (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Depreciation | $7,891 | $18,874 |
Amortization | $15,658 | $245,982 |
Stockholders_Equity_and_Stock_2
Stockholders' Equity and Stock Based Compensation (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2013 | Dec. 31, 2012 | |
Balance - Number of Options | 1,275,000 | 2,326,667 |
Options granted - Number of Options | 0 | |
Options exercised - Number of Options | 0 | |
Options forfeited - Number of Options | -1,051,667 | |
Balance at June 30, 2013 - Number of Options | 1,275,000 | 2,326,667 |
Exercisable at June 30, 2013 - Number of Options | 1,275,000 | |
Expected to vest after June 30, 2013 - Number of Options | 0 | |
Balance - Weighted Average Exercise Price Per Share (in dollars per share) | $0.24 | |
Options granted - Weighted Average Exercise Price Per Share (in dollars per share) | $0 | |
Options exercised - Weighted Average Exercise Price Per Share (in dollars per share) | $0 | |
Options forfeited - Weighted Average Exercise Price Per Share (in dollars per share) | $0.23 | |
Balance - Weighted Average Exercise Price Per Share (in dollars per share) | $0.25 | $0.24 |
Exercisable at June 30, 2013 - Weighted Average Exercise Price Per Share (in dollars per share) | $0.25 | |
Balance - Weighted Average Remaining Contractual Term | 7 years 7 days | 7 years 9 months 18 days |
Balance at June 30, 2013 - Weighted Average Remaining Contractual Term | 7 years 7 days | |
Balance at December - Aggregate Intrinsic Value | $0 | |
Balance at June - Aggregate Intrinsic Value | 0 | 0 |
Exercisable at June 30, 2013 - Aggregate Intrinsic Value | 0 | |
Expected to vest after June 30, 2013 - Aggregate Intrinsic Value | $0 |
Stockholders_Equity_and_Stock_3
Stockholders' Equity and Stock Based Compensation (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2013 | Jun. 30, 2013 | |
Contingent Expense | $748,000 | |
Stock Issued During Period, Value, New Issues | 517,500 | |
Director [Member] | ||
Stock Issued During Period, Shares, New Issues | 816,667 | |
Stock Issued During Period, Value, New Issues | 40,833 | |
Michael Mullarkey [Member] | ||
Stock Issued During Period, Shares, Issued For Services | 4,400,000 | |
Preferred Stock [Member] | ||
Stock Issued During Period, Shares, Issued For Services | 0 | |
Stock Issued During Period, Shares, New Issues | 0 | |
Stock Issued During Period, Value, New Issues | 0 | |
Common Stock [Member] | ||
Stock Issued During Period, Shares, Issued For Services | 5,236,666 | |
Stock Issued During Period, Shares, New Issues | 10,000,000 | |
Stock Issued During Period, Value, New Issues | $10,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
acre | |
Lease Expiration Date | 30-Jun-13 |
Area of Land | 1,700 |
Fort Lauderdale [Member] | Subsequent Event [Member] | |
Area of Land | 600 |
Operating Leases Rent Expense Per Month | 2,200 |
Lease Period | 12 |
Franklin Park, II [Member] | |
Description of Lessor Leasing Arrangements, Operating Leases | Our corporate headquarters are now located in Franklin Park, IL, where we occupy approximately 1,700 square feet of office space from Cortina, Inc. Cortina, which is owned by a friend of a former director, is letting us utilize the unoccupied space at no charge. This facility accommodates our principal sales, marketing, operations, finance and administrative activities. We will be moving our corporate headquarters to a new facility in October to a location in the Chicago area. |
Related_Party_Transactions_and1
Related Party Transactions and Certain Other Transactions (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2012 | Jan. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | |
Acorn [Member] | ||||
Subsequent Event [Member] | ||||
Consultation Fee Paid, Related Party | $48,000 | |||
Expenses Reimbursed, Related Party | $65,000 | |||
Stock Issued During Period Shares Payment Of Expenses | 325,000 | |||
Investment Owned, Percent of Net Assets | 35.00% |
Supplemental_NonCash_Informati1
Supplemental Non-Cash Information (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
Non Cash Future Issuance Of Common Stock | $42,000 | ||
Non Cash Future Issuance Of Warrants | 27,000 | ||
Non Cash Issuance Of Shares To Officers In Lieu Of Cash | 81,667 | ||
Settlements | 446,419 | 523,119 | |
Payments of Debt Issuance Costs | $95,000 | ||
Stock Issued During Period Shares Settlement For Debt | 475,000 |
Subsequent_Event_Details_Textu
Subsequent Event (Details Textual) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | |
Director [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |
Director [Member] | Chief Executive Officer [Member] | |||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures, Total | 1,056,000 | |||
Adjustments to Additional Paid in Capital, Warrant Issued | $450,000 | |||
Stock Issued During Period, Shares, New Issues | 816,667 | 700,000 | 500,000 | 250,000 |