Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 18, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'LIFEAPPS DIGITAL MEDIA INC. | ' |
Entity Central Index Key | '0001510247 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 76,000,000 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $18,612 | $36,876 |
Accounts receivable | 26,792 | 3,253 |
Inventory | 105,770 | 138,952 |
Other current assets | 1,937 | 3,472 |
Total current assets | 153,111 | 182,553 |
Fixed assets, net of depreciation | 4,484 | 5,763 |
Intangible asset, net of amortization | 64,124 | 82,179 |
Total Assets | 221,719 | 270,495 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 48,607 | 78,283 |
Amount due to related party | 25,864 | 6,487 |
Total current liabilities | 74,471 | 84,770 |
Notes payable, net of debt discount | 76,757 | ' |
Total liabilities | 151,228 | 84,770 |
Stockholders' Equity | ' | ' |
Preferred stock, $.001 par value, none issued or outstanding | ' | ' |
Common stock, $0.001 par value, 300,000,000 shares authorized, 76,000,000 shares issued and outstanding, as of June 30, 2014 and 2013 | 76,000 | 76,000 |
Additional paid in capital | 1,363,494 | 1,348,618 |
Accumulated (deficit) | -1,369,003 | -1,238,893 |
Total stockholders' equity | 70,491 | 185,725 |
Total Liabilities and Stockholders' Equity | $221,719 | $270,495 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Stockholders' Equity | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 76,000,000 | 76,000,000 |
Common stock, outstanding | 76,000,000 | 76,000,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Condensed Consolidated Statements Of Operations | ' | ' | ' | ' |
Revenue | $83,589 | $93,338 | $204,882 | $93,678 |
Cost of revenue | 54,845 | 65,362 | 163,625 | 65,362 |
Gross profit | 28,744 | 27,976 | 41,257 | 28,316 |
Operating expenses: | ' | ' | ' | ' |
General and administrative | 73,512 | 233,962 | 147,397 | 433,753 |
Depreciation and amortization | 9,666 | 8,544 | 19,333 | 9,939 |
Total operating expenses | 83,178 | 242,506 | 166,730 | 443,692 |
Operating loss | -54,434 | -214,530 | -125,473 | -415,376 |
Interest (income) expense | 4,010 | -10 | 4,637 | -25 |
Net (loss) | ($58,444) | ($214,520) | ($130,110) | ($415,351) |
Per share information - basic and fully diluted | ' | ' | ' | ' |
Weighted average shares outstanding | 76,000,000 | 76,000,000 | 76,000,000 | 76,000,000 |
Net (loss) per share | $0 | $0 | $0 | ($0.01) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Condensed Consolidated Statements Of Cash Flows | ' | ' |
Net cash used in operations | ($112,641) | ($426,436) |
Cash flow from investing activities: | ' | ' |
Assets purchased in business combination | ' | -99,500 |
Investment in intangible assets | ' | -12,608 |
Investment in fixed assets | ' | -2,670 |
Net Cash used in investing activities | ' | -114,778 |
Cash flow from financing activities: | ' | ' |
Issuance of convertible notes for cash | 75,000 | ' |
Advances from related party | 31,377 | ' |
Repayments of advances from related party | -12,000 | -347 |
Net cash provided by (used) in financing activities | 94,377 | -347 |
Net (decrease) in cash | -18,264 | -541,561 |
Cash at beginning of period | 36,876 | 791,065 |
Cash at end of period | $18,612 | $249,504 |
Nature_of_Business
Nature of Business | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 1. Nature of Business | ' |
Throughout this report, the terms “our,” “we,” “us,” and the “Company” refer to LifeApps Digital Media Inc., including its subsidiaries. The accompanying unaudited condensed consolidated financial statements of LifeApps Digital Media Inc. at June 30, 2014 and 2013 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2013. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended June 30, 2014 and 2013 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2013 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2013. | |
We are building health, fitness and sports communities across multiple digital platforms including mobile apps, digital sports and fitness publications, sports and fitness products, sporting events, gateway platforms, online websites and social media. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 2. Summary of Significant Accounting Policies | ' |
The accompanying financial statements have been prepared in conformity with GAAP, which contemplates our continuation as a going concern. We have incurred losses to date of $1,369,003. To date we have funded our operations through advances from a related party, issuance of convertible debt, and the sale of our common stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. | |
Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. | |
Accounts Receivable | |
A significant majority of our sales are through credit cards and other electronic payment methods. When we do grant credit to our customers it is generally in the form of short term accounts receivables, normally due in 30 days. The credit worthiness of the customer is evaluated prior to the sale. Currently there is no allowance for doubtful accounts as all of accounts are deemed collectable. | |
Inventory | |
Inventory consists of finished goods, sports and fitness products, and is stated at the lower of cost or net realizable value, with cost being determined on a first-in first-out basis. | |
Intangibles | |
Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 350 Intangibles – Goodwill and Other (“ASC 350”), the costs to obtain and register internet domain names were capitalized. | |
Fixed Assets | |
Fixed assets are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes are: | |
Furniture and equipment: 3 years | |
Revenue Recognition | |
Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. | |
We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. | |
We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. | |
Cost of Revenue | |
Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. | |
Research and development, Website Development Costs, and Software Development Costs | |
All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost, and ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed, were not material to our financial statements for the three and six months ended June, 2014 and 2013. Research and development expenses amounted to $2,561 and $26,732 for six months ended June 30, 2014 and 2013, respectively and $1,026 and $10,041 for the three months ended June 30, 2014 and 2013, respectively. Research and development expenses were included in general and administrative expenses. | |
Advertising Costs | |
We recognize advertising expense when incurred. Advertising expense was $9,278 and $43,040 for the six months ended June 30, 2014 and 2013, respectively, and $4,607 and $8,283 for the three months ended June 30, 2014 and 2013, respectively. | |
Rent Expense | |
We recognizes rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases (“ASC 840”). Our lease is short term and will be renewed on a month to month basis. Rent expense was $1,935 and $5,619 for the three months ended June 30, 2014 and 2013, respectively, and $2,896 and $9,339 for six months ended June 30, 2014 and 2013, respectively. | |
Equity-Based Compensation | |
Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. | |
Income Taxes | |
The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. | |
For the six months ended June 30, 2014 and 2013 we did not have any interest and penalties or any significant unrecognized uncertain tax positions. | |
There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2010 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statement of operations. There have been no income tax related interest or penalties assessed or recorded. | |
Recent Pronouncements | |
From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. FASB Accounting Standards Update ("ASU") 2014-09 Revenue From Contracts With Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers with an effective date after December 15, 2016 will be evaluated as to impact and implemented accordingly. |
Intangible_Assets
Intangible Assets | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 3. Intangible Assets | ' | ||||||||
At June 30, 2014 and December 31, 2013, intangible assets consist of the following: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Internet domain names | $ | 58,641 | $ | 58,641 | |||||
Less accumulated amortization | (30,589 | ) | (22,325 | ) | |||||
$ | 28,052 | $ | 36,316 | ||||||
Website and data bases | $ | 56,050 | $ | 56,050 | |||||
Less accumulated amortization | (23,353 | ) | (14,012 | ) | |||||
$ | 32,697 | $ | 42,038 | ||||||
Customer and supplier lists | $ | 4,500 | $ | 4,500 | |||||
Less accumulated amortization | (1,125 | ) | (675 | ) | |||||
$ | 3,375 | $ | 3,825 | ||||||
Total intangibles | $ | 119,191 | $ | 119,191 | |||||
(55,067 | ) | (37,012 | ) | ||||||
$ | 64,124 | $ | 82,179 | ||||||
The amount charged to amortization expense for all intangibles was $9,027 and $7,914 for the three months ended June 30, 2014 and 2013, respectively, and $18,055 and $9,278 for the six months ended June 30, 2014 and 2013, respectively. | |||||||||
Estimated future amortization expense related to the intangibles as of June 30, 2014 is as follows: | |||||||||
Year Ended December 31, | |||||||||
2014 (six months remaining) | $ | 18,056 | |||||||
2015 | 35,794 | ||||||||
2016 | 9,149 | ||||||||
2017 | 900 | ||||||||
2018 | 225 | ||||||||
$ | 64,124 |
Amount_Due_Shareholder
Amount Due Shareholder | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 4. Amount Due Shareholder | ' |
Parties, which can be a corporation or an individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. | |
Amount due related party represents amounts paid on our behalf by an officer and shareholder of the Company. These advances are non-interest bearing, short term in nature and due on demand. The balance at June 30, 2014 and December 31, 2013 was $25,864 and $6,487, respectively. |
Notes_Payable
Notes Payable | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Note 5. Notes Payable | ' | ||||
In March 2014, we executed a Promissory Note (the “Note”) and received $75,000. The Note is due March 17, 2016 and provides for an original issue discount of $8,437, which will be amortized over 24 months, and face interest rate of 12% per annum. The Lender has the right, at any time at its election to convert all or part of the outstanding and unpaid principal and accrued interest. The conversion price is the lesser of $0.0485 or 60% of the lowest trading price in the 25 trading days prior the conversion. The Note provides for additional penalties if we cannot deliver the underlying common stock on a timely basis. The Note also provides that the principal amount may be increased, with the consent of the lender to $445,000. | |||||
In accordance with the guidance in ASC Topic 470-20 Debt with Conversion and Other Options (“ASC 470”), we have not recognized a beneficial conversion feature in connection with the note. Per the agreement the conversion price may change based on the Company’s stock price prior to the Lender’s decision to convert the outstanding principal or if more favorable terms are given in a future security offering. | |||||
The balance at June 30, 2014 was comprised of: | |||||
Convertible notes payable | $ | 83,437 | |||
Unamortized original issue discount | (6,680 | ) | |||
$ | 76,757 | ||||
Interest expense for the three months ended June 30, 2014 was $4,010 and includes $1,512 of amortization of original issue discount and $2,498 of accrued interest. Interest expense for the six months ended June30, 2014 was $4,637 and includes $1,757 of amortization of original issue discount and $2,882 of accrued interest. |
Stock_Based_Compensation
Stock Based Compensation | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 6. Stock Based Compensation | ' | ||||||||||||||||
In prior periods, our Board of Directors adopted the 2012 Equity Incentive Plan (“2012 Plan”), which was approved by our shareholders. The 2012 Plan provides for the issuance of up to 10,000,000 shares of our common stock. The plan provides for the award of options, stock appreciation rights, performance share awards, and restricted stock and stock units. The plan is administered by the Board of Directors. Pursuant to the 2012 Plan our Board of Directors granted options to purchase 6,275,000 shares of our common stock. Subsequent to the grant 300,000 options were cancelled. All options were granted prior to the six months ended June 30, 2014. The fair value of the options previously granted, $215,628, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: | |||||||||||||||||
Expected life (in years) | 3 | ||||||||||||||||
Volatility (based on a comparable company) | 117 | % | |||||||||||||||
Risk Free interest rate | 0.36 - 0.48 | % | |||||||||||||||
Dividend yield (on common stock) | - | ||||||||||||||||
Amounts charged to expense for the options granted to employees and non-employees for the three month periods ended June 30, 2014 and 2013 was $7,103 and $52,149, respectively, and the amounts charged to expense for the options granted to employees for the six month periods ended June 30, 2014 and 2013 was $14,876 and $68,871, respectively. | |||||||||||||||||
The following is a summary of stock option issued to employees and directors: | |||||||||||||||||
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding January 1, 2014 | 4,950,000 | $ | 0.047 | ||||||||||||||
Granted | - | $ | - | ||||||||||||||
Exercised | - | $ | - | ||||||||||||||
Cancelled | - | $ | - | ||||||||||||||
Outstanding June 30, 2014 | 4,950,000 | $ | 0.047 | 1.81 | $ | - | |||||||||||
Exercisable June 30, 2014 | 4,950,000 | $ | 0.047 | 1.81 | $ | - | |||||||||||
There will be no additional compensation expense recognized in future periods. | |||||||||||||||||
The following is a summary of stock options issued to non-employees, excluding Directors: | |||||||||||||||||
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value at date of grant | ||||||||||||||
Outstanding January 1, 2014 | 1,025,000 | $ | 0.058 | ||||||||||||||
Granted | - | $ | |||||||||||||||
Exercised | - | $ | |||||||||||||||
Cancelled | - | $ | |||||||||||||||
Outstanding June 30, 2014 | 1,025,000 | $ | 0.058 | 1.64 | $ | - | |||||||||||
Exercisable June 30, 2014 | 1,025,000 | $ | 0.058 | 1.64 | $ | - |
Outstanding_Warrants
Outstanding Warrants | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 7. Outstanding Warrants | ' | ||||||||||||||||
There were no warrants issued during the three and six months ended June 30, 2014 or 2013. The following is a summary of outstanding warrants as of June 30, 2014: | |||||||||||||||||
Number of | Exercise price per share | Average remaining | Aggregate intrinsic | ||||||||||||||
warrants | term in years | value at date of grant | |||||||||||||||
Warrants issued in connection with private placement of units in 2012 | 6,000,000 | $ | 1 | 3.48 | $ | - |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 8. Income Taxes | ' |
As previously stated, we account for income taxes in interim periods in accordance with ASC Topic 740, Income Taxes (“ASC 740”). We have determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during our fiscal year to our best current estimate. As of June 30, 2014 the estimated effective tax rate for the year will be zero. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 9. Earnings Per Share | ' |
We calculate earnings per share in accordance with ASC Topic 260 Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Diluted earnings per share represent basic earnings per share adjusted to include the potentially dilutive effect of outstanding stock options and warrants. The dilutive earnings per share were not calculated because we recorded net losses for the three and six months ended June 30, 2014 and 2013, and the outstanding stock options and warrants are anti-dilutive. |
Business_Segments
Business Segments | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 10. Business Segments | ' |
We currently have two business segments; (i) the sale of physical products (“Products”) and (ii) digital publishing (“Publishing”). The accounting policies of the segments are the same as those described in the summary of significant accounting policies. | |
The publishing segment does not meet the quantitative threshold for disclosure as outlined ASC Topic 280 Segment Reporting. | |
All of our revenue is generated in the United States and accordingly no geographic segment reporting is included. | |
No customers accounted for more than 10% of our revenues in the six months ended June 30, 2014 and 2013. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 11. Subsequent Events | ' |
Management has evaluated all activity and concluded that no subsequent events have occurred that would require recognition in these financial statements or disclosure in the notes to these financial statements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Summary Of Significant Accounting Policies Policies | ' |
Principles of Consolidation | ' |
The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. | |
Use of Estimates | ' |
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. | |
Accounts Receivable | ' |
A significant majority of our sales are through credit cards and other electronic payment methods. When we do grant credit to our customers it is generally in the form of short term accounts receivables, normally due in 30 days. The credit worthiness of the customer is evaluated prior to the sale. Currently there is no allowance for doubtful accounts as all of accounts are deemed collectable. | |
Inventory | ' |
Inventory consists of finished goods, sports and fitness products, and is stated at the lower of cost or net realizable value, with cost being determined on a first-in first-out basis. | |
Intangibles | ' |
Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 350 Intangibles – Goodwill and Other (“ASC 350”), the costs to obtain and register internet domain names were capitalized. | |
Fixed Assets | ' |
Fixed assets are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes are: | |
Furniture and equipment: 3 years | |
Revenue recognition | ' |
Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. | |
We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. | |
We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. | |
Cost of Revenue | ' |
Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. | |
Research and development, Website Development Costs, and Software Development Costs | ' |
All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost, and ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed, were not material to our financial statements for the three and six months ended June, 2014 and 2013. Research and development expenses amounted to $2,561 and $26,732 for six months ended June 30, 2014 and 2013, respectively and $1,026 and $10,041 for the three months ended June 30, 2014 and 2013, respectively. Research and development expenses were included in general and administrative expenses. | |
Advertising Costs | ' |
We recognize advertising expense when incurred. Advertising expense was $9,278 and $43,040 for the six months ended June 30, 2014 and 2013, respectively, and $4,607 and $8,283 for the three months ended June 30, 2014 and 2013, respectively. | |
Rent Expense | ' |
We recognizes rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases (“ASC 840”). Our lease is short term and will be renewed on a month to month basis. Rent expense was $1,935 and $5,619 for the three months ended June 30, 2014 and 2013, respectively, and $2,896 and $9,339 for six months ended June 30, 2014 and 2013, respectively. | |
Equity-Based Compensation | ' |
Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. | |
Income Taxes | ' |
The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. | |
For the six months ended June 30, 2014 and 2013 we did not have any interest and penalties or any significant unrecognized uncertain tax positions. | |
There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2010 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statement of operations. There have been no income tax related interest or penalties assessed or recorded. | |
Recent Pronouncements | ' |
From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. FASB Accounting Standards Update ("ASU") 2014-09 Revenue From Contracts With Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers with an effective date after December 15, 2016 will be evaluated as to impact and implemented accordingly. |
Intangible_Assets_Tables
Intangible Assets (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Intangible Assets Tables | ' | ||||||||
Intangible Assets | ' | ||||||||
At June 30, 2014 and December 31, 2013, intangible assets consist of the following: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Internet domain names | $ | 58,641 | $ | 58,641 | |||||
Less accumulated amortization | (30,589 | ) | (22,325 | ) | |||||
$ | 28,052 | $ | 36,316 | ||||||
Website and data bases | $ | 56,050 | $ | 56,050 | |||||
Less accumulated amortization | (23,353 | ) | (14,012 | ) | |||||
$ | 32,697 | $ | 42,038 | ||||||
Customer and supplier lists | $ | 4,500 | $ | 4,500 | |||||
Less accumulated amortization | (1,125 | ) | (675 | ) | |||||
$ | 3,375 | $ | 3,825 | ||||||
Total intangibles | $ | 119,191 | $ | 119,191 | |||||
(55,067 | ) | (37,012 | ) | ||||||
$ | 64,124 | $ | 82,179 | ||||||
Estimated future amortization expense related to the intangibles | ' | ||||||||
Estimated future amortization expense related to the intangibles as of June 30, 2014 is as follows: | |||||||||
Year Ended December 31, | |||||||||
2014 (six months remaining) | $ | 18,056 | |||||||
2015 | 35,794 | ||||||||
2016 | 9,149 | ||||||||
2017 | 900 | ||||||||
2018 | 225 | ||||||||
$ | 64,124 |
Notes_Payable_Tables
Notes Payable (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Notes Payable Tables | ' | ||||
Notes Payable | ' | ||||
The balance at June 30, 2014 was comprised of: | |||||
Convertible notes payable | $ | 83,437 | |||
Unamortized original issue discount | (6,680 | ) | |||
$ | 76,757 |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock Based Compensation Tables | ' | ||||||||||||||||
fair value of the options of grant using the Black-Scholes option pricing model | ' | ||||||||||||||||
The fair value of the options previously granted, $215,628, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: | |||||||||||||||||
Expected life (in years) | 3 | ||||||||||||||||
Volatility (based on a comparable company) | 117 | % | |||||||||||||||
Risk Free interest rate | 0.36 - 0.48 | % | |||||||||||||||
Dividend yield (on common stock) | - | ||||||||||||||||
Stock option issued employees and directors | ' | ||||||||||||||||
The following is a summary of stock option issued to employees and directors: | |||||||||||||||||
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding January 1, 2014 | 4,950,000 | $ | 0.047 | ||||||||||||||
Granted | - | $ | - | ||||||||||||||
Exercised | - | $ | - | ||||||||||||||
Cancelled | - | $ | - | ||||||||||||||
Outstanding June 30, 2014 | 4,950,000 | $ | 0.047 | 1.81 | $ | - | |||||||||||
Exercisable June 30, 2014 | 4,950,000 | $ | 0.047 | 1.81 | $ | - | |||||||||||
Stock option issued to non employees | ' | ||||||||||||||||
The following is a summary of stock options issued to non-employees, excluding Directors: | |||||||||||||||||
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value at date of grant | ||||||||||||||
Outstanding January 1, 2014 | 1,025,000 | $ | 0.058 | ||||||||||||||
Granted | - | $ | |||||||||||||||
Exercised | - | $ | |||||||||||||||
Cancelled | - | $ | |||||||||||||||
Outstanding June 30, 2014 | 1,025,000 | $ | 0.058 | 1.64 | $ | - | |||||||||||
Exercisable June 30, 2014 | 1,025,000 | $ | 0.058 | 1.64 | $ | - |
Outstanding_Warrants_Tables
Outstanding Warrants (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Outstanding Warrants Tables | ' | ||||||||||||||||
Summary of outstanding warrants | ' | ||||||||||||||||
There were no warrants issued during the three and six months ended June 30, 2014 or 2013. The following is a summary of outstanding warrants as of June 30, 2014: | |||||||||||||||||
Number of | Exercise price per share | Average remaining | Aggregate intrinsic | ||||||||||||||
warrants | term in years | value at date of grant | |||||||||||||||
Warrants issued in connection with private placement of units in 2012 | 6,000,000 | $ | 1 | 3.48 | $ | - |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' | ' | ' |
Incurred losses | ' | ' | $1,369,003 | ' |
Estimated useful lives | ' | ' | '3 years | ' |
Research and development expenses | 1,026 | 10,041 | 2,561 | 26,732 |
Advertising expense | 4,607 | 8,283 | 9,278 | 43,040 |
Rent expense | $2,896 | $9,339 | $1,935 | $5,619 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Intangible Assets Details | ' | ' |
Internet domain names | $58,641 | $58,641 |
Less accumulated amortization | -30,589 | -22,325 |
Total | 28,052 | 36,316 |
Website and data bases | 56,050 | 56,050 |
Less accumulated amortization | -23,353 | -14,012 |
Total | 32,697 | 42,038 |
Customer and supplier lists | 4,500 | 4,500 |
Less accumulated amortization | -1,125 | -675 |
Total | 3,375 | 3,825 |
Total intangibles | 119,191 | 119,191 |
Less accumulated amortization | -55,067 | -37,012 |
Intangible assets net | $64,124 | $82,179 |
Intangible_Assets_Details_1
Intangible Assets (Details 1) (USD $) | Jun. 30, 2014 |
Intangible Assets Details 1 | ' |
2014 (six months remaining) | $18,056 |
2015 | 35,794 |
2016 | 9,149 |
2017 | 900 |
2018 | 225 |
Estimated future amortization expense | $64,124 |
Intangible_Assets_Details_Narr
Intangible Assets (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Intangible Assets Details Narrative | ' | ' | ' | ' |
Expenses for Amortization | $9,027 | $7,914 | $18,055 | $9,278 |
Amount_Due_Shareholder_Details
Amount Due Shareholder (Details Narrative) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Amount Due Shareholder Details Narrative | ' | ' |
Balance of related party | $25,864 | $6,487 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Notes Payable Details | ' | ' |
Convertible notes payable | $83,437 | ' |
Unamortized original issue discount | -6,680 | ' |
Notes payable | $76,757 | ' |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Notes Payable Details Narrative | ' | ' | ' | ' |
Interest expense | $4,010 | ($10) | $4,637 | ($25) |
Amortization of original issue discount | 1,512 | ' | 1,757 | ' |
Accrued interest paid | $2,498 | ' | $2,882 | ' |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Expected life (in years) | '3 years |
Volatility (based on a comparable company) | 117.00% |
Dividend yield (on common stock) | ' |
Minimum [Member] | ' |
Risk Free interest rate | 0.36% |
Maximum [Member] | ' |
Risk Free interest rate | 0.48% |
Stock_Based_Compensation_Detai1
Stock Based Compensation (Details 1) (Employees and Directors [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Employees and Directors [Member] | ' |
Options | ' |
Outstanding January 1, 2014 | 4,950,000 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | 4,950,000 |
Exercisable June 30, 2014 | 4,950,000 |
Weighted Average Exercise Price | ' |
Outstanding January 1, 2014 | $0.05 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | $0.05 |
Exercisable June 30, 2014 | $0.05 |
Weighted Average Remaining Contractual Term (in years) | ' |
Outstanding June 30, 2014 | '1 year 9 months 22 days |
Exercisable June 30, 2014 | '1 year 9 months 22 days |
Aggregate Intrinsic Value | ' |
Outstanding January 1, 2014 | ' |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | ' |
Exercisable June 30, 2014 | ' |
Stock_Based_Compensation_Detai2
Stock Based Compensation (Details 2) (Non Employees [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Non Employees [Member] | ' |
Options | ' |
Outstanding January 1, 2014 | 1,025,000 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | 1,025,000 |
Exercisable June 30, 2014 | 1,025,000 |
Weighted Average Exercise Price | ' |
Outstanding January 1, 2014 | $0.06 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | $0.06 |
Exercisable June 30, 2014 | $0.06 |
Weighted Average Remaining Contractual Term (in years) | ' |
Outstanding June 30, 2014 | '1 year 7 months 21 days |
Exercisable June 30, 2014 | '1 year 7 months 21 days |
Aggregate Intrinsic Value | ' |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Outstanding June 30, 2014 | ' |
Exercisable June 30, 2014 | ' |
Stock_Based_Compensation_Detai3
Stock Based Compensation (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Employees [Member] | ' | ' | ' | ' |
Expense for options granted to employees and non-employees | $7,103 | $7,103 | $14,876 | $68,871 |
Non Employees [Member] | ' | ' | ' | ' |
Expense for options granted to employees and non-employees | $52,149 | $52,149 | ' | ' |
Outstanding_Warrants_Details
Outstanding Warrants (Details) (Warrant [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Warrant [Member] | ' |
Number of warrants | 6,000,000 |
Exercise price per share | $1 |
Average remaining term in years | '3 years 5 months 23 days |
Aggregate intrinsic value at date of grant | ' |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) | Jun. 30, 2014 |
Income Taxes Details Narrative | ' |
Estimated effective tax rate | 0.00% |
Business_Segments_Details_Narr
Business Segments (Details Narrative) | 6 Months Ended |
Jun. 30, 2014 | |
Business Segments Details Narrative | ' |
No customers accounted revenues | 'More than 10% |