Propel Media (PROM) 10-Q 14 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 14, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Propel Media, Inc.
Entity Central Index Key	1,622,822
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		250,010,162

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets
Cash	$ 1,263,000	$ 1,629,000
Accounts receivable, net	5,851,000	7,559,000
Prepaid income taxes	493,000	385,000
Prepaid expenses and other current assets	154,000	229,000
Total current assets	7,761,000	9,802,000
Property and equipment, net	1,711,000	2,525,000
Restricted cash	1,000	94,000
Intangible assets	20,000	188,000
Goodwill	2,869,000	2,869,000
Deferred tax assets, net	32,416,000	34,074,000
Other assets	56,000	56,000
Total assets	44,834,000	49,608,000
Current liabilities
Accounts payable	2,915,000	4,288,000
Accrued expenses	2,614,000	2,485,000
Advertiser deposits	1,549,000	2,146,000
Current portion of long-term debt	6,066,000	5,997,000
Revolving credit facility		1,762,000
Total current liabilities	13,144,000	16,678,000
Long-term debt, less current portion, net	66,732,000	68,858,000
Obligations to transferors	14,416,000	13,923,000
Note payable stockholder, non-current, net		106,000
Other non-current liabilities	191,000	425,000
Total liabilities	94,483,000	99,990,000
Stockholders' Deficit
Preferred Stock, $0.0001 par value, authorized 1,000,000 shares, no shares issued or outstanding
Common Stock, $0.0001 par value, authorized 500,000,000 shares, issued and outstanding 250,010,162 at September 30, 2016 and December 31, 2015	25,000	25,000
Additional paid-in capital	2,529,000	1,117,000
Accumulated deficit	(52,203,000)	(51,524,000)
Total stockholders' deficit	(49,649,000)	(50,382,000)
Total liabilities and stockholders' deficit	$ 44,834,000	$ 49,608,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred Stock, shares issued
Preferred Stock, shares outstanding
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	250,010,162	250,010,162
Common stock, shares outstanding	250,010,162	250,010,162

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenues	$ 13,687,000	$ 19,106,000	$ 44,589,000	$ 60,052,000
Cost of revenues	3,826,000	7,304,000	16,430,000	27,490,000
Gross profit	9,861,000	11,802,000	28,159,000	32,562,000
Operating expenses:
Salaries, commissions, benefits and related expenses	2,581,000	3,939,000	10,501,000	11,158,000
Technology, development and maintenance	883,000	935,000	3,086,000	2,855,000
Sales and marketing	20,000	23,000	69,000	55,000
General and administrative	233,000	1,149,000	1,233,000	2,621,000
Professional services	416,000	204,000	996,000	1,531,000
Depreciation and amortization	525,000	498,000	1,723,000	1,321,000
Impairment of software and video library			183,000
Operating expenses	4,658,000	6,748,000	17,791,000	19,541,000
Operating income	5,203,000	5,054,000	10,368,000	13,021,000
Other income (expense):
Interest expense, net	(3,095,000)	(3,645,000)	(9,284,000)	(9,989,000)
Gain from extinguishment of debt			106,000
Other income			18,000
Total other expense	(3,095,000)	(3,645,000)	(9,160,000)	(9,989,000)
Income before income tax (expense) benefit	2,108,000	1,409,000	1,208,000	3,032,000
Income tax (expense) benefit	(2,250,000)	(972,000)	(1,887,000)	31,053,000
Net (loss) income	$ (142,000)	$ 437,000	$ (679,000)	$ 34,085,000
Net (loss) income per common share	$ 0	$ 0	$ 0	$ 0.14
Weighted average number of common shares outstanding	250,010,162	250,010,162	250,010,162	240,527,105
Pro-forma computation related to conversion to a C corporation upon completion of the reverse merger with Kitara Media Corp.:
Historical pre-tax net income before income taxes		$ 1,409,000		$ 3,032,000
Pro-forma income tax expense		(562,000)		(1,210,000)
Pro-forma net income		$ 847,000		$ 1,822,000
Unaudited pro-forma net income per common share - basic and diluted		$ 0		$ 0.01
Weighted average number of shares outstanding - basic and diluted	250,010,162	250,010,162	250,010,162	240,527,105

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Deficit Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($)	Total	Common stock	Additional Paid - In Capital	Accumulated Deficit
Balance at Dec. 31, 2015	$ (50,382,000)	$ 25,000	$ 1,117,000	$ (51,524,000)
Balance (in shares) at Dec. 31, 2015		250,010,162
Stock based compensation - amortization of stock options	1,412,000		1,412,000
Net loss	(679,000)			(679,000)
Balance at Sep. 30, 2016	$ (49,649,000)	$ 25,000	$ 2,529,000	$ (52,203,000)
Balance (in shares) at Sep. 30, 2016		250,010,162

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities
Net (loss) income	$ (679,000)	$ 34,085,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Bad debt expense	69,000	579,000
Stock-based compensation	1,412,000	952,000
Depreciation and amortization	1,723,000	1,321,000
Gain on sale of Health Guru	(51,000)
Gain from extinguishment of debt	(106,000)
Gain on sale of fixed asset		(3,000)
Accretion of debt premium	2,431,000	2,281,000
Amortization of debt discount	577,000	562,000
Amortization of financing costs	184,000	180,000
Amortization of discount due to Transferors	493,000	881,000
Impairment of intangible assets and software	183,000
Deferred income taxes	1,658,000	(31,756,000)
Changes in assets and liabilities:
Accounts receivable	1,665,000	3,759,000
Prepaid expenses and other current assets	(32,000)	(356,000)
Other assets		189,000
Accounts payable	(1,328,000)	(2,900,000)
Accrued expenses	129,000	(2,864,000)
Advertiser deposits	(597,000)	(57,000)
Other non-current liabilities	(236,000)	8,000
Net cash provided by operating activities	7,495,000	6,861,000
Cash Flows From Investing Activities
Restricted cash	94,000	(90,000)
Proceeds from sale of property and equipment		3,000
Purchase of property and equipment	(943,000)	(851,000)
Cash acquired in connection with the reverse merger with Kitara Media Corp.		1,901,000
Net cash (used in) provided by investing activities	(849,000)	963,000
Cash Flows From Financing Activities
Proceeds from long-term debt		78,120,000
Repayment of long-term debt	(5,250,000)	(4,719,000)
Repayment of Kitara Media Corp. line of credit		(1,539,000)
Repayment under line of credit	(54,964,000)	(34,374,000)
Borrowing under line of credit	53,202,000	36,845,000
Debt issuance costs		(916,000)
Distribution to Transferors - before reverse merger with Kitara Media Corp.		(1,674,000)
Distribution to Transferors - exchange		(80,000,000)
Distribution to Transferors - transaction fee reimbursement		(857,000)
Net cash used in financing activities	(7,012,000)	(9,114,000)
Net decrease in cash	(366,000)	(1,290,000)
Cash
Beginning of period	1,629,000	3,675,000
End of period	1,263,000	2,385,000
Cash paid during the period for:
Interest	5,604,000	5,721,000
Income taxes	239,000	1,057,000
Non-cash investing and financing activities:
Deferred Fixed Cash Payments to Transferors at fair value
Distribution to Transferors declared but not yet paid		10,000
Net of non-cash investing and financing activities		10,000
Outstanding common stock of Kitara recognized at the date of the reverse merger		8,000,000
Assets acquired and liabilities assumed:
Current assets, including cash acquired of $1,901,000		6,896,000
Property and equipment, net		1,138,000
Deferred income taxes		2,843,000
Other assets		172,000
Intangible assets		614,000
Goodwill		2,869,000
Accounts payable and accrued expenses		(4,866,000)
Advertiser deposits		(29,000)
Revolving credit facility		(1,437,000)
Note payable - stockholder - current		(102,000)
Note payable - stockholder - long-term, net		(98,000)
Total purchase price		8,000,000
Non-cash consideration		8,000,000
Non-cash consideration consisting of:
Common stock issued in connection with the reverse merger with Kitara Media Corp		$ 8,000,000

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited)	9 Months Ended
	Sep. 30, 2016USD ($)
Statement of Cash Flows [Abstract]
Cash acquired	$ 1,901,000

Organization and Description of

Organization and Description of Business	9 Months Ended
	Sep. 30, 2016
Organization and Description of Business [Abstract]
Organization and Description of Business	Note 1 – Organization and Description of Business Propel Media, Inc. (“Propel”), a Delaware corporation is a diversified online advertising company. Propel generates revenues through the sale of advertising to advertisers who want to reach consumers in the United States and internationally to promote their products and services. Propel is a holding company for Propel Media LLC (“Propel Media”), a California limited liability company, and Kitara Media Corp. (“Kitara”), a Delaware corporation (Propel, Propel Media and Kitara, together, the “Company”). Propel delivers advertising via its real-time, bid-based, online advertising platform called Propel Media Platform. This technology platform allows advertisers to target audiences and deliver video, display and text based advertising. Propel and its Propel Media Platform provide advertisers with an effective way to serve, manage and maximize the performance of their online advertising purchasing. Propel offers both a self-serve platform and a managed services option that give advertisers diverse solutions to reach online audiences and acquire customers. Propel has more than 1,400 advertiser customers and serves millions of ads per day. Propel primarily serves its advertising to users that it has acquired through a user-driven business model. These users have agreed to see advertising in exchange for free content that we provide. In this model, Propel also serves advertising through partners who also acquire users by providing a variety of applications free of charge in exchange for the ability to serve ads to their users. Propel has also developed a publisher-driven business model with a channel of direct publishers, networks and exchanges. These supply channels expand our ability to serve advertising. In this model, the advertising units are served to users through a traditional website, and we serve advertising units to the user in coordination with the publisher, network or exchange. Propel was formed on October 7, 2014. On January 28, 2015, Propel consummated the “reverse business combination” (the “Reverse Merger” or the “Transactions”) as contemplated by (i) the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of October 10, 2014, by and among Kitara, Propel, which was previously a wholly-owned subsidiary of Kitara, and Kitara Merger Sub, Inc. (“Merger Sub”), which was previously a wholly-owned subsidiary of Propel, and (ii) the Unit Exchange Agreement (the “Exchange Agreement”), dated as of October 10, 2014 and amended as of December 23, 2014, April 29, 2015 and January 26, 2016 by and among Kitara, Propel, Propel Media and the former members of Propel Media (“Transferors” or “Members”) (See Note 4 – Reverse Business Combination and Recapitalization). Upon the closing of the Transactions, Propel became the new public company and Kitara and Propel Media became wholly-owned subsidiaries of Propel. On January 28, 2015, in connection with the closing of the Reverse Merger, Propel, Kitara and Propel Media as “Borrowers” and certain of their subsidiaries as “Guarantors” entered into a financing agreement (“Financing Agreement”) with certain financial institutions as “Lenders.” The Financing Agreement provided the Borrowers with (a) a term loan in the aggregate principal amount of $81,000,000 (the “Term Loan”) and (b) a revolving credit facility in an aggregate principal amount not to exceed $15,000,000 at any time outstanding (the “Revolving Loan” and, together with the Term Loan, the “Loans”). The Loans will mature on January 28, 2019 (“Final Maturity Date”). Immediately following the Reverse Merger, the Transferors owned 61.7% of the merged company and the former stockholders of Kitara owned 38.3% of the merged company. As a result of the Reverse Merger, the Transferors acquired a majority of Propel’s common stock and both Propel Media’s and Kitara’s officers became the officers and directors of Propel, including the Company’s prior Chief Executive Officer, Mr. Robert Regular, who later left the Company on April 30, 2016. For accounting purposes, the Reverse Merger has been treated as an acquisition of Kitara by Propel Media whereby Propel Media was deemed to be the accounting acquirer. The historical consolidated financial statements prior to January 28, 2015 are those of Propel Media. In connection with the Reverse Merger, the equity accounts of Propel Media have been restated on a recapitalization basis so that all equity accounts are now presented as if the member interest exchanged for shares of Propel Media common stock had occurred at the beginning of the earliest period presented. Recent Developments Reduction in Force and Management Restructuring On April 26, 2016, Propel began notifying its employees about plans to reduce the Company’s workforce by approximately 20% percent. The notifications were completed on April 27, 2016. These actions were part of a strategic plan designed to improve operational and cost efficiency. For the most part, the employee reductions were in the Company’s publisher driven business. The Company intends to de-emphasize that business unit and will transfer its responsibilities to the remaining employees of the Company. Effective April 22, 2016, the Company entered into a separation agreement with Mr. Regular, who until April 30, 2016 served as the Company’s Chief Executive Officer. Pursuant to the separation agreement, the Company will pay Mr. Regular (i) $536,986 in 12 monthly installments, (ii) all valid expense reimbursements through April 30, 2016, and (iii) all accrued but unused vacation pay through April 30, 2016. In addition, an option to purchase 2,400,000 shares at $0.20 per share held by Mr. Regular will fully vest and be exercisable until June 30, 2018 and an option to purchase 2,100,000 shares at $0.55 per share held by Mr. Regular will fully vest and be exercisable until April 30, 2017. Non-cash charges for the acceleration of these stock-based compensation awards were approximately $489,000. The employment agreement, as modified by the separation agreement, will restrict Mr. Regular from disclosing confidential information concerning the business of the Company, will contain customary restrictive covenants relating to noncompetition and non-solicitation, which continue to run until January 28, 2017, and Mr. Regular has agreed to release and waive all claims against the Company. On June 30, 2016, Mr. Regular forgave a note payable due to him in exchange for a $5,000 cash payment and the rights to certain website, domain name, and email member databases (See Note 7). On April 26, 2016, the Company also entered into an amendment (the “Amendment”) to the employment agreement, dated as of March 5, 2015, as amended, with David Shapiro, the Company’s Chief Operating Officer. The Amendment increases Mr. Shapiro’s base salary from $320,000 to $350,000, effective as of May 1, 2016. S ale of Health Guru Operations On April 27, 2016, the Company sold certain assets of its Health Guru business. Pursuant to the purchase and sale agreement, the Company received a cash payment of $54,000 at closing. The Company is eligible to receive contingent consideration consisting of (i) upon each closing of a capital raise from an outside third party conducted by the purchaser for the Health Guru business, up to $200,000 in the aggregate among all such closings, provided that only 5% of the net proceeds (after deducting commissions and expenses) from any such raise shall be used to satisfy this payment obligation and (ii) quarterly payments over the 36 months following the closing date equal to 50% of the quarterly profits generated in full, or in part, by the assets, provided that such payments shall not exceed $2,000,000 in the aggregate. Through September 30, 2016, other than the gross cash proceeds from seller of $54,000, the Company has received no other consideration from the sale of the Health Guru business.

Liquidity and Capital Resources

Liquidity and Capital Resources	9 Months Ended
	Sep. 30, 2016
Liquidity and Capital Resources [Abstract]
Liquidity and Capital Resources	Note 2 – Liquidity and Capital Resources As of September 30, 2016, the Company’s cash on hand was $1,263,000 and the Company had a working capital deficit of $5,383,000. The Company recorded net losses of $142,000 and $679,000 for the three and nine months ended September 30, 2016, respectively. The net loss for the three months ended September 30, 2016 reflected an income before income tax of $2,108,000 and an income tax expense of $2,250,000. The net loss for the nine months ended September 30, 2016 reflected an income before income tax expense of $1,208,000 and an income tax expense of $1,887,000. The 2016 income tax expense includes charges of approximately $1,437,000, principally to adjust the Company’s deferred income tax accounts for updated estimates for state apportionment factors. The Company has historically met its liquidity requirements through operations. As of September 30, 2016, the borrowing base under the Revolving Loan was approximately $3,244,000. After consideration of the outstanding balance of $0 under the Revolving Loan, there remained $3,244,000 available to be borrowed at September 30, 2016 under the Revolving Loan. Cash flows used in financing activities for the nine months ended September 30, 2016 consisted of $5,250,000 of principal repayments on the Company’s Term Loan and repayments of $1,762,000 of the Revolving Loan. The Company’s operating cash flows are dependent upon being able to cost effectively acquire and maintain a base of user audience to whom the Company serves advertising from its customers. Due to certain broad-based industry changes, commencing in 2015, the Company has been losing user audience from its third party application partners. As a counter measure to rebuild its user audience, the Company has been developing an owned and operated audience of users. During the second and third quarters of 2016, based upon continuously evolving systemic industry changes, including by companies who operate the marketplace’s largest web browsers, the Company found it more difficult and expensive to grow and retain user audience through its owned and operated user audience. This made it difficult to increase revenues from owned and operated properties and correspondingly offset the revenue declines from the third party application partners. The Company is developing alternative products and methodologies through which it will acquire additional user audience. Pursuant to the Financing Agreement, the Company is subject to a leverage ratio requirement as of the end of each calendar quarter. The Company was in compliance with such leverage ratio requirement as of September 30, 2016. Based upon its current projections, the Company may not be in compliance with its future leverage ratio requirements. The Company is in discussions with the Lenders to obtain a waiver or other modification of its obligations under the Financing Agreement. There is no guarantee that the Lenders will approve a waiver and/or a modification of the Financing Agreement that would be acceptable to both the Lenders and the Company. Subject to the Company’s favorable progress in its initiatives to cost effectively develop and maintain its user audience and subject to a favorable resolution of its compliance obligations with the Lenders, management believes that the Company’s cash balances on hand and cash flows expected to be generated from operations and borrowings available under the Company’s Revolving Loan will be sufficient to fund the Company’s net cash requirements through November 2017.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 3 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s condensed consolidated balance sheets, statements of operations and cash flows for the interim periods presented. Operating results for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonal and other factors. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with US GAAP have been omitted in accordance with the rules and regulations of the SEC. Accordingly, these unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2016. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. Use of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in conformity with US GAAP, which requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. The Company’s most significant estimates relate to the accounts receivable allowance, the forfeiture of customer deposits, the valuation allowance on deferred tax assets, valuation of goodwill and intangibles, recognition of revenue, and the valuation of stock options. Cash The Company’s credit facility includes the Revolving Loan. The Company classifies a negative balance outstanding under the Revolving Loan as cash, as these amounts are legally owed to the Company and are immediately available to be drawn upon by the Company. Accounts Receivable Accounts receivable are stated at a gross invoice amount less an allowance for doubtful accounts. The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the Company’s customers may have an inability to meet financial obligations, such as customer payment history, credit worthiness and receivable amounts outstanding for an extended period beyond contractual terms. The Company uses assumptions and judgment, based on the best available facts and circumstances, to record an allowance to reduce the receivable to the amount expected to be collected. These allowances are re-evaluated and adjusted as additional information is received. The allowance for doubtful accounts as of September 30, 2016 and December 31, 2015 was $217,000 and $290,000, respectively. Intangible Assets The Company’s long-lived intangible assets, other than goodwill, are assessed for impairment when events or circumstances indicate there may be an impairment. These assets were initially recorded at their estimated fair value at the time of acquisition and assets not acquired in acquisitions were recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other intangible assets with indefinite life are reduced to their estimated fair value through an impairment charge to our condensed consolidated statements of operations. Based upon the decline of performance of the Health Guru operations, the Company recorded impairment charges of $0 and $129,000 for the three and nine months ended September 30, 2016, respectively, representing the remaining book value of the video library. Capitalization of Internally Developed Software The Company capitalizes certain costs related to its software developed or obtained for internal use in accordance with ASC 350-40. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal and external costs incurred during the application development stage, including upgrades and enhancements representing modifications that will result in significant additional functionality, are capitalized. Software maintenance and training costs are expensed as incurred. Capitalized costs are recorded as part of property and equipment and are amortized on a straight-line basis over the software’s estimated useful life ranging from 12 months to 36 months. The Company evaluates these assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Based upon the decline in performance of the Health Guru operations, the Company recorded impairment charges of $0 and $54,000 for the three and nine months ended September 30, 2016, respectively, to record the write off of the book value of Health Guru’s internally developed capitalized software. Revenue Recognition Propel generates revenue from advertisers by serving their ads to a user audience consisting of the Company’s private owned and operated network, users of our application partners’ properties and users from our publisher driven traffic. In all cases, our revenue is generated when an advertisement is served by us or when a user action occurs based on the advertisement we served (i.e., a view, a click, a conversion action, etc.). There is a specific transaction that triggers a billable instance. The Company recognizes revenue in accordance with ASC Topic 605, “Revenue Recognition” (“ASC 605”). Accordingly, the Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured and the amounts are fixed and determinable. The gross advertising campaign revenue is recognized in the period that the advertising impressions, clicks or actions occur, provided that all other revenue recognition criteria have been met. The Company’s agreements do not require a guaranteed minimum number of impressions, clicks or actions. With respect to advertising campaign activities, the Company acts as a principal in that it is the primary obligor to the advertiser customer. The amounts on deposit from customers are recorded as an advertiser deposit liability in the accompanying condensed consolidated balance sheets. Cost of Revenues Publisher expenses and other service costs represent the costs of acquiring advertising consumers for the Company’s publisher network, revenue-sharing costs to third party application developer partners, publisher costs of third-party networks and properties, transaction costs, and commissions to sales representatives for advertising revenue. The majority of the publisher expense represents marketing expenses to obtain new users for the Company’s owned and operated properties. Acquisition costs of new users are incurred on the date the user joins as a Company owned and operated user or when a prospective user views an impression of the Company’s advertising, and are accordingly charged to earnings on those respective dates. The advertising revenue associated with a user is recognized as it occurs over the period in which such user is part of the Company’s owned and operated network. The Company allows an approved group of third party application developer companies to distribute the Company’s advertising to its users through a revenue-share arrangement. The Company charges to expense the collected revenue-sharing costs of advertising units to users of third party application developer companies when the impression, click or action occurs. Concentration of Credit Risk and Significant Customers The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant vendors are presented in the following table for the three months and nine months ended September 30, 2016 and 2015. There were no concentrations of revenue or accounts receivable from key customers and no vendor concentrations within accounts payable during these periods; For the Three Months Ended For the Nine Months Ended 2016 2015 2016 2015 The Company’s largest vendors are presented as a percentage of the Company’s aggregate cost of revenues 14.0% and 13.7% of cost of revenue from two vendors respectively None over 10% 16.7%, 14.8%, and 13.6% of cost of revenues from three vendors respectively 11.1% of cost of revenues from one vendor Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accounts are insured by the FDIC up to $250,000. As of September 30, 2016 and December 31, 2015, the Company held cash balances in excess of federally insured limits. The Company extends credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. Income Taxes Effective January 28, 2015, the Company completed its Reverse Merger, whereby Propel Media (a limited liability company) was deemed to be the accounting acquirer of Kitara (a C corporation). The historical financial statements were those of Propel Media. From the date of the Reverse Merger, the Company’s results of operations began to be taxed as a C corporation. Prior to the Reverse Merger, the Company’s operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for the period prior to January 28, 2015. The unaudited pro forma computation of income tax expense included in the consolidated statement of operations for the three and nine months ended September 30, 2015, represents the tax effects that would have been reported had the Company been subject to U.S. federal and state income taxes as a corporation for all periods presented. Pro forma income tax expense is based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during each period. Actual rates and expenses could have differed had the Company actually been subject to U.S. federal and state income taxes for all periods presented. Therefore, the unaudited pro forma amounts are for informational purposes only and are intended to be indicative of the results of operations had the Company been fully subject to U.S. federal and state income taxes as a corporation for all periods presented. During the three and nine months ended September 30, 2016, the Company’s income tax provision included a charge of approximately $1,437,000 to reduce deferred income tax assets, principally to reflect updated estimated state apportionment factors for future state income taxes. During the nine months ended September 30, 2015, the Company recorded a one-time tax benefit of $31,386,000, for the change in income tax status of Propel Media. During the nine months ended September 30, 2016 and 2015, except for each of the above noted one-time adjustments, income tax related to ordinary income in such interim periods was computed at an estimated annual effective tax rate of 37% and 40% for each of the periods ending September 30, 2016 and 2015, respectively. Net Income (Loss) per Share Earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants. As of September 30, 2016 and 2015, the Company excluded potential common shares resulting from the exercise of stock options (23,517,500 and 28,675,000 potential common shares, respectively) and of warrants (6,363,636 potential common shares) as their inclusion would be anti-dilutive. Subsequent events The Company has evaluated events that occurred subsequent to September 30, 2016 through the date these condensed consolidated financial statements were issued. Management has concluded that there were no subsequent events that required disclosure in these condensed consolidated financial statements. Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income (loss). Recent Accounting Pronouncements In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement Period Adjustments”. ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The Company has adopted ASU 2015-16 effective January 1, 2016 and such adoption did not have a material impact on the Company’s financial position and results of operations. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718). This update requires that all excess tax benefits and tax deficiencies arising from share-based payment awards should be recognized as income tax expense or benefit on the income statement. The amendment also states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. In addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or account for forfeitures as they occur. The provisions of this update are effective for annual and interim periods beginning or after December 15, 2016. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. In April 2016, the FASB issued Accounting Standards Update ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606), “Identifying Performance Obligations and Licensing” (“ASU 2016-10”). ASU 2016-10 clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606)”, “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). The core principal of ASU 2016-12 is the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements. In August 2016, the FASB issued Accounting Standards Update ASU No. 2016-15 “Statement of Cash Flows (Topic 230)”, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The amendments for this update provide guidance on the eight specific cash flows: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements.

Reverse Business Combination an

Reverse Business Combination and Recapitalization	9 Months Ended
	Sep. 30, 2016
Reverse Business Combination and Recapitalization [Abstract]
Reverse Business Combination and Recapitalization	Note 4 – Reverse Business Combination and Recapitalization The Transactions and Merger Agreement On January 28, 2015, Propel, Propel Media and Kitara consummated the Transactions. Pursuant to the Exchange Agreement, as amended, the Members exchanged all of the outstanding Propel Media limited liability company interests for (i) $80,000,000 in cash, (ii) 154,125,921 shares of Propel common stock, (iii) the right to receive performance-based “earn out” payments that enables the Members to receive up to an additional $40,000,000 in cash or stock consideration based on Propel Media reaching certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) levels during the 2015 to 2018 fiscal years, (iv) on or prior to June 30, 2016, a $10,000,000 payment (the “Deferred Obligation”) in cash and/or shares of Propel common stock, and (v) immediately after the payment of certain fees to Highbridge on or about January 28, 2019, the $6,000,000 Deferred Payment in cash (the “Exchange”). Pursuant to the Exchange Agreement, as amended on January 26, 2016, the $10,000,000 Deferred Obligation is payable in cash and/or stock not later than, June 30, 2019. The Company can pay the $10,000,000 Deferred Obligation from the raising of capital via an equity financing or from available working capital. The Company is required to use its reasonable best efforts to complete equity financings that would raise sufficient net proceeds to pay the $10,000,000 Deferred Obligation in cash to the Transferors on or before June 30, 2019 (the “Equity Financing Period”). In addition, the Company’s board of directors, at least two times per year during the Equity Financing Period, is obligated to determine, in its sole and absolute discretion, the amount, if any, of the Company’s working capital available to be used to pay all or a portion of the $10,000,000 Deferred Obligation in cash, taking into account such factors as it may deem relevant. If the Company’s board of directors determines that there is available working capital to pay all or a portion of the $10,000,000 Deferred Obligation, the Company must use its reasonable best efforts to promptly obtain any required lender consent and, if such consent is obtained, must promptly pay to the Transferors an amount in cash equal to such available working capital. Finally, Mr. Pobre, on behalf of the Transferors, is permitted to elect, during the ten day period following each December 31st during the Equity Financing Period, commencing December 31, 2016, to receive any unpaid amount of the $10,000,000 Deferred Obligation in shares of the Company’s common stock. For such issuance, each share of the Company’s common stock will be valued at the closing market price of the Company’s common stock as reported on NASDAQ or such other national securities exchange on which the Holdco Common Stock is listed (or if not so listed, the bid price on the over-the-counter bulletin board) on the date prior to the date on which such shares are issued to the Transferors. The Company recorded the obligations for the $10,000,000 Deferred Payment and the $6,000,000 Deferred Payment, (in the aggregate, “Deferred Payments to Transferors”) to Transferors at fair value. Fair value was determined by recording the fixed obligations at their net present value, discounted at an interest rate of 10% per annum. The discount rate used was based upon the interest rate of the Term Loan. The Company is amortizing the discount utilizing the interest method over the periods for which future amounts are due. On January 28, 2015, upon the consummation of the Exchange, the Company recorded the fair value of the Deferred Payments to Transferors of $12,696,000, reflecting a discount of $3,304,000. As discussed above, on January 26, 2016, pursuant to the Exchange Agreement, the transferors agreed to defer receipt of the $10,000,000 until June 2019. This extension of the timing to remit payment was evaluated for extinguishment accounting. The amendment was determined to be a modification for accounting purposes, and as such, the unamortized discount of $9,582,000 will be amortized over the remaining term of the obligation. As a result, subsequent to the amendment date, the effective interest rate on the obligation was reduced to 1.25%. For the three month ended September 30, 2016 and 2015, the Company recorded discount amortization of $148,000 and $337,000, respectively. During the nine months ended September 30, 2016 and 2015, the Company recorded discount amortization of $493,000 and $881,000 respectively. The unamortized discount was $1,584,000 as of September 30, 2016 and $2,077,000 as of December 31, 2015. The following represents the obligations to Transferors outstanding under the Exchange Agreement as of September 30, 2016. Obligations to Transferors Amount due on or before June 30, 2019 $ 10,000,000 Amount due January 28, 2019 6,000,000 Total, gross 16,000,000 Less: discount (1,584,000 ) Total, net $ 14,416,000 Pro Forma Financial Information The following presents the unaudited pro forma combined financial information, as if (a) the Company had always been a taxable entity and (b) the Transactions had occurred as of January 1, 2015. The pro forma financial results are not shown for the three months ended September 30, 2015, since pro forma and actual results are the same. For the Nine Months Ended September 30, Revenues $ 61,008,000 Net income $ 1,103,000 Pro forma net income per common share, basic and diluted $ 0.00 Pro forma weighted average number of common shares outstanding - basic and diluted 250,010,162 The pro forma combined results of operations are not necessarily indicative of the results of operations that actually would have occurred had the Reverse Merger been completed as of January 1, 2015 nor are they necessarily indicative of future consolidated results.

Intangibles

Intangibles	9 Months Ended
	Sep. 30, 2016
Intangibles [Abstract]
Intangibles	Note 5 – Intangibles Intangible assets are comprised of the following: As of September 30, 2016 December 31, 2015 Domain and trade names (indefinite life) $ 20,000 $ 20,000 Video library - 313,000 Total Intangible Assets 20,000 333,000 Less: Accumulated amortization - (145,000 ) Net $ 20,000 $ 188,000 Intangible assets as of September 30, 2016 consist of the Propel Media trade name at a cost of $20,000. Amortization expense was $0 and $39,000 for the three months ended September 30, 2016 and 2015 respectively and $39,000 and $106,000 for the nine months ended September 30, 2016 and 2015, respectively (See Note 3 for the discussion of the impairment of the video library).

Financing Agreement

Financing Agreement	9 Months Ended
	Sep. 30, 2016
Financing Agreement [Abstract]
Financing Agreement	Note 6 – Financing Agreement The Financing Agreement provided for certain fees to be paid, including (i) a closing fee of $2,880,000 which was withheld from the proceeds of the Term Loan and was accounted for as an original issue discount and is being amortized to interest expense using the interest method over the term of the Term Loan and (ii) a (“Deferred Fee”) of $12,500,000 payable to the Lenders and due upon the fourth anniversary of the inception of the Term Loan. The Company is accreting the Deferred Fee as a finance charge over the term of the Term Loan. The Company recorded amortization of the closing fee as interest expense of $190,000 and $206,000, for the three months ended September 30, 2016 and 2015, respectively, and $577,000 and $556,000 for the nine months ended September 30, 2016 and 2015, respectively. The balance of the closing fee original issue discount as of September 30, 2016 was $1,544,000, and is reflected within the Term Loan obligations on the condensed consolidated balance sheets. The Company recorded as interest expense accretion of the Deferred Fee of $806,000 and $845,000, for the three months ended September 30, 2016 and 2015, respectively, and $2,431,000 and $2,281,000 for the nine month ended September 30, 2016 and 2015, respectively. The balance of the accreted Deferred Fee as of September 30, 2016 was $5,548,000, and is reflected within the Term Loan obligations on the condensed consolidated balance sheets. In addition, the Company incurred debt issuance costs of $916,000 in connection with the Loans which has been accounted for as debt discount and is being amortized using the effective interest method over the term of the Term Loan. The Company recorded as interest expense amortization of the debt issuance costs of $60,000 and $66,000 for the three months ended September 30, 2016 and 2015, respectively, and $184,000 and $180,000, respectively for the nine months ended September 30, 2016 and 2015. The balances of the unamortized debt issuance costs of $487,000 and $671,000 is reflected within the Term Loan obligations on the condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively. As of September 30, 2016, the Company was in compliance with the covenants under the Financing Agreement. However, based upon its current projections, the Company may not be in compliance with the leverage ratio as of December 31, 2016 (See Note 2). The Company is in discussions with the Lenders to obtain a waiver or other modification of its obligations under the Financing Agreement. Term Loan The following represents the obligation outstanding as of September 30, 2016 under the Term Loan: Term Loan Principal $ 69,281,000 Discounts (2,031,000 ) Accreted value through September 30, 2016 of the Deferred Fee ($12,500,000) 5,548,000 Net 72,798,000 Less: Current portion (6,066,000 ) Long-term portion $ 66,732,000 The future minimum payments on the Company’s Term Loan are as follows: For the years ended December 31, Term Loan 2016 (three months) $ 1,750,000 2017 7,000,000 2018 7,000,000 2019 53,531,000 Total, gross 69,281,000 Less: debt discount (2,031,000 ) Plus: accreted value through September 30, 2016 of the Deferred Fee ($12,500,000) 5,548,000 Total, net 72,798,000 Less: current portion (6,066,000 ) Long-term debt $ 66,732,000 Revolving Loan As of September 30, 2016, the Revolving Loan had a balance of $0 and $3,244,000 was available for future borrowing. Subject to the terms of the Financing Agreement, the Company may have multiple revolving loans under the revolving loan arrangement. Each revolving loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of such Loan until repaid, at a rate per annum equal to 6.00% plus either (i) the LIBOR rate for the interest period in effect for such Loan (but not less than 1%) (7.0% during the nine months ended September 30, 2016), or (ii) the bank’s reference rate (9.5% during the nine months ended September 30, 2016). During the nine months ended September 30, 2016, the Company received a one-time favorable interest reduction of $190,000 from the Lenders related to the revolver.

Related-Party Transactions

Related-Party Transactions	9 Months Ended
	Sep. 30, 2016
Related-Party Transactions [Abstract]
Related-Party Transactions	Note 7 – Related-Party Transactions The Company has outsourced technology development services and other administrative services to a technology company in Eastern Europe (“Technology Vendor”). This technology company is owned by an individual who through October 6, 2014 owned more than 10% of the member interest in Propel Media and subsequent to which such ownership was transferred to certain trusts. The technology development services and other administrative services provided to the Company by this related party during the three months ended September 30, 2016 and 2015, totaled $838,000 and $660,000 respectively, and $2,353,000 and $1,935,000 during the nine months ended September 30, 2016 and 2015, respectively. These amounts were included in property and equipment and operating expenses, as applicable, in the accompanying condensed consolidated balance sheets and condensed consolidated statements of operations. Certain of the costs incurred for the technology development services described above were for the development of internal-use software, which were capitalized and amortized over the estimated useful life. In addition, the Company had amounts due to this entity of $264,000 and $3,000 as of September 30, 2016 and December 31, 2015, respectively, which are reported within accrued expenses in the condensed consolidated balance sheets. On January 28, 2015, in connection with the Reverse Merger, the Company’s Board of Directors appointed Howard Yeaton as the Company’s Interim Chief Financial Officer. Mr. Yeaton is the Managing Principal of Financial Consulting Strategies LLC (“FCS”). During the three months ended September 30, 2016 and 2015 the Company has incurred a total of $47,000 and $97,000 respectively, and during the nine months ended September 30, 2016 and 2015 the Company has incurred a total of $149,000 and $435,000 respectively, representing Mr. Yeaton’s services as the Company’s Interim Chief Financial Officer and other financial advisory and accounting services provided by FCS. The balance due to FCS was $15,000 and $7,000 as of September 30, 2016 and December 31, 2015, respectively and was included within accrued expenses in the condensed consolidated balance sheets. The Company had a note payable due on January 1, 2023 to Mr. Robert Regular, the Company’s prior Chief Executive Officer. On June 30, 2016, Mr. Regular forgave this note in exchange for a $5,000 cash payment and rights to a certain website, domain name, and email member databases that were acquired by the Company in connection with the January 28, 2015 Reverse Merger. As a result, on June 30, 2016, the Company recognized a gain of $106,000 from extinguishment of debt, which is shown within other income (expense) on the consolidated statement of operations.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 8 – Commitments and Contingencies Operating leases On March 11, 2016, the Company signed a lease agreement for a New York, New York office location, with a month to month rental of $8,245 per month. On April 28, 2016, the Company gave its 30-day termination notice for this lease and accordingly, this lease was terminated as of May 31, 2016. On April 1, 2016, the Company terminated its Jersey City, New Jersey lease whereby the Company’s last rental payment for this lease was through March 31, 2016. In addition, as part of the lease termination, the Company paid to the landlord a termination fee of $95,330 and paid its brokers $48,170 ($24,085 paid on June 1, 2016 and $24,085 paid on July 5, 2016). Lastly, as part of the lease termination, the Company transferred to the landlord the security deposit it received from its subtenant from the sublease agreement ($16,674). Rent expense totaled $106,000 and $212,000 during the three months ended September 30, 2016 and 2015, respectively, and $323,000 and $572,000 for the nine months ended September 30, 2016 and 2015, respectively. Rent expense for the nine months ended September 30, 2016 included a reversal of $123,000 of deferred rent, recognized upon the termination of the New Jersey office lease at the end of April 30, 2016. The following is an annual schedule of approximate future minimum rental payments required under the operating lease agreement for the Company’s Irvine, California lease location: Years Ending December 31, Amount 2016 (three months) $ 147,000 2017 594,000 2018 458,000 $ 1,199,000 Litigation From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. Other than as set forth below, at September 30, 2016, there were no material pending legal proceedings to which the Company was a party or to which any of its property was subject that were expected, individually or in the aggregate, to have a material adverse effect on us. In December 2013, an action entitled Intrepid Investments, LLC (“Intrepid”) v. Selling Source, LLC (“Selling Source”), et al., Index No. 65429/2013 was filed in the Supreme Court of the State of New York, County of New York. This is an action commenced by Intrepid to collect on a Junior Secured Promissory Note signed by Selling Source in the original principal sum of $28,700,000 (the “Note”). The Company is not a signatory to the Note but Kitara Media did sign an August 31, 2010 Security Agreement (“Security Agreement”) pledging all of its accounts, cash and cash equivalents, chattel paper, contracts, deposit accounts, documents, equipment, fixtures, general intangibles, all other goods, all shares of capital stock of any companies it owned, all instruments including all promissory notes, all intellectual property, all insurance policies and all proceeds thereof, all inventory, all other investment property, all letter of credit rights, all other tangible and intangible personal property and all proceeds of any of the foregoing, as security for the Note. At the time Kitara Media signed the Security Agreement, it was wholly-owned by Selling Source. On July 1, 2013, Kitara Media merged with one of Kitara’s then wholly-owned subsidiaries, with Kitara Media surviving the merger and becoming a wholly-owned subsidiary of Kitara. Accordingly, it is no longer wholly-owned by Selling Source, although it is still an affiliate of Selling Source. In the action, Intrepid seeks to foreclose on the security interest. Both Selling Source’s and Kitara Media’s obligations to Intrepid under the Note and Security Agreement were subordinate to obligations Selling Source had to two groups of prior lenders (“Senior Lenders”). The right of Intrepid to compel payments under the Note and/or foreclose the lien created by the Security Agreement was subject to an Intercreditor Agreement by and between the Senior Lenders and Intrepid. Under the terms of the Intercreditor Agreement, Intrepid could not take steps to compel Selling Source to make payment on the Note or foreclose the Security Agreement so long as the obligations to the Senior Lenders remained outstanding. In addition, under the terms of the Intercreditor Agreement, the Senior Lenders had the right to have the lien released on any of the collateral pledged as security under the Security Agreement. In the New York action, Intrepid has challenged the Senior Lenders’ authority to release the lien and also challenged the enforceability of the Intercreditor Agreement generally. The Court has not yet ruled on the merits of that challenge. In addition, Selling Source’s obligations to the Senior Lenders remains outstanding. The second matter is Intrepid Investments, LLC v. Selling Source, LLC et al., Index No. 654309/2013, which was filed in the Supreme Court of the State of New York, County of New York. This matter was originally limited to claims asserted by Intrepid against Selling Source regarding an earn-out calculation entered into between it and Selling Source, and confirmed by an arbitrator. In August, 2014, Intrepid amended its complaint to include various breach of contractor claims against a variety of those defendants, including Kitara. The new defendants, including Kitara, answered the amended complaint on November 7, 2014, denying liability for all claims. On February 19, 2015, the Court entered an order granting Selling Source’s motion to affirm the arbitration results. On March 3, 2015, Selling Source filed a motion for partial summary judgment seeking dismissal of eleven of Intrepid’s remaining claims, and, in September 2015, the New York Supreme Court granted this motion for summary judgment. The claims asserted against Kitara were not among those addressed in Selling Source’s motion. Based on these facts, Propel believes Intrepid’s claims are without merit and intend to defend them vigorously. In any event, Selling Source has acknowledged an obligation to indemnify and defend Kitara Media from any liability to Intrepid arising out of the Note and Security Agreement. The parties have exchanged pleadings and Selling Source has provided documents and written interrogating responses to Intrepid.

Defined Contributions Plans

Defined Contributions Plans	9 Months Ended
	Sep. 30, 2016
Defined Contributions Plans [Abstract]
Defined Contributions Plans	Note 9 – Defined Contributions Plans The Company maintains a defined contribution plan under Section 401(k) of the Internal Revenue Code (the “Plan”). Participating employees may defer a percentage of their eligible pre-tax earnings up to the Internal Revenue Service’s annual contribution limit. All full-time employees of the Company are eligible to participate in the Plan. The Plan does not permit investment of participant contributions in the Company’s common stock. The Company’s matching contributions to the Plan are discretionary. The Company recorded contribution expense of $41,000 and $40,000 during the three months ended September 30, 2016 and 2015, respectively, and $178,000 and $152,000 during the nine months ended September 30, 2016 and 2015, respectively.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2016
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note 10 – Stock-Based Compensation Equity Incentive Plans 2014 Long-Term Incentive Equity Plan On October 9, 2014, Propel and its sole stockholder approved the 2014 Long-Term Incentive Plan (“2014 Plan”), pursuant to which a total of nine percent of the fully-diluted shares of the Company’s common stock outstanding as of the closing of the Transactions (or 26,172,326 shares) became available for awards under the plan upon such closing. Kitara’s stockholders approved the plan as of January 26, 2015. 2012 and 2013 Long-Term Incentive Equity Plans On May 14, 2012 and December 3, 2013, Kitara adopted the 2012 Long-Term Incentive Equity Plan (“2012 Plan”) and the 2013 Long-Term Incentive Equity Plan (“2013 Plan”). The 2012 Plan and 2013 Plan provide for the grant of stock options, stock appreciation rights, restricted stock and other stock-based awards to, among others, the officers, directors, employees and consultants of the Company. Effective January 28, 2015, Propel assumed the 2012 Plan and 2013 Plan, and all outstanding stock options thereunder. Propel amended the plans so that no further awards may be issued under such plans after the closing of the Reverse Merger. Stock Option Award Activity The following table is a summary of stock option award: Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at January 1, 2016 28,755,000 $ 0.48 $ 0.22 7.6 $ 40,000 Granted - - - - - Exercised - - - - - Forfeited, expired or canceled (5,237,500 ) 0.42 0.20 - - Outstanding at Sept. 30, 2016 23,517,500 $ 0.50 $ 0.27 7.1 $ - Exercisable at Sept. 30, 2016 12,890,012 $ 0.45 $ 0.24 6.1 $ - The aggregate intrinsic value is calculated as the difference between the weighted average exercise price of the underlying outstanding stock options and the fair value of the Company’s common stock, based upon the closing price of the Company’s common stock as reported on the OTCBB on September 30, 2016. The Black-Scholes method option pricing model was used to estimate the fair value of the option awards using the following range of assumptions. The simplified method was used to determine the expected life of grants to employees, as these granted options were determined to be “plain-vanilla” options. The full term was used for the expected life for options granted to consultants. Option Grants Option Grants Option Grants Option Grants Option Grants Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments of Unvested Options granted on March 6, 2015 as of September 30, Consultants Mark-to-Market Adjustments of Unvested Options granted on November 3, 2015 as of September 30, Stock Price $ 0.24 $ 0.05 $ 0.03 $ 0.02 $ 0.02 Exercise Price $ 0.55 $ 0.55 $ 0.55 $ 0.55 $ 0.55 Number of Options Granted 1,067,500 264,375 264,375 2,643,750 190,000 Dividend Yield 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Expected Volatility 67.1 % 66.6 % 66.6 % 66.6 % 66.6 % Risk-free interest rate 1.5 % 1.4 % 1.4 % 1.2 % 1.2 % Expected Life (in years) 9.0 8.7 8.5 8.4 9.1 The fair value of stock options is amortized on a straight line basis over the requisite service periods of the respective awards. Stock based compensation expense related to stock options was $240,000 and $408,000 for the three months ended September 30, 2016 and 2015, respectively, and $1,412,000 and $952,000 for the nine months ended September 30, 2016 and 2015, respectively. The expense was reflected in selling, general and administrative expenses on the accompanying consolidated statements of operations. As of September 30, 2016, the unamortized value of options was $2,207,000. As of September 30, 2016, the unamortized portion will be expensed through November 2019 and the weighted average remaining amortization period was 2.4 years.

Executive Bonus Plan

Executive Bonus Plan	9 Months Ended
	Sep. 30, 2016
Executive Bonus Plan [Abstract]
Executive Bonus Plan	Note 11 – Executive Bonus Plan The Company previously sponsored the Propel Media Incentive Profit Sharing Plan (the “Profit Sharing Plan”). Effective January 1, 2016, the Profit Sharing Plan was replaced with the Propel Media Executive Bonus Plan (the “Executive Bonus Plan”) for certain employees of the Company. The Executive Bonus Plan provides for bonuses based on the performance of the Company. Bonus expense for earned bonuses under the Executive Bonus Plan amounted to $237,000 and $390,000 for the three months ended September 30, 2016 and 2015, respectively, and $600,000 and $1,054,000 for the nine months ended September 30, 2016 and 2015, respectively. The bonuses are included in salaries, commissions, benefits and related expenses within the Company’s condensed consolidated statements of operations. At September 30, 2016 and December 31, 2015, the accrued executive bonuses were $234,000 and $416,000 respectively, and the amounts were included in accrued expenses within the condensed consolidated balance sheets.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s condensed consolidated balance sheets, statements of operations and cash flows for the interim periods presented. Operating results for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonal and other factors. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with US GAAP have been omitted in accordance with the rules and regulations of the SEC. Accordingly, these unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2016.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements.
Use of Estimates	Use of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in conformity with US GAAP, which requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. The Company’s most significant estimates relate to the accounts receivable allowance, the forfeiture of customer deposits, the valuation allowance on deferred tax assets, valuation of goodwill and intangibles, recognition of revenue, and the valuation of stock options.
Cash	Cash The Company’s credit facility includes the Revolving Loan. The Company classifies a negative balance outstanding under the Revolving Loan as cash, as these amounts are legally owed to the Company and are immediately available to be drawn upon by the Company.
Accounts Receivable	Accounts Receivable Accounts receivable are stated at a gross invoice amount less an allowance for doubtful accounts. The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the Company’s customers may have an inability to meet financial obligations, such as customer payment history, credit worthiness and receivable amounts outstanding for an extended period beyond contractual terms. The Company uses assumptions and judgment, based on the best available facts and circumstances, to record an allowance to reduce the receivable to the amount expected to be collected. These allowances are re-evaluated and adjusted as additional information is received. The allowance for doubtful accounts as of September 30, 2016 and December 31, 2015 was $217,000 and $290,000, respectively.
Intangible Assets	Intangible Assets The Company’s long-lived intangible assets, other than goodwill, are assessed for impairment when events or circumstances indicate there may be an impairment. These assets were initially recorded at their estimated fair value at the time of acquisition and assets not acquired in acquisitions were recorded at historical cost. However, if their estimated fair value is less than the carrying amount, other intangible assets with indefinite life are reduced to their estimated fair value through an impairment charge to our condensed consolidated statements of operations. Based upon the decline of performance of the Health Guru operations, the Company recorded impairment charges of $0 and $129,000 for the three and nine months ended September 30, 2016, respectively, representing the remaining book value of the video library.
Capitalization of Internally Developed Software	Capitalization of Internally Developed Software The Company capitalizes certain costs related to its software developed or obtained for internal use in accordance with ASC 350-40. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal and external costs incurred during the application development stage, including upgrades and enhancements representing modifications that will result in significant additional functionality, are capitalized. Software maintenance and training costs are expensed as incurred. Capitalized costs are recorded as part of property and equipment and are amortized on a straight-line basis over the software’s estimated useful life ranging from 12 months to 36 months. The Company evaluates these assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Based upon the decline in performance of the Health Guru operations, the Company recorded impairment charges of $0 and $54,000 for the three and nine months ended September 30, 2016, respectively, to record the write off of the book value of Health Guru’s internally developed capitalized software.
Revenue Recognition	Revenue Recognition Propel generates revenue from advertisers by serving their ads to a user audience consisting of the Company’s private owned and operated network, users of our application partners’ properties and users from our publisher driven traffic. In all cases, our revenue is generated when an advertisement is served by us or when a user action occurs based on the advertisement we served (i.e., a view, a click, a conversion action, etc.). There is a specific transaction that triggers a billable instance. The Company recognizes revenue in accordance with ASC Topic 605, “Revenue Recognition” (“ASC 605”). Accordingly, the Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured and the amounts are fixed and determinable. The gross advertising campaign revenue is recognized in the period that the advertising impressions, clicks or actions occur, provided that all other revenue recognition criteria have been met. The Company’s agreements do not require a guaranteed minimum number of impressions, clicks or actions. With respect to advertising campaign activities, the Company acts as a principal in that it is the primary obligor to the advertiser customer. The amounts on deposit from customers are recorded as an advertiser deposit liability in the accompanying condensed consolidated balance sheets.
Cost of Revenues	Cost of Revenues Publisher expenses and other service costs represent the costs of acquiring advertising consumers for the Company’s publisher network, revenue-sharing costs to third party application developer partners, publisher costs of third-party networks and properties, transaction costs, and commissions to sales representatives for advertising revenue. The majority of the publisher expense represents marketing expenses to obtain new users for the Company’s owned and operated properties. Acquisition costs of new users are incurred on the date the user joins as a Company owned and operated user or when a prospective user views an impression of the Company’s advertising, and are accordingly charged to earnings on those respective dates. The advertising revenue associated with a user is recognized as it occurs over the period in which such user is part of the Company’s owned and operated network. The Company allows an approved group of third party application developer companies to distribute the Company’s advertising to its users through a revenue-share arrangement. The Company charges to expense the collected revenue-sharing costs of advertising units to users of third party application developer companies when the impression, click or action occurs.
Concentration of Credit Risk and Significant Customers	Concentration of Credit Risk and Significant Customers The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant vendors are presented in the following table for the three months and nine months ended September 30, 2016 and 2015. There were no concentrations of revenue or accounts receivable from key customers and no vendor concentrations within accounts payable during these periods; For the Three Months Ended For the Nine Months Ended 2016 2015 2016 2015 The Company’s largest vendors are presented as a percentage of the Company’s aggregate cost of revenues 14.0% and 13.7% of cost of revenue from two vendors respectively None over 10% 16.7%, 14.8%, and 13.6% of cost of revenues from three vendors respectively 11.1% of cost of revenues from one vendor Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accounts are insured by the FDIC up to $250,000. As of September 30, 2016 and December 31, 2015, the Company held cash balances in excess of federally insured limits. The Company extends credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits.
Income Taxes	Income Taxes Effective January 28, 2015, the Company completed its Reverse Merger, whereby Propel Media (a limited liability company) was deemed to be the accounting acquirer of Kitara (a C corporation). The historical financial statements were those of Propel Media. From the date of the Reverse Merger, the Company’s results of operations began to be taxed as a C corporation. Prior to the Reverse Merger, the Company’s operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for the period prior to January 28, 2015. The unaudited pro forma computation of income tax expense included in the consolidated statement of operations for the three and nine months ended September 30, 2015, represents the tax effects that would have been reported had the Company been subject to U.S. federal and state income taxes as a corporation for all periods presented. Pro forma income tax expense is based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during each period. Actual rates and expenses could have differed had the Company actually been subject to U.S. federal and state income taxes for all periods presented. Therefore, the unaudited pro forma amounts are for informational purposes only and are intended to be indicative of the results of operations had the Company been fully subject to U.S. federal and state income taxes as a corporation for all periods presented. During the three and nine months ended September 30, 2016, the Company’s income tax provision included a charge of approximately $1,437,000 to reduce deferred income tax assets, principally to reflect updated estimated state apportionment factors for future state income taxes. During the nine months ended September 30, 2015, the Company recorded a one-time tax benefit of $31,386,000, for the change in income tax status of Propel Media. During the nine months ended September 30, 2016 and 2015, except for each of the above noted one-time adjustments, income tax related to ordinary income in such interim periods was computed at an estimated annual effective tax rate of 37% and 40% for each of the periods ending September 30, 2016 and 2015, respectively.
Net Income (Loss) per Share	Net Income (Loss) per Share Earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants. As of September 30, 2016 and 2015, the Company excluded potential common shares resulting from the exercise of stock options (23,517,500 and 28,675,000 potential common shares, respectively) and of warrants (6,363,636 potential common shares) as their inclusion would be anti-dilutive.
Subsequent events	Subsequent events The Company has evaluated events that occurred subsequent to September 30, 2016 through the date these condensed consolidated financial statements were issued. Management has concluded that there were no subsequent events that required disclosure in these condensed consolidated financial statements.
Reclassification	Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income (loss).
Recent Accounting Pronouncements	Recent Accounting Pronouncements In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement Period Adjustments”. ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The Company has adopted ASU 2015-16 effective January 1, 2016 and such adoption did not have a material impact on the Company’s financial position and results of operations. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718). This update requires that all excess tax benefits and tax deficiencies arising from share-based payment awards should be recognized as income tax expense or benefit on the income statement. The amendment also states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. In addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or account for forfeitures as they occur. The provisions of this update are effective for annual and interim periods beginning or after December 15, 2016. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements. In April 2016, the FASB issued Accounting Standards Update ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606), “Identifying Performance Obligations and Licensing” (“ASU 2016-10”). ASU 2016-10 clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606)”, “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). The core principal of ASU 2016-12 is the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements. In August 2016, the FASB issued Accounting Standards Update ASU No. 2016-15 “Statement of Cash Flows (Topic 230)”, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The amendments for this update provide guidance on the eight specific cash flows: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Summary of concentration of credit risk	For the Three Months Ended For the Nine Months Ended 2016 2015 2016 2015 The Company’s largest vendors are presented as a percentage of the Company’s aggregate cost of revenues 14.0% and 13.7% of cost of revenue from two vendors respectively None over 10% 16.7%, 14.8%, and 13.6% of cost of revenues from three vendors respectively 11.1% of cost of revenues from one vendor

Reverse Business Combination 21

Reverse Business Combination and Recapitalization (Tables)	9 Months Ended
	Sep. 30, 2016
Reverse Business Combination and Recapitalization [Abstract]
Schedule obligations to transferors outstanding under the exchange agreement	Obligations to Transferors Amount due on or before June 30, 2019 $ 10,000,000 Amount due January 28, 2019 6,000,000 Total, gross 16,000,000 Less: discount (1,584,000 ) Total, net $ 14,416,000
Schedule of unaudited pro forma combined financial information	For the Nine Months Ended September 30, Revenues $ 61,008,000 Net income $ 1,103,000 Pro forma net income per common share, basic and diluted $ 0.00 Pro forma weighted average number of common shares outstanding - basic and diluted 250,010,162

Intangibles (Tables)

Intangibles (Tables)	9 Months Ended
	Sep. 30, 2016
Intangibles [Abstract]
Schedule of intangible assets	As of September 30, 2016 December 31, 2015 Domain and trade names (indefinite life) $ 20,000 $ 20,000 Video library - 313,000 Total Intangible Assets 20,000 333,000 Less: Accumulated amortization - (145,000 ) Net $ 20,000 $ 188,000

Financing Agreement (Tables)

Financing Agreement (Tables)	9 Months Ended
	Sep. 30, 2016
Financing Agreement [Abstract]
Schedule of long-term debt	Term Loan Principal $ 69,281,000 Discounts (2,031,000 ) Accreted value through September 30, 2016 of the Deferred Fee ($12,500,000) 5,548,000 Net 72,798,000 Less: Current portion (6,066,000 ) Long-term portion $ 66,732,000
Summary of future minimum payments	For the years ended December 31, Term Loan 2016 (three months) $ 1,750,000 2017 7,000,000 2018 7,000,000 2019 53,531,000 Total, gross 69,281,000 Less: debt discount (2,031,000 ) Plus: accreted value through September 30, 2016 of the Deferred Fee ($12,500,000) 5,548,000 Total, net 72,798,000 Less: current portion (6,066,000 ) Long-term debt $ 66,732,000

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies [Abstract]
Schedule of approximate future minimum rental payments under the operating lease agreements	Years Ending December 31, Amount 2016 (three months) $ 147,000 2017 594,000 2018 458,000 $ 1,199,000

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2016
Stock-Based Compensation [Abstract]
Schedule of stock option plan activity	Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at January 1, 2016 28,755,000 $ 0.48 $ 0.22 7.6 $ 40,000 Granted - - - - - Exercised - - - - - Forfeited, expired or canceled (5,237,500 ) 0.42 0.20 - - Outstanding at Sept. 30, 2016 23,517,500 $ 0.50 $ 0.27 7.1 $ - Exercisable at Sept. 30, 2016 12,890,012 $ 0.45 $ 0.24 6.1 $ -
Schedule of expected life for options granted to consultants	Option Grants Option Grants Option Grants Option Grants Option Grants Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments Options Vested at Consultants Mark-to-Market Adjustments of Unvested Options granted on March 6, 2015 as of September 30, Consultants Mark-to-Market Adjustments of Unvested Options granted on November 3, 2015 as of September 30, Stock Price $ 0.24 $ 0.05 $ 0.03 $ 0.02 $ 0.02 Exercise Price $ 0.55 $ 0.55 $ 0.55 $ 0.55 $ 0.55 Number of Options Granted 1,067,500 264,375 264,375 2,643,750 190,000 Dividend Yield 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Expected Volatility 67.1 % 66.6 % 66.6 % 66.6 % 66.6 % Risk-free interest rate 1.5 % 1.4 % 1.4 % 1.2 % 1.2 % Expected Life (in years) 9.0 8.7 8.5 8.4 9.1

Organization and Description 26

Organization and Description of Business (Details)	1 Months Ended					3 Months Ended		9 Months Ended
	Jun. 30, 2016USD ($)	Apr. 27, 2016USD ($)	Apr. 26, 2016USD ($)	Apr. 22, 2016USD ($)installments$ / sharesshares	Jan. 28, 2015USD ($)	Sep. 30, 2016USD ($)Customers	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)Customers	Sep. 30, 2015USD ($)
Organization and Description of Business (Textual)
Advertiser customers | Customers						1,400		1,400
Aggregate principal amount of term debt					$ 81,000,000
Revolving credit facility maximum borrowing capacity					$ 15,000,000
Maturity date					Jan. 28, 2019
Percentage of workforce reduced			20.00%
Payments made to related party				$ 536,986
Number of installments | installments				12
Cash payment received on sale of asset		$ 54,000						$ 54,000
Contingent consideration, description		(i) upon each closing of a capital raise from an outside third party conducted by the purchaser for the Health Guru business, up to $200,000 in the aggregate among all such closings, provided that only 5% of the net proceeds (after deducting commissions and expenses) from any such raise shall be used to satisfy this payment obligation and (ii) quarterly payments over the 36 months following the closing date equal to 50% of the quarterly profits generated in full, or in part, by the assets, provided that such payments shall not exceed $2,000,000 in the aggregate.
Stock-based compensation				$ 489,000		$ 240,000	$ 408,000	$ 1,412,000	$ 952,000
Mr. Robert Regular [Member]
Organization and Description of Business (Textual)
Cash payment made by Mr. Regular	$ 5,000
Mr. Robert Regular [Member] | June 30, 2018 [Member]
Organization and Description of Business (Textual)
Options vested and exercisable | shares				2,400,000
Options vested and exercisable, exercise price | $ / shares				$ 0.20
Mr. Robert Regular [Member] | April 30, 2017 [Member]
Organization and Description of Business (Textual)
Options vested and exercisable | shares				2,100,000
Options vested and exercisable, exercise price | $ / shares				$ 0.55
Minimum [Member] | Mr.David Shapiro [Member]
Organization and Description of Business (Textual)
Base salary, Chief operating officer			$ 320,000
Maximum [Member] | Mr.David Shapiro [Member]
Organization and Description of Business (Textual)
Base salary, Chief operating officer			$ 350,000
Kitara [Member]
Organization and Description of Business (Textual)
Ownership percentage					38.30%
Transferors [Member]
Organization and Description of Business (Textual)
Ownership percentage					61.70%

Liquidity and Capital Resourc27

Liquidity and Capital Resources (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Liquidity and Capital Resources (Textual)
Cash on hand	$ 1,263,000	$ 2,385,000	$ 1,263,000	$ 2,385,000	$ 1,629,000	$ 3,675,000
Working capital deficit	5,383,000		5,383,000
Net income (loss)	(142,000)	437,000	(679,000)	34,085,000
Borrowing under revolving loan	3,244,000		3,244,000
Revolving credit facility outstanding balance
Income loss before income tax expense	2,108,000	1,409,000	1,208,000	3,032,000
Income tax benefit	2,250,000	$ 972,000	1,887,000	$ (31,053,000)
Borrowing amount available under credit facility	$ 3,244,000		3,244,000
Proceeds net of principal repayments			5,250,000
Repayments revolving loans receivable			1,762,000
Charges of income tax			$ 1,437,000

Summary of Significant Accoun28

Summary of Significant Accounting Policies (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Cost of revenues [Member] | Vendor [Member]
Summary of concentration of credit risk
Concentration risk, Description	14.0% and 13.7% of cost of revenue from two vendors respectively	None over 10	16.7%, 14.8%, and 13.6% of cost of revenues from three vendors respectively	11.1% of cost of revenues from one vendor

Summary of Significant Accoun29

Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Summary of Significant Accounting Policies (Textual)
Allowance for doubtful accounts	$ 217,000	$ 217,000		$ 290,000
Impairment charges		183,000
FDIC insured amount	250,000	$ 250,000
One-time tax benefit			$ 31,386,000
Effective tax rate		37.00%	40.00%
Charges of income tax		$ 1,437,000
Internally Developed Software [Member]
Summary of Significant Accounting Policies (Textual)
Impairment charges	0	54,000
Video Library [Member]
Summary of Significant Accounting Policies (Textual)
Impairment charges	$ 0	$ 129,000
Warrant [Member]
Summary of Significant Accounting Policies (Textual)
Potential common shares		6,363,636	6,363,636
Stock Option [Member]
Summary of Significant Accounting Policies (Textual)
Potential common shares		23,517,500	28,675,000
Maximum [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life		36 months
Minimum [Member]
Summary of Significant Accounting Policies (Textual)
Estimated useful life		12 months

Reverse Business Combination 30

Reverse Business Combination and Recapitalization (Details)	Sep. 30, 2016USD ($)
Reverse Business Combination and Recapitalization [Abstract]
Amount due on or before June 30, 2019	$ 10,000,000
Amount due January 28, 2019	6,000,000
Total, gross	16,000,000
Less: discount	(1,584,000)
Total, net	$ 14,416,000

Reverse Business Combination 31

Reverse Business Combination and Recapitalization (Details 1)	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Reverse Business Combination and Recapitalization [Abstract]
Revenues	$ 61,008,000
Net income	$ 1,103,000
Pro forma net income per common share, basic and diluted | $ / shares	$ 0
Pro forma weighted average number of common shares outstanding - basic and diluted | shares	250,010,162

Reverse Business Combination 32

Reverse Business Combination and Recapitalization (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 28, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jan. 26, 2016	Dec. 31, 2015
Reverse Business Combination and Recapitalization (Textual)
Deferred obligation payable in cash						$ 10,000,000
Obligations to transferors		$ 10,000,000		$ 10,000,000
Deferred Payment		6,000,000		6,000,000
Unpaid amount of deferred obligation received		$ 10,000,000		$ 10,000,000
Interest rate		10.00%		10.00%
Fair value of deferred fixed cash payments to transferors		$ 12,696,000		$ 12,696,000
Discount of payments to transferors		3,304,000		3,304,000
Amortization of obligation remaining term		9,582,000		$ 9,582,000
Effective interest rate on obligation reduced				1.25%
Discount of amortization		148,000	$ 337,000	$ 493,000	$ 881,000
Unamortized discount		1,584,000		1,584,000			$ 2,077,000
Board of directors [Member]
Reverse Business Combination and Recapitalization (Textual)
Deferred obligation payable in cash		$ 10,000,000		$ 10,000,000		$ 10,000,000
Propel Media LLC [Member]
Reverse Business Combination and Recapitalization (Textual)
Cash	$ 80,000,000
Shares of Propel common stock	154,125,921
Business combination description	(i) $80,000,000 in cash, (ii) 154,125,921 shares of Propel common stock, (iii) the right to receive performance-based "earn out" payments that enables the Members to receive up to an additional $40,000,000 in cash or stock consideration based on Propel Media reaching certain earnings before interest, taxes, depreciation and amortization ("EBITDA") levels during the 2015 to 2018 fiscal years, (iv) on or prior to June 30, 2016, the $10,000,000 Deferred Obligation in cash and/or shares of Propel common stock, and (v) immediately after the payment of certain fees to Highbridge on or about January 28, 2019, the $6,000,000 Deferred Payment in cash (the "Exchange").
Cash or stock consideration	$ 40,000,000

Intangibles (Details)

Intangibles (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Indefinite-lived Intangible Assets [Line Items]
Total Intangible Assets	$ 20,000	$ 333,000
Less: Accumulated amortization		(145,000)
Net	20,000	188,000
Domain and trade names (indefinite life) [Member]
Indefinite-lived Intangible Assets [Line Items]
Total Intangible Assets	20,000	20,000
Video library [Member]
Indefinite-lived Intangible Assets [Line Items]
Total Intangible Assets		$ 313,000

Intangibles (Details Textual)

Intangibles (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Intangibles (Textual)
Intangible assets	$ 20,000		$ 20,000		$ 188,000
Amortization expense	$ 0	$ 39,000	$ 39,000	$ 106,000

Financing Agreement (Details)

Financing Agreement (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Less: Current portion	$ 6,066,000	$ 5,997,000
Long-term portion	66,732,000	$ 68,858,000
Term Loan [Member]
Debt Instrument [Line Items]
Principal	69,281,000
Discounts	(2,031,000)
Accreted value through September 30, 2016 of the Deferred Fee ($12,500,000)	5,548,000
Net	72,798,000
Less: Current portion	(6,066,000)
Long-term portion	$ 66,732,000

Financing Agreement (Details 1)

Financing Agreement (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Less: current portion	$ 6,066,000	$ 5,997,000
Long-term debt	66,732,000	$ 68,858,000
Term Loan [Member]
Debt Instrument [Line Items]
2016 (three months)	1,750,000
2,017	7,000,000
2,018	7,000,000
2,019	53,531,000
Total, gross	69,281,000
Less: debt discount	(2,031,000)
Plus: accreted value through September 30, 2016 of the Deferred Fee ($12,500,000)	5,548,000
Total, net	72,798,000
Less: current portion	(6,066,000)
Long-term debt	$ 66,732,000

Financing Agreement (Details Te

Financing Agreement (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Financing Agreement (Textual)
Deferred fee			$ 12,500,000
Revolving credit facility outstanding balance
Borrowing amount available under credit facility	3,244,000		3,244,000
Accretion of debt premium	(806,000)	$ (845,000)	(2,431,000)	$ (2,281,000)
Payments of debt issuance costs				916,000
Amortization of debt issuance costs	60,000	66,000	184,000	180,000
Obligations to original issue discount			1,544,000
Favourable interest reduction from the Lenders			190,000
Amortization of the closing fee	190,000	$ 206,000	577,000	$ 562,000
Term Loan [Member]
Financing Agreement (Textual)
Deferred fee			12,500,000
Amortization of the closing fee			2,880,000
Balance of accreted deferred fee	5,548,000		5,548,000
Unamortized amortized debt issuance costs	487,000		487,000		$ 671,000
Discounts	$ (2,031,000)		$ (2,031,000)
Revolving Loan [Member]
Financing Agreement (Textual)
Revolving loan description			Each revolving loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of such Loan until repaid, at a rate per annum equal to 6.00% plus either (i) the LIBOR rate for the interest period in effect for such Loan (but not less than 1%) (7.0% during the nine months ended September 30, 2016), or (ii) the bank's reference rate (9.5% during the nine months ended September 30, 2016). During the nine months ended September 30, 2016, the Company received a one-time favorable interest reduction of $190,000 from the Lenders related to the revolver.

Related-Party Transactions (Det

Related-Party Transactions (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Oct. 06, 2014
Related Party Transactions (Textual)
Ownership percentage of member interest							10.00%
Technology development services and other administrative services from related party		$ 838,000	$ 660,000	$ 2,353,000	$ 1,935,000
Due to the entity				264,000		$ 3,000
Gain from extinguishment of debt				106,000
Mr. Yeaton [Member]
Related Party Transactions (Textual)
Due to related party		15,000		15,000		$ 7,000
Other financial advisory and accounting services		$ 47,000	$ 97,000	149,000	$ 435,000
Mr. Robert Regular [Member]
Related Party Transactions (Textual)
Cash payments	$ 5,000
Gain from extinguishment of debt				$ 106,000

Commitments and Contingencies39

Commitments and Contingencies (Details)	Sep. 30, 2016USD ($)
Commitments and Contingencies [Abstract]
2016 (three months)	$ 147,000
2,017	594,000
2,018	458,000
Total	$ 1,199,000

Commitments and Contingencies40

Commitments and Contingencies (Details Textual) - USD ($)	Mar. 11, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Commitments and Contingencies (Textual)
Initial monthly rent	$ 8,245
Rent expense		$ 106,000	$ 212,000	$ 323,000	$ 572,000
Reversal of deferred rent				123,000
June 1, 2016 [Member]
Commitments and Contingencies (Textual)
Due to brokers		24,085		24,085
July 5, 2016 [Member]
Commitments and Contingencies (Textual)
Due to brokers		24,085		24,085
April 1, 2016 [Member]
Commitments and Contingencies (Textual)
Termination fees				95,330
Due to brokers		48,170		48,170
Security deposit		(16,674)		(16,674)
Note [Member]
Commitments and Contingencies (Textual)
Aggregate principal amount		$ 28,700,000		$ 28,700,000

Defined Contributions Plans (De

Defined Contributions Plans (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Defined Contributions Plans (Textual)
Contribution expense	$ 41,000	$ 40,000	$ 178,000	$ 152,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - Stock Option [Member]	9 Months Ended
	Sep. 30, 2016USD ($)$ / sharesshares
Number of Options
Number of Options, Outstanding, Beginning Balance | shares	28,755,000
Number of Options, Granted | shares
Number of Options, Exercised | shares
Number of Options, Forfeited, expired or canceled | shares	(5,237,500)
Number of Options, Outstanding, Ending Balance | shares	23,517,500
Number of Options, Exercisable | shares	12,890,012
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning Balance	$ 0.48
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited, expired or canceled	0.42
Weighted Average Exercise Price Outstanding, Ending Balance	0.50
Weighted Average Exercise Price, Exercisable	0.45
Weighted Average Grant Date Fair Value
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance	0.22
Weighted Average Grant Date Fair Value, Granted
Weighted Average Grant Date Fair Value, Exercised
Weighted Average Grant Date Fair Value, Forfeited, expired or canceled	0.20
Weighted Average Grant Date Fair Value, Outstanding Ending Balance	0.27
Weighted Average Grant Date Fair Value, Exercisable	$ 0.24
Weighted Average Remaining Contractual Life
Weighted-Average Remaining Contractual Life, Outstanding (Years)	7 years 7 months 6 days
Weighted-Average Remaining Contractual Life, Outstanding (Years)	7 years 1 month 6 days
Weighted-Average Remaining Contractual Life, Exercisable (Years)	6 years 1 month 6 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value, Outstanding Beginning Balance | $	$ 40,000
Aggregate Intrinsic Value, Outstanding Ending Balance | $
Aggregate Intrinsic Value, Exercisable | $

Stock-Based Compensation (Det43

Stock-Based Compensation (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 22, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Oct. 09, 2014
Stock-Based Compensation (Textual)
Stock-based compensation expense	$ 489,000	$ 240,000	$ 408,000	$ 1,412,000	$ 952,000
Unamortized value of options				$ 2,207,000
Unamortized expectected term of options				The unamortized portion will be expensed through November 2019
Unamortized weighted average remaining period				2 years 4 months 24 days
2014 Long-Term Incentive Equity Plan [Member]
Stock-Based Compensation (Textual)
Fully-diluted shares of the company's common stock outstanding						26,172,326

Executive Bonus Plan (Details)

Executive Bonus Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Executive Bonus Plan (Textual)
Bonus expenses	$ 237,000	$ 390,000	$ 600,000	$ 1,054,000
Accrued executive bonuses	$ 234,000		$ 234,000		$ 416,000