Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 08, 2013 | |
Document And Entity Information | ||
Entity Registrant Name | BLUEGATE CORP | |
Entity Central Index Key | 768216 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 46,033,565 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2013 |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ||
Cash and cash equivalents | $954 | $3,762 |
Accounts receivable, net | 2,198 | 3,233 |
Prepaid expenses and other | 10,435 | 10,435 |
Total current assets | 13,587 | 17,430 |
Current liabilities: | ||
Accounts payable | 11,905 | 12,435 |
Accounts payable to related party | 667,766 | 519,241 |
Accrued liabilities | 2,294 | 20,837 |
Note payable to related party | 1,291,600 | 1,245,000 |
Accrued liabilities to related parties | 670,639 | 438,051 |
Deferred revenue | 776 | 7,813 |
Total current liabilities | 2,644,980 | 2,243,377 |
Stockholders' deficit: | ||
Preferred stock | ||
Common stock, $.001 par value, 50,000,000 shares authorized, 46,033,565 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 46,034 | 46,034 |
Additional paid-in capital | 22,400,286 | 22,400,286 |
Accumulated deficit | -25,077,713 | -24,672,267 |
Total stockholders' deficit | -2,631,393 | -2,225,947 |
Total liabilities and stockholders' deficit | 13,587 | 17,430 |
Series C Convertible Non-Redeemable preferred stock | ||
Stockholders' deficit: | ||
Preferred stock | ||
Series D Convertible Non-Redeemable preferred stock | ||
Stockholders' deficit: | ||
Preferred stock | ||
Undesignated preferred stock | ||
Stockholders' deficit: | ||
Preferred stock |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 46,033,565 | 46,033,565 |
Common stock, shares outstanding | 46,033,565 | 46,033,565 |
Series C Convertible Non-Redeemable preferred stock | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 48 | 48 |
Preferred stock, shares issued | 48 | 48 |
Preferred stock, shares outstanding | 48 | 48 |
Preferred stock, per share liquidation preference | $12,500 | $12,500 |
Preferred stock, aggregate liquidation value | $600,000 | |
Series D Convertible Non-Redeemable preferred stock | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 10 | 10 |
Preferred stock, shares issued | 10 | 10 |
Preferred stock, shares outstanding | 10 | 10 |
Preferred stock, per share liquidation preference | $8,725 | $8,725 |
Preferred stock, aggregate liquidation value | $87,250 | |
Undesignated preferred stock | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 9,999,942 | 9,999,942 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ||||
Service revenue | $24,473 | $36,096 | $80,634 | $112,471 |
Cost of services | 24,610 | 27,123 | 76,965 | 92,414 |
Gross profit | -137 | 8,973 | 3,669 | 20,057 |
Selling, general and administrative expenses | 53,730 | 59,487 | 176,526 | 183,165 |
Loss from operations | -53,867 | -50,514 | -172,857 | -163,108 |
Interest expense | -78,714 | -76,336 | -232,589 | -227,049 |
Net loss | ($132,581) | ($126,850) | ($405,446) | ($390,157) |
Net loss per share, basic and diluted | $0 | $0 | ($0.01) | ($0.01) |
Basic and diluted weighted average shares outstanding | 46,033,565 | 46,033,565 | 46,033,565 | 46,033,565 |
Statement_of_Stockholders_Defi
Statement of Stockholders' Deficit (Unaudited) (USD $) | Common Stock | Preferred Stock - Series C | Preferred Stock - Series D | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $46,034 | $22,400,286 | ($24,672,267) | ($2,225,947) | ||
Beginning Balance, Shares at Dec. 31, 2012 | 46,033,565 | 48 | 10 | |||
Net loss | -405,446 | -405,446 | ||||
Ending Balance, Amount at Sep. 30, 2013 | $46,034 | $22,400,286 | ($25,077,713) | ($2,631,393) | ||
Ending Balance, Shares at Sep. 30, 2013 | 46,033,565 | 48 | 10 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ||
Net loss | ($405,446) | ($390,157) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,035 | -268 |
Prepaid expenses and other current assets | -5,000 | |
Accounts payable and accrued liabilities | -19,073 | -13,085 |
Accounts payable to related party | 148,525 | 149,077 |
Accrued liabilities to related parties | 232,588 | 227,049 |
Deferred revenue | -7,037 | -3,419 |
Net cash used in operating activities | -49,408 | -35,803 |
Cash flows from financing activities: | ||
Proceeds from related party short term debt | 46,600 | 35,000 |
Net cash provided by financing activities | 46,600 | 35,000 |
Net decrease in cash and cash equivalents | -2,808 | -803 |
Cash and cash equivalents at beginning of period | 3,762 | 5,937 |
Cash and cash equivalents at end of period | 954 | 5,134 |
Supplemental information: | ||
Cash paid for interest | ||
Cash paid for income taxes |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis Of Presentation | |
Basis of Presentation | |
1. BASIS OF PRESENTATION | |
The accompanying unaudited interim financial statements of Bluegate Corporation (“we”, “our”, “Bluegate” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Bluegate's Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2012 as reported in the Form 10-K have been omitted. |
Going_Concern_Considerations
Going Concern Considerations | 9 Months Ended |
Sep. 30, 2013 | |
Going Concern Considerations | |
Going Concern Considerations | |
2. GOING CONCERN CONSIDERATIONS | |
During the nine months ended September 30, 2013, Bluegate has been unable to generate cash flows sufficient to support its operations and has been dependent on debt and equity raised from qualified individual investors and loans from a related party. In addition to negative cash flow from operations, Bluegate has experienced recurring net losses, and has a negative working capital and shareholders’ deficit. | |
These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Bluegate is unable to continue as a going concern. |
Accounts_Payable_To_Related_Pa
Accounts Payable To Related Party | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounts Payable To Related Party | |||||||||
Accounts Payable To Related Party | |||||||||
3. ACCOUNTS PAYABLE TO RELATED PARTY | |||||||||
The accounts payable to related party balance is owed to Sperco, LLC ("SLLC") (an entity controlled by Stephen J. Sperco, Bluegate's CEO/President/Director) and is summarized below: | |||||||||
9/30/13 | 12/31/12 | ||||||||
During November 2009, Bluegate entered into an Asset Sale and Purchase Agreement to sell certain assets to SLLC, and as a result, these balances represent funds collected by Bluegate on behalf of SLLC | $ | 98,766 | $ | 98,741 | |||||
As a result of the November 2009 transaction, commencing January 1, 2010, Bluegate had no employees and agreed to pay SLLC a monthly amount of $15,000 for management, accounting and administrative services, as well as, infrastructure and network engineering support. In August 2012 the monthly amount was $18,500 and beginning September 2012 the monthly amount was revised to $15,500 to reflect support for a new project engagement. | 595,000 | 455,500 | |||||||
From July 1, 2010 through July 31, 2011, SLLC agreed to pay Bluegate a monthly amount of $4,000 for office space and associated services for the Sperco entities | (52,000 | ) | (52,000 | ) | |||||
Commencing August 1, 2011, SLLC and Bluegate moved from Suite 600 to Suite 350 and Bluegate agreed to pay SLLC $1,000 rent on a month-to-month basis | 26,000 | 17,000 | |||||||
$ | 667,766 | $ | 519,241 |
Note_Payable_To_Related_Party
Note Payable To Related Party | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Note Payable To Related Party | |||||||||
Note Payable To Related Party | |||||||||
4. NOTE PAYABLE TO RELATED PARTY | |||||||||
Note payable at September 30, 2013 and December 31, 2012 is summarized below: | |||||||||
9/30/13 | 12/31/12 | ||||||||
Secured note payable to related party: During 2007, the Company entered into a line of credit agreement with SAI Corporation ("SAIC"), a corporation controlled by our CEO, Stephen J. Sperco, to borrow up to $500,000. The line of credit has been amended several times due to Bluegate’s need to borrow funds for working capital purposes and has been increased to $1,295,000 from the previous balance of $1,285,000. As a condition to and as additional consideration for SAIC’s agreement to lend additional funds to the Company, the Company granted SAIC a security interest in its assets as more specifically detailed in the Promissory Note and Security Agreement. Principal and interest is due on demand. Interest is at the rate of 15% per annum and payments are due and payable monthly at the end of each month until the outstanding principal balance is paid in full. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than fifteen days delinquent. | $ | 1,291,600 | $ | 1,245,000 | |||||
During the nine months ended September 30, 2013 and the year ended December 31, 2012, Bluegate borrowed $46,600 and $45,000, respectively for working capital purposes. | |||||||||
Accrued_Liabilities_To_Related
Accrued Liabilities To Related Parties | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accrued Liabilities To Related Parties | |||||||||
Accrued Liabilities To Related Parties | |||||||||
5. ACCRUED LIABILITIES TO RELATED PARTIES | |||||||||
The accrued liabilities to related parties is summarized below: | |||||||||
9/30/13 | 12/31/12 | ||||||||
Accrued interest on the note payable to SAIC | $ | 626,720 | $ | 394,132 | |||||
Fees accrued through March 31, 2009 to former Board of Director, Dale Geary | 20,419 | 20,419 | |||||||
Fees accrued through March 31, 2009 to Board of Director, Stephen J. Sperco | 17,500 | 17,500 | |||||||
Vehicle allowance accrued through December 31, 2008 to Stephen J. Sperco | 6,000 | 6,000 | |||||||
$ | 670,639 | $ | 438,051 |
Equity_Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | |
Equity Transactions | |
6. EQUITY TRANSACTIONS | |
As of September 30, 2013, the company had outstanding: (i) 46,033,565 shares of common stock and, (ii) preferred stock that is convertible into 1,450,000 shares of common stock, resulting on a fully diluted basis, 47,483,565 shares of common stock. The company had 50,000,000 shares of common stock authorized by our Articles of Incorporation. |
Lease_Commitment
Lease Commitment | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Commitment | 7. LEASE COMMITMENT |
Commencing August 1, 2011, SLLC and Bluegate moved from Suite 600 to Suite 350 and Bluegate agreed to pay SLLC $1,000 rent on a month-to-month basis. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis Of Presentation | |
Basis of Presentation | |
The accompanying unaudited interim financial statements of Bluegate Corporation (“we”, “our”, “Bluegate” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Bluegate's Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2012 as reported in the Form 10-K have been omitted. |
Accounts_Payable_To_Related_Pa1
Accounts Payable To Related Party (Table) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounts Payable To Related Party | |||||||||
Schedule of Accounts Payable To Related Party | |||||||||
9/30/13 | 12/31/12 | ||||||||
During November 2009, Bluegate entered into an Asset Sale and Purchase Agreement to sell certain assets to SLLC, and as a result, these balances represent funds collected by Bluegate on behalf of SLLC | $ | 98,766 | $ | 98,741 | |||||
As a result of the November 2009 transaction, commencing January 1, 2010, Bluegate had no employees and agreed to pay SLLC a monthly amount of $15,000 for management, accounting and administrative services, as well as, infrastructure and network engineering support. In August 2012 the monthly amount was $18,500 and beginning September 2012 the monthly amount was revised to $15,500 to reflect support for a new project engagement. | 595,000 | 455,500 | |||||||
From July 1, 2010 through July 31, 2011, SLLC agreed to pay Bluegate a monthly amount of $4,000 for office space and associated services for the Sperco entities | (52,000 | ) | (52,000 | ) | |||||
Commencing August 1, 2011, SLLC and Bluegate moved from Suite 600 to Suite 350 and Bluegate agreed to pay SLLC $1,000 rent on a month-to-month basis | 26,000 | 17,000 | |||||||
$ | 667,766 | $ | 519,241 |
Notes_Payable_Related_Party_Ta
Notes Payable Related Party (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Note Payable To Related Party | |||||||||
Schedule of Notes Payable to Related Party | |||||||||
9/30/13 | 12/31/12 | ||||||||
Secured note payable to related party: During 2007, the Company entered into a line of credit agreement with SAI Corporation ("SAIC"), a corporation controlled by our CEO, Stephen J. Sperco, to borrow up to $500,000. The line of credit has been amended several times due to Bluegate’s need to borrow funds for working capital purposes and has been increased to $1,295,000 from the previous balance of $1,285,000. As a condition to and as additional consideration for SAIC’s agreement to lend additional funds to the Company, the Company granted SAIC a security interest in its assets as more specifically detailed in the Promissory Note and Security Agreement. Principal and interest is due on demand. Interest is at the rate of 15% per annum and payments are due and payable monthly at the end of each month until the outstanding principal balance is paid in full. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than fifteen days delinquent. | $ | 1,291,600 | $ | 1,245,000 | |||||
During the nine months ended September 30, 2013 and the year ended December 31, 2012, Bluegate borrowed $46,600 and $45,000, respectively for working capital purposes. | |||||||||
Accrued_Liabilities_To_Related1
Accrued Liabilities To Related Parties (Table) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accrued Liabilities To Related Parties | |||||||||
Accrued Liabilites To Related Parties | |||||||||
9/30/13 | 12/31/12 | ||||||||
Accrued interest on the note payable to SAIC | $ | 626,720 | $ | 394,132 | |||||
Fees accrued through March 31, 2009 to former Board of Director, Dale Geary | 20,419 | 20,419 | |||||||
Fees accrued through March 31, 2009 to Board of Director, Stephen J. Sperco | 17,500 | 17,500 | |||||||
Vehicle allowance accrued through December 31, 2008 to Stephen J. Sperco | 6,000 | 6,000 | |||||||
$ | 670,639 | $ | 438,051 |
Accounts_Payable_To_Related_Pa2
Accounts Payable To Related Party (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Total | $667,766 | $519,241 |
Asset Sale and Purchase Agreement | SLLC | ||
Amounts due to related party | 98,766 | 98,741 |
General and Administrative Fees | SLLC | ||
Amounts due to related party | 595,000 | 455,500 |
Rent | SLLC | ||
Amounts due to related party | 26,000 | 17,000 |
Amounts due from related party | ($52,000) | ($52,000) |
Notes_Payable_Related_Party_De
Notes Payable Related Party (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Note Payable To Related Party | ||
Secured note payable to related party | $1,291,600 | $1,245,000 |
Accrued_Liabilities_To_Related2
Accrued Liabilities To Related Parties (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Total | $670,639 | $438,051 | ||
Former Member of Board of Directors | ||||
Accrued fees | 20,419 | [1] | 20,419 | [1] |
Member of Board of Directors | ||||
Accrued fees | 17,500 | [1] | 17,500 | [1] |
SAIC | ||||
Accrued interest | 626,720 | 394,132 | ||
CEO | ||||
Accrued vehicle allowance | $6,000 | [2] | $6,000 | [2] |
[1] | Accrued through March 31, 2009. | |||
[2] | Accrued through December 31, 2008 |
Accounts_Payable_To_Related_Pa3
Accounts Payable To Related Party (Details Narrative) (USD $) | Aug. 01, 2011 | Sep. 01, 2012 | Aug. 01, 2012 | Jan. 01, 2010 | Jul. 01, 2011 | Aug. 01, 2011 |
General and Administrative Fees | General and Administrative Fees | General and Administrative Fees | Rent Receivable | Rent Payable | ||
Initial monthly fee | $15,000 | |||||
Increase/decrease in monthly fee | 15,500 | 18,500 | ||||
Monthly rent | $1,000 | $4,000 | $1,000 | |||
Term | month-to-month | Monthly | Monthly | Monthly | July 1, 1010 to July 31, 2011 | Month-to-Month |
Notes_Payable_Related_Party_De1
Notes Payable Related Party (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2007 | Jun. 30, 2013 | |
Note Payable To Related Party | |||||
Credit line issuer | SAI Corporation ("SAIC"), a corporation controlled by our CEO, Stephen J. Sperco | ||||
Date of issuance of line of credit | 31-Dec-07 | ||||
Maximimum borrowing capacity of secured line of credit | $1,295,000 | $500,000 | $1,285,000 | ||
Line of credit due date | On demand | ||||
Line of credit interest rate | 15.00% | ||||
Late payment penalty | $10,000 penalty for late payment | ||||
Late payment penalty date | 15 days after due date | ||||
Draws against credit line in this period | $46,600 | $35,000 | $45,000 |
Equity_Transactions_Details_Na
Equity Transactions (Details Narrative) | Sep. 30, 2013 | Dec. 31, 2012 |
Stockholders' Equity Note [Abstract] | ||
Common stock outstanding | 46,033,565 | 46,033,565 |
Preferred stock convertible to common stock outstanding | 1,450,000 | |
Common stock outstanding, fully diluted, upon conversion of preferred stock | 47,483,565 | |
Common stock authorized | 50,000,000 | 50,000,000 |
Lease_Commitment_Details_Narra
Lease Commitment (Details Narrative) (USD $) | Aug. 01, 2011 |
Commitments and Contingencies Disclosure [Abstract] | |
Term | month-to-month |
Monthly rent | $1,000 |