Document and Entity Information
Document and Entity Information Document - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Nov. 03, 2017 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | IZEA, INC. | ||
Entity Central Index Key | 1,495,231 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 5,726,336 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 6,861,087 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 3,447,998 | $ 5,949,004 |
Accounts receivable, net | 5,253,423 | 3,745,695 |
Prepaid expenses | 414,619 | 322,377 |
Other current assets | 27,606 | 11,940 |
Total current assets | 9,143,646 | 10,029,016 |
Property and equipment, net | 310,277 | 460,650 |
Goodwill | 3,604,720 | 3,604,720 |
Intangible assets, net | 914,816 | 1,662,536 |
Software development costs, net | 1,004,905 | 1,103,959 |
Security deposits | 157,427 | 161,736 |
Total assets | 15,135,791 | 17,022,617 |
Liabilities, Current [Abstract] | ||
Accounts payable | 1,680,422 | 1,438,389 |
Accrued expenses | 1,888,985 | 1,242,889 |
Unearned revenue | 3,750,617 | 3,315,563 |
Line of credit | 810,376 | 0 |
Current portion of deferred rent | 41,886 | 34,290 |
Current portion of acquisition costs payable | 619,834 | 1,252,885 |
Total current liabilities | 8,792,120 | 7,284,016 |
Deferred rent, less current portion | 29,187 | 62,547 |
Acquisition costs payable, less current portion | 477,718 | 688,191 |
Warrant liability | 0 | 0 |
Total liabilities | 9,299,025 | 8,034,754 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,709,626 and 5,456,118, respectively, issued and outstanding | 571 | 545 |
Additional paid-in capital | 52,370,539 | 50,797,039 |
Accumulated deficit | (46,534,344) | (41,809,721) |
Total stockholders’ equity | 5,836,766 | 8,987,863 |
Total liabilities and stockholders’ equity | $ 15,135,791 | $ 17,022,617 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets Parentheticals - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Parentheticals - Balance Sheet [Abstract] | ||
Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
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 (per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares, issued (shares) | 5,709,626 | 5,456,118 |
Common stock, shares outstanding (shares) | 5,709,626 | 5,456,118 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 8,154,674 | $ 7,496,972 | $ 21,337,401 | $ 19,876,611 |
Cost of sales | 3,758,621 | 3,927,279 | 10,396,328 | 10,447,035 |
Gross profit | 4,396,053 | 3,569,693 | 10,941,073 | 9,429,576 |
Operating expenses: | ||||
General and administrative | 2,687,266 | 2,454,555 | 8,021,420 | 7,559,302 |
Sales and marketing | 2,342,002 | 2,584,287 | 7,666,720 | 7,556,664 |
Total operating expenses | 5,029,268 | 5,038,842 | 15,688,140 | 15,115,966 |
Loss from operations | (633,215) | (1,469,149) | (4,747,067) | (5,686,390) |
Other income (expense): | ||||
Interest expense | (15,058) | (25,511) | (45,406) | (58,261) |
Change in fair value of derivatives, net | 45,160 | (14,705) | 36,122 | 14,568 |
Other income (expense), net | 44,308 | (2,238) | 31,728 | (485) |
Total other income (expense), net | 74,410 | (42,454) | 22,444 | (44,178) |
Net loss | $ (558,805) | $ (1,511,603) | $ (4,724,623) | $ (5,730,568) |
Weighted average common shares outstanding – basic and diluted | 5,702,297 | 5,420,020 | 5,659,423 | 5,357,119 |
Basic and diluted loss per common share | $ (0.10) | $ (0.28) | $ (0.83) | $ (1.07) |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance (shares) at Dec. 31, 2016 | 5,456,118 | |||
Balance at Dec. 31, 2016 | $ 8,987,863 | $ 545 | $ 50,797,039 | $ (41,809,721) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock issued for payment of acquisition liability (shares) | 200,542 | |||
Stock issued for payment of acquisition liability | 928,041 | $ 20 | 928,021 | |
Stock purchase plan issuances (shares) | 9,998 | |||
Stock purchase plan issuances | 16,232 | $ 1 | 16,231 | |
Stock issued for payment of services (shares) | 42,968 | |||
Stock issued for payment of services | 130,524 | $ 5 | 130,519 | |
Stock issuance costs | (10,913) | (10,913) | ||
Stock-based compensation | 509,642 | 509,642 | ||
Net loss | (4,724,623) | (4,724,623) | ||
Balance (shares) at Sep. 30, 2017 | 5,709,626 | |||
Balance at Sep. 30, 2017 | $ 5,836,766 | $ 571 | $ 52,370,539 | $ (46,534,344) |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (4,724,623) | $ (5,730,568) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 163,597 | 190,338 |
Amortization of software development costs and other intangible assets | 932,234 | 744,725 |
Gain on disposal of equipment | (5,462) | (484) |
Provision for losses on accounts receivable | 44,827 | 155,000 |
Stock-based compensation | 509,642 | 576,144 |
Fair value of stock and warrants issued or to be issued for payment of services | 143,536 | 107,440 |
Increase (decrease) in fair value of contingent acquisition costs payable | 62,000 | 0 |
Gain on settlement of acquisition costs payable | (10,491) | 0 |
Change in fair value of derivatives, net | (36,122) | (14,568) |
Changes in operating assets and liabilities, net of effects of business acquired: | ||
Accounts receivable | (1,552,555) | (472,612) |
Prepaid expenses and other current assets | (84,798) | (51,792) |
Accounts payable | 242,033 | 263,706 |
Accrued expenses | 679,104 | (142,156) |
Unearned revenue | 435,054 | 161,967 |
Deferred rent | (25,764) | (2,948) |
Net cash used for operating activities | (3,227,788) | (4,215,808) |
Cash flows from investing activities: [Abstract] | ||
Purchase of equipment | (7,762) | (121,651) |
Increase in software development costs | (85,460) | (304,790) |
Acquisition, net of cash acquired | 0 | (329,468) |
Security deposits | 4,309 | (42,637) |
Net cash used for investing activities | (88,913) | (798,546) |
Cash flows from financing activities: [Abstract] | ||
Proceeds from line of credit | 810,376 | 0 |
Proceeds from stock purchase plan issuances | 16,232 | 34,587 |
Stock issuance costs | (10,913) | (22,493) |
Payments on capital lease obligations | 0 | (7,291) |
Net cash from financing activities | 815,695 | 4,803 |
Net decrease in cash and cash equivalents | (2,501,006) | (5,009,551) |
Cash and cash equivalents, beginning of year | 5,949,004 | 11,608,452 |
Cash and cash equivalents, end of period | 3,447,998 | 6,598,901 |
Supplemental cash flow information: [Abstract] | ||
Cash paid during the period for interest | 29,700 | 21,230 |
Non-cash financing and investing activities: | ||
Acquisition costs paid through issuance of common stock | 938,532 | 1,448,832 |
Fair value of common stock issued for future services | $ 23,110 | $ 31,962 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Information The accompanying consolidated balance sheet as of September 30, 2017 , the consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 , the consolidated statement of stockholders' equity for the nine months ended September 30, 2017 and the consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 are unaudited but include all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position at such dates and its results of operations and cash flows for the periods then ended in conformity with generally accepted accounting principles in the United States ("GAAP"). The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements at that date but, in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"), does not include all of the information and notes required by GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of results that may be expected for the entire fiscal year. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2016 included in the Company's Annual Report on Form 10-K filed with the SEC on March 28, 2017. Nature of Business IZEA, Inc. (together with its wholly-owned subsidiaries, "we," "us," "our," "IZEA" or the "Company") was founded in February 2006 under the name PayPerPost, Inc. and became a public company incorporated in the state of Nevada in May 2011. In January 2015, IZEA purchased all of the outstanding shares of capital stock of Ebyline, Inc. (“Ebyline”) and in July 2016, IZEA purchased all the outstanding shares of capital stock of ZenContent, Inc. ("ZenContent"). Both of these entities now operate as wholly-owned subsidiaries under IZEA, Inc. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary, incorporated in Ontario, Canada to operate as a sales office for IZEA's Canadian customers and partners. The Company is headquartered near Orlando, Florida with additional offices in Illinois, California and Canada and a sales presence in New York, Michigan and Massachusetts. The Company operates online marketplaces that facilitate transactions between marketers and influential content creators. These creators are compensated by IZEA for producing and distributing unique content such as long-form text, videos, photos, illustrations, and status updates on behalf of marketers through websites, blogs and social media channels. Marketers receive influential consumer content and engaging, shareable stories that drive awareness. The Company's primary technology platform, the IZEA Exchange (“ IZEAx ”), enables transactions to be completed at scale through the management of custom content development, creator search and targeting, bidding, analytics, and payment processing. IZEAx is designed to provide a unified ecosystem that enables the creation of multiple types of content including blog posts, status updates, videos and photos through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others. In addition to IZEAx , the Company operates the Ebyline technology platform, which it acquired in January 2015. The Ebyline platform is a self-service content marketplace which was originally designed to replace editorial newsrooms located within newspapers with a “virtual newsroom” to handle their content workflow. Principles of Consolidation The unaudited consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline after its acquisition on January 31, 2015, ZenContent, Inc. after its acquisition on July 31, 2016, and IZEA Canada, Inc. after its formation in March 2016. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline and ZenContent. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase to be cash equivalents. Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Uncollectability of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to develop or share content on behalf of a marketer. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account. Management determines the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $220,000 and $237,000 for doubtful accounts as of September 30, 2017 and December 31, 2016 , respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the three and nine months ended September 30, 2017 and 2016 . Concentrations of credit risk with respect to accounts receivable are typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. The Company had one customer that accounted for 14% of total accounts receivable at September 30, 2017 and no customers that accounted for more than 10% of accounts receivable at December 31, 2016 . The Company had one customer that accounted for 11% of its revenue during the three months ended September 30, 2017 and no customers that accounted for more than 10% of its revenue during the three months ended September 30, 2016 . The Company had no customers that accounted for more than 10% of its revenue during the nine months ended September 30, 2017 and one customer that accounted for 11% of its revenue during the nine months ended September 30, 2016 . Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $50,168 and $65,106 for the three months ended September 30, 2017 and 2016 , respectively. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $163,597 and $190,338 for the nine months ended September 30, 2017 and 2016 , respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $763,632 and $616,056 as of September 30, 2017 and December 31, 2016 , respectively. Intangible Assets The Company acquired the majority of its intangible assets through its acquisition of Ebyline on January 30, 2015 and its acquisition of ZenContent on July 31, 2016. The Company is amortizing the identifiable intangible assets over a period of 12 to 60 months. See Note 3 for further details. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the three and nine months ended September 30, 2017 and 2016 , there were no impairment charges associated with the Company's long-lived assets. Software Development Costs In accordance with Accounting Standards Codification ("ASC") 350-40, Internal Use Software and ASC 985-730, Computer Software Research and Development , research phase costs related to internal use software should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. The Company amortizes software development costs equally over 5 years upon initial launch of the software or additional features. See Note 4 for further details. Goodwill Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill in connection with its acquisition of Ebyline and ZenContent. Goodwill is not amortized, but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill during the fourth quarter of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that prior to and after the acquisition of Ebyline and ZenContent, it had, and continues to have, one reporting unit. Revenue Recognition In January 2017, the Company revised the way it categorizes its revenue streams to more closely align the revenue based on margin profiles and how it currently analyzes the business. The revised categories are as follows: Managed Services, Content Workflow, and Service Fee Revenue. Managed Services is when a marketer, typically a brand, agency or partner, contracts IZEA to provide custom content, influencer marketing or amplification services. Content Workflow is derived from the self-service use of the Ebyline platform by news agencies to handle their content workflow from initial content request to payment of content received. Service Fee Revenue is generated when fees are charged to customers primarily related to subscription fees for different levels of service within a platform, licensing fees for white-label use of IZEAx , early cash-out fees if a creator wishes to take proceeds earned for services from their account when the account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts. The Company recognizes revenue at various times depending on the service that is being performed. For Managed Services, the Company enters into an agreement to provide services that may require multiple deliverables in the form of: (a) sponsored social items, such as blogs, tweets, photos or videos shared through social network offerings that provide awareness or advertising buzz regarding the marketer's brand; (b) content promotion, such as click-through advertisements appearing in websites and social media channels; and (c) original content items, such as a research or news article, informational material or videos that a publisher or other marketer can use. The Company may provide one type or a combination of all types of these deliverables including a management fee on a statement of work for a lump sum fee. These deliverables are to be provided over a stated period that may range from one day to one year. Each item is considered delivered once the custom content has been delivered to the customer or once the content is distributed live through a public or social network. Revenue is accounted for separately on each of the deliverables depending on the type of service provided. The Company recognizes revenue related to influencer marketing services after a marketer's sponsored content is posted through IZEAx and shared through a creator's social network for a requisite period of time. The requisite period ranges from 3 days for a tweet to 30 days for a blog, video or other form of content. Management fees from advertising campaigns managed by the Company are recognized ratably over the term of the campaign which may range from a few days to one year. Revenue related to custom content provided to a marketer is recognized when the content is delivered to and accepted by the customer. Payment terms are typically 30 days from the invoice date. If the Company is unable to provide a portion of the services, it may agree with the customer to provide a different type of service or to provide a credit for the value of those services, which may be applied to the existing order or used for future services. The statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. For Content Workflow services, the self-service marketer contracts the creators directly to provide custom content. The Ebyline platform controls the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies to control the outsourcing of their content needs. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Service Fee Revenue is recognized immediately when the service is performed or at the time an account becomes dormant or is cashed out. Service Fee Revenue for subscription or licensing fees is recognized straight-line over the term of service. Marketers who use the Company to manage their social advertising campaigns or custom content requests may prepay for services or request credit terms. Payments received or billings in advance of completed services are recorded as unearned revenue until earned as described above. All of the Company's revenues are generated through the rendering of services. The Company recognizes revenue under the general guidelines of Staff Accounting Bulletin Topic 13 A.1, which states that revenue will be recognized when it is realized or realizable and earned. The Company considers its revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that is not subject to refund or adjustment) and determinable, and (iv) collectability is reasonably assured. The Company records revenue on the gross amount earned since it generally is the primary obligor in the arrangement, takes on credit risk, establishes the pricing and determines the service specifications. Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the three months ended September 30, 2017 and 2016 were approximately $79,000 and $74,000 , respectively. Advertising costs charged to operations for the nine months ended September 30, 2017 and 2016 were approximately $248,000 and $291,000 , respectively. Advertising costs are included in sales and marketing expense in the accompanying unaudited consolidated statements of operations. Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease terms. The Company accounts for rental expense on a straight-line basis over the lease terms. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying unaudited consolidated balance sheets. Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in four states which is included in general and administrative expenses in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2013, 2014 and 2015. Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. The fair value and outstanding derivative warrant liability related to these warrant shares as of December 31, 2016 was $0 . During the three and nine months ended September 30, 2016 , the Company recorded a gain of $1,231 and $4,960 , respectively, due to the change in the fair value of its warrant liability. Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: • Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities. • Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. • Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) as of September 30, 2017 and December 31, 2016 , and a warrant liability as of December 31, 2016 . Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, and accrued expenses. Unless otherwise disclosed, the fair value of the Company’s notes payable obligations approximate their carrying value based upon current rates available to the Company. Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and 2011 B Equity Incentive Plan (together, the "2011 Equity Incentive Plans") (see Note 6) is measured at the grant date, based on the fair value of the award, and is recognized as a straight-lined expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the date of the grant. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 43.08% 45.02% 43.49% 50.01% Weighted average risk free interest rate 1.91% 1.23% 1.98% 1.42% Expected dividends — — — — Effective January 1, 2017, the Company considered its accounting for stock options pursuant to Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU is intended to reduce the cost and complexity of accounting for employee share-based payments primarily surrounding the accounting for income taxes upon vesting or exercise of share-based payments and accounting for forfeitures, as well as related financial statement classifications. Although the new standard allows for the non-use of forfeiture estimates, the Company elected to continue the use of estimated forfeitures when accounting for stock-based compensation, because it has an established history of forfeitures for non-vested options. There was no effect on the Company's financial statements as a result of the adoption of this standard. The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Average expected forfeiture rates were 6.79% and 7.87% during the three months ended September 30, 2017 and 2016 , respectively. Average expected forfeiture rates were 9.01% and 10.74% during the nine months ended September 30, 2017 and 2016 , respectively. Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded in the accompanying consolidated statements of operations. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of consolidated operations are the basis on which management evaluates operations and makes business decisions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). The amendments in ASU 2016-08 are intended to improve the understanding of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective date for ASU 2016-08 is the same as for ASU 2014-09 stated above. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"). ASU 2016-10 is intended to reduce the cost and complexity of |
Business Acquisitions (Notes)
Business Acquisitions (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | BUSINESS ACQUISITIONS EBYLINE, INC. On January 30, 2015, the Company purchased all of the outstanding shares of capital stock of Ebyline pursuant to the terms of a Stock Purchase Agreement, dated as of January 27, 2015, by and among IZEA, Ebyline and the stockholders of Ebyline (the “Ebyline Stock Purchase Agreement”) for a maximum purchase price of $8,850,000 . The Ebyline Stock Purchase Agreement was made up of a combination of guaranteed payments and contingent performance payments to be paid if Ebyline met certain revenue targets in the three years following the closing. None of these targets were met in the first two years following the closing and it is not expected that they will be met in the third year. Therefore, the total consideration to be paid for the Ebyline acquisition is expected to be $3,327,064 . Purchase Price and Acquisition Costs Payable Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value 1/30/2015 1/30/2015 12/31/2016 9/30/2017 Cash paid at closing (a) $ 1,200,000 $ 1,200,000 $ — $ — Guaranteed purchase price (a) 2,127,064 1,982,639 934,728 — Contingent performance payments (b) 2,210,000 1,834,300 — — Acquisition costs payable by Ebyline shareholders (c) — — — — Total estimated consideration $ 5,537,064 $ 5,016,939 $ 934,728 $ — Current portion of acquisition costs payable $ 934,728 $ — Long term portion of acquisition costs payable — — Total acquisition costs payable $ 934,728 $ — (a) The Ebyline Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 ( subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000 ). Ebyline's final gross revenue for 2014 was $7,903,429 . As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% . Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $0 and $11,412 for the three months ended September 30, 2017 and 2016 , respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $3,804 and $38,137 for the nine months ended September 30, 2017 and 2016 , respectively. Per the Ebyline Stock Purchase Agreement, the Company issued 31,821 shares of its common stock to satisfy the $250,000 guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses (see item (c) below). On January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532 . The Company recorded a $10,491 gain on the settlement of the acquisition costs payable in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30-day average price of the stock required by the Ebyline Stock Purchase Agreement. (b) Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The initial fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over three years. Since the contingent consideration has an option like structure, a risk-neutral framework was considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5% ) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35% . The Monte Carlo simulation resulted in an initial calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015 . Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300 . Based on actual results for and projections for Content Revenue for 2015-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015, as no further payments are expected to be owed. (c) According to the Ebyline Stock Purchase Agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. ZENCONTENT, INC. On July 31, 2016, the Company purchased all of the outstanding shares of capital stock of ZenContent pursuant to the terms of a Stock Purchase Agreement, by and among IZEA, ZenContent and the stockholders of ZenContent (the “ZenContent Stock Purchase Agreement”) for a maximum purchase price to be paid over the next three years of $4,500,000 . Purchase Price and Acquisition Costs Payable Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value 7/31/2016 7/31/2016 12/31/2016 9/30/2017 Cash paid at closing (a) $ 400,000 $ 400,000 $ — $ — Stock paid at closing (a) 600,000 600,000 — — Guaranteed purchase price (b) 933,565 566,547 682,348 589,108 Contingent performance payments (c) 2,500,000 230,000 324,000 508,444 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 1,006,348 $ 1,097,552 Current portion of acquisition costs payable $ 318,157 $ 619,833 Long-term portion of acquisition costs payable 688,191 477,719 Total acquisition costs payable $ 1,006,348 $ 1,097,552 (a) The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000 . (b) Aggregate future consideration consists of (i) three equal annual installment payments totaling $1,000,000 , commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment ("guaranteed purchase price"), and (ii) contingent performance payments up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $28,125 and $151,042 for the three and nine months ended September 30, 2017 , respectively. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $40,972 for the three and nine months ended September 30, 2016 . The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% ( 5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $6,572 and $22,616 for the three and nine months ended September 30, 2017 . Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,348 for the three and nine months ended September 30, 2016 . (c) The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million , $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. We initially determined the fair value of the $2,500,000 contingent payments to be $230,000 . The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 17% ) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45% . The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% ( 6.25% ). The Company revalued its estimate of the contingent performance payment as of September 30, 2017 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $508,444 compared to $324,000 as of December 31, 2016 . The change in the estimated fair value of contingent performance payable resulted in a $184,444 increase to general and administrative expense in the Company's consolidated statement of operations during the nine months ended September 30, 2017 . Of this amount, $122,444 was allocated to compensation expense and a gain of $62,000 was allocated as a change in the fair value of the contingent performance payments. The change the estimated fair value of contingent performance payable from $342,861 as of June 30, 2017 to $508,444 as of September 30, 2017 resulted in a $165,583 decrease to general and administrative expense in the Company's consolidated statement of operations during the three months ended September 30, 2017 . Of this amount, a gain of $47,583 was allocated as a decrease in compensation expense and a gain of $118,000 was allocated as a change in the fair value of the contingent performance payments. Purchase Price Allocation The consolidated financial statements reflect the allocation of the purchase price to the underlying ZenContent tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. The allocation of the purchase price as of July 31, 2016 is summarized as follows: Final Purchase Price Allocation Current assets $ 415,798 Property and equipment 4,551 Identifiable intangible assets 722,000 Goodwill 1,136,431 Current liabilities (482,233 ) Total estimated consideration $ 1,796,547 The ZenContent operations are included in the consolidated financial statements beginning on the date of acquisition of July 31, 2016. The ZenContent operations contributed revenue of $1,332,877 and gross profit of $840,891 in the consolidated statement of operations for the three months ended September 30, 2017 . The ZenContent operations contributed revenue of $3,070,697 and gross profit of $1,930,281 in the consolidated statement of operations for the nine months ended September 30, 2017 . The ZenContent operations contributed revenue of $465,574 and gross profit of $219,313 in the consolidated statement of operations for the three and nine months ended September 30, 2016 . There are $29,621 and $40,918 of acquisition-related costs which are included in general and administrative expense on the Company's consolidated statement of operations for the three and nine months ended September 30, 2016 , respectively. |
Intangible Assets (Notes)
Intangible Assets (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | INTANGIBLE ASSETS The identifiable intangible assets consists of the following assets: Accumulated Amortization Useful Life (in years) Balance September 30, 2017 December 31, 2016 Content provider networks $ 160,000 $ 105,833 $ 57,083 1 Trade names 52,000 52,000 45,000 1 Developed technology 530,000 213,667 134,167 3 Self-service content customers 210,000 186,667 134,167 5 Managed content customers 2,140,000 1,727,222 1,192,222 3 Domains 166,469 58,264 33,294 5 Total identifiable intangible assets $ 3,258,469 $ 2,343,653 $ 1,595,933 Total identifiable intangible assets from the Ebyline and ZenContent purchase price allocation and other acquired assets net of accumulated amortization thereon consists of the following: September 30, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,343,653 ) (1,595,933 ) Intangible Assets, net $ 914,816 $ 1,662,536 The Company is amortizing the identifiable intangible assets over a weighted average period of three years . Amortization expense recorded in general and administrative expense in the accompanying consolidated statements of operations was $247,907 and $229,934 for the three months ended September 30, 2017 and 2016 , respectively. Amortization expense recorded in general and administrative expense in the accompanying consolidated statements of operations was $747,720 and $615,748 for the nine months ended September 30, 2017 and 2016 , respectively. As of September 30, 2017 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2017 (three months remaining) $ 246,908 2018 349,432 2019 207,349 2020 84,293 2021 26,834 Total $ 914,816 |
Software Development Costs (Not
Software Development Costs (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Research and Development [Abstract] | |
Research, Development, and Computer Software Disclosure [Text Block] | SOFTWARE DEVELOPMENT COSTS Software development costs consists of the following: September 30, December 31, Software development costs $ 1,578,125 $ 1,492,665 Less accumulated depreciation and amortization (573,220 ) (388,706 ) Software development costs, net $ 1,004,905 $ 1,103,959 The Company determined that on April 15, 2013, its project to create IZEAx became technologically feasible and the development phase began. Throughout 2013 and the first quarter of 2014, the Company developed its new web-based advertising exchange platform, IZEAx . On March 17, 2014, the Company launched a public beta of IZEA.com powered by IZEAx . This platform is being utilized both internally and externally to facilitate native advertising campaigns on a greater scale. The Company continues to add new features and additional functionality to this platform each year. These new features will enable IZEAx to facilitate the contracting, workflow, and delivery of direct content as well as provide for invoicing, collaborating, and direct payments for the Company's software as a service ("SaaS") customers. In accordance with ASC 350-40, Internal Use Software and ASC 985-730, Computer Software Research and Development , research phase costs should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. As a result, the Company has capitalized $1,578,125 in direct materials, consulting, payroll and benefit costs to software development costs in the consolidated balance sheet as of September 30, 2017 . The Company estimated the useful life of its developed software to be 5 years , consistent with the amount of time its legacy platforms were in-service. Amortization expense on software development costs recorded in general and administrative expense in the accompanying consolidated statements of operations was $76,890 and $44,549 for the three months ended September 30, 2017 and 2016 , respectively. Amortization expense on software development costs recorded in general and administrative expense in the accompanying consolidated statements of operations was $184,514 and $128,977 for the nine months ended September 30, 2017 and 2016 , respectively. As of September 30, 2017 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2017 (three months remaining) $ 98,259 2018 304,241 2019 218,910 2020 183,956 2021 134,432 2022 65,107 $ 1,004,905 |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS & CONTINGENCIES Credit Agreement The Company has a secured credit facility agreement with Western Alliance Bank, the parent company of Bridge Bank, N.A. of San Jose, California, which it obtained on March 1, 2013 and expanded on April 13, 2015. Pursuant to this agreement, the Company may submit requests for funding up to 80% of its eligible accounts receivable up to a maximum credit limit of $5 million . This agreement is secured by the Company's accounts receivable and substantially all of the Company's other assets. The agreement renews annually and requires the Company to pay an annual facility fee of $20,000 ( 0.4% of the credit limit) and an annual due diligence fee of $1,000 . Interest accrues on the advances at the rate of prime plus 2% per annum . The default rate of interest is prime plus 7% . As of September 30, 2017 , the Company had $810,376 outstanding under this line of credit agreement. The Company had no advances outstanding under this agreement as of December 31, 2016 . As of September 30, 2017 , the Company had a net accounts receivable balance of $5,253,423 . Assuming that all of the Company's accounts receivable balance was eligible for funding, it had $3,392,362 in remaining available credit under the agreement as of September 30, 2017 . The annual fees are capitalized in the Company's consolidated balance sheet within other current assets and are amortized to interest expense over one year . The Company amortized $5,250 and $8,750 of the annual costs through interest expense during the three months ended September 30, 2017 and 2016 , respectively. The Company amortized $15,750 and $14,546 of the annual costs through interest expense during the nine months ended September 30, 2017 and 2016 , respectively. The remaining value of the capitalized loan costs related to the Bridge Bank Credit Agreement as of September 30, 2017 is $12,250 . This amount will be amortized to interest expense over the next seven months . Litigation From time to time, the Company may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may harm the Company's business. The Company is currently not aware of any legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on its operations or financial position. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | STOCKHOLDERS' EQUITY Authorized Shares The Company has 200,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock, each with a par value of $0.0001 per share. Reverse Stock Split On January 6, 2016, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 20 shares outstanding prior to the effective date of the reverse stock split. All current and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock. Nasdaq Uplisting On January 26, 2016, the Company's shares of common stock commenced trading on the Nasdaq Capital Market under the symbol IZEA. Prior thereto, the Company's common stock was quoted on the OTCQB marketplace under the same symbol. Stock Issued for Purchases As further discussed in Note 2, the Company issued 31,821 shares of its common stock to satisfy the $250,000 guaranteed purchase price payment obligation on July 30, 2015 per the Ebyline Stock Purchase Agreement. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses owed as part of the Ebyline Stock Purchase Agreement and on January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532 . On July 31, 2016, the Company issued 86,207 shares of IZEA common stock valued at $600,000 as a partial payment of the guaranteed purchase price per the ZenContent Stock Purchase Agreement. Stock Issued for Services The Company issued its five independent directors a total of 32,385 shares of restricted common stock initially valued at $93,750 for their service as directors of the Company during the nine months ended September 30, 2017 . The stock vested monthly from January through September 2017. On February 12, 2017, the Company issued 7,109 shares valued at $30,000 as compensation for services a contractor provided. On August 14, 2017, the Company issued 2,812 shares of restricted stock to Mr. Edward Murphy, its Chief Executive Officer, as partial payment for his second quarter bonus. The stock was initially valued at $5,483 and vests in equal monthly installments over 48 months . On August 14, 2017, the Company issued 662 shares of restricted stock to Mr. Ryan Schram, its Chief Operating Officer, as partial payment for his second quarter bonus. The stock was initially valued at $1,291 and vests in equal monthly installments over 48 months . The following table contains summarized information about nonvested restricted stock outstanding during the nine months ended September 30, 2017 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2016 — $ — Granted 42,968 3.04 Vested (39,713 ) 3.61 Forfeited — — Nonvested at September 30, 2017 3,255 $ 7.10 3.8 Total expense recognized for stock-based payments for services during the three months ended September 30, 2017 and 2016 was $60,074 and $34,969 , respectively. Total expense recognized for stock-based payments for services during the nine months ended September 30, 2017 and 2016 was $143,536 and $107,439 , respectively. The fair value of the services is based on the value of the Company's common stock over the term of service. The Company recognized a gain of $45,160 and $36,122 as a change in the fair value of derivatives during the three and nine months ended September 30, 2017 , based on the change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting. The fair value of the remaining nonvested, but issued, 3,255 shares of restricted stock as of September 30, 2017 is $23,110 , and it is included in prepaid expenses in the accompanying unaudited consolidated balance sheets. This value is the current estimate of future compensation expense that is expected to be recognized over the remaining individual vesting periods up to 46 months. Stock Options In May 2011, the Board of Directors adopted the 2011 Equity Incentive Plan of IZEA, Inc. (the “May 2011 Plan”). At the Company's 2017 Annual Meeting of Stockholders held on June 21, 2017, the stockholders approved the amendment and restatement of the May 2011 Plan which increased the number of shares of common stock available for issuance under the May 2011 Plan by 500,000 shares. The amended May 2011 Plan allows the Company to grant options to purchase up to 1,500,000 shares as an incentive for its employees and consultants. As of September 30, 2017 , the Company had 438,636 shares of common stock available for future grants under the May 2011 Plan. On August 22, 2011, the Company adopted the 2011 B Equity Incentive Plan (the “August 2011 Plan”) reserving 4,375 shares of common stock for issuance under the August 2011 Plan. As of September 30, 2017 , the Company had 1,875 shares of common stock available for future grants under the August 2011 Plan. Under both the May 2011 Plan and the August 2011 Plan (together, the "2011 Equity Incentive Plans"), the Board of Directors determines the exercise price to be paid for the shares, the period within which each option may be exercised, and the terms and conditions of each option. The exercise price of the incentive and non-qualified stock options may not be less than 100% of the fair market value per share of the Company’s common stock on the grant date. If an individual owns stock representing more than 10% of the outstanding shares, the price of each share of an incentive stock option must be equal to or exceed 110% of fair market value. Unless otherwise determined by the Board of Directors at the time of grant, the purchase price is set at the fair market value of the Company’s common stock on the grant date, the term is set at ten years and the options typically vest on a straight-line basis over the requisite service period as follows: 25% of options shall vest one year from the date of grant and the remaining options shall vest monthly, in equal increments over the following three years . The Company issues new shares to the optionee for any stock awards or options exercised pursuant to its 2011 Equity Incentive Plans. A summary of option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2016 and the nine months ended September 30, 2017 , is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2015 830,599 $ 8.65 6.5 Granted 179,998 6.16 Exercised — — Forfeited (50,733 ) 10.15 Outstanding at December 31, 2016 959,864 $ 8.11 6.4 Granted 94,246 3.64 Exercised — — Forfeited (42,535 ) 50.15 Outstanding at September 30, 2017 1,011,575 $ 6.05 6.1 Exercisable at September 30, 2017 683,642 $ 6.24 5.1 During the three and nine months ended September 30, 2017 and 2016 , no options were exercised. The fair value of the Company's common stock on September 30, 2017 was $7.10 per share. The intrinsic value on outstanding options as of September 30, 2017 was $1,354,688 . The intrinsic value on exercisable options as of September 30, 2017 was $815,179 . A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2016 and the nine months ended September 30, 2017 , is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2015 461,926 $ 3.84 2.8 Granted 179,998 2.88 Vested (187,181 ) 4.00 Forfeited (40,437 ) 3.76 Nonvested at December 31, 2016 414,306 $ 3.60 2.6 Granted 94,246 1.28 Vested (161,321 ) 3.52 Forfeited (19,298 ) 3.12 Nonvested at September 30, 2017 327,933 $ 2.72 2.6 Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plans is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions stated in Note 1. Total stock-based compensation expense recognized on option awards outstanding during the nine months ended September 30, 2017 and 2016 was $509,642 and $576,144 , respectively. Stock-based compensation expense was recorded as $45,331 to sales and marketing and $464,311 to general and administrative expense in the Company's consolidated statement of operations during the nine months ended September 30, 2017 . Stock-based compensation expense was recorded as $67,586 to sales and marketing and $508,558 to general and administrative expense in the Company's consolidated statement of operations during the three and nine months ended September 30, 2016 . Future compensation related to nonvested awards expected to vest of $753,299 is estimated to be recognized over the weighted-average vesting period of approximately two years, six months . Employee Stock Purchase Plan On April 16, 2014, stockholders holding a majority of the Company's outstanding shares of common stock, upon previous recommendation and approval of the Board of Directors, adopted the IZEA, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”) and reserved 75,000 shares of the Company's common stock for issuance thereunder. Any employee regularly employed by the Company for 90 days or more on a full-time or part-time basis ( 20 hours or more per week on a regular schedule) is eligible to participate in the ESPP. The ESPP operates in successive six month offering periods commencing at the beginning of each fiscal year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock not to exceed $21,250 annually or 1,000 shares per offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first trading day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last trading day of the offering period. The ESPP will continue until January 1, 2024, unless otherwise terminated by the Board. Employees paid $16,232 to purchase 9,998 shares of common stock during the nine months ended September 30, 2017 . Employees paid $34,587 to purchase 5,340 shares of common stock during the nine months ended September 30, 2016 . As of September 30, 2017 , the Company had 39,764 remaining shares of common stock available for future grants under the ESPP. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted earnings per share is computed by dividing the net income or loss by the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Net loss $ (558,805 ) $ (1,511,603 ) $ (4,724,623 ) $ (5,730,568 ) Weighted average shares outstanding - basic and diluted 5,702,297 5,420,020 5,659,423 5,357,119 Basic and diluted loss per common share $ (0.10 ) $ (0.28 ) $ (0.83 ) $ (1.07 ) The Company excluded the following weighted average items from the above computation of diluted loss per common share as their effect would be anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 993,546 904,706 979,775 874,363 Warrants 520,147 557,423 537,039 550,002 Restricted stock units — — — — Total excluded shares 1,513,693 1,462,129 1,516,814 1,424,365 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS No material events have occurred after September 30, 2017 that require recognition or disclosure in the financial statements. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The unaudited consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline after its acquisition on January 31, 2015, ZenContent, Inc. after its acquisition on July 31, 2016, and IZEA Canada, Inc. after its formation in March 2016. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline and ZenContent. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase to be cash equivalents. |
Receivables, Policy [Policy Text Block] | Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Uncollectability of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to develop or share content on behalf of a marketer. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account. Management determines the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $220,000 and $237,000 for doubtful accounts as of September 30, 2017 and December 31, 2016 , respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the three and nine months ended September 30, 2017 and 2016 . |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of credit risk with respect to accounts receivable are typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. The Company had one customer that accounted for 14% of total accounts receivable at September 30, 2017 and no customers that accounted for more than 10% of accounts receivable at December 31, 2016 . The Company had one customer that accounted for 11% of its revenue during the three months ended September 30, 2017 and no customers that accounted for more than 10% of its revenue during the three months ended September 30, 2016 . The Company had no customers that accounted for more than 10% of its revenue during the nine months ended September 30, 2017 and one customer that accounted for 11% of its revenue during the nine months ended September 30, 2016 . |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $50,168 and $65,106 for the three months ended September 30, 2017 and 2016 , respectively. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $163,597 and $190,338 for the nine months ended September 30, 2017 and 2016 , respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $763,632 and $616,056 as of September 30, 2017 and December 31, 2016 , respectively. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets The Company acquired the majority of its intangible assets through its acquisition of Ebyline on January 30, 2015 and its acquisition of ZenContent on July 31, 2016. The Company is amortizing the identifiable intangible assets over a period of 12 to 60 months. See Note 3 for further details. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the three and nine months ended September 30, 2017 and 2016 , there were no impairment charges associated with the Company's long-lived assets. |
Software Development Costs, Policy [Policy Text Block] | Software Development Costs In accordance with Accounting Standards Codification ("ASC") 350-40, Internal Use Software and ASC 985-730, Computer Software Research and Development , research phase costs related to internal use software should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. The Company amortizes software development costs equally over 5 years upon initial launch of the software or additional features. See Note 4 for further details. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill in connection with its acquisition of Ebyline and ZenContent. Goodwill is not amortized, but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill during the fourth quarter of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that prior to and after the acquisition of Ebyline and ZenContent, it had, and continues to have, one reporting unit. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition In January 2017, the Company revised the way it categorizes its revenue streams to more closely align the revenue based on margin profiles and how it currently analyzes the business. The revised categories are as follows: Managed Services, Content Workflow, and Service Fee Revenue. Managed Services is when a marketer, typically a brand, agency or partner, contracts IZEA to provide custom content, influencer marketing or amplification services. Content Workflow is derived from the self-service use of the Ebyline platform by news agencies to handle their content workflow from initial content request to payment of content received. Service Fee Revenue is generated when fees are charged to customers primarily related to subscription fees for different levels of service within a platform, licensing fees for white-label use of IZEAx , early cash-out fees if a creator wishes to take proceeds earned for services from their account when the account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts. The Company recognizes revenue at various times depending on the service that is being performed. For Managed Services, the Company enters into an agreement to provide services that may require multiple deliverables in the form of: (a) sponsored social items, such as blogs, tweets, photos or videos shared through social network offerings that provide awareness or advertising buzz regarding the marketer's brand; (b) content promotion, such as click-through advertisements appearing in websites and social media channels; and (c) original content items, such as a research or news article, informational material or videos that a publisher or other marketer can use. The Company may provide one type or a combination of all types of these deliverables including a management fee on a statement of work for a lump sum fee. These deliverables are to be provided over a stated period that may range from one day to one year. Each item is considered delivered once the custom content has been delivered to the customer or once the content is distributed live through a public or social network. Revenue is accounted for separately on each of the deliverables depending on the type of service provided. The Company recognizes revenue related to influencer marketing services after a marketer's sponsored content is posted through IZEAx and shared through a creator's social network for a requisite period of time. The requisite period ranges from 3 days for a tweet to 30 days for a blog, video or other form of content. Management fees from advertising campaigns managed by the Company are recognized ratably over the term of the campaign which may range from a few days to one year. Revenue related to custom content provided to a marketer is recognized when the content is delivered to and accepted by the customer. Payment terms are typically 30 days from the invoice date. If the Company is unable to provide a portion of the services, it may agree with the customer to provide a different type of service or to provide a credit for the value of those services, which may be applied to the existing order or used for future services. The statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. For Content Workflow services, the self-service marketer contracts the creators directly to provide custom content. The Ebyline platform controls the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies to control the outsourcing of their content needs. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Service Fee Revenue is recognized immediately when the service is performed or at the time an account becomes dormant or is cashed out. Service Fee Revenue for subscription or licensing fees is recognized straight-line over the term of service. Marketers who use the Company to manage their social advertising campaigns or custom content requests may prepay for services or request credit terms. Payments received or billings in advance of completed services are recorded as unearned revenue until earned as described above. All of the Company's revenues are generated through the rendering of services. The Company recognizes revenue under the general guidelines of Staff Accounting Bulletin Topic 13 A.1, which states that revenue will be recognized when it is realized or realizable and earned. The Company considers its revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that is not subject to refund or adjustment) and determinable, and (iv) collectability is reasonably assured. The Company records revenue on the gross amount earned since it generally is the primary obligor in the arrangement, takes on credit risk, establishes the pricing and determines the service specifications. |
Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the three months ended September 30, 2017 and 2016 were approximately $79,000 and $74,000 , respectively. Advertising costs charged to operations for the nine months ended September 30, 2017 and 2016 were approximately $248,000 and $291,000 , respectively. Advertising costs are included in sales and marketing expense in the accompanying unaudited consolidated statements of operations. |
Deferred Charges, Policy [Policy Text Block] | Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease terms. The Company accounts for rental expense on a straight-line basis over the lease terms. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying unaudited consolidated balance sheets. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in four states which is included in general and administrative expenses in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2013, 2014 and 2015. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. The fair value and outstanding derivative warrant liability related to these warrant shares as of December 31, 2016 was $0 . During the three and nine months ended September 30, 2016 , the Company recorded a gain of $1,231 and $4,960 , respectively, due to the change in the fair value of its warrant liability. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: • Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities. • Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. • Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) as of September 30, 2017 and December 31, 2016 , and a warrant liability as of December 31, 2016 . Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, and accrued expenses. Unless otherwise disclosed, the fair value of the Company’s notes payable obligations approximate their carrying value based upon current rates available to the Company. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and 2011 B Equity Incentive Plan (together, the "2011 Equity Incentive Plans") (see Note 6) is measured at the grant date, based on the fair value of the award, and is recognized as a straight-lined expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the date of the grant. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 43.08% 45.02% 43.49% 50.01% Weighted average risk free interest rate 1.91% 1.23% 1.98% 1.42% Expected dividends — — — — Effective January 1, 2017, the Company considered its accounting for stock options pursuant to Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU is intended to reduce the cost and complexity of accounting for employee share-based payments primarily surrounding the accounting for income taxes upon vesting or exercise of share-based payments and accounting for forfeitures, as well as related financial statement classifications. Although the new standard allows for the non-use of forfeiture estimates, the Company elected to continue the use of estimated forfeitures when accounting for stock-based compensation, because it has an established history of forfeitures for non-vested options. There was no effect on the Company's financial statements as a result of the adoption of this standard. The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Average expected forfeiture rates were 6.79% and 7.87% during the three months ended September 30, 2017 and 2016 , respectively. Average expected forfeiture rates were 9.01% and 10.74% during the nine months ended September 30, 2017 and 2016 , respectively. |
Non-Employee Stock-Based Compensation [Policy Text Block] | Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded in the accompanying consolidated statements of operations. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. |
Segment Reporting, Policy [Policy Text Block] | Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of consolidated operations are the basis on which management evaluates operations and makes business decisions. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). The amendments in ASU 2016-08 are intended to improve the understanding of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective date for ASU 2016-08 is the same as for ASU 2014-09 stated above. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"). ASU 2016-10 is intended to reduce the cost and complexity of applying the guidance in the FASB's new revenue standard on identifying performance obligations, and is also intended to improve the understanding of the licensing implementation guidance. The effective date for ASU 2016-10 is the same as for ASU 2014-09 stated above. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12"). ASU 2016-12 does not change the core principles of ASU 2014-09 but is intended to improve the guidance on collectability, noncash consideration, and completed contracts at transition. Additionally, the amendments in this ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date for ASU 2016-10 is the same as for ASU 2014-09 stated above. These new revenue recognition standards will be effective for the Company on January 1, 2018. The Company is continuing to work towards establishing policies, updating its processes and implementing necessary changes to be able to comply with the new requirements. The Company is reviewing each of the five steps in the new revenue recognition model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) performance obligations are satisfied. The Company is currently focusing its assessment on revenue related to Managed Services or Content Workflow, which accounts for over 99% of the Company's revenue. The Company anticipates completing its assessment by December 31, 2017 and expects that any required change in accounting will be reflected retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). While the Company is continuing to assess all potential impacts of the standard, it currently believes the most significant impact relates to additional disclosures related to qualitative and quantitative information concerning the nature, amount, timing, and any uncertainty of revenue and cash flows from contracts with customers. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new standard addresses eight specific cash flow issues and provides guidance for classification. The new standard is effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To address concerns over the cost and complexity of the two-step goodwill impairment test, the new standard removes the requirement for the second step of the goodwill impairment test for certain entities. An entity may apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 43.08% 45.02% 43.49% 50.01% Weighted average risk free interest rate 1.91% 1.23% 1.98% 1.42% Expected dividends — — — — |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Ebyline, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value 1/30/2015 1/30/2015 12/31/2016 9/30/2017 Cash paid at closing (a) $ 1,200,000 $ 1,200,000 $ — $ — Guaranteed purchase price (a) 2,127,064 1,982,639 934,728 — Contingent performance payments (b) 2,210,000 1,834,300 — — Acquisition costs payable by Ebyline shareholders (c) — — — — Total estimated consideration $ 5,537,064 $ 5,016,939 $ 934,728 $ — Current portion of acquisition costs payable $ 934,728 $ — Long term portion of acquisition costs payable — — Total acquisition costs payable $ 934,728 $ — |
ZenContent [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value 7/31/2016 7/31/2016 12/31/2016 9/30/2017 Cash paid at closing (a) $ 400,000 $ 400,000 $ — $ — Stock paid at closing (a) 600,000 600,000 — — Guaranteed purchase price (b) 933,565 566,547 682,348 589,108 Contingent performance payments (c) 2,500,000 230,000 324,000 508,444 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 1,006,348 $ 1,097,552 Current portion of acquisition costs payable $ 318,157 $ 619,833 Long-term portion of acquisition costs payable 688,191 477,719 Total acquisition costs payable $ 1,006,348 $ 1,097,552 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The allocation of the purchase price as of July 31, 2016 is summarized as follows: Final Purchase Price Allocation Current assets $ 415,798 Property and equipment 4,551 Identifiable intangible assets 722,000 Goodwill 1,136,431 Current liabilities (482,233 ) Total estimated consideration $ 1,796,547 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The identifiable intangible assets consists of the following assets: Accumulated Amortization Useful Life (in years) Balance September 30, 2017 December 31, 2016 Content provider networks $ 160,000 $ 105,833 $ 57,083 1 Trade names 52,000 52,000 45,000 1 Developed technology 530,000 213,667 134,167 3 Self-service content customers 210,000 186,667 134,167 5 Managed content customers 2,140,000 1,727,222 1,192,222 3 Domains 166,469 58,264 33,294 5 Total identifiable intangible assets $ 3,258,469 $ 2,343,653 $ 1,595,933 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets from the Ebyline and ZenContent purchase price allocation and other acquired assets net of accumulated amortization thereon consists of the following: September 30, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,343,653 ) (1,595,933 ) Intangible Assets, net $ 914,816 $ 1,662,536 Software development costs consists of the following: September 30, December 31, Software development costs $ 1,578,125 $ 1,492,665 Less accumulated depreciation and amortization (573,220 ) (388,706 ) Software development costs, net $ 1,004,905 $ 1,103,959 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of September 30, 2017 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2017 (three months remaining) $ 246,908 2018 349,432 2019 207,349 2020 84,293 2021 26,834 Total $ 914,816 As of September 30, 2017 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2017 (three months remaining) $ 98,259 2018 304,241 2019 218,910 2020 183,956 2021 134,432 2022 65,107 $ 1,004,905 |
Software Development Costs (Tab
Software Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Research and Development [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets from the Ebyline and ZenContent purchase price allocation and other acquired assets net of accumulated amortization thereon consists of the following: September 30, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,343,653 ) (1,595,933 ) Intangible Assets, net $ 914,816 $ 1,662,536 Software development costs consists of the following: September 30, December 31, Software development costs $ 1,578,125 $ 1,492,665 Less accumulated depreciation and amortization (573,220 ) (388,706 ) Software development costs, net $ 1,004,905 $ 1,103,959 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of September 30, 2017 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2017 (three months remaining) $ 246,908 2018 349,432 2019 207,349 2020 84,293 2021 26,834 Total $ 914,816 As of September 30, 2017 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2017 (three months remaining) $ 98,259 2018 304,241 2019 218,910 2020 183,956 2021 134,432 2022 65,107 $ 1,004,905 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table contains summarized information about nonvested restricted stock outstanding during the nine months ended September 30, 2017 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2016 — $ — Granted 42,968 3.04 Vested (39,713 ) 3.61 Forfeited — — Nonvested at September 30, 2017 3,255 $ 7.10 3.8 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2016 and the nine months ended September 30, 2017 , is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2015 830,599 $ 8.65 6.5 Granted 179,998 6.16 Exercised — — Forfeited (50,733 ) 10.15 Outstanding at December 31, 2016 959,864 $ 8.11 6.4 Granted 94,246 3.64 Exercised — — Forfeited (42,535 ) 50.15 Outstanding at September 30, 2017 1,011,575 $ 6.05 6.1 Exercisable at September 30, 2017 683,642 $ 6.24 5.1 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Share Activity [Table Text Block] | A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2016 and the nine months ended September 30, 2017 , is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2015 461,926 $ 3.84 2.8 Granted 179,998 2.88 Vested (187,181 ) 4.00 Forfeited (40,437 ) 3.76 Nonvested at December 31, 2016 414,306 $ 3.60 2.6 Granted 94,246 1.28 Vested (161,321 ) 3.52 Forfeited (19,298 ) 3.12 Nonvested at September 30, 2017 327,933 $ 2.72 2.6 |
Earnings (Loss) Per Common Sh21
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted earnings per share is computed by dividing the net income or loss by the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Net loss $ (558,805 ) $ (1,511,603 ) $ (4,724,623 ) $ (5,730,568 ) Weighted average shares outstanding - basic and diluted 5,702,297 5,420,020 5,659,423 5,357,119 Basic and diluted loss per common share $ (0.10 ) $ (0.28 ) $ (0.83 ) $ (1.07 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The Company excluded the following weighted average items from the above computation of diluted loss per common share as their effect would be anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 993,546 904,706 979,775 874,363 Warrants 520,147 557,423 537,039 550,002 Restricted stock units — — — — Total excluded shares 1,513,693 1,462,129 1,516,814 1,424,365 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Accounts Receivable and Concentration of Credit Risk (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||||
Allowance for doubtful accounts receivable | $ 220,000 | $ 237,000 | ||
Bad debt expense percentage of revenues (percentage) | 1.00% | |||
Sales Revenue, Product Line [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, customer | 1 | 0 | 1 | |
Concentration risk, benchmark description | more than 10% | |||
Revenue, major customer (percentage) | 11.00% | |||
Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, customer | 1 | |||
Concentration risk, benchmark description | 0.14 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 763,632 | $ 763,632 | $ 616,056 | ||
Computer Equipment [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 3 years | ||||
Software Costs [Member] | Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 3 years | ||||
Software Costs [Member] | Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 5 years | ||||
Office Equipment [Member] | Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 3 years | ||||
Office Equipment [Member] | Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 10 years | ||||
Furniture and Fixtures [Member] | Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 5 years | ||||
Furniture and Fixtures [Member] | Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life (in years) | 10 years | ||||
General and Administrative Expense [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Depreciation | $ 50,168 | $ 65,106 | $ 163,597 | $ 190,338 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Other Asset Impairment Charges | $ 0 | $ 0 | $ 0 | $ 0 |
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life (in years) | 12 months | |||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life (in years) | 60 months |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Software Development Costs (Details Textual) | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies [Line Items] | |
Amortization period of software development costs (in years) | 5 years |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Revenue Recognition (Details Textual) | 9 Months Ended |
Sep. 30, 2017 | |
Minimum [Member] | |
Significant Accounting Policies [Line Items] | |
Revenue recognition requisite period (in days) | 3 days |
Maximum [Member] | |
Significant Accounting Policies [Line Items] | |
Revenue recognition requisite period (in days) | 30 days |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Advertising Costs (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Selling and Marketing Expense [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Advertising costs | $ 79,000 | $ 74,000 | $ 248,000 | $ 291,000 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Derivative Financial Instruments (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | ||||
Derivative liability | $ 0 | $ 0 | ||
Warrant [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Derivative, gain on derivative | $ 1,231 | $ 4,960 | ||
Liability [Member] | September 2012 Public Offering [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Warrant shares issued | 5,502 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Significant Accounting Policies [Line Items] | ||||
Current average expected forfeiture rate (percentage) | 6.79% | 7.87% | 9.01% | 10.74% |
Equity Incentive 2011 Plan [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Expected term (in years) | 6 years | 6 years | 6 years | 6 years |
Weighted average volatility (percentage) | 43.08% | 45.02% | 43.49% | 50.01% |
Weighted average risk free interest rate (percentage) | 1.91% | 1.23% | 1.98% | 1.42% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Business Acquisitions (Details
Business Acquisitions (Details Textual) - USD ($) | Jan. 30, 2017 | Jan. 30, 2016 | Jul. 31, 2015 | Jan. 30, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Business Acquisition [Line Items] | |||||||||||||||
Gain on settlement of acquisitions payable | $ 10,491 | $ 0 | |||||||||||||
Common Stock [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Stock issued for payment of acquisition liability (shares) | 200,542 | ||||||||||||||
Ebyline, Inc. [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangements, description | The Ebyline Stock Purchase Agreement was made up of a combination of guaranteed payments and contingent performance payments to be paid if Ebyline met certain revenue targets in the three years following the closing. None of these targets were met in the first two years following the closing and it is not expected that they will be met in the third year. | ||||||||||||||
Cash paid at closing | $ 1,200,000 | $ 3,327,064 | |||||||||||||
Business combination, contingent consideration arrangements, change in range of outcomes, contingent consideration, liability, value, high | $ 1,900,000 | ||||||||||||||
Business combination, contingent consideration arrangements, basis for amount | subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000 | ||||||||||||||
Business acquisition, revenue reported by acquired entity for last annual period | $ 7,903,429 | ||||||||||||||
Business combination, consideration transferred, liabilities incurred | $ 1,877,064 | ||||||||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | $ 938,532 | $ 938,532 | |||||||||||||
Acquisition costs, interest rate terms | borrowing rate of prime plus 2% | ||||||||||||||
Interest expense, acquisition costs | $ 0 | $ 11,412 | $ 3,804 | $ 38,137 | |||||||||||
Stock issued for payment of acquisition liability (shares) | 200,542 | 114,398 | |||||||||||||
Gain on settlement of acquisitions payable | $ 10,491 | ||||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 27,000,000 | $ 17,000,000 | |||||||||||||
Number of simulation trials | 100,000 | ||||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 848,832 | $ 250,000 | |||||||||||||
Business combination, separately recognized transactions, additional disclosures, acquisition costs | $ 5,500,000 | ||||||||||||||
Fair value assumptions, risk adjusted discount | 8.50% | ||||||||||||||
Fair value assumption, simulation trials volatility rate | 35.00% | ||||||||||||||
Ebyline, Inc. [Member] | Maximum [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total estimated consideration | $ 8,850,000 | ||||||||||||||
Ebyline, Inc. [Member] | Subsequent Event [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 32,000,000 | ||||||||||||||
Ebyline, Inc. [Member] | Common Stock [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Stock issued for payment of acquisition liability (shares) | 31,821 | ||||||||||||||
Ebyline, Inc. [Member] | Achieves at least 90% of Content-Only Revenue [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangements, percentage of performance payment owed | 90.00% | ||||||||||||||
Ebyline, Inc. [Member] | Achieves less than 90% of Content-Only Revenue [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 17.00% | ||||||||||||||
Ebyline, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total estimated consideration | $ 5,537,064 | ||||||||||||||
Cash paid at closing | [1] | 1,200,000 | |||||||||||||
Contingent performance payments | [2] | 2,210,000 | $ 1,834,300 | ||||||||||||
Fair value of contingent performance payment, value, reduction related to continued employment of key employees | [2] | $ 357,700 | |||||||||||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total estimated consideration | 0 | 934,728 | |||||||||||||
Cash paid at closing | [1] | 0 | 0 | ||||||||||||
Acquisition costs payable by Ebyline shareholders | $ 89,700 | 0 | [3] | 0 | [3] | ||||||||||
Contingent performance payments | [2] | $ 0 | $ 0 | ||||||||||||
[1] | The Ebyline Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 (subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000). Ebyline's final gross revenue for 2014 was $7,903,429. As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2%. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $0 and $11,412 for the three months ended September 30, 2017 and 2016, respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $3,804 and $38,137 for the nine months ended September 30, 2017 and 2016, respectively. Per the Ebyline Stock Purchase Agreement, the Company issued 31,821 shares of its common stock to satisfy the $250,000 guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses (see item (c) below). On January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532. The Company recorded a $10,491 gain on the settlement of the acquisition costs payable in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30-day average price of the stock required by the Ebyline Stock Purchase Agreement. | ||||||||||||||
[2] | Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The initial fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over three years. Since the contingent consideration has an option like structure, a risk-neutral framework was considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in an initial calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for and projections for Content Revenue for 2015-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015, as no further payments are expected to be owed. | ||||||||||||||
[3] | According to the Ebyline Stock Purchase Agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. |
Business Acquisitions (Detail31
Business Acquisitions (Details 1) - USD ($) | Jan. 30, 2016 | Jan. 30, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | |||
Business Acquisition [Line Items] | |||||||
Current portion of acquisition costs payable | $ 619,834 | $ 1,252,885 | |||||
Acquisition costs payable, less current portion | 477,718 | 688,191 | |||||
Ebyline, Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid at closing | $ 1,200,000 | 3,327,064 | |||||
Current portion of acquisition costs payable | 0 | 934,728 | |||||
Acquisition costs payable, less current portion | 0 | 0 | |||||
Total acquisition costs payable | 0 | 934,728 | |||||
Ebyline, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid at closing | [1] | 1,200,000 | |||||
Guaranteed purchase price | [1] | 2,127,064 | |||||
Contingent performance payments | [2] | 2,210,000 | 1,834,300 | ||||
Total estimated consideration | 5,537,064 | ||||||
Ebyline, Inc. [Member] | Initial Present Value [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid at closing | [1] | 1,200,000 | |||||
Guaranteed purchase price | [1] | 1,982,639 | |||||
Contingent performance payments | [2] | 1,834,300 | |||||
Acquisition costs payable by Ebyline shareholders | [3] | 0 | |||||
Total estimated consideration | $ 5,016,939 | ||||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid at closing | [1] | 0 | 0 | ||||
Guaranteed purchase price | [1] | 0 | 934,728 | ||||
Contingent performance payments | [2] | 0 | 0 | ||||
Acquisition costs payable by Ebyline shareholders | $ (89,700) | 0 | [3] | 0 | [3] | ||
Total estimated consideration | $ 0 | $ 934,728 | |||||
[1] | The Ebyline Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 (subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000). Ebyline's final gross revenue for 2014 was $7,903,429. As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2%. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $0 and $11,412 for the three months ended September 30, 2017 and 2016, respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $3,804 and $38,137 for the nine months ended September 30, 2017 and 2016, respectively. Per the Ebyline Stock Purchase Agreement, the Company issued 31,821 shares of its common stock to satisfy the $250,000 guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses (see item (c) below). On January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532. The Company recorded a $10,491 gain on the settlement of the acquisition costs payable in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30-day average price of the stock required by the Ebyline Stock Purchase Agreement. | ||||||
[2] | Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The initial fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over three years. Since the contingent consideration has an option like structure, a risk-neutral framework was considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in an initial calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for and projections for Content Revenue for 2015-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015, as no further payments are expected to be owed. | ||||||
[3] | According to the Ebyline Stock Purchase Agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. |
Business Acquisitions (Detail32
Business Acquisitions (Details Textual 2) - ZenContent [Member] - USD ($) | Jul. 31, 2016 | Jul. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Dec. 31, 2016 | ||
Business Acquisition [Line Items] | |||||||||||||
Business combination, consideration transferred, payment period (years) | 3 years | ||||||||||||
Business combination, consideration transferred | $ 1,796,547 | ||||||||||||
Business combination, contingent consideration arrangements, description | three equal annual installment payments totaling $1,000,000 | ||||||||||||
Business combination guarantee fee reduction amount | $ 300,000 | ||||||||||||
Compensation expense, acquisition guaranteed payments | $ 28,125 | $ 40,972 | 151,042 | $ 40,972 | |||||||||
Guarantee purchase price basis spread on variable rate | 2.00% | ||||||||||||
Interest expense, acquisition costs | 6,572 | $ 5,348 | $ 22,616 | $ 5,348 | |||||||||
Volatility range of inputs (percentage) | 45.00% | ||||||||||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 30.00% | ||||||||||||
Simulation interest rate | 6.00% | ||||||||||||
Fair value inputs, discount rate | 5.50% | ||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 2,500,000 | ||||||||||||
Business combination, contingent consideration, percentage paid in cash | 33.00% | 33.00% | |||||||||||
Fair value assumptions, risk adjusted discount | 17.00% | ||||||||||||
Number of simulation trials | 250,000 | ||||||||||||
Compensation expense, acquisition contingent payments | 47,583 | $ 122,444 | |||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | 118,000 | 62,000 | |||||||||||
General and Administrative Expense [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | $ 165,583 | 184,444 | |||||||||||
Maximum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, consideration transferred | $ 4,500,000 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 4,500,000 | $ 3,500,000 | |||||||||||
Working Capital Adjustment [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | 66,435 | ||||||||||||
Estimated Gross Purchase Consideration [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, consideration transferred | 4,433,565 | ||||||||||||
Payments to acquire businesses, gross | [1] | $ 400,000 | |||||||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | ||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | $ 600,000 | |||||||||||
Contingent performance payments | [2] | 2,500,000 | |||||||||||
Initial Present Value [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, consideration transferred | 1,796,547 | ||||||||||||
Payments to acquire businesses, gross | [1] | 400,000 | |||||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | |||||||||||
Contingent performance payments | [2] | $ 230,000 | |||||||||||
Remaining Present and Fair Value [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, consideration transferred | 1,097,552 | $ 1,006,348 | |||||||||||
Payments to acquire businesses, gross | 0 | 0 | [1] | ||||||||||
Business combination, consideration transferred, equity interests issued and issuable | 0 | 0 | [1] | ||||||||||
Contingent performance payments | [2] | $ 342,861 | $ 508,444 | $ 324,000 | |||||||||
[1] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. | ||||||||||||
[2] | The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. We initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 17%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% (6.25%). The Company revalued its estimate of the contingent performance payment as of September 30, 2017 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $508,444 compared to $324,000 as of December 31, 2016. The change in the estimated fair value of contingent performance payable resulted in a $184,444 increase to general and administrative expense in the Company's consolidated statement of operations during the nine months ended September 30, 2017. Of this amount, $122,444 was allocated to compensation expense and a gain of $62,000 was allocated as a change in the fair value of the contingent performance payments. The change the estimated fair value of contingent performance payable from $342,861 as of June 30, 2017 to $508,444 as of September 30, 2017 resulted in a $165,583 decrease to general and administrative expense in the Company's consolidated statement of operations during the three months ended September 30, 2017. Of this amount, a gain of $47,583 was allocated as a decrease in compensation expense and a gain of $118,000 was allocated as a change in the fair value of the contingent performance payments. |
Business Acquisitions (Detail33
Business Acquisitions (Details 2) - USD ($) | Jul. 31, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | ||
Business Acquisition [Line Items] | ||||||
Current portion of acquisition costs payable | $ 619,834 | $ 1,252,885 | ||||
Acquisition costs payable, less current portion | 477,718 | 688,191 | ||||
ZenContent [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Total estimated consideration | $ 1,796,547 | |||||
Current portion of acquisition costs payable | 619,833 | 318,157 | ||||
Acquisition costs payable, less current portion | 477,719 | 688,191 | ||||
Total acquisition costs payable | 1,097,552 | 1,006,348 | ||||
Estimated Gross Purchase Consideration [Member] | ZenContent [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | [1] | 400,000 | ||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||||
Guaranteed purchase price | [2] | 933,565 | ||||
Contingent performance payments | [3] | 2,500,000 | ||||
Total estimated consideration | 4,433,565 | |||||
Initial Present Value [Member] | ZenContent [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | [1] | 400,000 | ||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||||
Guaranteed purchase price | [2] | 566,547 | ||||
Contingent performance payments | [3] | 230,000 | ||||
Total estimated consideration | $ 1,796,547 | |||||
Remaining Present and Fair Value [Member] | ZenContent [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | 0 | 0 | [1] | |||
Business combination, consideration transferred, equity interests issued and issuable | 0 | 0 | [1] | |||
Guaranteed purchase price | [2] | 589,108 | 682,348 | |||
Contingent performance payments | [3] | $ 342,861 | 508,444 | 324,000 | ||
Total estimated consideration | $ 1,097,552 | $ 1,006,348 | ||||
[1] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. | |||||
[2] | Aggregate future consideration consists of (i) three equal annual installment payments totaling $1,000,000, commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment ("guaranteed purchase price"), and (ii) contingent performance payments up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $28,125 and $151,042 for the three and nine months ended September 30, 2017, respectively. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $40,972 for the three and nine months ended September 30, 2016. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% (5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $6,572 and $22,616 for the three and nine months ended September 30, 2017. Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,348 for the three and nine months ended September 30, 2016. | |||||
[3] | The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. We initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 17%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% (6.25%). The Company revalued its estimate of the contingent performance payment as of September 30, 2017 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $508,444 compared to $324,000 as of December 31, 2016. The change in the estimated fair value of contingent performance payable resulted in a $184,444 increase to general and administrative expense in the Company's consolidated statement of operations during the nine months ended September 30, 2017. Of this amount, $122,444 was allocated to compensation expense and a gain of $62,000 was allocated as a change in the fair value of the contingent performance payments. The change the estimated fair value of contingent performance payable from $342,861 as of June 30, 2017 to $508,444 as of September 30, 2017 resulted in a $165,583 decrease to general and administrative expense in the Company's consolidated statement of operations during the three months ended September 30, 2017. Of this amount, a gain of $47,583 was allocated as a decrease in compensation expense and a gain of $118,000 was allocated as a change in the fair value of the contingent performance payments. |
Business Acquisitions (Detail34
Business Acquisitions (Details Textual 3) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Gross Profit | $ 4,396,053 | $ 3,569,693 | $ 10,941,073 | $ 9,429,576 |
ZenContent [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | 1,332,877 | 465,574 | 3,070,697 | 465,574 |
Gross Profit | $ 840,891 | 219,313 | $ 1,930,281 | 219,313 |
ZenContent [Member] | General and Administrative Expense [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Acquisition Related Costs | $ 29,621 | $ 40,918 |
Business Acquisitions (Detail35
Business Acquisitions (Details 3) - ZenContent [Member] | Jul. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | $ 1,796,547 |
Current Assets [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 415,798 |
Property, Plant and Equipment [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 4,551 |
Identifiable intangible assets [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 722,000 |
Goodwill [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 1,136,431 |
Current Liabilities [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred, liabilities incurred | $ (482,233) |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 3,258,469 | $ 3,258,469 |
Finite-Lived Intangible Assets, Accumulated Amortization | 2,343,653 | 1,595,933 |
Content Provider Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 160,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 105,833 | 57,083 |
Useful life (in years) | 1 year | |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 52,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 52,000 | 45,000 |
Useful life (in years) | 1 year | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 530,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 213,667 | 134,167 |
Useful life (in years) | 3 years | |
Self-service Content Customers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 210,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 186,667 | 134,167 |
Useful life (in years) | 5 years | |
Managed content customers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 2,140,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 1,727,222 | 1,192,222 |
Useful life (in years) | 3 years | |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 166,469 | 166,469 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 58,264 | $ 33,294 |
Useful life (in years) | 5 years |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 3,258,469 | $ 3,258,469 |
Accumulated amortization | (2,343,653) | (1,595,933) |
Intangible assets, net | 914,816 | 1,662,536 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 166,469 | 166,469 |
Accumulated amortization | (58,264) | (33,294) |
Ebyline, Inc. [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 2,370,000 | 2,370,000 |
ZenContent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 722,000 | $ 722,000 |
Intangible Assets (Details 3)
Intangible Assets (Details 3) | Sep. 30, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, 2017 (three months remaining) | $ 246,908 |
Finite-Lived Intangible Assets, 2018 | 349,432 |
Finite-Lived Intangible Assets, 2019 | 207,349 |
Finite-Lived Intangible Assets, 2020 | 84,293 |
Finite-Lived Intangible Assets, 2021 | 26,834 |
Finite-Lived Intangible Assets, Net | $ 914,816 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired finite-lived intangible assets, weighted average useful life (years) | 3 years | |||
Amortization of intangible assets | $ 932,234 | $ 744,725 | ||
Ebyline and ZenContent related identifiable intangible assets[Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 247,907 | $ 229,934 | $ 747,720 | |
Ebyline related identifiable intangible assets [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 615,748 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Research and Development [Abstract] | ||
Software development costs | $ 1,578,125 | $ 1,492,665 |
Less accumulated depreciation and amortization | (573,220) | (388,706) |
Software development costs, net | $ 1,004,905 | $ 1,103,959 |
Software Development Costs (D41
Software Development Costs (Details 1) | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Software Amortization Expense, 2018 | $ 349,432 |
Software Amortization Expense, 2019 | 207,349 |
Software Amortization Expense, 2020 | 84,293 |
Software Amortization Expense, 2021 | 26,834 |
Software Amortization Expense, Net | 914,816 |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Software Amortization Expense, Remainder of Fiscal Year | 98,259 |
Software Amortization Expense, 2018 | 304,241 |
Software Amortization Expense, 2019 | 218,910 |
Software Amortization Expense, 2020 | 183,956 |
Software Amortization Expense, 2021 | 134,432 |
Software Amortization Expense, 2022 | 65,107 |
Software Amortization Expense, Net | $ 1,004,905 |
Software Development Costs (D42
Software Development Costs (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Capitalized computer software, gross | $ 1,578,125 | $ 1,578,125 | $ 1,492,665 | ||
Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life (in years) | 60 months | ||||
Software Development [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life (in years) | 5 years | ||||
General and Administrative Expense [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Capitalized computer software, amortization | $ 76,890 | $ 44,549 | $ 184,514 | $ 128,977 |
Commitments and Contingencies43
Commitments and Contingencies (Details Textual) - USD ($) | Apr. 13, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Other Commitments [Line Items] | ||||||
Line of credit | $ 810,376 | $ 810,376 | $ 0 | |||
Accounts receivable, net | 5,253,423 | 5,253,423 | 3,745,695 | |||
Secured Line of Credit Facility [Member] | Credit Agreement [Member] | ||||||
Other Commitments [Line Items] | ||||||
Eligible Securitization Percentage of Accounts Receivable | 80.00% | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||||
Debt instrument, annual facility fee | $ 20,000 | |||||
Line of Credit Facility, Commitment Fee Percentage | 0.40% | |||||
Line of Credit Facility, Annual Due Dilligence Fee | $ 1,000 | |||||
Debt Instrument, Description of Variable Rate Basis | prime plus 2% per annum | |||||
Debt instrument, description of default rate of interest | prime plus 7% | |||||
Line of credit | 810,376 | 810,376 | ||||
Line of Credit Facility, Average Outstanding Amount | $ 0 | |||||
Accounts receivable, net | 5,253,423 | 5,253,423 | ||||
Line of Credit Facility, Current Borrowing Capacity | 3,392,362 | $ 3,392,362 | ||||
Debt Issuance Cost Amortization Period | 1 year | |||||
Amortization of Debt Issuance Costs | 5,250 | $ 8,750 | $ 15,750 | $ 14,546 | ||
Debt Issuance Costs, Net | $ 12,250 | $ 12,250 | ||||
Capitalized loan costs amortization period | 7 months |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Shares (Details Textual) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Series A Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Series A Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Stockholders' Equity - Reverse
Stockholders' Equity - Reverse Stock Split (Details Textual) | Jan. 06, 2016 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity, Reverse Stock Split | ratio of one share for every 20 shares outstanding prior to the effective date of the reverse stock split. All current and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock. |
Stockholders' Equity - Stock Is
Stockholders' Equity - Stock Issued for Purchases (Details) - USD ($) | Jan. 30, 2017 | Jul. 31, 2016 | Jan. 30, 2016 | Jul. 31, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | |||
Ebyline, Inc. [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued for payment of acquisition liability (shares) | 200,542 | 114,398 | |||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 848,832 | $ 250,000 | |||||||
Business combination, consideration transferred, liabilities incurred, installment payments | $ 938,532 | 938,532 | |||||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Acquisition costs payable by Ebyline shareholders | $ 89,700 | $ 0 | [1] | $ 0 | [1] | ||||
ZenContent [Member] | Remaining Present and Fair Value [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 0 | $ 0 | [2] | ||||||
ZenContent [Member] | Estimated Gross Purchase Consideration [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | ||||||||
Business combination, consideration transferred, equity interests issued and issuable | [2] | $ 600,000 | |||||||
Common Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued for payment of acquisition liability (shares) | 200,542 | ||||||||
Common Stock [Member] | Ebyline, Inc. [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued for payment of acquisition liability (shares) | 31,821 | ||||||||
[1] | According to the Ebyline Stock Purchase Agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. | ||||||||
[2] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. |
Stockholders' Equity - Stock 47
Stockholders' Equity - Stock issued for Services (Details) | Aug. 14, 2017USD ($)shares | Feb. 12, 2017USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of independent directors | 5 | |||||
Stock issued for payment of services | $ 130,524 | |||||
Derivative, loss on derivative | $ 45,160 | $ 36,122 | ||||
Amount shares remaining to vest | shares | 3,255 | |||||
Fair value of common stock issued for future services | $ 23,110 | $ 31,962 | ||||
Restricted Stock [Member] | General and Administrative Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 60,074 | $ 34,969 | $ 143,536 | $ 107,439 | ||
Contractor [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | shares | 7,109 | |||||
Stock issued for payment of services | $ 30,000 | |||||
Five Directors [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | shares | 32,385 | |||||
Stock issued for payment of services | $ 93,750 | |||||
Chief Executive Officer [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | shares | 2,812 | |||||
Stock issued for payment of services | $ 5,483 | |||||
Stock issued during period, vesting period | 48 months | |||||
Chief Operating Officer [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | shares | 662 | |||||
Stock issued for payment of services | $ 1,291 | |||||
Stock issued during period, vesting period | 48 months |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Non-Vested Restricted Stock (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 42,968 |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period | shares | (39,713) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 3,255 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 3.04 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | 3.61 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares | $ 7.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 3 years 10 months |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details Textual) - USD ($) | Aug. 22, 2011 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 21, 2017 | Dec. 31, 2016 | Apr. 16, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of individual ownership of common stock (percentage) | 10.00% | |||||
Weighted average exercise price, exercisable | $ 7.10 | |||||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 1,354,688 | |||||
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 815,179 | |||||
Equity Incentive 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 438,636 | 500,000 | ||||
Weighted average exercise price, exercisable | $ 6.24 | |||||
Equity Incentive B 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 4,375 | 1,875 | ||||
May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value of incentive stock options (percentage) | 100.00% | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 509,642 | $ 576,144 | ||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 753,299 | |||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition (in years) | 2 years 6 months | |||||
Investor Relations Services [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 1,500,000 | |||||
Individual Stock Ownership in Excess of 10 Percent [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value of incentive stock options (percentage) | 110.00% | |||||
Twelve Months After Grant Date [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, equity instruments options, percentage vested (pecentage) | 25.00% | |||||
Monthly in equal installments [Member] | Employee Stock Option [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period (in years) | 3 years | |||||
Selling and Marketing Expense [Member] | Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 45,331 | 67,586 | ||||
General and Administrative Expense [Member] | Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 464,311 | $ 508,558 |
Stockholders' Equity - Schedu50
Stockholders' Equity - Schedule of Options Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price, exercisable | $ 7.10 | |||
Equity Incentive 2011 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Common shares, outstanding beginning of period | 959,864 | 830,599 | ||
Common shares, granted | 94,246 | 179,998 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||
Common shares, forfeited | (42,535) | (50,733) | ||
Common shares, outstanding end of period | 1,011,575 | 959,864 | 830,599 | |
Share-based compensation arrangement by share-based payment award, options, exercisable, number | 683,642 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price, beginning of period | $ 8.11 | $ 8.65 | ||
Weighted average exercise price, granted | 3.64 | 6.16 | ||
Weighted average exercise price, exercised | 0 | 0 | ||
Weighted average exercise price, forfeited | 50.15 | 10.15 | ||
Weighted average exercise price, end of period | $ 8.11 | $ 8.65 | $ 8.65 | $ 6.05 |
Weighted average exercise price, exercisable | $ 6.24 | |||
Weighted average remaining life (years), outstanding | 6 years 1 month | 6 years 5 months | 6 years 6 months | |
Weighted average remaining life (years), exercisable | 5 years 1 month |
Stockholders' Equity - Schedu51
Stockholders' Equity - Schedule of Nonvested Stock Option (Details) - Equity Incentive 2011 Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |||
Common shares, nonvested beginning of period | 414,306 | 461,926 | |
Common shares, granted | 94,246 | 179,998 | |
Common shares, vested | (161,321) | (187,181) | |
Common shares, forfeited | (19,298) | (40,437) | |
Common shares, nonvested end of period | 327,933 | 414,306 | 461,926 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Weighted average grant date fair value, nonvested beginning of period | $ 3.60 | $ 3.84 | |
Weighted average grant date fair value, granted | 1.28 | 2.88 | |
Weighted average grant date fair value, vested | 3.52 | 4 | |
Weighted average grant date fair value, forfeited | 3.12 | 3.76 | |
Weighted average grant date fair value, nonvested end of period | $ 2.72 | $ 3.60 | $ 3.84 |
Weighted average remaining years to vest | 2 years 7 months | 2 years 7 months | 2 years 9 months |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details Textual) - 2014 Employee Stock Purchase Plan [Member] | Apr. 16, 2014USD ($)shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, capital shares reserved for future issuance (shares) | 75,000 | 39,764 | |
Share-based compensation arrangement by share-based payment award, award vesting period (in years) | 90 days | ||
Minimum hour requirement for employees participation in the ESSP (hours) | 20 | ||
Annual compensation limit percentage, employee stock purchase plan (percentage) | 10.00% | ||
Annual compensation limit, employee stock purchase plan (dollars) | $ | $ 21,250 | ||
Shares issuance limit per offering period, employee stock purchase plan | 1,000 | ||
Fair market value of shares available for issuance (percentage) | 85.00% | ||
Stock issued during period, value, employee stock ownership plan | $ | $ 16,232 | $ 34,587 | |
Stock issued during period, shares, employee stock ownership plan | 9,998 | 5,340 |
Earnings (Loss) Per Common Sh53
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (558,805) | $ (1,511,603) | $ (4,724,623) | $ (5,730,568) |
Weighted average common shares outstanding – basic and diluted | 5,702,297 | 5,420,020 | 5,659,423 | 5,357,119 |
Basic and diluted loss per common share | $ (0.10) | $ (0.28) | $ (0.83) | $ (1.07) |
Earnings (Loss) Per Common Sh54
Earnings (Loss) Per Common Share (Details 1) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1,513,693 | 1,462,129 | 1,516,814 | 1,424,365 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 993,546 | 904,706 | 979,775 | 874,363 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 520,147 | 557,423 | 537,039 | 550,002 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 | 0 | 0 |