Document_and_Entity_Informatio
Document and Entity Information (USD $) | 3 Months Ended | |
Mar. 31, 2015 | 15-May-15 | |
Document and Entity Information: | ||
Entity Registrant Name | iGambit, Inc. | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1479681 | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 26,583,990 | |
Entity Public Float | $0 | |
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 | 2015 | |
Document Fiscal Period Focus | Q1 |
IGAMBIT_INC_CONSOLIDATED_BALAN
IGAMBIT INC CONSOLIDATED BALANCE SHEETS MARCH 31, 2015 AND DECEMBER 31 2014 (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Assets, Current | ||
Cash and Cash Equivalents, at Carrying Value | $38,734 | $133,436 |
Accounts Receivable, Net, Current | 111,529 | 81,671 |
Prepaid Expense, Current | 19,435 | 45,110 |
Assets, Current | 169,698 | 260,217 |
Assets, Noncurrent | ||
Property and Equipment, Net | 12,156 | 8,436 |
Deposits Assets, Noncurrent | 12,133 | 12,133 |
Assets | 193,987 | 280,786 |
Liabilities, Current | ||
Accounts Payable, Current | 301,197 | 285,277 |
Notes Payable, related party | 30,180 | |
Liabilities, Current | 331,377 | 285,277 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | ||
Common Stock, Value, Outstanding | 26,584 | 26,584 |
Additional Paid in Capital, Common Stock | 2,863,122 | 2,851,124 |
Retained Earnings (Accumulated Deficit) | -3,027,096 | -2,882,199 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | -137,390 | -4,491 |
Liabilities and Equity | $193,987 | $280,786 |
Statement_of_Financial_Positio
Statement of Financial Position - Parenthetical Igambit Inc March 31st 2015 and December 31st 2014 (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets Parenthetical | ||
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 26,583,990 | 26,583,990 |
Common Stock, Shares Outstanding | 26,583,990 | 26,583,990 |
Common Stock, Value, Outstanding | $26,584 | $26,584 |
IGAMBIT_INC_STATEMENT_OF_INCOM
IGAMBIT INC STATEMENT OF INCOME THREE MONTHS ENDED MARCH 31, 2015 AND 2014 (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenues | ||
Sales Revenue, Net | $300,347 | $240,213 |
Cost of Sales | 135,622 | 102,912 |
Gross Profit | 164,725 | 137,301 |
Operating Expenses | ||
General and Administrative Expense | 307,919 | 272,267 |
Operating Income (Loss) | -143,194 | -134,966 |
Nonoperating Income (Expense) | ||
Interest Expense | -1,703 | -3,467 |
Other Depreciation and Amortization | -34,500 | |
Nonoperating Income (Expense) | -1,703 | -37,967 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | -144,897 | -172,933 |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 11,355 | |
Net Income (Loss) Attributable to Parent | ($144,897) | ($161,578) |
Earnings Per Share | ||
Continuing operations | ($0.01) | ($0.01) |
Discontinued operations, net of tax | $0 | $0 |
Weighted Average Number of Shares Outstanding, Basic | 26,583,900 | 25,044,056 |
IGAMBIT_INC_CONSOLIDATED_STATE
IGAMBIT INC CONSOLIDATED STATEMENTS OF CASH FLOWS JANUARY 1ST TO MARCH 31, 2015 AND 2014 (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | ($144,897) | ($161,578) |
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Depreciation | 1,306 | 1,191 |
Income from discontinued operations | -11,355 | |
Depreciation, Depletion and Amortization | 34,500 | |
Stock-based compensation expense | 11,998 | |
Increase (Decrease) in Operating Assets | ||
Increase (Decrease) in Receivables | -29,858 | 32,581 |
Increase (Decrease) in Prepaid Expense and Other Assets | 25,675 | -14,204 |
Due from rescission agreement | 10,000 | |
Increase (Decrease) in Operating Liabilities | ||
Increase (Decrease) in Accounts Payable | 15,920 | 74,240 |
Net cash used by continuing operating activities | -119,856 | -34,625 |
Net cash used by discontinued operating activities | 37,500 | |
Net Cash Provided by (Used in) Operating Activities | -119,856 | 2,875 |
Net Cash Provided by (Used in) Investing Activities | ||
Payments to Acquire Property, Plant, and Equipment | -5,026 | -2,026 |
Proceeds from Sale and Collection of Receivables | -2,712 | |
Net Cash Provided by (Used in) Investing Activities | -5,026 | -4,738 |
Net Cash Provided by (Used in) Financing Activities | ||
Proceeds from (Repayments of) Related Party Debt | 30,180 | 3,600 |
Net Cash Provided by (Used in) Financing Activities | 30,180 | 3,600 |
Cash and Cash Equivalents, Period Increase (Decrease) | -94,702 | 1,737 |
Cash Beginning of Period | 133,436 | 26,870 |
Cash End of period | 38,734 | 28,607 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid during the period for Interest | $1,703 | $1,425 |
Note_1_Organization_and_Basis_
Note 1 - Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 1 - Organization and Basis of Presentation | |
Note 1 - Organization and Basis of Presentation | |
The consolidated financial statements presented are those of iGambit Inc., (the “Company”) and its wholly-owned subsidiary, Gotham Innovation Lab Inc. (“Gotham”). The Company was incorporated under the laws of the State of Delaware on April 13, 2000. The Company was originally incorporated as Compusations Inc. under the laws of the State of New York on October 2, 1996. The Company changed its name to BigVault.com Inc. upon changing its state of domicile on April 13, 2000. The Company changed its name again to bigVault Storage Technologies Inc. on December 21, 2000 before changing to iGambit Inc. on April 5, 2006. Gotham was incorporated under the laws of the state of New York on September 23, 2009. The Company is a holding company which seeks out acquisitions of operating companies in technology markets. Gotham is in the business of providing media technology services to real estate agents and brokers in the New York metropolitan area. | |
Interim Financial Statements | |
The following (a) condensed consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of results that may be expected for the year ending December 31, 2015. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on April 15, 2015. | |
. |
Note_2_discontinued_Operations
Note 2 -discontinued Operations | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 2 -discontinued Operations | Note 2 –Discontinued Operations |
] Accounts Receivable Assets from discontinued operations, net includes accounts receivable which represents 50% of contingency payments earned for the previous quarters. The reserve for bad debts of $250,000 charged to operations in 2010 was reversed in connection with the Summary Judgment and Forbearance Agreement described in Note 11. Also included is accrued interest receivable of $85,156 recorded for interest granted on the balance due from Digi-data through May 2014. The entire balance including accrued interest totaling $655,746 was repaid to the Company by Digi-data in the year ended December 31, 2014 |
Note_3_Summary_of_Significant_
Note 3 - Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 3 - Summary of Significant Accounting Policies | |
Note 3 – Summary of Significant Accounting Policies | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Gotham Innovation Lab, Inc. All intercompany accounts and transactions have been eliminated. | |
Use of Estimates in the Preparation of Financial Statements | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. | |
Fair Value of Financial Instruments | |
For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and amounts due to related parties, the carrying amounts approximate fair value due to their short maturities. Additionally, there are no assets or liabilities for which fair value is remeasured on a recurring basis. . | |
Revenue Recognition | |
The Company’s revenues are derived primarily from the sale of products and services rendered to real estate brokers. The Company recognizes revenues when the services or products have been provided or delivered, the fees charged are fixed or determinable, the Company and its customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. | |
Advertising Costs | |
The Company expenses advertising costs as incurred. Advertising costs for the three months ended March 31, 2015 and 2014 were $1,325 and $843, respectively. | |
Cash and Cash Equivalents | |
For purposes of reporting cash flows, cash and cash equivalents include checking and money market accounts and any highly liquid debt instruments purchased with a maturity of three months or less. | |
Accounts Receivable | |
The Company analyzes the collectability of accounts receivable from continuing operations each accounting period and adjusts its allowance for doubtful accounts accordingly. A considerable amount of judgment is required in assessing the realization of accounts receivables, including the creditworthiness of each customer, current and historical collection history and the related aging of past due balances. The Company evaluates specific accounts when it becomes aware of information indicating that a customer may not be able to meet its financial obligations due to deterioration of its financial condition, lower credit ratings, bankruptcy or other factors affecting the ability to render payment. Allowance for doubtful accounts was $17,865 at March 31, 2015 and December 31, 2014, respectively. There was no bad debt expense charged to operations for the three months ended March 31, 2015 and 2014, respectively. | |
Property and equipment and depreciation | |
Property and equipment are stated at cost. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets. Computer equipment is depreciated over 5 years and furniture and fixtures are depreciated over 7 years. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. | |
Depreciation expense of $1,306 and $1,191 was charged to operations for the three months ended March 31, 2015 and 2014, respectively. | |
Stock-Based Compensation | |
The Company accounts for its stock-based awards granted under its employee compensation plan in accordance with ASC Topic No. 718-20, Awards Classified as Equity, which requires the measurement of compensation expense for all share-based compensation granted to employees and non-employee directors at fair value on the date of grant and recognition of compensation expense over the related service period for awards expected to vest. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock options and warrants. The Black-Scholes option pricing model requires the input of highly subjective assumptions including the expected stock price volatility of the Company’s common stock, the risk free interest rate at the date of grant, the expected vesting term of the grant, expected dividends, and an assumption related to forfeitures of such grants. Changes in these subjective input assumptions can materially affect the fair value estimate of the Company’s stock options and warrants. | |
Income Taxes | |
The Company accounts for income taxes using the asset and liability method in accordance with ASC Topic No. 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. | |
The Company applies the provisions of ASC Topic No. 740 for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the Company’s financial statements. In accordance with this provision, tax positions must meet a more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position. | |
Recent Accounting Pronouncements | |
FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers: | |
In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: | |
Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. | |
Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. | |
FASB ASC 718 ASU 2014-12 – Compensation – Stock Compensation: | |
In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period," ("ASU 2014-12"). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC Topic No. 718, "Compensation - Stock Compensation" as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company does not anticipate that the adoption of ASU 2014-12 will have a material impact on its consolidated financial statements. | |
Note_4_Earnings_Per_Common_Sha
Note 4 - Earnings Per Common Share | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes | |||||
Note 4 - Earnings Per Common Share | |||||
Note 4 - Earnings Per Common Share | |||||
The Company calculates net earnings (loss) per common share in accordance with ASC 260 “Earnings Per Share” (“ASC 260”). Basic and diluted net earnings (loss) per common share was determined by dividing net earnings (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. The Company’s potentially dilutive shares, which include outstanding common stock options and common stock warrants, have not been included in the computation of diluted net earnings (loss) per share for all periods as the result would be anti-dilutive. | |||||
Three Months Ended | |||||
March 31, | |||||
2015 | 2014 | ||||
Stock options | 1,718,900 | 668,900 | |||
Stock warrants | 275,000 | 275,000 | |||
Total shares excluded from calculation | 1,993,900 | 943,900 | |||
Note7_Derivative_Liability
Note7 - Derivative Liability | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note7 - Derivative Liability | |
Note 7 - Derivative Liability | |
Convertible Note | |
During the year ended December 31, 2013, the Company issued a convertible note (see Note 6 above). | |
The note is convertible into common stock, at the holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified embedded derivatives included in these notes as a result of certain anti-dilutive (reset) provisions, related to certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the convertible note and debt discount amortization to fair value as of each subsequent reporting date. This resulted in a fair value of derivative liability of $152,076 in which to the extent of the face value of convertible note was treated as debt discount with the remainder treated as interest expense. | |
The fair value of the embedded derivatives at December 31, 2013, in the amount of $152,076, was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 243.00%, (3) weighted average risk-free interest rate of 0.09%, (4) expected lives of 0.72 to 0.75 years, and (5) estimated fair value of the Company’s common stock of $0.51 per share. The Company recorded interest expense from the excess of the derivative liability over the convertible note of $48,576 during the year ended December 31, 2013. A gain on derivative liability of $152,076 was recorded during the year ended December 31, 2014 for the satisfaction of the convertible note. | |
Based upon ASC 840-15-25 (EITF Issue 00-19, paragraph 11) the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible note. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date. |
Note_9_Income_Taxes
Note 9 - Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 9 - Income Taxes | |
Note 9 - Income Taxes | |
Quarter Ended March 31, | |
2015 2014 | |
Effective tax rate 0.0 % 0.0 % | |
A full valuation allowance was recorded against the Company’s net deferred tax assets. A valuation allowance must be established if it is more likely than not that the deferred tax assets will not be realized. This assessment is based upon consideration of available positive and negative evidence, which includes, among other things, the Company’s most recent results of operations and expected future profitability. Based on the Company’s cumulative losses in recent years, a full valuation allowance against the Company’s deferred tax assets has been established as Management believes that the Company will not realize the benefit of those deferred tax assets. |
Note_10_Retirement_Plan
Note 10 - Retirement Plan | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 10 - Retirement Plan | |
Note 10 - Retirement Plan | |
Gotham has adopted the Gotham Innovation Lab, Inc. SIMPLE IRA Plan, which covers substantially all employees. Participating employees may elect to contribute, on a tax-deferred basis, a portion of their compensation in accordance with Section 408 (a) of the Internal Revenue Code. The Company matches up to 3% of employee contributions. The Company's contributions to the plan for the three months ended March 31, 2015 and 2014 were $1,300 and $2,149, respectively. |
Note_11_Concentrations_and_Cre
Note 11 - Concentrations and Credit Risk | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 11 - Concentrations and Credit Risk | |
Note 11 – Concentrations and Credit Risk | |
Sales and Accounts Receivable | |
Gotham had sales to one customer which accounted for approximately 57% of Gotham’s total sales for the three months ended March 31, 2015. The one customer accounted for approximately 64% of accounts receivable at March 31, 2015. | |
Gotham had sales to one customer which accounted for approximately 65% of Gotham’s total sales for the three months ended March 31, 2014. The one customer accounted for approximately 62% of accounts receivable at March 31, 2014. | |
Cash | |
Cash is maintained at a major financial institution. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time, however, the Company has not experienced any such losses. The Company did not have any interest-bearing accounts at March 31, 2015 and December 31, 2014, respectively. |
Fair_Value_Measurement_Policy
Fair Value Measurement, Policy | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Fair Value Measurement, Policy | |
Note 12 - Fair Value Measurement | |
The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: | |
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |
Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. | |
All items required to be recorded or measured on a recurring basis consist of derivative liabilities and are based upon level 3 inputs. | |
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level is the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. | |
Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements. | |
The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible note payable), and other current assets and liabilities approximate fair value because of their short-term maturity. | |
As of March 31, 2015 and December 31, 2014, the Company did not have any items that would be classified as level 1 or 2 disclosures. | |
The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed in Note 7. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Note 7 are that of volatility and market price of the underlying common stock of the Company. | |
As of March 31, 2015 and December 31, 2014, the Company did not have any derivative instruments that were designated as hedges. | |
Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases, therefore decreasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. A 10% change in pricing inputs and changes in volatilities and correlation factors would currently not result in a material change in value for the level 3 financial liability. |
Note_12_Related_Party_Transact
Note 12 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 12 - Related Party Transactions | |
Note 13 - Related Party Transactions | |
Note Payable – Related Party | |
Gotham was provided a loan which was due on December 31, 2013 from an entity that was previously a related party. The balance of $6,263 has not been paid and is accordingly included in accounts payable at December 31, 2014. | |
Loan Payable - Stockholder | |
A stockholder/officer of the Company made cash advances totaling $30,180 on behalf of the Company. The loan does not bear interest and will be repaid by December 31, 2015. | |
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Note_13_Commitments_and_Contin
Note 13 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 13 - Commitments and Contingencies | |
Note 14 – Commitments and Contingencies | |
Lease Commitment | |
On February 1, 2012, iGambit entered into a 5 year lease for new executive office space in Smithtown, New York commencing on March 1, 2012 at a monthly rent of $1,500 with 2% annual increases. | |
Gotham has a month to month license agreement for office space that commenced on August 2, 2012 at a monthly license fee of $4,025. The license agreement may be terminated upon 30 days’ notice. | |
Total future minimum annual lease payments under the lease for the years ending December 31 are as follows: | |
2015 $ 14,370 | |
2016 19,440 | |
2017 3,240 | |
$ 37,050 | |
Rent expense of $17,273 and $17,456 was charged to operations for the three months ended March 31, 2015 and 2014, respectively. . | |
Contingencies | |
The Company provides accruals for costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. |
Note_2_discontinued_Operations1
Note 2 -discontinued Operations: Accounts Receivable (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Accounts Receivable | |
Accounts Receivable | |
Assets from discontinued operations, net includes accounts receivable which represents 50% of contingency payments earned for the previous quarters. The reserve for bad debts of $250,000 charged to operations in 2010 was reversed in connection with the Summary Judgment and Forbearance Agreement described in Note 11. Also included is accrued interest receivable of $85,156 recorded for interest granted on the balance due from Digi-data through May 2014. The entire balance including accrued interest totaling $655,746 was repaid to the Company by Digi-data in the year ended December 31, 2014 |
Note_3_Summary_of_Significant_1
Note 3 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Principles of Consolidation | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Gotham Innovation Lab, Inc. All intercompany accounts and transactions have been eliminated. |
Note_3_Summary_of_Significant_2
Note 3 - Summary of Significant Accounting Policies: Use of Estimates in The Preparation of Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Use of Estimates in The Preparation of Financial Statements | |
Use of Estimates in the Preparation of Financial Statements | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
Note_3_Summary_of_Significant_3
Note 3 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | |
For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and amounts due to related parties, the carrying amounts approximate fair value due to their short maturities. Additionally, there are no assets or liabilities for which fair value is remeasured on a recurring basis. . |
Note_3_Summary_of_Significant_4
Note 3 - Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Revenue Recognition | |
Revenue Recognition | |
The Company’s revenues are derived primarily from the sale of products and services rendered to real estate brokers. The Company recognizes revenues when the services or products have been provided or delivered, the fees charged are fixed or determinable, the Company and its customers understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured. |
Note_3_Summary_of_Significant_5
Note 3 - Summary of Significant Accounting Policies: Advertising Costs (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Advertising Costs | |
Advertising Costs | |
The Company expenses advertising costs as incurred. Advertising costs for the three months ended March 31, 2015 and 2014 were $1,325 and $843, respectively. |
Note_3_Summary_of_Significant_6
Note 3 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | |
For purposes of reporting cash flows, cash and cash equivalents include checking and money market accounts and any highly liquid debt instruments purchased with a maturity of three months or less. |
Note_3_Summary_of_Significant_7
Note 3 - Summary of Significant Accounting Policies: Property and Equipment and Depreciation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Property and Equipment and Depreciation | |
Property and equipment and depreciation | |
Property and equipment are stated at cost. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets. Computer equipment is depreciated over 5 years and furniture and fixtures are depreciated over 7 years. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. | |
Depreciation expense of $1,306 and $1,191 was charged to operations for the three months ended March 31, 2015 and 2014, respectively. |
Note_3_Summary_of_Significant_8
Note 3 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | |
FASB ASC 606 ASU 2014-09 - Revenue from contracts with customers: | |
In May 2014, the FASB issued amended guidance on contracts with customers to transfer goods or services or contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The guidance requires an entity to recognize revenue on contracts with customers to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires that an entity depict the consideration by applying the following steps: | |
Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. | |
Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. This amendment is to be either retrospectively adopted to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. Adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. | |
FASB ASC 718 ASU 2014-12 – Compensation – Stock Compensation: | |
In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period," ("ASU 2014-12"). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC Topic No. 718, "Compensation - Stock Compensation" as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in ASU 2014-12 either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company does not anticipate that the adoption of ASU 2014-12 will have a material impact on its consolidated financial statements. | |
Options_Policies
Options (Policies) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Policies | |||||||||||||
Options | |||||||||||||
Options | |||||||||||||
In 2006, the Company adopted the 2006 Long-Term Incentive Plan (the "2006 Plan"). Awards granted under the 2006 Plan have a ten-year term and may be incentive stock options, non-qualified stock options or warrants. The awards are granted at an exercise price equal to the fair market value on the date of grant and generally vest over a three or four year period. The Plan expired on December 31, 2009, therefore as of March 31, 2015, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 plan. | |||||||||||||
The 2006 Plan provided for the granting of options to purchase up to 10,000,000 shares of common stock. 8,146,900 options have been issued under the plan to date of which 7,157,038 have been exercised and 692,962 have expired to date. There were 296,900 options outstanding under the 2006 Plan on its expiration date of December 31, 2009. All options issued subsequent to this date were not issued pursuant to any plan. | |||||||||||||
Stock option activity during the three months ended March 31, 2015 and 2014 follows: | |||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Weighted | Remaining | ||||||||||||
Average | Contractual | ||||||||||||
Weighted | |||||||||||||
Average | |||||||||||||
Options | Exercise Price | Grant-Date Fair Value | Life (Years) | ||||||||||
Outstanding | |||||||||||||
Options outstanding at December 31, 2013 | 668,900 | $ | 0.06 | $ | 0.1 | 4.69 | |||||||
No option activity | -- | -- | -- | ||||||||||
Options outstanding at March 31, 2014 | 668,900 | 0.06 | 0.1 | 4.44 | |||||||||
Options outstanding at December 31, 2014 | 1,518,900 | $ | 0.03 | $ | 0.1 | 4.76 | |||||||
Options granted | 200,000 | 0.01 | 0.4 | 4.98 | |||||||||
31-Mar-15 | 1,718,900 | $ | 0.03 | $ | 0.13 | 4.57 | |||||||
Options outstanding at March 31, 2015 consist of: | |||||||||||||
Date | Number | Number | Exercise | Expiration | |||||||||
Issued | Outstanding | Exercisable | Price | Date | |||||||||
1-May-06 | 100,000 | 100,000 | $0.01 | 1-May-16 | |||||||||
1-May-06 | 100,000 | 100,000 | $0.01 | 1-May-16 | |||||||||
1-May-06 | 50,000 | 50,000 | $0.01 | 1-May-16 | |||||||||
1-May-06 | 46.9 | 46,900 | $0.01 | 1-May-16 | |||||||||
9-Jun-14 | 213,000 | 213,000 | $0.03 | 9-Jun-24 | |||||||||
9-Jun-14 | 159,000 | 159,000 | $0.03 | 9-Jun-24 | |||||||||
9-Jun-14 | 600,000 | 600,000 | $0.03 | 9-Jun-24 | |||||||||
6-Jun-14 | 250,000 | 250,000 | $0.05 | 6-Jun-19 | |||||||||
March 24, 2015 | 200,000 | 200,000 | $0.01 | 24-Mar-20 | |||||||||
Total | 1,718,900 | 1,718,900 | |||||||||||
Warrants_Policies
Warrants (Policies) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Policies | |||||||||||||
Warrants | |||||||||||||
Warrants | |||||||||||||
In addition to our 2006 Long Term Incentive Plan, we have issued and outstanding compensatory warrants to two consultants entitling the holders to purchase a total of 275,000 shares of our common stock at an average exercise price of $0.94 per share. Warrants to purchase 25,000 shares of common stock vest upon 6 months after the Company engages in an IPO, have an exercise price of $3.00 per share, and expire 2 years after the Company engages in an IPO. Warrants to purchase 250,000 shares of common stock vest 100,000 shares on issuance (June 1, 2009), and 50,000 shares on each of the following three anniversaries of the date of issuance, have exercise prices ranging from $0.50 per share to $1.15 per share, and expire on June 1, 2019. The issuance of the compensatory warrants was not submitted to our shareholders for their approval. | |||||||||||||
Warrant activity during the three months ended March 31, 2015 and 2014 follows: | |||||||||||||
Weighted | (1)Weighted | ||||||||||||
Weighted | Average Grant-Date | Average Remaining | |||||||||||
Warrants | Average Exercise Price | Fair Value | Contractual Life (Years) | ||||||||||
Outstanding | |||||||||||||
Warrants outstanding at December 31, 2013 | 275,000 | $ | 0.94 | $ | 0.1 | 5.42 | |||||||
No warrant activity | -- | -- | -- | ||||||||||
Warrants outstanding at March 31, 2014 | 275,000 | $ | 0.94 | $ | 0.1 | 5.17 | |||||||
Warrants outstanding at December 31, 2014 | 275,000 | 0.94 | 0.1 | 4.42 | |||||||||
No warrant activity | -- | -- | -- | ||||||||||
Warrants outstanding at March 31, 2015 | 275,000 | $ | 0.94 | $ | 0.1 | 4.17 | |||||||
(1) Exclusive of 25,000 warrants expiring 2 years after initial IPO. | |||||||||||||
Warrants outstanding at December 31, 2014 consist of: | |||||||||||||
Date | Number | Number | Exercise | Expiration | |||||||||
Issued | Outstanding | Exercisable | Price | Date | |||||||||
1-Apr-00 | 25,000 | 25,000 | $3.00 | 2 years after IPO | |||||||||
1-Jun-09 | 100,000 | 100,000 | $0.50 | 1-Jun-19 | |||||||||
1-Jun-09 | 50,000 | 50,000 | $0.65 | 1-Jun-19 | |||||||||
1-Jun-09 | 50,000 | 50,000 | $0.85 | 1-Jun-19 | |||||||||
1-Jun-09 | 50,000 | 50,000 | $1.15 | 1-Jun-19 | |||||||||
Total | 275,000 | 275,000 | |||||||||||
Note_13_Commitments_and_Contin1
Note 13 - Commitments and Contingencies: Lease Commitment (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Lease Commitment | |
Lease Commitment | |
On February 1, 2012, iGambit entered into a 5 year lease for new executive office space in Smithtown, New York commencing on March 1, 2012 at a monthly rent of $1,500 with 2% annual increases. | |
Gotham has a month to month license agreement for office space that commenced on August 2, 2012 at a monthly license fee of $4,025. The license agreement may be terminated upon 30 days’ notice. | |
Total future minimum annual lease payments under the lease for the years ending December 31 are as follows: | |
2015 $ 14,370 | |
2016 19,440 | |
2017 3,240 | |
$ 37,050 | |
Rent expense of $17,273 and $17,456 was charged to operations for the three months ended March 31, 2015 and 2014, respectively. . |