Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 17, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Bright Mountain Media, Inc. | |
Entity Central Index Key | 0001568385 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 65,051,862 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and Cash Equivalents | $ 727,525 | $ 1,042,457 |
Accounts Receivable, net | 933,361 | 561,470 |
Note Receivable, net | 549,053 | 18,750 |
Prepaid Expenses and Other Current Assets | 531,845 | 611,206 |
Current Assets - Discontinued Operations | 41,054 | 239,747 |
Total current assets | 2,782,838 | 2,473,630 |
Property and Equipment, net | 3,112 | 5,464 |
Website Acquisition Assets, net | 88,950 | 113,741 |
Intangible Assets, net | 218,095 | 221,117 |
Goodwill | 988,926 | 988,926 |
Prepaid Services and Consulting Agreements - Long Term | 1,085,000 | 1,162,500 |
Right of Use Asset | 225,536 | 0 |
Other Assets | 4,703 | 0 |
Other Assets - Discontinued Operations | 0 | 60,740 |
Total Assets | 5,397,160 | 5,025,848 |
Current Liabilities | ||
Accounts Payable | 1,015,622 | 655,229 |
Accrued Expenses | 315,994 | 465,032 |
Accrued Interest - Related Party | 947 | 947 |
Premium Finance Loan Payable | 60,206 | 92,537 |
Deferred Revenues | 6,648 | 4,163 |
Long Term Debt, Current Portion | 165,162 | 229,844 |
Operating Lease Liability, Current Portion | 84,472 | 0 |
Current Liabilities - Discontinued Operations | 76,696 | 143,929 |
Total Current Liabilities | 1,725,747 | 1,591,681 |
Long Term Debt to Related Parties, net | 15,140 | 11,688 |
Operating Lease Liability, net of Current Portion | 141,064 | 0 |
Total Liabilities | 1,881,951 | 1,603,369 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Common stock, par value $0.01, 324,000,000 shares authorized, 64,065,864 and 62,125,114 issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 640,689 | 621,252 |
Additional Paid-in Capital | 20,559,308 | 19,775,753 |
Accumulated Deficit | (17,753,228) | (17,042,966) |
Total Shareholders' Equity | 3,515,209 | 3,422,479 |
Total Liabilities and Shareholders' Equity | 5,397,160 | 5,025,848 |
Series A Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | 0 | 0 |
Series B Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | 0 | 0 |
Series C Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | 0 | 0 |
Series D Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | 0 | 0 |
Series E Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | 25,000 | 25,000 |
Series F Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock, par value $0.01, 20,000,000 shares authorized | $ 43,440 | $ 43,440 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value per share | $ .01 | $ .01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value per share | $ .01 | $ .01 |
Common stock, shares authorized | 324,000,000 | 324,000,000 |
Common stock, shares issued | 64,065,864 | 62,125,114 |
Common stock, shares outstanding | 64,065,864 | 62,125,114 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 100,000 |
Preferred stock, shares outstanding | 0 | 100,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series D Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series E Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 2,500,000 | 2,500,000 |
Preferred stock, shares outstanding | 2,500,000 | 2,500,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Advertising | $ 1,085,456 | $ 683,058 |
Total revenues | 1,085,456 | 683,058 |
Cost of revenue | ||
Advertising | 885,696 | 510,704 |
Total Cost of revenue | 885,696 | 510,704 |
Gross profit | 199,760 | 172,354 |
Selling, general and administrative expenses | 915,954 | 828,992 |
Loss from operations | (716,194) | (656,638) |
Other income (expense) | ||
Interest income | 6,006 | 275 |
Gain on settlement of liability | 122,500 | 0 |
Interest expense | (909) | (15,353) |
Interest expense - related party | (6,201) | (99,858) |
Total other income (expense) | 121,396 | (114,936) |
Net Loss from Continuing Operations | (594,798) | (771,574) |
Loss from Discontinued Operations | (115,464) | (177,676) |
Net Loss | (710,262) | (949,250) |
Preferred stock dividends | ||
Series A, Series E, and Series F preferred stock | (74,171) | (14,763) |
Net loss attributable to common shareholders | $ (784,433) | $ (964,013) |
Basic and diluted net loss for continuing operations per share | $ (0.01) | $ (0.02) |
Basic and diluted net loss for discontinued operations per share | (0.002) | (0.004) |
Basic and diluted net loss per share | $ (0.01) | $ (0.02) |
Weighted average shares outstanding - basic and diluted | 62,900,662 | 45,807,289 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 14,750 | $ 461,689 | $ 11,685,685 | $ (11,818,902) | $ 343,222 |
Balance, shares at Dec. 31, 2017 | 1,475,000 | 46,168,864 | |||
Common stock issued for 10% dividend payment pursuant to Series A preferred stock Subscription Agreements | $ 100 | (100) | |||
Common stock issued for 10% dividend payment pursuant to Series A preferred stock Subscription Agreements, shares | 10,000 | ||||
Issuance of Series E preferred Stock | $ 5,000 | 195,000 | 200,000 | ||
Issuance of Series E preferred Stock, shares | 500,000 | ||||
Series E and F preferred stock dividend | (14,763) | (14,763) | |||
Stock option vesting expense | 7,344 | 7,344 | |||
Units consisting of one share of common stock and one warrant issued for cash, net of costs | $ 17,625 | 616,876 | 634,501 | ||
Units consisting of one share of common stock and one warrant issued for cash, net of costs, shares | 1,762,500 | ||||
Net loss | (949,250) | (949,250) | |||
Balance at Mar. 31, 2018 | $ 19,750 | $ 479,414 | 12,490,042 | (12,768,152) | 221,054 |
Balance, shares at Mar. 31, 2018 | 1,975,000 | 47,941,364 | |||
Balance at Dec. 31, 2018 | $ 68,440 | $ 621,252 | 19,775,753 | (17,042,966) | 3,422,479 |
Balance, shares at Dec. 31, 2018 | 6,844,017 | 62,125,114 | |||
Series E and F preferred stock dividend | (74,171) | (74,171) | |||
Stock option vesting expense | 3,213 | 3,213 | |||
Common stock issued for services - cancelled | (3,000) | ||||
Units consisting of one share of common stock and one warrant issued for cash, net of costs | $ 19,437 | 854,513 | 873,950 | ||
Units consisting of one share of common stock and one warrant issued for cash, net of costs, shares | 1,943,750 | ||||
Net loss | (710,262) | ||||
Balance at Mar. 31, 2019 | $ 68,440 | $ 640,689 | $ 20,559,308 | $ (17,753,228) | $ 3,515,209 |
Balance, shares at Mar. 31, 2019 | 6,844,017 | 64,065,864 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (710,262) | $ (949,250) |
Addback: Loss attributable to discontinued operations | 115,464 | 177,676 |
Adjustments to reconcile net loss to net cash and cash equivalents used in operations: | ||
Depreciation | 2,352 | 2,964 |
Amortization of debt discount | 3,452 | 48,389 |
Amortization of intangibles | 35,813 | 71,456 |
Gain on settlement of liability | (122,500) | 0 |
Stock option compensation expense | 3,213 | 7,344 |
Provision for bad debt | 4,034 | 26,281 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (375,928) | (33,790) |
Prepaid expenses and other current assets | 29,361 | 26,191 |
Prepaid Services and Consulting contracts | 127,500 | 0 |
Other assets | (4,703) | (1,980) |
Accounts payable | 360,393 | 117,572 |
Accrued expense | (26,538) | (4,815) |
Deferred revenue | 2,485 | (1,499) |
Cash used in continuing operations for operating activities | (555,864) | (513,461) |
Cash used in discontinued operations for operating activities | (73,589) | (162,299) |
Net cash used in operating activities | (629,453) | (675,760) |
Cash flows from investing activities: | ||
Purchase of property and equipment | 0 | (505) |
Cash paid for website acquisition | (8,000) | 0 |
Net cash used in investing activities | (8,000) | (505) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of commissions | 873,950 | 634,501 |
Proceeds from issuance of preferred stock | 0 | 200,000 |
Payments of insurance premium notes payable | (32,331) | (22,224) |
Dividend payments | (74,171) | (14,763) |
Principal payment on Notes Payable | (64,681) | (50,000) |
Note receivable funded | (375,303) | 0 |
Net cash provided by financing activities | 327,464 | 747,514 |
Net (decrease) increase in cash and cash equivalents including cash and cash equivalents classified within assets related to discontinued operations | (309,989) | 26,246 |
Net decrease in cash and cash equivalents classified within assets related to discontinued operations | (4,943) | (764) |
Net (decrease) increase in cash and cash equivalents | (314,932) | 25,482 |
Cash and cash equivalents at beginning of period | 1,042,457 | 101,231 |
Cash and cash equivalents at end of period | 727,525 | 126,713 |
Supplemental disclosure of cash flow information | ||
Cash paid for: Interest | 2,749 | 62,176 |
Non-cash investing and financing activities | ||
Premium finance loan payable recorded as prepaid | 71,845 | 66,131 |
Notes receivable for the sale of Black Helmet | 155,000 | 0 |
Recognition of right of use assets and lease liability | 245,540 | 0 |
Stock dividend | $ 0 | $ 100 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Organization and Nature of Operations Bright Mountain Media, Inc. is a Florida corporation formed on May 20, 2010. Its wholly owned subsidiaries, Bright Mountain LLC, and The Bright Insurance Agency, LLC, were formed as Florida limited liability companies in May 2011. Its wholly owned subsidiary, Bright Watches, LLC was formed as a Florida limited liability company in December 2015, and its wholly owned subsidiary DEM Group LLC (“DEM”) was formed as a New Jersey limited liability company in February 2015. When used herein, the terms "BMTM, the "Company," "we," "us," "our" or "Bright Mountain" refers to Bright Mountain Media, Inc. and its subsidiaries. Discontinued Operations Effective December 31, 2018 the Company discontinued the E-Commerce operations, the Products segment, as of December 31, 2018 per the determination of Management and the Board of Directors. Accordingly, the Company determined that the assets and liabilities of this reportable segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45, and were classified as discontinued operations at December 31, 2018. See Discontinued Operations Note 4. Continuing Operations We are a digital media holding company for online assets targeting and servicing the military and public safety markets and as such we delivered impressions, which include both our targeted demographic and the larger general demographic from our ad network. Our owned websites are dedicated to providing “those that keep us safe” places to go online where they can do everything from stay current on news and events affecting them, look for jobs, share information, and communicate with the public. We own 19 websites and manage five additional websites, for a total of 24 websites, which are customized to provide our niche users, including active, reserve and retired military, law enforcement, first responders and other public safety employees with information, news and entertainment across various platforms that has proven to be of interest and engaging to them. During the past several years the Company has evolved to place its emphasis on not only providing quality content on our websites to drive traffic increases, but to increase the advertising revenue we generate from companies and brands looking to reach our audiences. Our ad network connects general use advertisers with approximately 200 digital publications worldwide. Bright Mountain’s websites feature timely, proprietary and aggregated content covering current events and a variety of additional subjects that are targeted to the specific, primarily young male, demographics of the individual website. Our business strategy requires us to continue to provide this quality content to our niche markets as we grow our business, operations and revenues. The Company’s focus is to launch its full-scale Ad Network Business platform, the Bright Mountain Media Ad Network Business. On September 19, 2017, under the terms of an Amended and Restated Membership Interest Purchase Agreement with DEM, and its members, the Company acquired 100% of the membership interests of DEM. Launched in 2015, DEM is an ad network that connects advertisers with approximately 200 digital publications worldwide. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2019 | |
GOING CONCERN [Abstract] | |
GOING CONCERN | The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained a net loss from continuing operations of $594,798, a loss of $115,464 from discontinued operations and used net cash in operating activities of $629,453 for the three months ended March 31, 2019. The Company had an accumulated deficit of $17,753,228 at March 31, 2019. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. The Company's continuation as a going concern is dependent upon its ability to generate revenues, control its expenses and its ability to continue obtaining investment capital and loans from related parties and outside investors to sustain its current level of operations. Management continues raising capital through private placements and is exploring additional avenues for future fund-raising through both public and private sources. The Company is not currently involved in any binding agreements to raise private equity capital. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The accompanying unaudited financial statements for the three months ended March 31, 2019 and 2018 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of December 31, 2018 was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on April 12, 2019. The interim condensed consolidated financial statements should be read in conjunction with that report. Revenue Recognition On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) To determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the advertising services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the advertising services promised within each contract and determines those that are performance obligations and assesses whether each promised advertising service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied. The Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through its publishing advertiser impressions and pay-for-click services. the Company’s owned and operated sites, our ad network, or platforms.. Invalid traffic on the Ad Network may impact the amount collected and adjusted by our Ad Network. The Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated sites, our ad network, or platforms. The revenue is earned when the users click on the published website advertisements. Specific revenue recognition criteria for the advertising revenue stream is as follows: ● Advertising revenues are generated by users "clicking" on website advertisements utilizing several ad network partners. ● Revenues are recognized net of adjustments based on the traffic generated and is billed monthly. The Company subsequently settles these transactions with publishers at which time adjustments for invalid traffic may impact the amount collected; and Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. On January 1, 2019, the Company adopted the new lease standard using the optional transition method under which comparative financial information has not been restated and will continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods. In addition, the new lease standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; and did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The new lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right of use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (office building). The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the remaining lease terms as of January 1, 2019. Since the Company’s lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based on the information available at January 1, 2019 in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred. On January 1, 2019, the Company recognized a ROU asset and a lease liability of approximately $245,000 on its consolidated balance sheet. Use of Estimates Our consolidated financial statements are prepared in accordance with GAAP. These accounting principles require management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. Significant estimates included in the accompanying consolidated financial statements include revenue recognition, the fair value of acquired assets for purchase price allocation in business combinations, valuation of inventory, valuation of intangible assets, estimates of amortization period for intangible assets, estimates of depreciation period for fixed assets and the valuation of equity-based transactions, and the valuation allowance on deferred tax assets. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Fair Value of Financial Instruments and Fair Value Measurements FASB ASC 820 “ Fair Value Measurement and Disclosures: The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities. We adopted accounting guidance for fair values measurements and disclosures (ASC 820). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Financial instruments recognized in the consolidated balance sheets consist of cash, accounts receivable, prepaid expenses and other current assets, note receivable, accounts payable, accrued expenses and premium finance loan payable. The Company believes that the carrying value of its current financial instruments approximates their fair values due to the short-term nature of these instruments. The carrying value of long-term debt to related parties and long-term debt to others approximates the current borrowing rate for similar debt instruments. The following are the major categories of liabilities measured at fair value on a recurring basis for the three months ended March 31, 2019, using significant unobservable inputs (Level 3): Fair Value measurement using Level 3 Balance at December 31, 2018 $ 309,844 Long term debt additions during 2019 - Principal reductions during 2019 (64,681 ) Adjustment to fair value - Balance at March 31, 2019 $ 245,163 Accounts Receivable Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense. The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 60 or net 90 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. Property and Equipment Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of seven years for office furniture and equipment, and five years for computer equipment. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Website Development Costs The Company accounts for its website development costs in accordance with ASC 350-50, "Website Development Costs". These costs, if any, are included in intangible assets in the accompanying consolidated financial statements. ASC 350-50 requires the expensing of all costs of the preliminary project stage and the training and application maintenance stage and the capitalization of all internal or external direct costs incurred during the application and infrastructure development stage. Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred. The Company amortizes the capitalized website development costs over an estimated life of five years. For the three months ended March 31, 2019 $8,000 was capitalized for the purchase of a Facebook page. During the three months ended March 31, 2018 all website costs were expensed. Amortization and Impairment of Long-Lived Assets Amortization and impairment of long-lived assets are non-cash expenses relating primarily to website acquisitions. The Company accounts for long-lived assets in accordance with the provisions of ASC 360, "Property, Plant and Equipment". This requires thatlong-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Website acquisition costs are amortized over five years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. While it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing business. Stock-Based Compensation The Company accounts for stock-based instruments issued to employees for services in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC Topic 505-50, "Equity-Based Payments to Non-Employees". Advertising, Marketing and Promotion Costs Advertising, marketing and promotion expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying statement of operations. For the three months ended March 31, 2019 and 2018, advertising, marketing and promotion expense was $6,000 and $217, respectively for continuing operations and $6,002 and $60,923 for discontinued operations, respectively. Income Taxes We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period those differences are expected to reverse. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. The Company follows the provisions of ASC 740-10, Income Taxes - Overall. As of March 31, 2019, tax years 2018, 2017, and 2016 remain open for Internal Revenue Service ("IRS") audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. Concentrations The Company generates revenues from through an Ad Exchange Network and through our Owned and Operated Ad Exchange Network. There are two large customers who account for approximately 59% of the Ad Exchange Network Revenue for the three months ended March 31, 2019. One of those customers accounted for approximately 24% of the Accounts Receivable at March 31, 2019. Credit Risk The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At March 31, 2019 and December 31, 2018, the Company had approximately $469,000 and $706,000, respectively, in cash balances above the FDIC insured limit. The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral. Concentration of Funding During the three months ended March 31, 2019 a large portion of the Company's funding was provided through the sale of shares of the Company's common stock with related warrants. Basic and Diluted Net Earnings (Loss) Per Common Share In accordance with ASC 260-10 , "Earnings Per Share", Segment Information The Company currently operates in one reporting segment. This segment is focused on producing advertising revenue generated by users "clicking" on website advertisements utilizing several ad network partners and direct advertisers. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses” which replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model applies to financial assets subject to credit losses and measured at amortized cost and certain off-balance sheet exposures. Under current U.S. GAAP, an entity reflects credit losses on financial assets measured on an amortized cost basis only when losses are probable and have been incurred, generally considering only past events and current conditions in making these determinations. ASU 2016-13 prospectively replaces this approach with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, starting when such assets are first acquired. Under the revised methodology, credit losses will be measured based on past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets. ASU 2016-13 also revises the approach to recognizing credit losses for available-for-sale securities by replacing the direct write-down approach with the allowance approach and limiting the allowance to the amount at which the security’s fair value is less than the amortized cost. In addition, ASU 2016-13 provides that the initial allowance for credit losses on purchased credit impaired financial assets will be recorded as an increase to the purchase price, with subsequent changes to the allowance recorded as a credit loss expense. ASU 2016-13 also expands disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for credit losses. The amendments of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted as of January 1, 2019. The Company is currently evaluating the impact the adoption of this new standard will have on its consolidated financial statements. In January 2017, the FASB issued 2017-04, Intangibles - Goodwill and Other In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair valuemeasurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. We do not expect the adoption of this guidance to have a material impact on our consolidated Financial Statements. Reclassification Certain reclassifications have been made to the December 31, 2018 and March 31, 2018 consolidated financial statements to conform to the March 31, 2019 presentation. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | Management, prior to December 31, 2018 with the appropriate level or authority, determined to exit, effective December 31, 2018, its Black Helmet business line as a result of, among other things, the change in our strategic direction to a focus solely in our advertising segment. Historically revenues from our product sales segment including revenues from two of our websites that operate as e-commerce platforms, included Bright Watches and Black Helmet, as well as Bright Watches’ retail location. Management, prior to December 31, 2018, with the appropriate level of authority, determined to discontinue the operations of Bright Mountain watches effective December 31, 2018. The decisions to exit all components of our product segment will result in these businesses being accounted for as discontinued operations. The Company has determined that the exit of the Bright Watches business requires the Company to liquidate the inventory and settle all obligations to wind down the business unit. The Company sold the remaining inventory during the three months ended March 31, 2019. Accordingly, the Company determined that the assets and liabilities of this reportable segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45, as such the results have been classified as discontinued operations. On March 8, 2019 the Black Helmet Apparel E-Commerce business was sold for $175,000. The Company received $20,000 at the closing and issued a 6% promissory note for $155,000 payable in twelve monthly payments of principal and interest. At December 31, 2018, approximately $180,000 of inventory was considered held for sale and included in discontinued operations. On March 22, 2019 the Company sold the remaining Bright Watches inventory for approximately $7,000. At December 31, 2018 $7,454 of inventory, written down to fair market value, was considered held for sale and included in discontinued operations. The detail of the consolidated balance sheets, the consolidated statements of operations and consolidated cash flows for the discontinued operations is as stated below: Three Months Ended March 31, 2019 December 31, 2018 Cash $ 11,804 $ 16,747 Inventory 29,250 223,000 Total Current Assets 41,054 239,747 Fixed assets, net - 49,347 Other Assets - 11,123 Total Other assets - discontinued operations - 60,470 Total Assets - Discontinued Operations $ 41,054 300,217 Accounts payable 20,907 127,512 Accrued Expenses 55,789 - Deferred rents - 16,417 Total current liabilities - discontinued operations 76,696 143,929 Net Assets (Liabilities) Discontinued Operations $ (35,642 ) $ 156,288 For the Three Months Ended March 31, 2019 2018 Revenues $ 98,797 $ 375,286 Cost of revenues 50,863 291,565 Gross profit 47,934 83,722 Selling, General and Administrative Expenses 130,650 261,411 Loss from discontinued operations (82,716 ) (177,689 ) Other income (expense) (32,748 ) 13 Loss from discontinued operations $ (115,464 ) $ (177,676 ) Basic and fully diluted net loss per share $ (0.002 ) $ (0.004 ) Cash (used in) provided by operations for discontinued operations: Loss from discontinued operations $ (115,464 ) (177,676 ) Depreciation - 3,375 Amortization of website acquisition and intangibles - 41,267 Loss on sale of Black Helmet Business Unit 11,309 - Write-off of property and equipment 49,348 - Inventory 37,327 107,706 Deposits 11,123 - Prepaid rents - 10,540 Accounts payable (106,604 ) (126,588 ) Accrued Expenses 55,789 (5,816 ) Deferred rents (16,417 ) (15,107 ) Cash used in discontinued operations $ (73,589 ) $ (162,299 ) Net decrease in cash and cash equivalents from discontinued operations $ (4,943 ) $ (764 ) |
PREPAID COSTS AND EXPENSES
PREPAID COSTS AND EXPENSES | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID COSTS AND EXPENSES | At March 31, 2019 and December 31, 2018, prepaid expenses and other current assets consisted of the following: March 31, 2019 December 31, 2018 Prepaid insurance 71,845 101,206 Current portion of prepaid service agreements 460,000 510,000 Prepaid expenses and other current assets $ $ 531,845 811,206 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | At March 31, 2019 and December 31, 2018, property and equipment consisted of the following: Useful Lives March 31, 2019 December 31, 2018 Furniture and fixtures 3-5 years $ 36,374 $ 36,374 Computer equipment 3 years 57,112 57,112 Leasehold improvements 5 years - 0 Total property and equipment 93,486 93,486 Less: accumulated depreciation (90,374 ) (88,022 ) Total property and equipment, net $ 3,112 $ 5,464 Depreciation expense for the three months ending March 31, 2019 and 2018, was $2,352 and $2,964, respectively. |
WEBSITE ACQUISITION AND INTANGI
WEBSITE ACQUISITION AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Website Acquisition And Intangible Assets | |
WEBSITE ACQUISITION AND INTANGIBLE ASSETS | At March 31, 2019 and December 31, 2018, respectively, website acquisitions, net consisted of the following: March 31, 2019 December 31, 2018 Website Acquisition Assets $ 1,124,846 $ 1,116,846 Less: accumulated amortization (835,500 ) (802,709 ) Less: accumulated impairment loss (200,396 ) (200,396 ) Website Acquisition Assets, net $ 88,950 $ 113,741 At March 31, 2019 and December 31, 2018, respectively, intangible assets, net consisted of the following: Useful Lives March 31, 2019 December 31, 2018 Tradename 5 years 32,000 32,000 Customer relationships 5 years 187,000 187,000 Non-compete agreements 5-8 years 78,000 78,000 Total Intangible Assets $ 297,000 $ 297,000 Less: accumulated amortization (78,905 ) (75,883 ) Intangible assets, net $ 218,095 $ 221,117 Amortization expense for the three months ended March 31, 2019 and 2018 was $35,813 and $71,456, respectively, related to both the website acquisition costs and the intangible assets. During the first quarter of 2019 the Company paid $8,000 for a Facebook page which will dramatically expand our social media audience and provide an opportunity to increase our advertising impressions. There were no outstanding assets, liabilities, or trademarks associated with this acquisition. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | At March 31, 2019 and 2018, respectively, accrued expenses consisted of the following: March 31, 2019 Decrmbrt 31, 2018 (unaudited) Accrued dividends 25,548 25,909 Accrued legal fees 37,887 94,200 Accrued audit fees 12,500 - Other accrued expenses (3,215 ) 51,979 Accrued liquidation damages 88,020 - Accrued traffic settlements 95,254 95,254 DEM Settlement $ 60,000 $ 197,690 Total Accrued Expenses $ 315,994 $ 267,342 As further described in Note 10, during the quarter ended March 31, 2019 the Company reached a settlement of $75,000 for publisher payments in collections of $197,500 resulting in a gain on settlement of $122,500. During March 2019 a $15,000 payment was made. Series E and F dividends totaling $25,548 and $25,909 for March 31, 2019 and 2018, respectively, have been included in accrued expenses. The Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements. A total of $95,254 was accrued at March 31, 2019 and December 31, 2018 for these potential future settlements. The Company accrued $88,020 in liquidation damages related to the late filing of the Resale Registration Statement discussed in Note 10. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | Long Term Debt to Related Parties Between September 2016 and August 2017 , the Company issued a series of convertible notes payable to an executive officer and a major shareholder totaling $2,035,000. The notes mature five years from at which time all principal and interest are payable. Interest rates on the notes ranged from 6% to 12% and the notes were convertible at any time prior to maturity at conversion prices ranging from $0.40 to 0.50 per share . The Company recognized a beneficial conversion feature when the fair value of the underlying common stock to which note is convertible into was in excess of the face value of the note. For notes payable under this criteria the intrinsic value of the beneficial conversion features was recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is being amortized to over the five-year life of the note the effective interest method. On November 7, 2018 the Company entered into a Note Exchange Agreement with Mr. W. Kip Speyer, our CEO and member of our Board of Directors, pursuant to which we exchanged our convertible notes for three new series of preferred stock as outlined below: ● $1,075,000 principal amount and accrued but unpaid interest due Mr. Speyer under 12% Convertible Promissory Notes maturing between September 26, 2021 and April 10, 2022 for 2,177,233 shares of our newly created Series F-1 Convertible Preferred Stock in full satisfaction of those notes; ● $660,000 principal amount and accrued but unpaid interest due Mr. Speyer under 6% Convertible Promissory Notes maturing between April 19, 2022 and July 27, 2022 for 1,408,867 shares of our newly created Series F-2 Convertible Preferred Stock in full satisfaction of those notes. ● $300,000 principal amount and accrued but unpaid interest due Mr. Speyer under 10% Convertible Promissory Notes maturing between August 1, 2022 and August 30, 2022 for 757,197 shares of our newly created Series F-3 Convertible Preferred Stock in full satisfaction of those notes. During November 2018 the Company issued 10% convertible promissory notes in the amount of $80,000 to a related party, to our Chief Executive Officer. The notes mature five years from issuance and is convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $0.40 per share. A beneficial conversion feature exists on the date the convertible notes were issued whereby the fair value of the underlying common stock to which the notes are convertible into is in excess of the face value of the note of $70,000. The principal balance of these notes was $80,000 at March 31, 2019 and December 31 , and discounts recognized upon origination dates as a of the conversion feature total $64,860 and $68,312 At March 31, 2019 and December 31, 2018, the total convertible notes payable to related net of discounts was $15,140 and $11,688, respectively. Interest expense for note payable to related party was $2,749 and $49,651 for the three months ended March 31, 2019 and March 31, 2018, respectively and discount amortization was $3,452 and $50,207, respectively. Long-term debt The Company has a note payable originating from a prior website acquisition. At the time of the acquisition, the Company agreed to pay $150,000, payable monthly in an amount equal to 30% of the net revenues from the website, when collected, with the total amount of the earn out to be paid by January 4, 2019. The Company recorded the future monthly payments totaling $150,000 at a present value of $117,268, net of a discount of $32,732. The present value was calculated at a discount rate of 12% using the estimate future revenues. The balance of the note payable at March 31, 2019 and December 31, 2018, was $0 and $57,181 net of discounts of $0 respectively. In connection with the acquisition of DEM, the Company issued promissory notes totaling $380,000. The notes have no stated interest rate and matured on September 19, 2018 and the Company is in default pending the final outcome of the legal matters. The balance of the notes payable at March 31, 2019 and December 31, 2018 were $165,162. This note was not paid off by the maturity date due to pending litigation. See further discussion in Note 11, under Legal. At March 31, 2019 and December 31, 2018 a summary of the Company's debt is as follows: March 31, 2019 December 31, 2018 $150,000 non-interest bearing Note Payable issued on January 6, 2016 for the acquisition of the WarIsBoring.com website maturing on January 4, 2019 $ — $ 57,181 Non-interest bearing Promissory Note issued for the DEM acquisition on September 19, 2017 which matured on September 19, 2018. The original note was $380,000 of which $35,000 was reclassified in 2018 to the Service Agreement listed below. 165,162 165,162 $45,000 non-interest bearing Note Payable issued on August 23,2018 and maturing on April 23, 2019 associated with a Service Agreement through August 23, 2020 — 7,501 Total Debt 165,162 229,844 Less Short Term Debt 165,162 229,844 Long Term Debt $ — $ — Interest expense for notes payable was $2,749 and $15,353 for the three months ended March 31, 2019 and 2018, respectively and discount amortization was $4,361 and $52,025, respectively. Premium Finance Loan Payable The Company generally finances its annual insurance premiums through the use of short-term notes, payable in 10 equal monthly installments. Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in 2019 of $110,200 and $41,914, respectively. Total Premium Finance Loan Payable balance for all of the Company’s policies was $60,206 T March 31, 2019 and $92,537 at December 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | The Company leases its corporate offices at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487 under a long-term non-cancellable operating lease agreement expiring on October 31, 2021. The lease terms require base rent payments of approximately $7,260 plus sales tax per month for the first twelve months commencing in September 2018, with a 3% escalation each year. Included in other assets is a required security deposit of $18,100. The right of use asset and lease liability is as follows as of March 31, 2019: Assets Right-of-Use Asset $ 225,536 Liabilities Operating lease liability, current $ 84,472 Operating lease liability, net of current portion 141,064 Total operating lease liability $ 225,536 The Company’s non-lease components are primarily related to property maintenance and other operating services, which varies based on future outcomes and is recognized in rent expense when incurred and not included in the measurement of the lease liability. The Company did not have any variable lease payments for its operating lease for the three months ended March 31, 2019. The maturity of the Company’s operating lease liability is as follows as of March 31, 2019: 2020 $ 94,799 2021 97,643 2022 49,668 Total undiscounted lease payments 242,110 Present value adjustment (16,574 ) Total net lease liability $ 225,536 The following summarizes additional information related to the operating lease: March 31, 2019 Weighted-average remaining lease term 2.66 years Weighted-average discount rate 5.50 % The Company leased retail space for its product sales division at 4900 Linton Boulevard, Bay 17A, Delray Beach, FL 33445 under a two long-term, non-cancellable lease agreement, which contained renewal options. The leases commenced in January 2017 and are in effect for a period of five years. Minimum base rentals total approximately $6,000 per month, escalating 3% per year thereafter. The Company also provided a $10,000 security deposit and prepaid $96,940 in future rents on the facility through the funding of certain leasehold improvements. The Company discontinued all retail operations and has made a settlement with the landlord to terminate the lease of approximately $55,000 which is included in accrued expenses. See Discontinued Operations Note 4. On December 16, 2016, under the terms of the Asset Purchase Agreement, we acquired the assets constituting the Black Helmet apparel business including various website properties and content, social media content, inventory and other intellectual property right. We also acquired the right to assume the lease of their warehouse facility consisting of approximately 2,667 square feet. The lease was renewed for a three-year term in April 2016 with an initial base rental rate of $1,641 per month, escalating at approximately 3% per year thereafter. The Company vacated the premises before March 31, 2019. See Discontinued Operations Note 4. For the three months ended March 31, 2019 and 2018, rent expense in continuing operations was $29,409 and $33,303, respectively. For the three months ended March 31, 2019 and 2018, rent expense included in discontinued operations was $37,042 and $30,787, respectively. Legal Effective July 18, 2018 we terminated the employment agreements with each of Messrs. Harry G. Pagoulatos and George G. Rezitis for cause. Messrs . Pagoulatos and Rezitis had been employed by us as chief operating officer and chief technology officer, respectively, of our DEM subs idiary since our acquisition of that company in September 2017. Mr. Todd Speyer, our Vice President, Digital and a member of our board of directors , have assumed operating responsibilities for DEM. While the malfeasance of Messrs. Harry G. Pagoulatos and George G. Rezitis giving rise to their for-cause termination adversely affected our results of operations for the second and third quarters, we do not expect that these terminations will result in any material, long-term change in the operations of DEM. In July of 2018, Messrs. Pagoulato s and Rezitis , along with a third party who had been a minority owner in DEM prior to our acquisition of that company, filed a Complaint in the U.S. District Court, District of New Jersey (case number 2: l 8-cv-11357-ES-SCM) against our Company and our Chief Executive Officer, seeking compensatory and punitive damages and attorneys' fees , among other items, and alleging , among other items , fraud and breach of contract. We vehemently deny all allegation s in the complaint and believe them to be without merit. We filed a Motion to Dismiss this case for a multitude of reasons including, but not restricted to, failure to state a cause of action and jurisdictional and venue arguments as the acquisition and employment agreements provides that any di s pute should be heard in either the state or local courts of Palm Beach County, Florida. This Motion to Dismiss has been pending a decision since October 2018. At the appropriate juncture , we also intend to serve a Rule 11 Motion for Sanctions based upon the fact that the Complaint contains frivolo us arguments or arguments with no evidentiary support. In connection with the DEM acquisition, the Company entered into three-year employment agreements with two former members of the entity. Under these agreements, the Company was obliged to pay base salaries of $65,000 and $70,000, respectively to the employees with an increase to $75,000 each in the second year of the agreement as well as bonuses to be paid at the discretion of the board of directors. As discussed in Note 8 , the principles of DEM failed to disclose an obligation at closing. During the quarter ended March 31, 2019 the Company reached a settlement with the collections lawyer to pay down the amount remaining in collections through equal monthly payments through February 1, 2020. From time-to-time, we may be involved in litigation or be subject to claims arising out of our operations or content appearing on our websites in the normal course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on our company because of defense and settlement costs , diversion of management resources and other factors. Other Commitments On September 5 , 2018 the Company entered into a Master Services Agreement with Kubient , Inc. pursuant to which it will provide its programmatic technology platform to us on a nonexclusive basis for the purpose of managing our programmatic business partners. The Company did not pay anything to Kubient , Inc. for the year ended March 31, 2019 for its platform. The Company has provided advertising services to Kubient and at March 31, 2019 the Company is owed $108,817 and a note receivable of $75,000 and we have reserved a total of $136,000 against these balances. On September 28 , 2018 Bright Mountain Media , Inc. entered into a non-binding letter of intent with Kubient , Inc . pursuant to which we may acquire Kubient , Inc . in an all stock transaction. The Company has completed the due diligence process and has made a determination that it will not pursue the acquisition of Kubient, Inc. On September 6 , 2017 Bright Mountain Media , Inc . entered into a five- year Consulting Agreement with the Spartan Capital Securities , LLC ( " Spartan Capital"), which became effective on September 28 , 2018 and, accordingly, Spartan Capital was engaged to provide advisory services . The consulting agreement calls for payments of $5,000 per month for a term of 60 months to be prepaid upon the effective date of the agreement. In addition , the Company issued Spartan Capital 1,000,000 shares of our common stock (the "Consulting Shares") in accordance with the consulting agreement. On September 6 , 2017 we also entered into a five-year M&A Advisory Agreement with Spartan Capital which became effective on September 28, 2018 for sixty months. Under the terms of the agreement, Spartan Capital will provide consulting services to us related to potential mergers or acquisitions. As consideration for the M&A advisory service we paid Spartan Capital a fee of $500,000 on the effective date of the agreement. Consulting fees consisting of $300 , 000 in cash and 1,000 , 000 shares of common stock valued at $750,000 as well as the $500,000 M&A advisory fee are considered prepaid expenses. Total prepaid service/consulting fees, net were $1,472,500 , of which $310,000 is considered short-term and is included in prepaid expenses and other current assets as of December 31, 2018. These prepaid expenses are being amortized over 60 months, the term of the respective agreements. The amortization expense was $77,500 for the three months ended March 31, 2019. The Company granted the purchasers in the offering demand and piggy-back registration rights with respect to the share s of our common stock included in the Units and the shares of common stock issuable upon the exercise of the Private Placement Warrants. In addition , the Company agreed to file a resale registration statement within 120 days following the final closing of this offering covering the shares of common stock issuable upon the exercise of the Private Placement Warrants included in the Units. If the Company should fail to timely file this resale registration statement, then within five business days of the end of month we will pay the holders an amount in cash, as of the date the deficiency is cured or the expiration of six months from filing deadline . The Company will keep any such registration statement effective until the earlier of the date upon which all such securities may be sold without registration under Rule 144 promulgated under the Securities Act or the date which is six months after the expiration date of the Private Placement Warrants. We are obligated to pay all costs associated with this registration statement , other than selling expenses of the holders . On April 25, 2019 we filed the Registration Statement and included in accrued expenses $88,020 for the liquidated damages due at March 31, 2019. On December 11, 2018 we entered into an Uplisting Advisory and Consulting Agreement with Spartan Capital pursuant to which Spartan Capital will provide (i) advice and input with respect to strategies to accomplish an uplisting of our common stock to the Nasdaq Capital Market or NYSE American LLC or another national securities exchange, and the implementation of such strategies and making introductions to facilitate the uplisting, (ii) advice and input with respect to special situation and restructuring services, including debtor and creditor advisory services, and (iii) sell-side advisory services with respect to the sale and disposition of non-core businesses and assets, including facilitating due diligence and identifying potential buyers and strategic partners and positioning these businesses and assets to maximize value. We paid Spartan Capital a fee of $200,000 for its services under this agreement which is for a 12 month term beginning on the closing date of the offering. The agreement also provides that we will reimburse Spartan Capital for reasonable out-of-pocket expenses, which we must approve in advance. The Company has included the uplisting fee in prepaid expense at March 31, 2019 and December 31, 2018 of $150,000 and $200,000, respectively and it is amortized over a twelve-month period. For the three months ended March 31, 2019 and 2018 the Company recognized $50,000 and $0, respectively. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | Preferred Stock The Company has authorized 20,000,000 shares of preferred stock with a par value of $0.01 (the "Preferred Stock"), issuable in such series and with such designations, rights and preferences as the board of directors may determine. The Company's board of directors has previously designated five series of preferred stock, consisting of 10% Series A Convertible Preferred Stock ("Series A Stock"), 10% Series B Convertible Preferred Stock ("Series B Stock"), 10% Series C Convertible Preferred Stock ("Series C Stock"), 10% Series D Convertible Preferred Stock ("Series D Stock") and 10% Series E Convertible Preferred Stock ("Series E Stock"). Dividends paid for Series E Convertible Preferred Stock paid during the three months ended March 31, 2019 and 2018 was $24,658 and $16,986, respectively. Dividends paid for Series F Convertible Preferred Stock paid during the three months ended March 31, 2019 and 2018 was $49,512 and $0, respectively. Common Stock Between January 2019 and March 2019, the Company sold an aggregate of 163,750 units of its securities to 1 accredited investor in a private placement registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds to the Company of $58,950. Each unit, which was sold at a purchase price of $0.40, consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.65 per share. Spartan Capital, served as placement agent for the Company in this offering. As compensation for its services, the Company paid Spartan Capital commissions and other fees totaling $6,550, and issued Spartan Capital Placement Agents Warrants to purchase an aggregate of 16,375 shares of our common stock, including the cash commission and Placement Agent Warrants issued pursuant to the final closing on January 9, 2019 included in the Company’s consolidated statement of changes in shareholders’ equity for the three months ended March 31, 2019. Between January 2019 and March 2019, the Company sold an aggregate of 1,030,000 units of its securities to 9 accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross the Company of $515,000. Each unit, which was sold at a purchase price of $0.50, consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.75 per share. We used $463,500 of the proceeds to issue 6% promissory notes to Inform, Inc as a part of the potential acquisition. Between February 2019 and March 2019, the Company sold an aggregate of 750,000 units of its securities to 3 accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds to the Company of $300,000. Each unit, which was sold at a purchase price of $0.40, consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.65 per share. During the period January 2018 to March 2018, warrants to purchase an aggregate of 176,250 of the Company’s common stock were valued at $95,552. The Company initially recorded the warrants as professional fees in the condensed consolidated statement of operations however management subsequently determined that based on the services specified in the agreement, the fees incurred from the warrant issuance were solely for the purpose of raising capital in connection with the private placement discussed above. As a result, the fees are considered an offering cost and should have been reflected as a component of shareholder’s equity for the period ended March 31, 2018. Stock Option Compensation The Company accounts for stock option compensation issued to employees for services in accordance with ASC Topic 718, “Compensation – Stock Compensation”. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU No. 2018- 07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.”. The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model. Stock options issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option, whichever is more reliably measurable in accordance with FASB ASC 505, Equity, and FASB ASC 718, including related amendments and interpretations. The related expense is recognized over the period the services are provided. The Company recorded $3,213 and $7,344 of stock option expense for the three months ended March 31, 2019 and 2018 respectively. The stock option expense for the three months ended March 31, 2019 and 2018, respectively has been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements. As of March 31, 2019 there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $8,465 to be recognized through December 2020. A summary of the Company's stock option activity during the three months ended March 31, 2019 is presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance Outstanding, December 31, 2018 $ 1,797,000 $ 0.44 5.1 $ 825,647 Granted $ — $ — — $ — Exercised $ — $ — — $ — Forfeited $ — $ — — $ — Expired $ — $ — — $ — Balance Outstanding, March 31, 2019 $ 1,797,000 $ 0.44 4.7 $ 788,690 Exercisable at March 31, 2019 $ 1,693,000 $ 0.44 4.2 $ 715,323 Summarized information with respect to options outstanding under the two option plans at March 31, 2019 is as follows: Options Outstanding Range or Number Weighted Average Exercise Price Remaining Number Exercise Price Outstanding Average Exercisable Contractual Life (In Years) 0.14 - 0.24 540,000 $ 0.14 2.4 540,000 0.25 - 0.49 351,000 $ 0.28 3.9 351,000 0.50 - 0.85 906,000 $ 0.68 6.4 802,000 1,797,000 $ 0.44 4.7 1,693,000 |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | During November 2018, Mr. w. Kip Speyer, the Company’s Chairman and Chief Executive Officer, entered into two convertible note agreements with the company totaling $80,000. These notes have a conversion price of $0.40 per share and resulted in the recognition of a beneficial conversion feature recorded as a debt discount. These notes payable total $15,140 and $11,688 at March 31, 2019 and December 31, 2018. The notes are reported net of their unamortized debt discount of $64,860 and $68,312 as of March 31, 2019 and December 31, 2018, respectively. During the three months ended March 31, 2019 and March 31,2018 we paid cash dividends on these outstanding shares of the Company’s Series E and F Preferred Stock of $24,658 and $49,513, and $82,627 and $0, respectively to W Kip Speyer and Rich Rogers. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
NOTES RECEIVABLE | In March 2019 we sold the assets which were used in our Black Helmet apparel E-Commerce business to an unaffiliated third party for $175,000, of which $20,000 was paid at closing and the balance is payable under the terms of a promissory note in the principal amount of $155,000 and bearing interest at 8% per annum. The note is secured by a guarantee of the principal of the purchaser. The term of the note is twelve months. As of March 31, 2019 the Company has a total of $373,500 in Notes Receivable to Inform, Inc., a potential acquisition. The notes bear interest at 6% and mature on June 30, 2019. The Company funded these notes though a Private Placement memorandum placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. There is more information regarding these notes in Note 11. A $75,000 note was issued to Kubient, Inc. during 2018 as a part of an acquisition which the Company withdrew from. The note has been defaulted on and has been sent to our collection agent, and as a result the Company has recorded a reserve of $56,250 on the note. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On April 25, 2019 the Company entered into an amended non-binding letter of intent with Inform, Inc. pursuant to which we may acquire Inform, Inc. in an all stock transaction. The amended non-binding letter of intent replaced in its entirety the February 2019 non-binding letter of intent previously entered into by the parties. Inform, Inc. provides data-driven technology solutions for the syndication and monetization of contextually relevant, personalized premium video content. Inform seeks to solve the industry’s supply challenge for premium video by creating new video streams and impression opportunities across the most desirable online publishing destinations in the United States. Pursuant to the execution of the February 2019 non-binding letter of intent with Inform, Inc., During the April, and May, 2019, the Company sold an aggregate of 709,000 units of its securities to 15 accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds to the Company of $354,500. Each unit, which was sold at a purchase price of $0.50, consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.75 per share. We used $319,050 of the proceeds to issue 6% promissory notes to Inform, Inc as a part of the potential acquisition. The remaining $35,450 of the proceeds were used for general working capital. On May 14, 2019 the Company submitted an amended Registration Statement under Form S-1/A (the “Report”) to amend the S-1 filed on April 25, 019. A notice of effectiveness was issued making the Report effective May 14, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Bright Mountain Media, Inc. is a Florida corporation formed on May 20, 2010. Its wholly owned subsidiaries, Bright Mountain LLC, and The Bright Insurance Agency, LLC, were formed as Florida limited liability companies in May 2011. Its wholly owned subsidiary, Bright Watches, LLC was formed as a Florida limited liability company in December 2015, and its wholly owned subsidiary Daily Engage Media Group LLC (“Daily Engage Media”) was formed as a New Jersey limited liability company in February 2015. When used herein, the terms "BMTM, the "Company," "we," "us," "our" or "Bright Mountain" refers to Bright Mountain Media, Inc. and its subsidiaries. Discontinued Operations The Company discontinued the E-Commerce operations, the Products segment, as of December 31, 2018 per the determination of Management and the Board of Directors. Accordingly, the Company determined that the assets and liabilities of this reportable segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45, and were classified as discontinued operations at December 31, 2018. See Discontinued Operations Note 4. Continuing Operations We are a digital media holding company for online assets targeting and servicing the military and public safety markets. During the three months ended March 31, 2019 we delivered approximately During the past several years the Company has evolved to place its emphasis on not only providing quality content on our websites to drive traffic increases, but to increase the advertising revenue we generate from companies and brands looking to reach our audiences. Our ad network connects general use advertisers with approximately 200 digital publications worldwide. Bright Mountain’s websites feature timely, proprietary and aggregated content covering current events and a variety of additional subjects that are targeted to the specific, primarily young male, demographics of the individual website. Our business strategy requires us to continue to provide this quality content to our niche markets as we grow our business, operations and revenues. The Company’s focus is to launch its full-scale Ad Network Business platform, the Bright Mountain Media Ad Network Business. On September 19, 2017, under the terms of an Amended and Restated Membership Interest Purchase Agreement with DEM, and its members, the Company acquired 100% of the membership interests of Daily Engage Media. Launched in 2015, DEM is an ad network that connects advertisers with approximately 200 digital publications worldwide. |
Principles of Consolidation and Basis of Presentation | The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The accompanying unaudited financial statements for the three months ended March 31, 2019 and 2018 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of December 31, 2018 was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on April 12, 2019. The interim condensed consolidated financial statements should be read in conjunction with that report. |
Revenue Recognition | On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) To determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the advertising services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the advertising services promised within each contract and determines those that are performance obligations and assesses whether each promised advertising service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied. The Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through its publishing advertiser impressions and pay-for-click services. the Company’s owned and operated sites, our ad network, or platforms.. Invalid traffic on the Ad Network may impact the amount collected and adjusted by our Ad Network. The Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated sites, our ad network, or platforms. The revenue is earned when the users click on the published website advertisements. Specific revenue recognition criteria for the advertising revenue stream is as follows: ● Advertising revenues are generated by users "clicking" on website advertisements utilizing several ad network partners. ● Revenues are recognized net of adjustments based on the traffic generated and is billed monthly. The Company subsequently settles these transactions with publishers at which time adjustments for invalid traffic may impact the amount collected; and |
Leases | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. On January 1, 2019, the Company adopted the new lease standard using the optional transition method under which comparative financial information has not been restated and will continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods. In addition, the new lease standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; and did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The new lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right of use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (office building). The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the remaining lease terms as of January 1, 2019. Since the Company’s lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based on the information available at January 1, 2019 in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred. On January 1, 2019, the Company recognized a ROU asset and a lease liability of approximately $245,000 on its consolidated balance sheet. |
Use of Estimates | Our consolidated financial statements are prepared in accordance with GAAP. These accounting principles require management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. Significant estimates included in the accompanying consolidated financial statements include revenue recognition, the fair value of acquired assets for purchase price allocation in business combinations, valuation of inventory, valuation of intangible assets, estimates of amortization period for intangible assets, estimates of depreciation period for fixed assets and the valuation of equity-based transactions, and the valuation allowance on deferred tax assets. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Fair Value of Financial Instruments and Fair Value Measurements | FASB ASC 820 “ Fair Value Measurement and Disclosures: The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities. We adopted accounting guidance for fair values measurements and disclosures (ASC 820). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Financial instruments recognized in the consolidated balance sheets consist of cash, accounts receivable, prepaid expenses and other current assets, note receivable, accounts payable, accrued expenses and premium finance loan payable. The Company believes that the carrying value of its current financial instruments approximates their fair values due to the short-term nature of these instruments. The carrying value of long-term debt to related parties and long-term debt to others approximates the current borrowing rate for similar debt instruments. The following are the major categories of liabilities measured at fair value on a recurring basis for the three months ended March 31, 2019, using significant unobservable inputs (Level 3): Fair Value measurement using Level 3 Balance at December 31, 2018 $ 309,844 Long term debt additions during 2019 - Principal reductions during 2019 (64,681 ) Adjustment to fair value - Balance at March 31, 2019 $ 245,163 |
Accounts Receivable | Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense. The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 60 or net 90 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. |
Property and Equipment | Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of seven years for office furniture and equipment, and five years for computer equipment. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. |
Website Development Costs | The Company accounts for its website development costs in accordance with ASC 350-50, "Website Development Costs". These costs, if any, are included in intangible assets in the accompanying consolidated financial statements. ASC 350-50 requires the expensing of all costs of the preliminary project stage and the training and application maintenance stage and the capitalization of all internal or external direct costs incurred during the application and infrastructure development stage. Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred. The Company amortizes the capitalized website development costs over an estimated life of five years. For the three months ended March 31, 2019 and 2018, $8,000 was capitalized and all website development costs have been expensed in 2018. |
Amortization and Impairment of Long-Lived Assets | Amortization and impairment of long-lived assets are non-cash expenses relating primarily to website acquisitions. The Company accounts for long-lived assets in accordance with the provisions of ASC 360, "Property, Plant and Equipment". This requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Website acquisition costs are amortized over five years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. While it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing business. |
Stock-Based Compensation | The Company accounts for stock-based instruments issued to employees for services in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC Topic 505-50, "Equity-Based Payments to Non-Employees". |
Advertising, Marketing and Promotion Costs | Advertising, marketing and promotion expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying statement of operations. For the three months ended March 31, 2019 and 2018, advertising, marketing and promotion expense was $6,000 and $217, respectively for continuing operations and $6,002 and $60,706 for discontinued operations, respectively. |
Income Taxes | We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period those differences are expected to reverse. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. The Company follows the provisions of ASC 740-10, Income Taxes - Overall. As of March 31, 2019, tax years 2018, 2017, and 2016 remain open for Internal Revenue Service ("IRS") audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. |
Concentrations | Concentrations The Company generates revenues from through an Ad Exchange Network and through our Owned and Operated Ad Exchange Network. There are two large customers who account for approximately 59% of the Ad Exchange Network Revenue for the three months ended March 31, 2019. One of those customers accounted for approximately 24% of the Accounts Receivable at March 31, 2019. Credit Risk The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At March 31, 2019 and December 31, 2018, the Company had approximately $469,141 and $456,000, respectively, in cash balances above the FDIC insured limit. The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral. Concentration of Funding During the three months ended March 31, 2019 a large portion of the Company's funding was provided through the sale of shares of the Company's common stock with related warrants. |
Basic and Diluted Net Earnings (Loss) Per Common Share | In accordance with ASC 260-10 , "Earnings Per Share", |
Segment Information | The Company currently operates in one reporting segment. This segment is focused on producing advertising revenue generated by users "clicking" on website advertisements utilizing several ad network partners and direct advertisers. |
Recent Accounting Pronouncements | In April 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses” which replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model applies to financial assets subject to credit losses and measured at amortized cost and certain off-balance sheet exposures. Under current U.S. GAAP, an entity reflects credit losses on financial assets measured on an amortized cost basis only when losses are probable and have been incurred, generally considering only past events and current conditions in making these determinations. ASU 2016-13 prospectively replaces this approach with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, starting when such assets are first acquired. Under the revised methodology, credit losses will be measured based on past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets. ASU 2016-13 also revises the approach to recognizing credit losses for available-for-sale securities by replacing the direct write-down approach with the allowance approach and limiting the allowance to the amount at which the security’s fair value is less than the amortized cost. In addition, ASU 2016-13 provides that the initial allowance for credit losses on purchased credit impaired financial assets will be recorded as an increase to the purchase price, with subsequent changes to the allowance recorded as a credit loss expense. ASU 2016-13 also expands disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for credit losses. The amendments of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted as of January 1, 2019. The Company is currently evaluating the impact the adoption of this new standard will have on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows –Restricted Cash” after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have an impact on our statement of cash flows. In January 2017, the FASB issued 2017-04, Intangibles - Goodwill and Other In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. We do not expect the adoption of this guidance to have a material impact on our consolidated Financial Statements. |
Reclassification | Certain reclassifications have been made to the December 31, 2018 and March 31, 2018 consolidated balance sheets to conform to the March 31, 2019 consolidated balance sheet presentation. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | Three Months Ended March 31, 2019 December 31, 2018 Cash $ 11,804 $ 16,747 Inventory 29,250 223,000 Total Current Assets 41,054 239,747 Fixed assets, net - 49,347 Other Assets - 11,123 Total Other assets - discontinued operations - 60,470 Total Assets - Discontinued Operations $ 41,054 300,217 Accounts payable 20,907 127,512 Accrued Expenses 55,789 - Deferred rents - 16,417 Total current liabilities - discontinued operations 76,696 143,929 Net Assets (Liabilities) Discontinued Operations $ (35,642 ) $ 156,288 For the Three Months Ended March 31, 2019 2018 Revenues $ 98,797 $ 375,286 Cost of revenues 50,863 291,565 Gross profit 47,934 83,722 Selling, General and Administrative Expenses 130,650 261,411 Loss from discontinued operations (82,716 ) (177,689 ) Other income (expense) (32,748 ) 13 Loss from discontinued operations $ (115,464 ) $ (177,676 ) Basic and fully diluted net loss per share $ (0.002 ) $ (0.004 ) Cash (used in) provided by operations for discontinued operations: Loss from discontinued operations $ (115,464 ) (177,676 ) Depreciation - 3,375 Amortization of website acquisition and intangibles - 41,267 Loss on sale of Black Helmet Business Unit 11,309 - Write-off of property and equipment 49,348 - Inventory 37,327 107,706 Deposits 11,123 - Prepaid rents - 10,540 Accounts payable (106,604 ) (126,588 ) Accrued Expenses 55,789 (5,816 ) Deferred rents (16,417 ) (15,107 ) Cash used in discontinued operations $ (73,589 ) $ (162,299 ) Net decrease in cash and cash equivalents from discontinued operations $ (4,943 ) $ (764 ) |
PREPAID COSTS AND EXPENSES. (Ta
PREPAID COSTS AND EXPENSES. (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Costs and Expenses | March 31, 2019 December 31, 2018 Prepaid insurance 71,845 101,206 Current portion of prepaid service agreements 460,000 510,000 Prepaid expenses and other current assets $ $ 531,845 811,206 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Useful Lives March 31, 2019 December 31, 2018 Furniture and fixtures 3-5 years $ 36,374 $ 36,374 Computer equipment 3 years 57,112 57,112 Leasehold improvements 5 years - 0 Total property and equipment 93,486 93,486 Less: accumulated depreciation (90,374 ) (88,022 ) Total property and equipment, net $ 3,112 $ 5,464 |
WEBSITE ACQUISITION AND INTAN_2
WEBSITE ACQUISITION AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Website Acquisition And Intangible Assets | |
Schedule of intangible assets | At March 31, 2019 and December 31, 2018, respectively, website acquisitions, net consisted of the following: March 31, 2019 December 31, 2018 Website Acquisition Assets $ 1,124,846 $ 1,116,846 Less: accumulated amortization (835,500 ) (802,709 ) Less: accumulated impairment loss (200,396 ) (200,396 ) Website Acquisition Assets, net $ 88,950 $ 113,741 At March 31, 2019 and December 31, 2018, respectively, intangible assets, net consisted of the following: Useful Lives March 31, 2019 December 31, 2018 Tradename 5 years 32,000 32,000 Customer relationships 5 years 187,000 187,000 Non-compete agreements 5-8 years 78,000 78,000 Total Intangible Assets $ 297,000 $ 297,000 Less: accumulated amortization (78,905 ) (75,883 ) Intangible assets, net $ 218,095 $ 221,117 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | March 31, 2019 Decrmbrt 31, 2018 (unaudited) Accrued dividends 25,548 25,909 Accrued legal fees 37,887 94,200 Accrued audit fees 12,500 - Other accrued expenses (3,215 ) 51,979 Accrued liquidation damages 88,020 - Accrued traffic settlements 95,254 95,254 DEM Settlement $ 60,000 $ 197,690 Total Accrued Expenses $ 315,994 $ 267,342 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
Schedule of debt | March 31, 2019 December 31, 2018 $150,000 non-interest bearing Note Payable issued on January 6, 2016 for the acquisition of the WarIsBoring.com website maturing on January 4, 2019 — 57,181 Non-interest bearing Promissory Note issued for the DEM acquisition on September 19, 2017 which matured on September 19, 2018. The original note was $380,000 of which $35,000 was reclassified in 2018 to the Service Agreement listed below. 165,162 165,162 $45,000 non-interest bearing Note Payable issued on August 23,2018 and maturing on April 23, 2019 associated with a Service Agreement through August 23, 2020 — 7,501 Total Debt 165,162 229,844 Less Short Term Debt 165,162 229,844 Long Term Debt $ — $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease right-of-use assets | Assets Operating lease Right-of-Use Asset $ 225,536 Liabilities Operating lease liability, current 84,472 Operating lease liability, net of current portion 141,064 Total operating lease liability $ 225,536 |
Schedule of maturity of operating lease liabilities | Operating Undiscounted lease payments Leases 2019 (excluding the three months ended March 31, 2019) $ 94,799 2020 97,643 2021 49,668 Total undiscounted lease payments 242,110 Present value adjustment (16,574 ) Total net lease liability $ 225,536 |
Supplemental information related to lease | March 31, 2019 Weighted-average remaining lease term Operating lease 2.66 years Weighted-average discount rate Operating lease 5.50 % |
Schedule of future minimum lease commitments | The Company's future undiscounted lease payments under operating leases (as defined by prior guidance) as of December 31, 2018 are as follow (in thousands): 2019 $ 109,582 2020 112,763 2021 and thereafter 115,642 Total minimum lease payments $ 337,987 Future minimum lease commitments due for facilities under non-cancellable operating leases at March 31, 2019 are as follows: 2019 (excluding first three months of 2019) $ 70,808 2020 96,923 2021 74,379 Total minimum lease payments $ 242,110 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Option Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance Outstanding, December 31, 2018 $ 1,797,000 $ 0.44 5.1 $ 4,584,340 Granted $ — $ — — $ — Exercised $ — $ — — $ — Forfeited $ — $ — — $ — Expired $ — $ — — $ — Balance Outstanding, March 31, 2019 $ 1,797,000 $ 0.44 4.7 $ 788,690 Exercisable at March 31, 2019 $ 1,693,000 $ 0.44 4.2 $ 715,323 |
Schedule of options outstanding under the option plans | Options Outstanding Range or Number Weighted Average Exercise Price Remaining Number Exercise Price Outstanding Average Exercisable Contractual Life (In Years) 0.14 - 0.24 540,000 $ 0.14 2.4 540,000 0.25 - 0.49 351,000 $ 0.28 3.9 351,000 0.50 - 0.85 906,000 $ 0.68 6.4 802,000 1,797,000 $ 0.44 4.7 1,693,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
GOING CONCERN [Abstract] | |||
Net loss | $ 710,262 | $ 949,250 | |
Net cash used in operating activities | 629,453 | $ 675,760 | |
Accumulated deficit | $ 17,753,228 | $ 17,042,966 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-based compensation expense | $ 3,213 | $ 7,340 |
Advertising, marketing and promotion expense | $ 6,000 | $ 217 |
Stock Option [Member] | ||
Dilutive common stock equivalent shares outstanding | 1,797,000 | 2,027,000 |
Warrants | ||
Dilutive common stock equivalent shares outstanding | 16,319,875 | 0 |
Preferred Stock | ||
Dilutive common stock equivalent shares outstanding | 6,844,017 | 1,475,000 |
Convertible Notes Payable [Member] | ||
Dilutive common stock equivalent shares outstanding | 0 | 4,070,000 |
Continuing Operations | ||
Advertising, marketing and promotion expense | $ 6,000 | $ 217 |
Discontinued Operations | ||
Advertising, marketing and promotion expense | $ 6,002 | $ 60,706 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash and Cash Equivalents | $ 11,804 | $ 16,747 |
Inventory, net | 29,250 | 223,000 |
Total Current Assets | 41,054 | 239,747 |
Fixed assets, net | 0 | 49,347 |
Other Assets | 0 | 60,740 |
Total Other Assets - Discontinued Operations | 0 | 60,470 |
Total Assets - Discontinued Operations | 41,054 | 300,217 |
Accounts Payable | 20,907 | 127,512 |
Accrued Expenses | 55,789 | 0 |
Deferred Rents | 0 | 16,417 |
Total Current Liabilities - Discontinued Operations | 76,696 | 143,929 |
Net Assets (Liabilities) Discontinued Operations | $ (35,642) | $ 156,288 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenues | $ 98,797 | $ 375,286 |
Cost of revenue | 50,863 | 291,565 |
Gross profit | 47,934 | 83,722 |
Selling general, and administrative expenses | 130,650 | 261,411 |
Loss from operations - discontinued operations | (82,716) | (177,689) |
Other income (expense) | (32,748) | 13 |
Loss from discontinued operations | $ (115,464) | $ (177,676) |
Basic and fully diluted net loss per share | $ (0.002) | $ (0.004) |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash (used in) provided by operations for discontinued operations: | ||
Loss from discontinued operations | $ (115,464) | $ (177,676) |
Depreciation | 0 | 3,375 |
Amortization of website acquisitions and intangibles | 0 | 41,267 |
Loss on sale of Black Helmet Business Unit | 11,309 | 0 |
Write-off of property and equipment | 49,348 | 0 |
Change in Assets and Liabilities Classified as Discontinued Operations: | ||
Inventory | 37,327 | 107,706 |
Deposits | 11,123 | 0 |
Prepaid rents | 0 | 10,540 |
Accounts payable | (106,604) | (126,588) |
Accrued Expenses | 55,789 | (5,816) |
Deferred Rents | (16,417) | (15,107) |
Change in cash (used in) provided by discontinued operations | (73,589) | (162,299) |
Net decrease in cash and cash equivalents from discontinued operations | $ (4,943) | $ (764) |
PREPAID COSTS AND EXPENSES (Det
PREPAID COSTS AND EXPENSES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 71,845 | $ 101,206 |
Current portion of prepaid service agreements | 460,000 | 510,000 |
Prepaid expenses and other current assets | $ 531,845 | $ 611,206 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Total property and equipment | $ 93,486 | $ 93,486 |
Less: Accumulated Depreciation | (90,374) | (88,022) |
Total property and equipment, net | 3,112 | 5,464 |
Furniture and Fixtures [Member] | ||
Total property and equipment | $ 36,374 | 36,374 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property and equipment, Useful Life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property and equipment, Useful Life | 5 years | |
Computer Equipment [Member] | ||
Total property and equipment | $ 57,112 | 57,112 |
Property and equipment, Useful Life | 3 years | |
Leasehold Improvements [Member] | ||
Total property and equipment | $ 0 | $ 0 |
Property and equipment, Useful Life | 5 years |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Non-cash depreciation expense | $ 2,352 | $ 2,964 |
WEBSITE ACQUISITION AND INTAN_3
WEBSITE ACQUISITION AND INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Website Acquisition And Intangible Assets Details Abstract | ||
Website Acquisition Assets | $ 1,124,846 | $ 1,116,846 |
Less: accumulated amortization | (835,500) | (802,709) |
Less: accumulated impairment loss | (200,396) | (200,396) |
Website Acquisition Assets, net | $ 88,950 | $ 113,741 |
WEBSITE ACQUISITION AND INTAN_4
WEBSITE ACQUISITION AND INTANGIBLE ASSETS (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Intangible assets | $ 297,000 | $ 297,000 |
Less: accumulated amortization | (78,905) | (75,883) |
Intangible assets, net | 218,095 | 221,117 |
Tradename | ||
Intangible assets | $ 32,000 | 32,000 |
Intangible Asset, Useful Life | 5 years | |
Customer relationships | ||
Intangible assets | $ 187,000 | 187,000 |
Intangible Asset, Useful Life | 5 years | |
Non-compete agreements | ||
Intangible assets | $ 78,000 | $ 78,000 |
Non-compete agreements | Minimum [Member] | ||
Intangible Asset, Useful Life | 5 years | |
Non-compete agreements | Maximum [Member] | ||
Intangible Asset, Useful Life | 8 years |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued dividends | $ 25,548 | $ 25,909 |
Accrued legal fees | 37,887 | 94,200 |
Accrued audit fees | 12,500 | 0 |
Other accrued expenses | (3,215) | 51,979 |
Accrued liquidation damages | 88,020 | 0 |
Accrued traffic settlements | 95,254 | 95,254 |
DEM Settlement | 60,000 | 197,690 |
Total Accrued Expenses | $ 315,994 | $ 465,032 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Total debt | $ 165,162 | $ 165,162 | $ 229,844 |
Total short term debt | $ 165,162 | 229,844 | 229,844 |
Total long term debt | 0 | 0 | |
Note Payable 1 | |||
Total debt | 0 | 57,181 | |
Note Payable 2 | |||
Total debt | 165,162 | 165,162 | |
Note Payable 3 | |||
Total debt | $ 0 | $ 7,501 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes Payable [Abstract] | ||||
Interest expense on the convertible notes payable | $ 2,749 | $ 49,651 | ||
Notes payable | 165,162 | $ 165,162 | $ 229,844 | |
Interest expense on notes payable | $ 2,749 | $ 15,353 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Operating lease Right-of-Use Asset | $ 225,536 | $ 0 |
Liabilities | ||
Operating lease liability, current | 84,472 | 0 |
Operating lease liability, net of current portion | 141,064 | $ 0 |
Total operating lease liability | $ 225,536 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Mar. 31, 2019USD ($) |
Commitments And Contingencies Details 1Abstract | |
2019 (excluding the three months ended March 31, 2019) | $ 94,799 |
2020 | 97,643 |
2021 | 49,668 |
Total undiscounted lease payments | 242,110 |
Present value adjustment | (16,574) |
Total net lease liability | $ 225,536 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) | Mar. 31, 2019 |
Commitments And Contingencies Details 3Abstract | |
Weighted-average remaining lease term Operating lease | 2 years 7 months 28 days |
Weighted-average discount rate Operating lease | 5.50% |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details 3) | Mar. 31, 2019USD ($) |
Commitments And Contingencies Details 4Abstract | |
2019 | $ 109,582 |
2020 | 112,763 |
2021 | 115,642 |
Total minimum lease payments | $ 337,987 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Details 4) | Mar. 31, 2019USD ($) |
Commitments And Contingencies Details 2Abstract | |
2019 (excluding first three months of 2019) | $ 70,808 |
2020 | 96,923 |
2021 | 74,379 |
Total minimum lease payments | $ 242,110 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Prepaid rent | $ 150,000 | $ 200,000 | |
Rent expense | 66,451 | $ 64,090 | |
Continuing Operations | |||
Rent expense | $ 29,409 | $ 33,303 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Number of Options | |
Balance Outstanding, Beginning | shares | 1,797,000 |
Granted | shares | 0 |
Exercised | shares | 0 |
Forfeited | shares | 0 |
Expired | shares | 0 |
Balance Outstanding, Ending | shares | 1,797,000 |
Exercisable, Ending | shares | 1,693,000 |
Weighted Average Exercise Price | |
Balance Outstanding, Beginning | $ / shares | $ 0.44 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Forfeited | $ / shares | 0 |
Expired | $ / shares | 0 |
Balance Outstanding, Ending | $ / shares | 0.44 |
Exercisable, Ending | $ / shares | $ 0.44 |
Weighted Average Remaining Contractual Term | |
Outstanding, Beginning | 5 years 1 month 6 days |
Outstanding, Ending | 4 years 8 months 12 days |
Exercisable, Ending | 4 years 2 months 12 days |
Aggregate Intrinsic Value | |
Outstanding, Beginning | $ | $ 4,584,340 |
Outstanding, Ending | $ | 788,690 |
Exercisable | $ | $ 715,323 |
SHAREHOLDERS' EQUITY (Details 1
SHAREHOLDERS' EQUITY (Details 1) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Options Outstanding | |
Number Outstanding | shares | 1,797,000 |
Remaining Average Contractual Life (In Years) | 4 years 8 months 12 days |
Weighted Average Exercise Price | $ 0.44 |
Options Exercisable | |
Number Exercisable | shares | 1,693,000 |
Weighted Average Exercise Price | $ 0.42 |
0.14 - 0.24 [Member] | |
Exercise price lower range limit | 0.14 |
Exercise price upper range limit | $ 0.24 |
Options Outstanding | |
Number Outstanding | shares | 540,000 |
Remaining Average Contractual Life (In Years) | 2 years 4 months 24 days |
Weighted Average Exercise Price | $ 0.14 |
Options Exercisable | |
Number Exercisable | shares | 540,000 |
Weighted Average Exercise Price | $ 0.14 |
0.25 - 0.49 [Member] | |
Exercise price lower range limit | 0.25 |
Exercise price upper range limit | $ 0.49 |
Options Outstanding | |
Number Outstanding | shares | 351,000 |
Remaining Average Contractual Life (In Years) | 3 years 10 months 24 days |
Weighted Average Exercise Price | $ 0.28 |
Options Exercisable | |
Number Exercisable | shares | 351,000 |
Weighted Average Exercise Price | $ 0.28 |
0.50 - 0.85 [Member] | |
Exercise price lower range limit | 0.50 |
Exercise price upper range limit | $ 0.85 |
Options Outstanding | |
Number Outstanding | shares | 906,000 |
Remaining Average Contractual Life (In Years) | 6 years 4 months 24 days |
Weighted Average Exercise Price | $ 0.68 |
Options Exercisable | |
Number Exercisable | shares | 802,000 |
Weighted Average Exercise Price | $ 0.68 |
SHAREHOLDERS' EQUITY (Details N
SHAREHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Preferred stock, par value per share | $ .01 | $ .01 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |
Share based compensation expense | $ 3,213 | $ 7,344 | |
Unrecognized compensation cost | $ 8,465 | ||
Series A Preferred Stock [Member] | |||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares issued | 0 | 100,000 | |
Preferred stock, shares outstanding | 0 | 100,000 | |
Series B Preferred Stock [Member] | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Series C Preferred Stock [Member] | |||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Series D Preferred Stock [Member] | |||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Series E Preferred Stock [Member] | |||
Preferred stock, shares authorized | 2,500,000 | 2,500,000 | |
Preferred stock, shares issued | 2,500,000 | 2,500,000 | |
Preferred stock, shares outstanding | 2,500,000 | 2,500,000 |