Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||
Sep. 30, 2014 | Nov. 14, 2014 | Nov. 14, 2014 | |
Common Class A [Member] | Common Class B [Member] | ||
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
Entity Registrant Name | 'SOCIAL REALITY, Inc. | ' | ' |
Entity Central Index Key | '0001538217 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 26,079,749 | 0 |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $576,797 | $1,715,264 |
Accounts receivable, net of allowance for doubtful accounts of $0 | 700,657 | 441,831 |
Prepaid expenses | 70,874 | 46,109 |
Other current assets | 11,548 | 5,018 |
Total current assets | 1,359,876 | 2,208,222 |
Property and equipment, net of accumulated depreciation of $20,442 and $10,184 | 24,396 | 27,798 |
Deferred offering costs | ' | 5,453 |
Deferred debt issue costs | 200,000 | ' |
Prepaid stock based compensation | 1,166,630 | 1,662,074 |
Other assets | 4,804 | 4,000 |
Total assets | 2,755,706 | 3,907,547 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 659,875 | 812,809 |
Total current liabilities | 659,875 | 812,809 |
Stockholders' equity | ' | ' |
Additional paid in capital | 7,566,667 | 6,081,014 |
Accumulated deficit | -5,491,971 | -3,006,299 |
Total stockholders' equity | 2,095,831 | 3,094,738 |
Total liabilities and stockholders' equity | 2,755,706 | 3,907,547 |
Undesignated, 49,800,000 shares, no shares issued and outstanding [Member] | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, authorized 50,000,000 shares, $0.001 par value, | ' | ' |
Series 1 Preferred stock, authorized 200,000 shares, 121,000 shares issued and outstanding [Member] | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, authorized 50,000,000 shares, $0.001 par value, | 121 | 121 |
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 21,013,794 and 19,901,794 shares issued and outstanding, respectively [Member] | ' | ' |
Stockholders' equity | ' | ' |
Common stock | 21,014 | 19,902 |
Class B common stock, authorized 9,000,000 shares, $0.001 par value, no shares issued and outstanding [Member] | ' | ' |
Stockholders' equity | ' | ' |
Common stock | ' | ' |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts | ' | ' |
Accumulated depreciation | $20,442 | $10,184 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 259,000,000 | ' |
Undesignated Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 49,800,000 | 49,800,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series 1 Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 121,000 | 121,000 |
Preferred stock, shares outstanding | 121,000 | 121,000 |
Class A Common Stock [Member] | ' | ' |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares issued | 21,013,794 | 19,901,794 |
Common stock, shares outstanding | 21,013,794 | 19,901,794 |
Class B Common Stock [Member] | ' | ' |
Common stock, shares authorized | 9,000,000 | 9,000,000 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
CONDENSED STATEMENTS OF OPERATIONS [Abstract] | ' | ' | ' | ' |
Revenues | $663,144 | $853,338 | $1,493,755 | $1,519,999 |
Cost of revenue | 489,416 | 671,412 | 1,066,336 | 1,077,098 |
Gross profit | 173,728 | 181,926 | 427,419 | 442,901 |
Operating expense | 1,091,749 | 864,394 | 2,914,356 | 1,614,340 |
Loss from operations | -918,021 | -682,468 | -2,486,937 | -1,171,439 |
Interest income (expense) | 271 | -147,148 | 1,265 | -313,053 |
Loss before provision for income taxes | -917,750 | -829,616 | -2,485,672 | -1,484,492 |
Provision for income taxes | ' | ' | ' | ' |
Net loss | ($917,750) | ($829,616) | ($2,485,672) | ($1,484,492) |
Net loss per share, basic and diluted | ($0.04) | ($0.06) | ($0.12) | ($0.11) |
Weighted average shares outstanding | 21,013,794 | 13,801,891 | 20,843,431 | 13,295,851 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($2,485,672) | ($1,484,492) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Amortization of stock based prepaid fees | 495,444 | 85,503 |
Stock based compensation | 235,348 | 493,785 |
Amortization of debt issue costs | ' | 274,737 |
Depreciation | 10,258 | 4,500 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -258,826 | -427,280 |
Prepaid expenses | -24,765 | ' |
Tax refunds receivable | ' | 38,000 |
Other current assets | -6,530 | -402 |
Other assets | -804 | ' |
Accounts payable and accrued expenses | -152,934 | 798,459 |
Cash used in operating activities | -2,188,481 | -217,190 |
Cash flows from investing activities: | ' | ' |
Purchase of equipment | -6,856 | ' |
Cash used by investing activities | -6,856 | ' |
Cash flows from financing activities: | ' | ' |
Sale of common stock | 1,273,161 | ' |
Cost of common stock sale | -16,291 | -14,539 |
Proceeds from note payable | ' | 486,425 |
Repayments of note payable | ' | -178,703 |
Debt issue costs | -200,000 | -36,162 |
Cash provided by financing activities | 1,056,870 | 257,021 |
Net (decrease) increase in cash | -1,138,467 | 39,831 |
Cash, beginning of period | 1,715,264 | 105,987 |
Cash, end of period | 576,797 | 145,818 |
Supplemental Schedule of Cash Flow Information: | ' | ' |
Cash paid for interest | ' | 37,318 |
Cash paid for taxes | ' | -38,000 |
Non-cash financial activities: | ' | ' |
Fees and costs deducted from proceeds of debt | ' | 63,575 |
Common and preferred stock issued as prepayment for services | ' | 1,235,000 |
Common stock warrant issued as prepayment for services | ' | 124,916 |
Common stock issued as payment of financing fee | ' | 175,000 |
Common stock issued as payment of accounts payable | ' | $3,000 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Organization and Summary of Significant Accounting Policies [Abstract] | ' |
Organization and Summary of Significant Accounting Policies | ' |
Note 1 - Organization and Summary of Significant Accounting Policies. | |
Organization and Nature of Operations | |
Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired all of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009, which began business in May of 2010, in exchange for 12,328,767 shares of our Class A and Class B common stock. The former members of Social Reality, LLC owned all of our common stock after the acquisition. | |
Currently, our principal source of revenue is through the provision of inventory to real time bidding exchanges (RTB) through our network of website partners. We provide the service of yield optimization for these partners and deliver the highest possible price for inventory provided from our partners to the exchange. | |
We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay fees based on the number of times the target audience is exposed to the advertisement, cost per click ("CPC") whereby our customers pay fees based on the number of times a specific advertisement in clicked on, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. | |
Social Reality is also an approved and accredited Facebook advertising network company. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and large websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We also create custom applications for brands both large and small that leverage traffic on our partner sites to seed the applications to help them go viral. | |
We create these applications as custom programs and build them on a campaign by campaign basis as well as offer them on a managed or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. | |
We are headquartered in Los Angeles, California. | |
Basis of Presentation | |
The accompanying condensed financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. | |
These interim financial statements as of and for the three and nine months ended September 30, 2014 and 2013 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any future period. All references to September 30, 2014 and 2013 in these footnotes are unaudited. | |
These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2013, included in the Company's annual report on Form 10-K filed with the SEC on March 27, 2014. | |
The condensed balance sheet as of December 31, 2013 has been derived from the audited financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America. | |
Use of Estimates | |
Accounting principles generally accepted in the United States require management of the Company to make estimates and assumptions in the preparation of these financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. | |
The most significant area that requires management judgment and which is susceptible to possible change in the near term include the Company's revenue recognition policies, discussed elsewhere in these financial statements. | |
Cash and Cash Equivalents | |
The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. | |
Revenue Recognition | |
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. | |
Cost of Revenue | |
Cost of revenue consists of payments to website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. | |
Accounts Receivable | |
Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. No allowance was recorded as of September 30, 2014 and December 31, 2013. The Company usually does not require collateral. | |
Concentration of Credit Risk, Significant Customers and Supplier Risk | |
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $327,000 at September 30, 2014. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. | |
At September 30, 2014, three AD Exchange customers, who collect advertising payments from multiple advertisers and one additional customer each accounted for more than 10% of the accounts receivable balance, for a total of 59%. For the nine months ended September 30, 2014, 58% of our revenue was collected and paid to us by two of our RTB exchange service providers. For the nine months ended September 30, 2013 79% of our revenue was collected and paid to us by one of our RTB exchange service providers. | |
Fair Value of Financial Instruments | |
The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses are carried at historical cost. At September 30, 2014 and December 31, 2013 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. | |
Loss Per Share | |
We use ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 5,754,535 and 1,629,001 common share equivalents at September 30, 2014 and 2013, respectively. For the three and nine months ended September 30, 2014 and 2013 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. | |
Recently Issued Accounting Standards | |
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
Note 2 – Stockholders' Equity. | |
We are authorized to issue 50,000,000 of preferred stock, par value $0.001, of which 200,000 shares have been designated as Series 1 Preferred Stock. Our board of directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our board of directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our board of directors can fix limitations and restrictions, if any, upon the payment of dividends on both classes of our common stock to be effective while any shares of preferred stock are outstanding. | |
We are authorized to issue an aggregate of 259,000,000 shares of common stock. Our certificate of incorporation provides that we will have two classes of common stock: Class A common stock (authorized 250,000,000 shares, par value $0.001), which has one vote per share, and Class B common stock (authorized 9,000,000 shares, par value $0.001), which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock are identical. | |
Common Stock | |
In January 2014 we sold an aggregate of 978,668 shares of our Class A common stock at a purchase price of $1.50 per share to 22 accredited investors in a private placement exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. We received gross proceeds of $1,468,001. T.R. Winston & Company, LLC acted as placement agent for us in this offering. We paid the placement agent and a selling agent commissions and a non-accountable expense allowance totaling $190,840 and issued these firms three year Series B common stock purchase warrants to purchase an aggregate of 97,866 shares of our Class A common stock at an exercise price of $2.00 per share as additional compensation. We are using the net proceeds for working capital. | |
We agreed to file a registration statement with the SEC within 90 days after the closing of this offering registering for resale all of the shares of our Class A common stock sold in this offering together with the shares underlying the Series B common stock purchase warrants issued to the selling agent. This prospectus is part of that registration statement. If we fail to timely file the registration statement, or if the registration statement is not declared effective by the SEC within 90 days of its filing date, we are subject to the payment to purchasers of shares in this offering (but not the selling agent) registration rights damages of 2% for each 30 days, or portion thereof, of the gross proceeds we received in this offering, until the earlier of the date the deficiency is cured or the expiration of six months. | |
The registration statement was filed on January 27, 2014 and declared effective on February 11, 2014. | |
During June 2014 we issued 133,332 shares of common stock pursuant to the vesting of stock grants. | |
Stock Awards | |
During May 2014 we granted an aggregate of 200,000 common stock awards to ten employees. One half of the shares will vest ratably over three years and one half will vest upon the attainment of a performance condition. Compensation expense will be recognized over the vesting period. During the three and nine months ended September 30, 2014 we recorded $16,858 and $26,775 of compensation expense related to these awards. Awards in the amount of 20,000 shares were forfeited during the third quarter. | |
During the three and nine months ended September 30, 2014 we recorded expense of $57,665 and $169,122, respectively, related to stock awards granted in prior years. | |
Stock Options and Warrants | |
During February 2014 we granted 12,000 common stock options to a director. The options will vest quarterly over one year. The options have an exercise price of $2.70 per share and a term of five years. These options have a grant date fair value of $0.65 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.375 % ; (2) dividend yield of 0 %; (3) volatility factor of the expected market price of our common stock of 43 %; and (4) an expected life of the options of 2 years. We have recorded an expense for the director options of $1,958 and $5,222 for the three and nine months ended September 30, 2014, respectively. | |
On March 15, 2014 we granted 200,000 Class A common stock options to a non-employee. The individual became an employee on June 19, 2014 and left our employ during the third quarter of 2014. Pursuant to the separation agreement all vested and unvested options were forfeited. During the three and nine months ended September 30, 2014 we have recorded a credit of $665 and expense of $7,678 related to the fair value of the options that vested or forfeited prior to vesting. | |
On June 19, 2014 we granted 300,000 Class A common stock options to an employee. The employee left our employ during the third quarter of 2014. Pursuant to the separation agreement all vested and unvested options were forfeited. We have recorded a credit of $1,528 and expense of $0 for the three and nine months ended September 30, 2014 related to the fair value of options that were forfeited prior to vesting. | |
On August 15, 2014 we granted 310,000 common stock options to employees. One half of the shares will vest ratably over three years, such vesting to begin August 15, 2014, and one half will vest ratably over three years commencing upon the attainment of a performance condition, such vesting to begin August 15, 2016. The options subject to the performance condition will terminate if the performance condition is not met by July 31, 2015. Compensation expense will be recognized over the vesting period. The options have an exercise price of $1.00 per share and expire three years following vesting date. These options have a grant date fair value of $0.29 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.875%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 41%; and (4) an expected life of the options of 3 years. We have recorded an expense for the options of $3,707 for the three and nine months ended September 30, 2014, respectively. | |
During the three and nine months ended September 30, 2014 we recorded expense of $9,444 and $22,844, respectively, related to stock options granted in prior years. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
Note 3 – Subsequent Events. | |
Acquisition of Steel Media | |
On October 30, 2014, we acquired 100% of the capital stock of Steel Media, a California corporation ("Steel Media"), from Richard Steel pursuant to the terms and conditions of a stock purchase agreement, dated October 30, 2014, by and among the Company, Steel Media and Mr. Steel (the "Stock Purchase Agreement"). | |
The acquisition of Steel Media is intended to complement and augment the current operations of Social Reality. Together, the companies intend to offer and deliver performance and technology for social data and Internet ad buy-and-sell solutions, delivered to agencies and brands by our combined digital sales team. We expect that the combined expertise of the two companies will enhance the quality of our technology and service. | |
As consideration for the purchase of Steel Media, we agreed to pay Mr. Steel up to $20 million, consisting of: (i) a cash payment at closing of $7.5 million; (ii) a cash payment of $2 million which is being held in escrow to satisfy certain indemnification obligations to the extent such arise under the Stock Purchase Agreement; (iii) a one year secured subordinated promissory note in the principal amount of $2.5 million (the "Note") which is secured by 2,386,863 shares of our Class A common stock (the "Escrow Shares"); and (iv) an earnout payment of up to $8 million (the "Earnout Consideration"). | |
The Earnout Consideration is payable upon the attainment of certain earnings before interest, taxes, depreciation and amortization ("EBITDA") targets of Steel Media during the two year period following the closing, 60% of which may be satisfied in shares of Social Reality's Class A common stock subject to the satisfaction of certain conditions set forth in the Stock Purchase Agreement. Further, in the event of (i) a change of control of the Company or Steel Media or (ii) Mr. Steel's termination without "cause" or resignation for "good reason" (each as defined in Mr. Steel's employment agreement (as hereinafter described)) during the two year period following the closing, we are obligated to pay Mr. Steel 100% of the Earnout Consideration (less any amount previously paid to Mr. Steel). To the extent we are prohibited from paying any Earnout Consideration in cash and Mr. Steel is prohibited from receiving same under the terms of the Subordination Agreement (as hereinafter defined) described below, Mr. Steel has the right to request that the Company pay him the prohibited cash earnout payment in shares of the Company's Class A common stock. | |
The Note issued to Mr. Steel at the closing bears interest at the rate of 5% per annum and the principal and accrued interest is due and payable on October 30, 2015. The amounts due under the Note accelerate and become immediately due and payable upon the occurrence of an event of default as described in the Note. Upon an event of default under the Note, the interest rate increases to 10% per annum. The Note may be prepaid upon five days' notice to Mr. Steel, and the Note must be prepaid upon a change of control of the Company or Steel Media. The Note is also subject to certain mandatory partial prepayments for each of the fiscal quarters ending December 31, 2014, March 31, 2015 and June 30, 2015 in an amount equal to 25% of the "Excess Cash Amount" as defined in the Note. | |
The obligations under the Note are subordinated to the Company's obligations under the Financing Agreement (as hereinafter defined) pursuant to the terms of the Subordination Agreement (as hereinafter described) and are secured by the Escrow Shares. Upon an event of default under the Note, if the Escrow Shares are released to Mr. Steel all amounts due under the Note will be deemed paid and the Note will be satisfied in full provided that (i) all of the Escrow Shares (or at least 90% of the Escrow Shares, in the case of a cut-back required by the SEC as a result of limitations under SEC Rule 415, as defined in the Registration Rights Agreement described below) are subject to a then effective SEC registration statement having a customary plan of distribution for resale, (ii) the Escrow Shares are freely tradable by Mr. Steel, without restriction of any kind or nature (other than insider trading laws), and (iii) the certificates evidencing the Escrow Shares are free of any legend or other restrictive notation. If these conditions are not each satisfied at the time of release of the Escrow Shares to Mr. Steel, then the principal and interest due under the Note remains outstanding except that it will be deemed repaid from time to time, dollar for dollar, from the proceeds realized by Mr. Steel from the sale or other disposition of the Escrow Shares. The Escrow Shares are considered issued but not outstanding and Mr. Steel does not have any voting or other rights as a stockholder to the Escrow Shares during the period they are held in escrow. The Escrow Shares are being held by an escrow agent pursuant to the terms of that certain Escrow Agreement, dated October 30, 2014, by and among Mr. Steel, the Company and Lowenstein Sandler LLP, as escrow agent (the "Escrow Shares Agreement"). Subject to the terms and conditions of the Stock Purchase Agreement and the Subordination Agreement, upon a release of the Escrow Shares to Mr. Steel, Mr. Steel has the right to put the Escrow Shares to the Company at a per share price of $1.0474 (the "Put Right"). | |
On October, 30, 2014, in connection with the acquisition of Steel Media, the Company entered into a registration rights agreement (the "Registration Rights Agreement") with Mr. Steel pursuant to which the Company agreed to register any Earnout Shares issued to him or Escrow Shares released to him. The Company granted Mr. Steel demand registration rights over the Escrow Shares and the Earnout Shares which he may exercise 90 days after such shares are issued or released to him. In addition, Mr. Steel has the right to include any Earnout Shares issued to him or Escrow Shares released to him in registration statements for offerings by the Company as well as offerings of the Company's Class A common stock held by third parties. | |
The initial accounting for the acquisition of Steel Media is incomplete and will be completed during the fourth quarter of 2014. The required pro forma financial disclosures will be included in the consolidated financial statements for the year ended December 31, 2014. | |
Financing Agreement with Victory Park Management, LLC as agent for the lenders | |
On October 30, 2014 (the "Financing Agreement Closing Date"), the Company entered into a financing agreement (the "Financing Agreement") with Victory Park Management, LLC, as administrative agent and collateral agent for the lenders and holders of notes and warrants issued thereunder (the "Agent"). The Financing Agreement provides for borrowings of up to $20 million to be evidenced by notes issued thereunder, which are secured by a first priority, perfected security interest in substantially all of the assets of the Company and its subsidiaries (including Steel Media) and a pledge of 100% of the equity interests of each domestic subsidiary of the Company pursuant to the terms of a pledge and security agreement (the "Pledge and Security Agreement") entered into by the Company on the Financing Agreement Closing Date (which was joined by Steel Media immediately after the Company's acquisition of Steel Media). The Financing Agreement contains covenants limiting, among other things, indebtedness, liens, transfers or sales of assets, distributions or dividends, and merger or consolidation activity. The notes (the "Financing Notes") issued pursuant to the Financing Agreement, including the note issued to the lender thereunder in the original aggregate principal amount of $9 million on the Financing Agreement Closing Date (the "Initial Financing Note"), bear interest at a rate per annum equal to the sum of (1) cash interest at a rate of 10% per annum and (2) payment-in-kind (PIK) interest at a rate of 4% per annum for the period commencing on the Financing Agreement Closing Date and extending through the last day of the calendar month during which the Company's financial statements for December 31, 2014 are delivered, and which PIK interest rate thereafter from time to time may be adjusted based on the ratio of the Company's consolidated indebtedness to its earnings before interest, taxes, depreciation and amortization. If the Company achieves a reduction in the leverage ratio as described in the Financing Agreement, the PIK interest rate declines on a sliding scale from 4% to 2%. The Financing Notes issued under the Financing Agreement are scheduled to mature on October 30, 2017. Proceeds from the Initial Financing Note issued on the Financing Agreement Closing Date were used to finance, in part, the Company's acquisition of Steel Media as described earlier in this report. | |
The Financing Agreement provides for subsidiaries of the Company to join the Financing Agreement from time to time as borrowers and cross guarantors thereunder. Immediately after the Company's acquisition of Steel Media on October 30, 2014, Steel Media executed a joinder agreement under which it became a borrower under the Financing Agreement. The Company and its subsidiary, Steel Media, are cross guarantors of each other's obligations under the Financing Agreement, all of which guaranties and obligations are secured pursuant to the terms of the Pledge and Security Agreement. | |
Pursuant to the Financing Agreement, the Company also issued to the lender thereunder, on the Financing Agreement Closing Date, a five year warrant to purchase 2,900,000 shares of its Class A common stock at an exercise price of $1.00 per share (the "Financing Warrant"). The warrant holder may not, however, exercise the Financing Warrant for a number of shares of Class A common stock that would cause such holder to beneficially own shares of Class A common stock in excess of 4.99% of the Company's outstanding shares of Class A common stock following such exercise. The number of shares issuable upon exercise of the Financing Warrant and the exercise price therefor are subject to adjustment in the event of stock splits, stock dividends, recapitalizations and similar corporate events. Pursuant to the Financing Warrant, the warrant holder has the right, at any time after the earlier of April 30, 2016 and the maturity date of the Financing Notes issued pursuant to the Financing Agreement, but prior to the date that is five years after the Financing Agreement Closing Date, to exercise its put right under the terms of the Financing Warrant, pursuant to which the warrant holder may sell to the Company, and the Company will purchase from the warrant holder, all or any portion of the Financing Warrant that has not been previously exercised. In connection with any exercise of this put right, the purchase price will be equal to an amount based upon the percentage of the Financing Warrant for which the put right is being exercised, multiplied by the lesser of (A) 50% of the total revenue for the Company and its subsidiaries, on a consolidated basis, for the trailing 12- month period ending with the Company's then-most recently completed fiscal quarter, and (B) $1,500,000. | |
As contemplated under the Financing Agreement, the Company also entered into a registration rights agreement on the Financing Agreement Closing Date (the "Financing Registration Rights Agreement") with the holder of the Financing Warrant, pursuant to which the Company granted to such holder certain "piggyback" rights to register the shares of the Company's Class A common stock issuable upon exercise of the Financing Warrant. Specifically, the holder of the Financing Warrant has the right, subject to certain allocation provisions set forth in the Financing Registration Rights Agreement, to include the shares underlying the Financing Warrant in registration statements for offerings by the Company of its Class A common stock, as well as offerings of the Company's Class A common stock held by third parties. | |
As part of the arrangements under the Financing Agreement, the Agent, Mr. Steel, and the Company and Steel Media (as borrowers under the Financing Agreement) have also entered into a subordination agreement (the "Subordination Agreement") under which Mr. Steel has agreed, subject to the terms and conditions of the Subordination Agreement, to subordinate to the lenders and holders of Financing Notes and the Financing Warrant issued under the Financing Agreement (i) certain obligations, liabilities, and indebtedness, including, without limitation, payments under the Note and payments of Earnout Consideration, owed to him by the Company and any of its subsidiaries and (ii) Mr. Steel's right to exercise the Put Right. | |
Employment Agreements | |
In connection with the acquisition of Steel Media, on October 30, 2014, the Company entered into employment agreements with Mr. Steel and two other employees. The four year agreements provide for base salary, guaranteed and discretionary bonuses and option grants. The agreements contain severance provisions if the employees are terminated without cause, as defined in the agreements. | |
On November 5, 2014 the board of directors of Social Reality, Inc. appointed Carrie McQueen as our Chief Financial Officer. In conjunction with our appointment of Ms. McQueen as our Chief Financial Officer we entered into an executive employment agreement with her. The initial term of the agreement is for two years and may be extended by us in our discretion for additional one year terms upon notice to Ms. McQueen. The agreement provides for base salary, discretionary bonuses and stock and option grants. The agreement contains severance provisions if Ms. McQueen is terminated upon her death or disability and with or without cause, as defined in the agreement. | |
Private Placement | |
On October 30, 2014 and November 5, 2014, the Company sold 4,220,500 units of its securities to 28 accredited investors in a private placement exempt from registration under the Securities Act of 1933. The units were sold at a purchase price of $1.00 per unit resulting in gross proceeds to the Company of $4,220,500. Each unit consisted of one share of the Company's Class A common stock and one three year Class A common stock purchase warrant to purchase 0.5 shares of its Class A common stock. Each redeemable three year warrant (the "Private Placement Warrants") entitles the holder to purchase one-half share of the Company's Class A common stock at an exercise price of $1.50 per share. The Private Placement Warrants must be exercised in such denominations as to require the issuance of a whole number of shares. Providing that there is an effective registration statement registering the shares of the Company's Class A common stock issuable upon exercise of the Private Placement Warrants, the Company has the right to redeem all or any portion of the warrants at a price of $0.001 per share of Class A common stock underlying such warrants upon 20 days' notice at any time that the closing price of the Company's Class A common stock equals or exceeds $3.75 per share for 20 consecutive trading days and the daily average minimum volume of its Class A common stock during those 20 trading days is at least 100,000 shares. | |
In addition to the units sold for cash, the Company also issued T.R. Winston & Company, LLC ("T.R. Winston") 800,000 units, valued at $800,000, as compensation for the firm's investment banking services to it in connection with the acquisition of Steel Media described above. The units issued to T.R. Winston are identical to the units sold in the private placement. | |
As a result, the Company issued an aggregate of 5,020,500 shares of its Class A common stock and Private Placement Warrants to purchase an additional 2,510,250 shares of its Class A common stock. T.R. Winston acted as placement agent for the Company in private placement offering. The Company paid the placement agent and a selling agent cash commissions totaling $351,435 and agreed to issue T.R. Winston and the selling agent three year warrants which are identical to the Private Placement Warrant to purchase 301,230 shares of the Company's Class A common stock at an exercise price of $1.50 per share. The Company used $2,500,000 of the net proceeds from the offering as part of the cash consideration for the acquisition of Steel Media described above and used approximately $678,000 for fees in this transaction, including $580,000 to T.R. Winston as a loan origination fee for the Financing Agreement. The balance of the net proceeds will be used for general working capital. | |
The Company has agreed to file a registration statement covering the shares underlying the Private Placement Warrants and the placement agent warrants within 90 days from the closing of the Steel Media acquisition. The Company is obligated to pay all costs associated with this registration statement, other than selling expenses of the warrant holders. |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Organization and Summary of Significant Accounting Policies [Abstract] | ' |
Organization and Nature of Operations | ' |
Organization and Nature of Operations | |
Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired all of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009, which began business in May of 2010, in exchange for 12,328,767 shares of our Class A and Class B common stock. The former members of Social Reality, LLC owned all of our common stock after the acquisition. | |
Currently, our principal source of revenue is through the provision of inventory to real time bidding exchanges (RTB) through our network of website partners. We provide the service of yield optimization for these partners and deliver the highest possible price for inventory provided from our partners to the exchange. | |
We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay fees based on the number of times the target audience is exposed to the advertisement, cost per click ("CPC") whereby our customers pay fees based on the number of times a specific advertisement in clicked on, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. | |
Social Reality is also an approved and accredited Facebook advertising network company. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and large websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We also create custom applications for brands both large and small that leverage traffic on our partner sites to seed the applications to help them go viral. | |
We create these applications as custom programs and build them on a campaign by campaign basis as well as offer them on a managed or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. | |
We are headquartered in Los Angeles, California. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying condensed financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. | |
These interim financial statements as of and for the three and nine months ended September 30, 2014 and 2013 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any future period. All references to September 30, 2014 and 2013 in these footnotes are unaudited. | |
These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2013, included in the Company's annual report on Form 10-K filed with the SEC on March 27, 2014. | |
The condensed balance sheet as of December 31, 2013 has been derived from the audited financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America. | |
Use of Estimates | ' |
Use of Estimates | |
Accounting principles generally accepted in the United States require management of the Company to make estimates and assumptions in the preparation of these financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. | |
The most significant area that requires management judgment and which is susceptible to possible change in the near term include the Company's revenue recognition policies, discussed elsewhere in these financial statements. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. | |
Cost of Revenue | ' |
Cost of Revenue | |
Cost of revenue consists of payments to website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. | |
Accounts Receivable | ' |
Accounts Receivable | |
Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. No allowance was recorded as of September 30, 2014 and December 31, 2013. The Company usually does not require collateral. | |
Concentration of Credit Risk, Significant Customers and Supplier Risk | ' |
Concentration of Credit Risk, Significant Customers and Supplier Risk | |
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $327,000 at September 30, 2014. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. | |
At September 30, 2014, three AD Exchange customers, who collect advertising payments from multiple advertisers and one additional customer each accounted for more than 10% of the accounts receivable balance, for a total of 59%. For the nine months ended September 30, 2014, 58% of our revenue was collected and paid to us by two of our RTB exchange service providers. For the nine months ended September 30, 2013 79% of our revenue was collected and paid to us by one of our RTB exchange service providers. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses are carried at historical cost. At September 30, 2014 and December 31, 2013 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. | |
Loss Per Share | ' |
Loss Per Share | |
We use ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 5,754,535 and 1,629,001 common share equivalents at September 30, 2014 and 2013, respectively. For the three and nine months ended September 30, 2014 and 2013 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. | |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | |
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jan. 31, 2012 | Jan. 31, 2012 | |
Accounts receivable [Member] | Revenue [Member] | Revenue [Member] | Social Reality LLC [Member] | Social Reality LLC [Member] | ||||||
Three Customers [Member] | One RTB exchange service providers [Member] | Two RTB exchange service providers [Member] | Class A and Class B common stock [Member] | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued in business acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,328,767 |
Effective date of business acquisition | ' | ' | ' | ' | ' | ' | ' | ' | 1-Jan-12 | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | ' | ' | ' | 59.00% | 79.00% | 58.00% | ' | ' |
Allowance for doubtful accounts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Uninsured cash bank balance | $327,000 | ' | $327,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock equivalents that were excluded from the shares used to calculate diluted earnings per share | 5,754,535 | 1,629,001 | 5,754,535 | 1,629,001 | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | 31-May-14 | Sep. 30, 2014 | Sep. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Aug. 15, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Employee [Member] | Employee [Member] | Employee [Member] | Director [Member] | Director [Member] | Director [Member] | Private Placement [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class A Common Stock [Member] | Class B Common Stock [Member] | Class B Common Stock [Member] | Series 1 Preferred Stock [Member] | Series 1 Preferred Stock [Member] | Common stock | Common stock | Common stock | |||||
Stock Awards [Member] | Stock Awards [Member] | Stock Awards [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Employee [Member] | Employee [Member] | Employee [Member] | Non-Employee [Member] | Non-Employee [Member] | Non-Employee [Member] | Employee [Member] | Employee [Member] | Employee [Member] | ||||||||||||
Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | ' | 50,000,000 | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 200,000 | ' | ' | ' |
Preferred stock, par value per share | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | 259,000,000 | 259,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 250,000,000 | 250,000,000 | ' | ' | ' | ' | ' | ' | 9,000,000 | 9,000,000 | ' | ' | ' | ' | ' |
Common stock, par value per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' |
Common stock, voting rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'One vote per share | ' | ' | ' | ' | ' | ' | ' | 'ten votes per share | ' | ' | ' | ' | ' | ' |
Securities sold to accredited investors in a private placement, units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 978,668 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Puchase price, per unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of accredited investors in a private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,468,001 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees paid to placement agents and selling agent , including commissions and a non-accountable expense allowance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 190,840 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued to pay placement agents and selling agent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 97,866 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued pursuant to the vesting of stock grants, shares | 133,332 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense related to stock awards | ' | 57,665 | 169,122 | ' | ' | 16,858 | 26,775 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation, shares granted in period | ' | ' | ' | ' | 200,000 | ' | ' | 12,000 | ' | ' | ' | ' | ' | 300,000 | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | 310,000 | ' | ' |
Share-based compensation, vesting period | ' | ' | ' | ' | '3 years | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Options exercise price | ' | ' | ' | ' | ' | ' | ' | $2.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 |
Options term | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Stock options granted, grant date fair value | ' | ' | ' | ' | ' | ' | ' | $0.65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.29 |
Pricing model used in calculation of grant-date fair value | ' | ' | ' | ' | ' | ' | ' | 'Black-Scholes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Black-Scholes |
Share-based compensation, risk free interest rate | ' | ' | ' | ' | ' | ' | ' | 0.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.88% |
Share-based compensation, expected dividend yield | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% |
Share-based compensation, expected volatility rate | ' | ' | ' | ' | ' | ' | ' | 43.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41.00% |
Share-based compensation, expected life in years | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Expense related to stock options | ' | 9,444 | 22,844 | ' | ' | ' | ' | ' | 1,958 | 5,222 | ' | ' | ' | ' | ' | 0 | ' | ' | 7,678 | ' | ' | ' | ' | ' | 3,707 | 3,707 |
Awards forfeited during the period | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit related to stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,528 | ' | ' | $665 | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation, vesting percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Share-based compensation, vesting percentage upon the attainment of a performance condition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Share-based compensation, vesting period upon the attainment of a performance condition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||
Jan. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Nov. 05, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | Oct. 30, 2014 | |
Private Placement [Member] | Common Class A [Member] | Common Class A [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | Subsequent events [Member] | |
Private Placement [Member] | Private Placement [Member] | Financing Agreement [Member] | Financing Agreement [Member] | Employment Agreement [Member] | Common Class A [Member] | Common Class A [Member] | Minimum [Member] | Maximum [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | Steel Media [Member] | |||||
T.R. Winston [Member] | T.R. Winston [Member] | Ms. McQueen [Member] | Private Placement [Member] | Financing Agreement [Member] | Financing Agreement [Member] | Financing Agreement [Member] | Private Placement [Member] | Employment Agreement [Member] | Common Class A [Member] | Secured subordinated promissory note | Secured subordinated promissory note | Minimum [Member] | Maximum [Member] | ||||||||
item | T.R. Winston [Member] | Common Class A [Member] | Secured subordinated promissory note | ||||||||||||||||||
Common Class A [Member] | |||||||||||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership acquired (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Purchase consideration | ' | ' | ' | $2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $20,000,000 |
Cash payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | ' | ' |
Cash payment held in escrow | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Notes term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' |
Notes issued | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | 2,500,000 | ' | ' | ' |
Escrow shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,386,863 | ' | ' |
Earnout consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 |
Period of earnout consideration payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' |
Percentage of earnout consideration to be paid in shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60.00% | ' | ' | ' | ' |
Percentage of earnout consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' |
Increased interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' |
Notice period for prepayment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 days | ' | ' | ' |
Percentage of quarterly installments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' |
Percentage of escrow shares subject to effective registration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90.00% | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.75 | ' | ' | ' | ' | ' | ' | $1.05 | ' | ' | ' | ' |
Period when registration rights can be exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' |
Percentage of equity interest pledged | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Paid-in-kind interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' | 2.00% | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise period of warrants | ' | ' | ' | ' | ' | '3 years | '5 years | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares to be issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,510,250 | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | $2 | ' | ' | ' | ' | $1.50 | $1 | ' | ' | $1.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficially own shares as a percentage of shares outstanding | ' | ' | ' | ' | ' | ' | 4.99% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenue used as base to calculate purchase price | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount used as base to calculate purchase price | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' |
Term of agreement extension period | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Securities sold to accredited investors in a private placement, units | 978,668 | ' | ' | ' | 4,220,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' |
Number of accredited investors in a private placement | 22 | ' | ' | ' | 28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Puchase price, per unit | $1.50 | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of private placement | 1,468,001 | ' | ' | ' | 4,220,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' |
Number of shares issued for each unit in private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants issued for each unit in private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares called by each warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period for redemption of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | '20 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of consecutive trading days | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Daily average minimum volume in 20 consecutive trading days (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | 21,013,794 | 19,901,794 | ' | ' | ' | ' | ' | ' | 5,020,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees paid to placement agents and selling agent , including commissions and a non-accountable expense allowance | 190,840 | ' | ' | 678,000 | ' | 351,435 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued to pay placement agents and selling agent | 97,866 | ' | ' | ' | ' | 301,230 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan origination fee | ' | ' | ' | ' | ' | ' | ' | $580,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |