Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 12, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Liberated Syndication Inc. | |
Entity Central Index Key | 0001667489 | |
Amendment Flag | true | |
Document Type | 10-Q/A | |
Amendment Description | This Quarterly Report on Form 10-Q/A (Amendment No. 1) amends the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) by Liberated Syndication Corp. (the “Company”) on November 14, 2018 (the “Original 10-Q”) to restate our unaudited consolidated financial statements for the quarterly period ended September 30, 2018 and to amend related disclosures. | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 29,776,974 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 000-55779 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash | $ 9,364,218 | $ 5,211,845 |
Accounts receivable, net | 515,852 | 660,139 |
Prepaid expenses | 243,534 | 186,425 |
Prepaid domains, net | 216,760 | 0 |
Total current assets | 10,340,364 | 6,058,409 |
Property and equipment, net | 2,381,456 | 3,007,025 |
Goodwill | 16,388,171 | 16,352,069 |
Definite life - intangible assets | 8,251,014 | 9,644,000 |
Prepaid domains, net of current portion | 149,257 | 0 |
Other | 3,582 | 7,076 |
Deferred tax assets | 1,416,762 | 0 |
Total assets | 38,930,606 | 35,068,579 |
CURRENT LIABILITIES: | ||
Accounts payable | 452,418 | 440,565 |
Income tax payable | 589,438 | 0 |
Accrued expenses | 307,332 | 769,485 |
Deferred revenue, net | 2,293,245 | 1,247,686 |
Current portion of capital lease obligation | 72,032 | 69,243 |
Current portion of loans payable, net of $29,371 and $33,366 discount, respectively | 2,637,296 | 1,566,634 |
Total current liabilities | 6,351,761 | 4,093,613 |
LONG TERM LIABILITIES: | ||
Loans payable, net of $58,151 and $79,634 discount, respectively, less current portion | 6,075,182 | 8,320,366 |
Capital lease obligation, net of current portion | 19,439 | 73,817 |
Deferred revenue, net | 280,774 | 133,617 |
Total long-term liabilities | 6,375,395 | 8,527,800 |
Total liabilities | 12,727,156 | 12,621,413 |
COMMITMENTS & CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock | 29,778 | 29,596 |
Additional paid-in capital | 35,092,997 | 34,804,457 |
Accumulated deficit | (8,919,325) | (12,386,887) |
Total stockholders' equity | 26,203,450 | 22,447,166 |
Total liabilities and stockholders' equity | $ 38,930,606 | $ 35,068,579 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Current loans payable discount | $ 29,371 | $ 33,366 |
Noncurrent loans payable discount | 58,151 | 79,634 |
Allowance for doubtful accounts | $ 14,000 | $ 14,000 |
Common stock authorized | 200,000,000 | 200,000,000 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock outstanding | 29,776,974 | 29,595,473 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,726,425 | $ 2,730,237 | $ 16,091,492 | $ 7,723,250 |
Costs and operating expenses | ||||
Cost of revenue (excluding depreciation and amortization) | 962,817 | 636,090 | 2,374,702 | 1,833,868 |
General and administrative | 1,348,731 | 642,262 | 4,252,630 | 1,916,787 |
Non-cash compensation | 0 | 0 | 318,000 | 1,752,000 |
Technology | 426,339 | 157,328 | 1,292,238 | 463,386 |
Selling | 220,460 | 75,649 | 647,833 | 235,583 |
Customer support | 680,094 | 53,099 | 2,055,389 | 138,721 |
Depreciation and amortization | 736,818 | 4,329 | 2,273,083 | 12,648 |
Total costs and operating expenses | 4,375,259 | 1,568,757 | 13,213,875 | 6,352,993 |
Operating income | 1,351,166 | 1,161,480 | 2,877,617 | 1,370,257 |
Interest expense | (92,002) | 0 | (291,205) | 0 |
Interest income | 21,904 | 0 | 44,970 | 0 |
Other income | 3,690 | 0 | 8,857 | 0 |
Income from operations before income taxes | 1,284,758 | 1,161,480 | 2,640,239 | 1,370,257 |
Income tax expense (benefit) | 270,527 | 0 | (827,323) | 0 |
Net Income | $ 1,014,231 | $ 1,161,480 | $ 3,467,562 | $ 1,370,257 |
BASIC AND DILUTED INCOME PER COMMON SHARE | $ 0.03 | $ 0.05 | $ 0.12 | $ 0.06 |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 29,776,974 | 24,415,860 | 29,733,256 | 24,195,567 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net income | $ 3,467,562 | $ 1,370,257 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 2,273,083 | 14,098 |
Issuance of common stock | 318,000 | 1,752,000 |
Deferred income taxes | 1,416,762 | 0 |
Discount on loan fees | 25,478 | 0 |
Change in assets and liabilities: | ||
Accounts receivable | 78,906 | (206,236) |
Prepaid expenses | (419,633) | (3,599) |
Accounts payable | 11,853 | (106,918) |
Accrued expense | (462,152) | (239,285) |
Deferred revenue | 1,192,715 | (9,142) |
Net Cash Provided by Operating Activities | 5,658,489 | 2,571,175 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (254,527) | (69,064) |
Net Cash Used in Investing Activities | (254,527) | (69,064) |
Cash Flows from Financing Activities: | ||
Repayment on term loan | (1,200,000) | 0 |
Repayment on capital lease | (51,589) | 0 |
Re-purchase of common stock | 0 | (8,000) |
Net Cash Used in Financing Activities | (1,251,589) | (8,000) |
Net Increase in Cash | 4,152,373 | 2,494,111 |
Cash at Beginning of Period | 5,211,845 | 4,875,458 |
Cash at End of Period | 9,364,218 | 7,369,569 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid during the periods for: Interest | 263,981 | 0 |
Cash paid during the periods for: Income taxes | 0 | 0 |
Supplemental Non-Cash Investing and Financing Activities | ||
Returned common stock | $ 29,278 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Organization Basis of Presentation Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2018. These financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K). Prior Period Reclassifications - Accounting Estimates Our more significant estimates include: ● the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements; ● the fair value of assets acquired, and liabilities assumed in business acquisitions; ● the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; ● the estimated reserve for refunds; ● the estimated useful lives of intangible and depreciable assets; ● the grant date fair value of equity-based awards; ● the recognition, measurement, and valuation of current and deferred income taxes; We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates. Cash and Cash Equivalents Depreciation Accounts Receivable Long-lived intangible assets Software Development Costs Goodwill Advertising Costs Fair Value of Financial Instruments ● Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable, deferred revenue and accrued expenses approximates their recorded values due to their short-term maturities. Revenue Recognition The adoption of the new standard did not have a material impact to our financial statements. Revenue is recognized when control of the promised services is transferred to our customers, in an amount reflecting the consideration we expect to be entitled to in exchange for those services. Certain products are generally sold with a right of return within our policy, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Refunds are estimated at contract inception using the expected value method based on historical refund experience and updated each reporting period as additional information becomes available and only to the extent it is probable a significant reversal of any incremental revenue will not occur. Refunds reduce deferred revenue at the time they are granted and resulted in a reduced amount of revenue recognized over the contract term of the applicable service compared to the amount originally expected. Our revenue is categorized and disaggregated as follows: Domains Hosting Services Podcast Hosting Media Subscription Services Advertising Equity-Based Compensation - Leases Earnings Per Share Income Taxes Recently Enacted Accounting Standards - Recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | The following is a summary of property and equipment at: Life September 30, 2018 December 31, 2017 Furniture, fixtures, and equipment 3-10 yrs $ 8,103,172 $ 8,032,178 Leasehold improvements 3 - 5 yrs 2,646,400 2,646,400 Software 3 yrs 190,038 6,503 10,939,609 10,685,081 Less: Accumulated depreciation (8,558,154 ) (7,678,056 ) Property & equipment, net $ 2,381,456 $ 3,007,025 Depreciation expense for the nine months ended September 30, 2018 and 2017 was $880,097 and $14,098, respectively. |
GOODWILL AND OTHER DEFINITE-LIF
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS | Goodwill September 30, December 31, 2018 2017 Goodwill at beginning of period $ 16,352,069 $ 11,484,251 Acquisition of Pair 36,102 4,867,818 Impairment - - Goodwill at end of period $ 16,388,171 $ 16,352,069 During the first quarter of 2018, the Company completed its net-working capital closing adjustment for the acquisition of Pair, resulting in an additional allocation of $36,102 of goodwill. Other definite-life intangible assets As of September 30, 2018, identifiable intangible assets consist of following: Preliminary Fair Value Weighted Average Useful Life (in Years) Accumulated Amortization Net Carrying Amount Customer Relationships $ 3,947,000 7 $ 422,893 $ 3,524,107 Intellectual Property 3,709,000 7 397,393 3,311,607 Trade name 576,000 10 43,200 532,800 Non-compete 1,412,000 2 529,500 882,500 Total $ 9,644,000 $ 1,392,986 $ 8,251,014 Amortization expense for the nine months ended September 30, 2018 and 2017 was $1,392,986 and $0, respectively The estimated future amortization expenses related to other intangible assets as of September 30, 2018 are as follows: For twelve months ending September 30, 2019 $ 1,857,314 2020 1,327,814 2021 1,151,315 2022 1,151,314 2023 1,151,314 Thereafter 1,611,943 Total $ 8,251,014 |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2018 | |
Loans | |
LOANS | On December 27, 2017, the Company entered into a loan agreement (the “Loan Agreement”) among the Company, Libsyn, and Pair, together, and First Commonwealth Bank, a Pennsylvania bank and trust company (the “Bank”). The Loan Agreement provides for: (i) a revolving credit facility pursuant to which the Company may borrow an aggregate principal amount not to exceed $2,000,000 (the “Revolving Credit Facility”); and (ii) a term loan in a principal amount equal to $8,000,000 (the “Term Loan” and, together with the Revolving Credit Facility, the “Facility”). A portion of the Revolving Credit Facility, up to $500,000, may be used for standby letters of credit for the account of the Company. As of September 30, 2018, $2,000,000 was drawn down on the revolving line with $0 available. The loan currently accrues interest at LIBOR plus 150 base points or prime plus 75 basis points at the election of the Company. As of September 30, 2018, the Company has elected LIBOR plus 150 basis points or 3.886%. The Term Loan is repayable in quarterly installments of $400,000 commencing on March 30, 2018 and on the last day of each June, September, December and March thereafter, through and including September 30, 2022. Accrued interest is payable in arrears not less frequently than quarterly. The remaining unpaid principal balance of the Term Loan, together with accrued interest thereon, is due and payable in full on December 27, 2022. The Term Loan also calls for additional payment equal to the following: 1)100% of the proceeds from the sale of any common shares 2) 100% of the proceeds from the sale of assets not immediately replaced 3) excess liquidity in any given year up to $1,066,667 a year and no more than $3,200,000 over the life of the term loan. As of September 30, 2018, the balance on the term loan was $6,800,000. The Company, Libsyn and Pair have granted the bank a blanket security interest in their respective assets, and the Company has pledged the stock of Webmayhem Inc. and Pair Networks Inc. to the bank, as security for all obligations under the Loan Agreement. Borrowings under the Facility are at variable rates which are, at the Company’s option, tied to LIBOR (London Interbank Offered Rate) plus an applicable rate or a prime rate. Interest rates are subject to change based on the Company’s combined cash balances. The Facility contains covenants that may have the effect of limiting the ability of the Company to, among other things, merge with or acquire other entities, enter into a transaction resulting in a change in control, create certain new liens, incur certain additional indebtedness, engage in certain transactions with affiliates, engage in new lines of business or sell a substantial part of its assets. The Facility also requires the Company to maintain certain consolidated fixed charge coverage ratios and minimum liquidity balances. The Facility also contains customary events of default, including (but not limited to) default in the payment of principal or, following an applicable grace period, interest, breaches of the Company’s covenants or warranties under the Facility, payment default or acceleration of certain indebtedness of the Company or any subsidiary, certain events of bankruptcy, insolvency or liquidation involving the Company or its subsidiaries, certain judgments or uninsured losses, changes in control and certain liabilities related to ERISA based plans. On December 27, 2017, the Company drew $10,000,000 under the Facility to finance a portion of the cash consideration payable to the Seller pursuant to the Share Purchase Agreement. Debt issuance costs of $113,000 for the Facility were recorded as a discount and will be amortized over the life of the Facility. As of September 30, 2018, the discount was $87,522. Future maturities of the loans at September 30, 2018 are as follows: For the year ending September 30, 2019 $ 2,666,667 2020 1,600,000 2021 1,600,000 2022 1,600,000 2023 1,333,333 Thereafter - Total $ 8,800,000 |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK | Common Stock During the first quarter of 2018, the Company issued 200,000 shares of common stock valued at $318,000 to a consultant for services rendered. During the first quarter of 2018, the seller of Pair Networks Inc., returned $18,499 shares valued at $29,278 to the company as per the terms of the acquisition agreement dated December 27, 2017 in connection with the closing adjustment for the net-working capital provision. During the first quarter of 2017, the Company issued 3,650,000 shares of common stock valued at $1,752,000 to officers and directors. During the second quarter of 2017, the Company repurchased 40,000 shares of common stock for $8,000, and the stock was retired. |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue [Abstract] | |
DEFERRED REVENUE | Deferred revenue consists of the following: September 30, 2018 December 31, 2017 Current: Hosting services $ 1,698,164 $ 1,032,000 Domains 486,102 104,172 Media subscription 108,979 111,514 $ 2,293,245 $ 1,247,686 Noncurrent: Hosting services - 50,351 Domains 280,774 83,266 $ 2,574,019 $ 1,381,303 Deferred revenue as of September 30, 2018 is expected to be recognized as revenue as follows: Remainder of 2018 2019 2020 2021 2022 Thereafter Total Domains $ 169,901 $ 350,520 $ 99,312 $ 67,619 $ 54,236 $ 25,289 $ 766,877 Hosting 821,308 791,839 85,016 - - - 1,698,163 Media Subscription 55,633 53,346 - - - - 108,979 $ 1,046,842 $ 1,195,705 $ 184,328 $ 67,619 $ 54,236 $ 25,289 $ 2,574,019 Disaggregated revenue consists of following: Three Months Ended September 30 Nine months ended September 30 2018 2017 2018 2017 Hosting services $ 2,246,071 $ - $ 6,439,706 $ - Podcast hosting 2,794,994 2,191,311 7,945,625 6,159,613 Advertising 449,467 443,107 1,020,881 1,285,075 Domains 159,128 - 347,423 - Other 76,765 95,819 337,857 278,562 $ 5,726,425 $ 2,730,237 $ 16,091,492 $ 7,723,250 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards. At September 30, 2018 and December 31, 2017, the total of all deferred tax assets was $1,416,762 and $3,458,667, respectively, and the total of the deferred tax assets related to goodwill was $0 and $1,848,717, respectively. The 2017 deferred tax asst was fully allowed for in the year. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which cannot be determined. Management has analyzed the health of the Company and it is now more likely than not that the company will likely have strong income from operations moving forward. Therefore, the valuation allowance has been relieved. The change in the valuation allowance for the nine months ended September 30, 2018 and 2017 was $1,416,762 and $557,580, respectively. The components of income tax expense (benefit) from continuing operations for the nine months ended September 30, 2018 and 2017 consist of the following: For the Nine months ended September 30, 2018 2017 Current tax expense: Federal $ 589,438 $ - State - - Current tax expense 589,438 - Deferred tax (benefit) expense: Deferred revenue (21,045 ) - Depreciation and amortization (67,966 ) - Intangible Assets - 383,331 Non-cash compensation (1,327,751 ) Valuation Allowance - (557,580 ) Net operating loss carryforward 174,249 Subtotal deferred tax (benefit) expense (1,416,762 ) - Income tax (benefit) expense $ (827,327 ) $ - A reconciliation of income tax expense as the federal statutory rate to income tax expense at the Company’s effective rate is as follows: For the Nine months ended September 30, 2018 2017 Computed tax at the expected statutory rate $ 589,438 $ 465,893 State and local income taxes, net of federal - 90,565 Other non-deductible expenses - 1,122 Valuation Allowance (1,416,762 ) (557,580 ) Income tax (benefit) expense $ (827,327 ) $ - The temporary differences, tax credits and carryforwards gave rise to the following deferred tax asset at September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 Current deferred tax assets (liabilities): Allowance for doubtful accounts $ - $ - Vacation accrual - - Total current deferred tax assets (liabilities) - - Long-term deferred tax assets (liabilities): Depreciation and amortization 67,966 - Deferred revenue 21,045 - Non-cash compensation 1,327,751 - Goodwill - impaired - 2,066,632 Intangible assets – tax amortization - (3,915,349 ) Net operating loss carryforward - 5,307,384 Valuation allowance - (3,458,667 ) Net term deferred tax assets (liabilities) $ 1,416,762 $ - At December 31, 2018, the company has loss carryforwards of $0. We file U.S. federal, and U.S. states returns, and we are generally no longer subject to tax examinations for years prior to 2015 for U.S. federal and U.S. states tax returns. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
LEASES | Operating Lease The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of September 30, 2018 are as follows: Year ending September 30: Lease Payments 2019 466,260 2020 466,260 2021 466,260 2022 33,887 Total Minimum Lease Payment $ 1,432,667 Lease expense charged to operations was $458,805 and $153,252 for the nine months ended September 30, 2018 and 2017, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | Basic income (loss) per share is computed by dividing net income (loss) attributable to Liberated Syndication Inc. by the weighted-average number of shares of common stock outstanding during the period. As of September 30, 2018, there were no common stock equivalents outstanding. The following data shows the amounts used in computing earnings per share and the weighted average number of shares of common stock outstanding for the periods presented for the periods ended: For the Three Months For the Nine Months September 30 September 30 2018 2017 2018 2017 Income from operations available to common stockholders (numerator)$ $ 1,014,231 $ 1,161,480 $ 3,467,562 1,370,257 Income available to common stockholders (numerator) 1,014,231 1,161,480 3,467,562 1,370,257 Restated Weighted average number of common shares outstanding during the period used in earnings per share (denominator) 29,776,974 24,415,860 29,733,256 24,195,567 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | After the Spin-Off, FAB Universal Corp. (“FAB”), the former parent company of the Company, may have obligations that at the present time are unknown or unforeseen. As the nature of such obligations are unknown, we are unable to provide an estimate of the potential obligation. However, should FAB incur such obligations, the Company may be financially obligated to pay any losses incurred. The Company has a 401 (k) plan and profit-sharing plan for the benefit of the employees of the Company. Employees are eligible to participate in the plan the first of the month following their hire date and attaining the age of 21. Profit sharing contributions are made at the discretion of the Board of Directors and vest 100% after the second year of service. The Company made a $100,000 profit sharing contribution to the plan in 2018. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments. The Company is engaged in providing hosting services. The Company's chief operating decision maker (“CODM”) has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, the Company has determined that it has two operating segments as of September 30, 2018 which are podcast hosting services (Libsyn) and internet hosting services (Pair). The following table presents summary information by segment for the nine months ended September 30, 2018 and 2017, respectively: 2018 2017 (in thousands) Libsyn Pair Total Libsyn Pair Total Revenue $ 9,260 $ 6,831 $ 16,091 $ 7,723 $ - $ 7,723 Cost of revenue 1,818 557 2,375 1,834 - 1,834 Total assets $ 21,092 $ 17,839 $ 38,931 $ 19,583 $ - $ 19,583 Depreciation and amortization $ 30 $ 2,243 $ 2,273 $ 14 $ - $ 14 The following table presents summary information by segment for the three months ended September 30, 2018 and 2017, respectively: 2018 2017 (in thousands) Libsyn Pair Total Libsyn Pair Total Revenue $ 3,352 $ 2,374 $ 5,726 $ 2,730 $ - $ 2,730 Cost of revenue 745 218 963 636 - 636 Depreciation and amortization $ 12 $ 725 $ 737 $ 6 $ - $ 6 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Management has evaluated subsequent events through the date of the filing of this report. |
RESTATEMENT OF PREVIOUSLY REPOR
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS | Background of the Restatement On April 28, 2020, the Audit Committee of the Board of Directors of Liberated Syndication Inc, a Nevada corporation (the “Company”) determined that (a) the Consolidated Balance Sheet as of December 31, 2018, (b) the Consolidated Statement of Operations for the year ended December 31, 2018, (c) the Statement of Stockholders’ Equity for the year ended December 31, 2018, and (d) the Consolidated Statement of Cash Flows for the year December 31, 2018, all as presented in the Company’s Annual Report on Form 10-K for the Period Ended December 31, 2018, as previously filed with the U.S. Securities and Exchange Commission on March 14, 2019, should not be relied upon. Subsequent to such determination, the Company reviewed the related interim financial statements and interim financial statements for the first three quarters of 2019 and 2018, and as a result of such review, on May 20, 2020, the Audit Committee determined that such interim financial statement should likewise no longer be relied upon. Specifically, the amounts reported in the Consolidated Balance Sheet as of September 30, 2018 for total assets, current liabilities, and consequently total liabilities and total stockholders’ equity, were determined to be materially different. Additionally, the income tax (benefit) expense in the Consolidated Statement of Operations for the three and nine months ended September 30, 2018 was changed. As a result, the net income and the basic and diluted income per common share were determined to be materially different. The Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 also changed as a result of the deferred income taxes and income tax payable for 2018. During the 2019 audit process, it was discovered through an ongoing IRS examination it was discovered that the Company owed Federal tax for 2018. The IRS examination uncovered an error in calculating the Net Operating Loss Carryforward (NOL) resulting from the spin-off of Libsyn in 2016. At December 31, 2017, the Company had recorded an NOL of approximately $14 million. The NOL was part of deferred tax asset which was valued at $0 on the balance sheet, as it had a full valuation allowance. Consequently, the Company was not recognizing tax expenses or the associated tax payable during 2018. However, as the IRS examination continued, it has become clear that the $14 million NOL was overestimated by approximately $12.5 million, and by March 31, 2018, that the NOL has been completely utilized. The result is that the Company ought to have begun recording tax expenses in 2018. This Federal Tax Balance will be paid with an amended return in 2020. The Company has temporary tax differences which result in a deferred tax asset (DTA). Under the provisions of ASC Topic 740, a DTA is to be recognized for the potential future tax benefit from a loss carryforward. Full realization of the benefit, however, depends on the Company having income in future years. Because the NOL has been completely utilized and the Company is now consistently recording profits, a DTA with the associated payable should have been recorded in 2018. DTAs represent future income tax benefits. But the tax benefits will be realized only if there is sufficient taxable income from which the deductible amount can be deducted. Impact of the Restatement As a result of the restatement, reported net income from continuing operations was decreased by $270,527, or $0.01 per basic and diluted share for the three months ended September 30, 2018. As a result of the restatement, reported net income from continuing operations was increased by $827,323, or $0.03 per basic and diluted share for the nine months ended September 30, 2018. Total assets increased by $1,416,762 at September 30, 2018. Current and total liabilities increased by $589,438 at September 30, 2018. Accumulated deficit decreased by $827,323 at September 30, 2018. The financial statements included in this Form 10-Q/A have been restated to reflect the adjustments described. The table below summarizes the effects of the restatement on Libsyn’s Unaudited Consolidated Statements of Operation for the nine months ended September 30, 2018 and, Unaudited Consolidated Balance Sheet at September 30, 2018. In addition to the restatement of the financial statements, certain information within Note 7 – Income Taxes to the financial statements has been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate. Unaudited Consolidated Balance Sheet September 30, 2018 As Reported Corrections September 30, 2018 As Restated Deferred Tax Assets — 1,416,762 1,416,762 Total Assets 37,513,844 1,416,762 38,930,606 Income Taxes Payable — 589,438 589,438 Total Current Liabilities 5,762,323 589,438 6,351,761 Total Liabilities 12,137,718 589,438 12,727,156 Accumulated Deficit (9,746,648 ) 827,323 (8,919,325 ) Stockholder’s Equity 25,376,127 827,323 26,203,450 Unaudited Consolidated Statement of Operations Nine months ended September 30, 2018 As Reported Corrections Nine months ended September 30, 2018 As Restated Income Tax (Benefit) Expense — 827,323 827,323 Net Income 2,640,239 827,323 3,467,562 Basic and Diluted Income Per Common Share 0.09 0.03 0.12 Unaudited Consolidated Statement of Operations Three months ended September 30, 2018 As Reported Corrections Three months ended September 30, 2018 As Restated Income Tax (Benefit) Expense — 270,527 270,527 Net Income 1,284,758 270,527 1,014,231 Basic and Diluted Income Per Common Share 0.04 (0.01 ) 0.03 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization |
Basis of Presentation | Basis of Presentation Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2018. These financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K). |
Prior Period Reclassifications | Prior Period Reclassifications - |
Accounting Estimates | Accounting Estimates Our more significant estimates include: ● the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements; ● the fair value of assets acquired, and liabilities assumed in business acquisitions; ● the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; ● the estimated reserve for refunds; ● the estimated useful lives of intangible and depreciable assets; ● the grant date fair value of equity-based awards; ● the recognition, measurement, and valuation of current and deferred income taxes; We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Depreciation | Depreciation |
Accounts Receivable | Accounts Receivable |
Long-lived intangible assets | Long-lived intangible assets |
Software Development Costs | Software Development Costs |
Goodwill | Goodwill |
Advertising Costs | Advertising Costs |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ● Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable, deferred revenue and accrued expenses approximates their recorded values due to their short-term maturities. |
Revenue Recognition | Revenue Recognition The adoption of the new standard did not have a material impact to our financial statements. Revenue is recognized when control of the promised services is transferred to our customers, in an amount reflecting the consideration we expect to be entitled to in exchange for those services. Certain products are generally sold with a right of return within our policy, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Refunds are estimated at contract inception using the expected value method based on historical refund experience and updated each reporting period as additional information becomes available and only to the extent it is probable a significant reversal of any incremental revenue will not occur. Refunds reduce deferred revenue at the time they are granted and resulted in a reduced amount of revenue recognized over the contract term of the applicable service compared to the amount originally expected. Our revenue is categorized and disaggregated as follows: Domains Hosting Services Podcast Hosting Media Subscription Services |
Advertising | Advertising |
Equity-Based Compensation | Equity-Based Compensation - |
Leases | Leases |
Earnings Per Share | Earnings Per Share |
Income Taxes | Income Taxes |
Recently Enacted Accounting Standards | Recently Enacted Accounting Standards - Recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Life September 30, 2018 December 31, 2017 Furniture, fixtures, and equipment 3-10 yrs $ 8,103,172 $ 8,032,178 Leasehold improvements 3 - 5 yrs 2,646,400 2,646,400 Software 3 yrs 190,038 6,503 10,939,609 10,685,081 Less: Accumulated depreciation (8,558,154 ) (7,678,056 ) Property & equipment, net $ 2,381,456 $ 3,007,025 |
GOODWILL AND OTHER DEFINITE-L_2
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of goodwill | September 30, December 31, 2018 2017 Goodwill at beginning of period $ 16,352,069 $ 11,484,251 Acquisition of Pair 36,102 4,867,818 Impairment - - Goodwill at end of period $ 16,388,171 $ 16,352,069 |
Summary of other intangible assets | Preliminary Fair Value Weighted Average Useful Life (in Years) Accumulated Amortization Net Carrying Amount Customer Relationships $ 3,947,000 7 $ 422,893 $ 3,524,107 Intellectual Property 3,709,000 7 397,393 3,311,607 Trade name 576,000 10 43,200 532,800 Non-compete 1,412,000 2 529,500 882,500 Total $ 9,644,000 $ 1,392,986 $ 8,251,014 |
Schedule of estimated future amortization expenses related to other intangible assets | For twelve months ending September 30, 2019 $ 1,857,314 2020 1,327,814 2021 1,151,315 2022 1,151,314 2023 1,151,314 Thereafter 1,611,943 Total $ 8,251,014 |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loans Tables Abstract | |
Future maturities of the loans | For the year ending September 30, 2019 $ 2,666,667 2020 1,600,000 2021 1,600,000 2022 1,600,000 2023 1,333,333 Thereafter - Total $ 8,800,000 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue | |
Schedule of deferred revenue | September 30, 2018 December 31, 2017 Current: Hosting services $ 1,698,164 $ 1,032,000 Domains 486,102 104,172 Media subscription 108,979 111,514 $ 2,293,245 $ 1,247,686 Noncurrent: Hosting services - 50,351 Domains 280,774 83,266 $ 2,574,019 $ 1,381,303 |
Deferred revenue expected to be recognized | Remainder of 2018 2019 2020 2021 2022 Thereafter Total Domains $ 169,901 $ 350,520 $ 99,312 $ 67,619 $ 54,236 $ 25,289 $ 766,877 Hosting 821,308 791,839 85,016 - - - 1,698,163 Media Subscription 55,633 53,346 - - - - 108,979 $ 1,046,842 $ 1,195,705 $ 184,328 $ 67,619 $ 54,236 $ 25,289 $ 2,574,019 |
Disaggregated revenue | Three Months Ended September 30 Nine months ended September 30 2018 2017 2018 2017 Hosting services $ 2,246,071 $ - $ 6,439,706 $ - Podcast hosting 2,794,994 2,191,311 7,945,625 6,159,613 Advertising 449,467 443,107 1,020,881 1,285,075 Domains 159,128 - 347,423 - Other 76,765 95,819 337,857 278,562 $ 5,726,425 $ 2,730,237 $ 16,091,492 $ 7,723,250 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense | For the Nine months ended September 30, 2018 2017 Current tax expense: Federal $ 589,438 $ - State - - Current tax expense 589,438 - Deferred tax (benefit) expense: Deferred revenue (21,045 ) - Depreciation and amortization (67,966 ) - Intangible Assets - 383,331 Non-cash compensation (1,327,751 ) Valuation Allowance - (557,580 ) Net operating loss carryforward 174,249 Subtotal deferred tax (benefit) expense (1,416,762 ) - Income tax (benefit) expense $ (827,327 ) $ - |
Schedule of Effective Income Tax Rate Reconciliation | For the Nine months ended September 30, 2018 2017 Computed tax at the expected statutory rate $ 589,438 $ 465,893 State and local income taxes, net of federal - 90,565 Other non-deductible expenses - 1,122 Valuation Allowance (1,416,762 ) (557,580 ) Income tax (benefit) expense $ (827,327 ) $ - |
Schedule of Deferred Tax Assets and Liabilities | September 30, December 31, 2018 2017 Current deferred tax assets (liabilities): Allowance for doubtful accounts $ - $ - Vacation accrual - - Total current deferred tax assets (liabilities) - - Long-term deferred tax assets (liabilities): Depreciation and amortization 67,966 - Deferred revenue 21,045 - Non-cash compensation 1,327,751 - Goodwill - impaired - 2,066,632 Intangible assets – tax amortization - (3,915,349 ) Net operating loss carryforward - 5,307,384 Valuation allowance - (3,458,667 ) Net term deferred tax assets (liabilities) $ 1,416,762 $ - |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | Year ending September 30: Lease Payments 2019 466,260 2020 466,260 2021 466,260 2022 33,887 Total Minimum Lease Payment $ 1,432,667 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | For the Three Months For the Nine Months September 30 September 30 2018 2017 2018 2017 Income from operations available to common stockholders (numerator)$ $ 1,014,231 $ 1,161,480 $ 3,467,562 1,370,257 Income available to common stockholders (numerator) 1,014,231 1,161,480 3,467,562 1,370,257 Restated Weighted average number of common shares outstanding during the period used in earnings per share (denominator) 29,776,974 24,415,860 29,733,256 24,195,567 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting | |
Segment Reporting | 2018 2017 (in thousands) Libsyn Pair Total Libsyn Pair Total Revenue $ 9,260 $ 6,831 $ 16,091 $ 7,723 $ - $ 7,723 Cost of revenue 1,818 557 2,375 1,834 - 1,834 Total assets $ 21,092 $ 17,839 $ 38,931 $ 19,583 $ - $ 19,583 Depreciation and amortization $ 30 $ 2,243 $ 2,273 $ 14 $ - $ 14 |
RESTATEMENT OF PREVIOUSLY REP_2
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Balance sheet restatement | Unaudited Consolidated Balance Sheet September 30, 2018 As Reported Corrections September 30, 2018 As Restated Deferred Tax Assets — 1,416,762 1,416,762 Total Assets 37,513,844 1,416,762 38,930,606 Income Taxes Payable — 589,438 589,438 Total Current Liabilities 5,762,323 589,438 6,351,761 Total Liabilities 12,137,718 589,438 12,727,156 Accumulated Deficit (9,746,648 ) 827,323 (8,919,325 ) Stockholder’s Equity 25,376,127 827,323 26,203,450 |
Statement of operations restatement | Unaudited Consolidated Statement of Operations Nine months ended September 30, 2018 As Reported Corrections Nine months ended September 30, 2018 As Restated Income Tax (Benefit) Expense — 827,323 827,323 Net Income 2,640,239 827,323 3,467,562 Basic and Diluted Income Per Common Share 0.09 0.03 0.12 Unaudited Consolidated Statement of Operations Three months ended September 30, 2018 As Reported Corrections Three months ended September 30, 2018 As Restated Income Tax (Benefit) Expense — 270,527 270,527 Net Income 1,284,758 270,527 1,014,231 Basic and Diluted Income Per Common Share 0.04 (0.01 ) 0.03 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Cash balances in excess of federally insured limits | $ 8,858,914 | ||
Allowance for doubtful accounts | 14,000 | $ 14,000 | |
Adjusted allowance for bad debt | 0 | $ 0 | |
Software development costs | 1,292,238 | 463,386 | |
Advertising costs | $ 95,075 | $ 25,344 |
PROPERY AND EQUIPMENT (Details)
PROPERY AND EQUIPMENT (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 10,939,609 | $ 10,685,081 |
Less: Accumulated depreciation | (8,558,154) | (7,678,056) |
Property & equipment, net | 2,381,456 | 3,007,025 |
Furniture, fixtures and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 8,103,172 | 2,646,400 |
Furniture, fixtures and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Life | 3 years | |
Furniture, fixtures and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Life | 10 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,646,400 | 8,032,178 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Life | 3 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Life | 5 years | |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 190,038 | $ 6,503 |
Life | 3 years |
PROPERY AND EQUIPMENT (Details
PROPERY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 880,097 | $ 14,098 |
GOODWILL AND OTHER DEFINITE-L_3
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill | ||
Goodwill at beginning of period | $ 16,352,069 | $ 11,484,251 |
Acquisition of Pair | 36,102 | 4,867,818 |
Impairment | 0 | 0 |
Goodwill at end of period | $ 16,388,171 | $ 16,352,069 |
GOODWILL AND OTHER DEFINITE-L_4
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Preliminary fair value | $ 9,644,000 | |
Accumulated amortization | 1,392,986 | |
Net carrying amount | 8,251,014 | $ 9,644,000 |
Customer relationships | ||
Preliminary fair value | $ 3,947,000 | |
Weighted average useful life | 7 years | |
Accumulated amortization | $ 422,893 | |
Net carrying amount | 3,524,107 | |
Intellectual property | ||
Preliminary fair value | $ 3,709,000 | |
Weighted average useful life | 7 years | |
Accumulated amortization | $ 397,393 | |
Net carrying amount | 3,311,607 | |
Trade name | ||
Preliminary fair value | $ 576,000 | |
Weighted average useful life | 10 years | |
Accumulated amortization | $ 43,200 | |
Net carrying amount | 532,800 | |
Non-compete | ||
Preliminary fair value | $ 1,412,000 | |
Weighted average useful life | 2 years | |
Accumulated amortization | $ 529,500 | |
Net carrying amount | $ 882,500 |
GOODWILL AND OTHER DEFINITE-L_5
GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS (Details 2) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 1,857,314 | |
2020 | 1,327,814 | |
2021 | 1,151,315 | |
2022 | 1,151,314 | |
2023 | 1,151,314 | |
Thereafter | 1,611,943 | |
Total | $ 8,251,014 | $ 9,644,000 |
LOANS (Details)
LOANS (Details) | Sep. 30, 2018USD ($) |
Loans Details Abstract | |
2019 | $ 2,666,667 |
2020 | 1,600,000 |
2021 | 1,600,000 |
2022 | 1,600,000 |
2023 | 1,333,333 |
Thereafter | 0 |
Total | $ 8,800,000 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders' Equity Note [Abstract] | ||
Common stock authorized | 200,000,000 | 200,000,000 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock issued | 29,776,974 | |
Common stock outstanding | 29,776,974 | 29,595,473 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current revenue | $ 2,293,245 | $ 1,247,686 |
Noncurrent revenue | 280,774 | 133,617 |
Deferred revenue | 2,574,019 | 1,381,303 |
Hosting Services | ||
Current revenue | 1,698,164 | 1,032,000 |
Noncurrent revenue | 0 | 50,351 |
Deferred revenue | 1,698,163 | |
Domains | ||
Current revenue | 486,102 | 104,172 |
Noncurrent revenue | 280,774 | 83,266 |
Deferred revenue | 766,877 | |
Media Subscription | ||
Current revenue | 108,979 | $ 111,514 |
Deferred revenue | $ 108,979 |
DEFERRED REVENUE (Details 1)
DEFERRED REVENUE (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Remainder of 2018 | $ 1,046,842 | |
2019 | 1,195,705 | |
2020 | 184,328 | |
2021 | 67,619 | |
2022 | 54,236 | |
Thereafter | 25,289 | |
Total | 2,574,019 | $ 1,381,303 |
Domains | ||
Remainder of 2018 | 169,901 | |
2019 | 350,520 | |
2020 | 99,312 | |
2021 | 67,619 | |
2022 | 54,236 | |
Thereafter | 25,289 | |
Total | 766,877 | |
Hosting Services | ||
Remainder of 2018 | 821,308 | |
2019 | 791,839 | |
2020 | 85,016 | |
2021 | 0 | |
2022 | 0 | |
Thereafter | 0 | |
Total | 1,698,163 | |
Media Subscription | ||
Remainder of 2018 | 55,633 | |
2019 | 53,346 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
Thereafter | 0 | |
Total | $ 108,979 |
DEFERRED REVENUE (Details 2)
DEFERRED REVENUE (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 5,726,425 | $ 2,730,237 | $ 16,091,492 | $ 7,723,250 |
Hosting Services | ||||
Revenue | 2,246,071 | 0 | 6,439,706 | 0 |
Podcast Hosting | ||||
Revenue | 2,794,994 | 2,191,311 | 7,945,625 | 6,159,613 |
Advertising | ||||
Revenue | 449,467 | 443,107 | 1,020,881 | 1,285,075 |
Domains | ||||
Revenue | 159,128 | 0 | 347,423 | 0 |
Other | ||||
Revenue | $ 76,765 | $ 95,819 | $ 337,857 | $ 278,562 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current tax expense: | ||||
Federal | $ 589,438 | $ 0 | ||
State | 0 | 0 | ||
Current tax expense | 589,438 | 0 | ||
Deferred tax expense (benefit): | ||||
Deferred revenue | (21,045) | 0 | ||
Depreciation and amortization | (67,966) | 0 | ||
Intangible Assets | 0 | 383,331 | ||
Non-cash compensation | (1,327,751) | 0 | ||
Valuation Allowance | 0 | (557,580) | ||
Net operating loss carryforward | 0 | 174,249 | ||
Subtotal deferred tax expense/(benefit) | (1,416,762) | 0 | ||
Income tax expense/(benefit) | $ 270,527 | $ 0 | $ (827,323) | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Effective Income Tax Rate Reconciliation | ||||
Computed tax at the expected statutory rate | $ 589,438 | $ 465,893 | ||
State and local income taxes, net of federal | 0 | 90,565 | ||
Other non-deductible expenses | 0 | 1,122 | ||
Valuation Allowance | (14,167,762) | (557,580) | ||
Income tax expense/(benefit) | $ 270,527 | $ 0 | $ (827,323) | $ 0 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current deferred tax assets (liabilities): | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Vacation accrual | 0 | 0 |
Total current deferred tax assets (liabilities | 0 | 0 |
Long-term deferred tax assets (liabilities): | ||
Depreciation and amortization | 67,966 | 0 |
Deferred Revenue | 21,045 | 0 |
Non-cash compensation | 1,327,751 | 0 |
Goodwill - impaired | 0 | 2,903,618 |
Intangible assets - tax amortization | 0 | (5,245,512) |
Net operating loss carryforward | 0 | 5,825,770 |
Valuation allowance | 0 | (3,483,876) |
Net term deferred tax assets (liabilities) | $ 1,416,762 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Total of all deferred tax assets | $ 1,416,762 | $ 3,458,667 | |
Deferred tax assets related to goodwill | 0 | $ 1,848,717 | |
Change in the valuation allowance | $ 1,416,762 | $ 557,580 |
LEASES (Details)
LEASES (Details) | Sep. 30, 2018USD ($) |
Year ending December 31: | |
2019 | $ 466,260 |
2020 | 466,260 |
2021 | 466,260 |
2022 | 33,887 |
Total Minimum Lease Payment | $ 1,432,667 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Leases [Abstract] | ||
Lease expense | $ 458,805 | $ 153,252 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Income from operations available to common stockholders (numerator) | $ 1,014,231 | $ 1,161,480 | $ 3,467,562 | $ 1,370,257 |
Income available to common stockholders (numerator) | $ 1,014,231 | $ 1,161,480 | $ 3,467,562 | $ 1,370,257 |
Restated Weighted average number of common shares outstanding during the period used in earnings per share (denominator) | 29,776,974 | 24,415,860 | 29,733,256 | 24,195,567 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 5,726 | $ 2,730 | $ 16,091 | $ 7,723 |
Cost of revenue | 963 | 636 | 2,375 | 1,834 |
Total assets | 37,514 | 19,583 | 37,514 | 19,583 |
Depreciation and amortization | 737 | 6 | 2,273 | 14 |
Libsyn | ||||
Revenue | 3,352 | 2,730 | 9,260 | 7,723 |
Cost of revenue | 745 | 636 | 1,818 | 1,834 |
Total assets | 19,675 | 19,583 | 19,675 | 19,583 |
Depreciation and amortization | 12 | 6 | 30 | 14 |
Pair [Member] | ||||
Revenue | 2,374 | 0 | 6,831 | 0 |
Cost of revenue | 218 | 0 | 557 | 0 |
Total assets | 17,839 | 0 | 17,839 | 0 |
Depreciation and amortization | $ 725 | $ 0 | $ 2,243 | $ 0 |
RESTATEMENT OF PREVIOUSLY REP_3
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred tax assets | $ 1,416,762 | $ 0 |
Total assets | 38,930,606 | 35,068,579 |
Income tax payable | 589,438 | 0 |
Total current liabilities | 6,351,761 | 4,093,613 |
Total liabilities | 12,727,156 | 12,621,413 |
Accumulated deficit | (8,919,325) | (12,386,887) |
Total stockholders' equity | 26,203,450 | $ 22,447,166 |
As Reported | ||
Deferred tax assets | 0 | |
Total assets | 37,513,844 | |
Income tax payable | 0 | |
Total current liabilities | 5,762,323 | |
Total liabilities | 12,137,718 | |
Accumulated deficit | (9,746,648) | |
Total stockholders' equity | 25,376,127 | |
Corrections | ||
Deferred tax assets | 1,416,762 | |
Total assets | 1,416,762 | |
Income tax payable | 589,438 | |
Total current liabilities | 589,438 | |
Total liabilities | 589,438 | |
Accumulated deficit | 827,323 | |
Total stockholders' equity | 827,323 | |
As Restated | ||
Deferred tax assets | 1,416,762 | |
Total assets | 38,930,606 | |
Income tax payable | 589,438 | |
Total current liabilities | 6,351,761 | |
Total liabilities | 12,727,156 | |
Accumulated deficit | (8,919,325) | |
Total stockholders' equity | $ 26,203,450 |
RESTATEMENT OF PREVIOUSLY REP_4
RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income tax expense (benefit) | $ 270,527 | $ 0 | $ (827,323) | $ 0 |
Net Income | $ 1,014,231 | $ 1,161,480 | $ 3,467,562 | $ 1,370,257 |
Basic and diluted income per common share | $ 0.03 | $ 0.05 | $ 0.12 | $ 0.06 |
As Reported | ||||
Income tax expense (benefit) | $ 0 | $ 0 | ||
Net Income | $ 1,284,758 | $ 2,640,239 | ||
Basic and diluted income per common share | $ 0.04 | $ 0.09 | ||
Corrections | ||||
Income tax expense (benefit) | $ 270,527 | $ 827,323 | ||
Net Income | $ 270,527 | $ 827,323 | ||
Basic and diluted income per common share | $ (0.01) | $ 0.03 | ||
As Restated | ||||
Income tax expense (benefit) | $ 270,527 | $ (827,323) | ||
Net Income | $ 1,014,231 | $ 3,467,562 | ||
Basic and diluted income per common share | $ 0.03 | $ 0.12 |