Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Inuvo, Inc. | ||
Entity Central Index Key | 829,323 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 28,443,577 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 28.9 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 3,946,804 | $ 4,257,204 |
Accounts receivable, net of allowance for doubtful accounts of $23,000 and $17,200, respectively | 7,586,129 | 7,001,337 |
Unbilled revenue | 8,644 | 16,154 |
Prepaid expenses and other current assets | 284,469 | 345,752 |
Total current assets | 11,826,046 | 11,620,447 |
Property and equipment, net | 1,615,223 | 1,805,561 |
Other assets | ||
Goodwill | 5,760,808 | 5,760,808 |
Intangible assets, net of accumulated amortization | 8,343,876 | 9,320,951 |
Other assets | 15,186 | 224,759 |
Total other assets | 14,119,870 | 15,306,518 |
Total assets | 27,561,139 | 28,732,526 |
Current liabilities | ||
Accounts payable | 9,280,779 | 10,080,315 |
Accrued expenses and other current liabilities | 2,689,640 | 3,169,445 |
Total current liabilities | 11,970,419 | 13,249,760 |
Long-term liabilities | ||
Deferred tax liability | 3,738,500 | 3,799,600 |
Other long-term liabilities | 326,428 | 722,722 |
Total long-term liabilities | 4,064,928 | 4,522,322 |
Stockholders’ equity | ||
Preferred stock, $.001 par value: Authorized shares - 500,000 - none issued and outstanding | 0 | 0 |
Common stock, $.001 par value: Authorized shares - 40,000,000, issued shares 25,300,189 and 24,752,408, respectively; outstanding shares 24,923,6627 and 24,375,881, respectively | 25,300 | 24,752 |
Additional paid-in capital | 130,418,413 | 129,081,029 |
Accumulated deficit | (117,521,362) | (116,748,778) |
Treasury stock, at cost - 376,527 shares | (1,396,559) | (1,396,559) |
Total stockholders' equity | 11,525,792 | 10,960,444 |
Total liabilities and stockholders' equity | $ 27,561,139 | $ 28,732,526 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Allowance for doubtful accounts | $ 23,000 | $ 17,200 |
Stockholders Equity | ||
Preferred stock par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock shares issued (in shares) | 25,300,189 | 24,752,408 |
Common stock shares Outstanding (in shares) | 24,923,662 | 24,375,881 |
Treasury stock (in shares) | 376,527 | 376,527 |
CONSOLIDATED STATEMENTS OPERATI
CONSOLIDATED STATEMENTS OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Net revenue | $ 71,530,102 | $ 70,438,116 |
Cost of revenue | 21,364,795 | 23,721,996 |
Gross profit | 50,165,307 | 46,716,120 |
Operating expenses | ||
Marketing costs | 39,195,653 | 34,324,646 |
Compensation | 6,830,338 | 5,598,804 |
Selling, general and administrative | 4,996,482 | 4,645,697 |
Total operating expenses | 51,022,473 | 44,569,147 |
Operating (loss) income | (857,166) | 2,146,973 |
Interest expense, net | (99,965) | (141,311) |
(Loss) income from continuing operations before taxes | (957,131) | 2,005,662 |
Income tax benefit | 29,260 | 300,143 |
Net (loss) income from continuing operations | (927,871) | 2,305,805 |
Net income from discontinued operations | 155,287 | 33,969 |
Net (loss) income | $ (772,584) | $ 2,339,774 |
Per common share data: Basic and Diluted | ||
Net (loss) income from continuing operations (in usd per share) | $ (0.04) | $ 0.10 |
Net income from discontinued operations (in usd per share) | 0.01 | 0 |
Net (loss) income (in usd per share) | $ (0.03) | $ 0.10 |
Weighted average shares | ||
Basic (in shares) | 24,660,995 | 24,249,852 |
Diluted (in shares) | 24,660,995 | 24,539,555 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock | Additional Paid in Capital | Accumulated Deficit | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2014 | 23,711,100 | ||||
Beginning Balance at Dec. 31, 2014 | $ 8,273,735 | $ 24,087 | $ 128,734,759 | $ (119,088,552) | $ (1,396,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | 2,339,774 | 2,339,774 | |||
Stock-based compensation | 707,544 | 707,544 | |||
Stock issued for vested restricted stock awards (in shares) | 664,781 | ||||
Stock issued for vested restricted stock awards | (109,527) | $ 665 | (110,192) | ||
Taxes withheld on vested restricted stock | (251,082) | (251,082) | |||
Ending Balance (in shares) at Dec. 31, 2015 | 24,375,881 | ||||
Ending Balance at Dec. 31, 2015 | 10,960,444 | $ 24,752 | 129,081,029 | (116,748,778) | (1,396,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (772,584) | (772,584) | |||
Stock-based compensation | 1,264,266 | 1,264,266 | |||
Stock issued for vested restricted stock awards (in shares) | 396,997 | ||||
Stock issued for vested restricted stock awards | 0 | $ 397 | (397) | ||
Taxes withheld on vested restricted stock | (203,836) | (203,836) | |||
Contingent stock issuance (in shares) | 166,667 | ||||
Contingent stock issuance | 300,001 | $ 167 | 299,834 | ||
Treasury Stock Repurchase (in shares) | (15,883) | ||||
Treasury Stock Repurchase | (22,499) | $ (16) | (22,483) | ||
Ending Balance (in shares) at Dec. 31, 2016 | 24,923,662 | ||||
Ending Balance at Dec. 31, 2016 | $ 11,525,792 | $ 25,300 | $ 130,418,413 | $ (117,521,362) | $ (1,396,559) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | ||
Net (loss) income | $ (772,584) | $ 2,339,774 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,209,738 | 1,807,350 |
Stock based compensation | 1,264,266 | 707,544 |
Provision (Recovery) for doubtful accounts | 5,800 | (6,036) |
Adjustment of European liabilities related to discontinued operations | (176,988) | (59,751) |
Deferred income taxes | (61,100) | 233,480 |
Amortization of financing fees | 25,600 | 19,804 |
Settlement of tax liability | 0 | (406,453) |
Change in operating assets and liabilities: | ||
Prepaid expenses and other assets | 219,656 | (19,370) |
Accounts payable | (622,548) | 4,545,906 |
Accounts receivable and unbilled revenue | (583,082) | (2,001,613) |
Accrued expenses and other liabilities | (420,875) | (1,054,363) |
Other | (34,864) | 0 |
Net cash provided by operating activities | 1,053,019 | 6,106,272 |
Investing activities: | ||
Purchases of equipment and capitalized development costs | (1,116,371) | (1,525,888) |
Net cash used in investing activities | (1,116,371) | (1,525,888) |
Financing activities: | ||
Proceeds from revolving line of credit | 7,950,000 | 4,000,000 |
Prepaid financing fees | 25,600 | 25,600 |
Payments on revolving line of credit | (7,950,000) | (5,793,275) |
Net taxes paid on RSU grants exercised | (203,836) | (360,608) |
Payments on term note payable and capital leases | (46,313) | (1,909,422) |
Treasury Stock Repurchase | (22,499) | 0 |
Net cash used in financing activities | (247,048) | (4,037,705) |
Net change – cash | (310,400) | 542,679 |
Cash, beginning of year | 4,257,204 | 3,714,525 |
Cash, end of year | 3,946,804 | 4,257,204 |
Supplemental information: | ||
Interest paid | 72,751 | 122,136 |
Income taxes paid, net of refund | 26,000 | 280,453 |
Cash received from construction allowance | 0 | 200,000 |
Non-cash investing and financing activities: | ||
Purchase of property and equipment under capital lease | 0 | 103,609 |
Purchase of intangible assets through a contingent liability | 0 | 715,874 |
Stock issuance for partial settlement of contingent liability | 300,001 | 0 |
Write-down of domain names due to partial settlement of contingent liability | $ 46,367 | $ 0 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Company Overview Inuvo, Inc. is an internet advertising technology and digital publishing company. We develop technology that delivers content and advertisements over the internet. We develop direct to consumer marketing technology to acquire consumers for our content. We develop analytics and optimization technologies to align advertisements with consumers. We generate revenue when an end user clicks on the advertisements we delivered. We manage our business as two segments, the Partner Network (advertising technology) and the Owned and Operated Network (digital publishing). Within the Partner Network, we recruit online publishers and provide them an advertising delivery service, the primary brand for which is SearchLinks © . This service allows publishers the ability to place Inuvo ad-technology in various locations and configurations within their website or app for either a desktop or mobile implementation. We generate revenue in this segment when an advertisement that is delivered is subsequently clicked on by a consumer. Advertisements can be served by either Inuvo or a third party depending on the needs of the publisher. Typically, we collect revenue from advertisers when an advertisement is clicked and then share a portion of the revenue with the publisher. We deliver well in excess of a billion such advertisements annually. The Owned and Operated Network designs, builds and markets consumer websites and applications. This segment consists of our main online property marketed under the ALOT brand and a number of other websites targeted at specific demographics like EARNSPENDLIVE and sites designed specifically for generating leads in a specific market vertical like ASKTHIS for automotive. The majority of revenue generated by this segment is derived from advertisements that have been delivered on web pages that include both Inuvo content and advertisements. Our ALOT branded websites and applications have a broad appeal focusing on popular topics such as health, finance, careers, local search, travel, living, education and auto. We have a number of highly differentiated and proprietary strengths that include; long standing advertising relationships with Yahoo and Google from whom we source advertising inventory which we distribute through our own online properties or through those of third party publishers; the ability to serve hundreds of millions of advertisements to any device or browser in milliseconds; the ability to both self-market and self-monetize our own publishing business; the ability to test advertising technology within our own publishing business; the ability to target advertisements based on website content, past behavior or to redirect users back to Inuvo content when the economics and alignment are optimized; the ability to expand to other geographies where appropriate; the ability to develop and publish content just-in-time to meet demand from advertisers; a low cost operation in central Arkansas with access to numerous universities, and a proprietary technology infrastructure developed by, and in some cases patented by Inuvo. We plan to continue growing our website and mobile application business by expanding the ALOT brand and acquiring new websites where appropriate. We will continue to distribute SearchLinks broadly throughout the Internet by growing our network of publishers. Financially, we are focused on growth while maintaining a positive cash flow. We expect to continue to make strategic investments principally in these areas; marketing technology associated with direct to consumer acquisition; the SearchLinks platform, and advertising targeting analytics. Liquidity On September 27, 2016, we renewed our Business Financing Agreement with Western Alliance Bank ("Western Alliance Bank"), the parent company of Bridge Bank, N.A., our original lender (see Note 6, "Notes Payable"). The renewal provided continued access to the revolving line of credit up to $10 million through September 2018. As of December 31, 2016 , the balance of the revolving line of credit was zero . The revolving line of credit had approximately $6.0 million in availability at December 31, 2016 . During the first quarter of 2014, we filed an S-3 registration statement with the Securities and Exchange Commission ("SEC") to replace the existing, expiring S-3 "shelf" registration statement. Though we believe the revolving line of credit and cash generated by operations will provide sufficient cash for operations over the next twelve months, we may still elect to sell stock to the public or to selected investors, or borrow under the current or any replacement line of credit or other debt instruments in order to fund the development of our technologies, make acquisitions, pursue new business opportunities or grow existing businesses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation - The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents - Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. Revenue recognition - We recognize revenue in accordance with Accounting Standards Codification (“ASC”) ASC 605-10 Revenue Recognition-General when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed and determinable, no significant obligations remain and collection of the related receivable is reasonably assured. Most of our revenue is generated through clicks on advertisements presented on our properties or those of our partners. We recognize revenue from clicks in the period in which the click occurs. Payments to partners who display advertisements on our behalf are recognized as cost of revenue. Revenue from data sales and commissions is recognized in the period in which the transaction occurs and the other revenue recognition criteria are met. Accounts receivable - Accounts receivable consists of trade receivables from customers. We record accounts receivable at its net realizable value, recognizing an allowance for doubtful accounts based on our best estimate of probable credit losses on our existing accounts receivable. Balances are written off against the allowance after all means of collection have been exhausted and the possibility of recovery is considered remote. Marketing costs - Marketing costs include the purchase of sponsored listings from search engines and is our primary method of attracting consumers to our owned and operated applications and websites. We expense these costs as incurred and present them as a separate line item in operating expenses on the consolidated statements of operations. Property and equipment - Property and equipment are stated at cost, net of accumulated depreciation and amortization. Major renewals and improvements are capitalized while maintenance and repairs which do not improve or extend the life of the respective assets are expensed as incurred. Costs of assets sold or retired and the related accumulated depreciation are eliminated from accounts and the net gain or loss is reflected as an operating expense in the statements of operations. Property and equipment are depreciated on a straight-line basis over three years for equipment, five to seven years for furniture and fixtures and two to three years for software. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the remaining term of the lease. Depreciation expense was $1,279,030 and $882,105 , respectively, for the years ended December 31, 2016 and 2015 . Capitalized Software Costs - We capitalize certain costs related to internally developed software and amortize these costs using the straight-line method over the estimated useful life of the software, generally two years . We do not sell internally developed software. Certain development costs not meeting the criteria for capitalization, in accordance with ASC 350-40 Internal-Use Software , are expensed as incurred. Goodwill - Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”), we test goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis or more frequently if we believe indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying value, including goodwill. We generally determine the fair value of our reporting units using the income approach methodology of valuation that includes the undiscounted cash flow method as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill (See Note 5). During 2016 and 2015 , we elected to proceed directly to the two-step testing process. We determined there was no impairment of goodwill during 2016 and 2015 . See Note 5, Intangible Assets and Goodwill, for more information. Intangible Assets - We allocate a portion of the purchase price of acquisitions to identifiable intangible assets and we amortize definite-lived assets over their estimated useful lives. We consider our indefinite-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We amortize our identifiable intangible assets, which result from acquisitions accounted for under the purchase method of accounting, using the straight-line method over their estimated useful lives. Trade names are not amortized as they are believed to have an indefinite life. Trade names are reviewed annually for impairment under ASC 350. As a result of our acquisition of Vertro, Inc. ("Vertro") in March 2012, we recognized an asset for the customer relationship with Google of $8,820,000 and assigned it a useful life of 20 years. A primary reason for acquiring Vertro was its relationship with Google. Up to the time of the acquisition, we principally had access to the Yahoo! inventory of advertisements. Among the many valuable assets acquired in the Vertro transaction was this Google relationship and the access it provided to an enormous inventory of advertisements. In addition, we acquired the ALOT brand, whose products are monetized through Google and has historically produced a better margin than monetization through Yahoo!. In determining the useful life of this asset, we considered the strategic importance of Vertro's strong relationship with Google. Vertro and its predecessor company had contracts and successful renewals with Google that date back to 2006. The Google contract has been extended through February 28, 2017. We expect the relationship with Google to continue through the 20 -year amortization period and beyond. At the time of the Vertro acquisition, we engaged a third party valuation service to determine the fair value of the acquired assets. At the close of the 2016 and 2015 fiscal years, we again engaged a third party valuation service to reassess the fair value of the acquired assets. From time to time, both search marketplaces, Google and Yahoo!, may implement policy or marketplace changes. In January 2013 Google requested changes to our agreement that impacted marketing programs for one of our ALOT products, the Appbar, the result of which was a decline in the number of product installs. Since acquiring the ALOT brand in the Vertro acquisition, we have materially expanded the brand into a number of additional owned and operated websites and applications. We expect products within the brand to ebb and flow as customer preferences change and Google adjusts its marketplace policies. At the close of 2013, we considered the Google change and decided to transition out of the Appbar product and replace it with web properties that we develop. At the close of 2014, we determined that the asset continued to be recoverable despite the impact to the Appbar product and our decision to transition away from it. We made this determination in part because during 2014 we completely replaced the revenue and margin from the Appbar product with other ALOT-branded and Google monetized products. Between websites and applications, we have launched more than 20 new ALOT-branded products beginning in 2013 and we expect to continue aggressively building out our Owned and Operated Network segment into the future. In May 2015, we purchased two domain websites and recorded the purchase at $715,874 . We recorded no impairment of intangible assets during 2016 or 2015 . See Note 5, Intangible Assets and Goodwill, for more information. Income taxes - We utilize the liability method of accounting for income taxes as set forth in ASC 740 , Income Taxes (“ASC 740”). Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, we must project future levels of taxable income, which requires significant judgment. We examine evidence related to the history of taxable losses or income, the economic conditions in which we operate, organizational characteristics, our forecasts and projections, as well as factors affecting liquidity. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a full valuation for the net deferred tax assets as of December 31, 2016 and 2015 . We have adopted certain provisions of ASC 740. This statement clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. ASC 740 prescribes a recognition threshold of more likely than not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order to be recognized in the financial statements. Impairment of long-lived assets - In accordance with ASC 360 , Property, Plant and Equipment , long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of the carrying amount to future undiscounted cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value. Stock-based compensation - We value stock compensation based on the fair value recognition provisions ASC 718 , Compensation – Stock Compensation, which establishes accounting for stock-based awards exchanged for employee services and requires companies to expense the estimated grant date fair value of stock awards over the requisite employee service period. The fair value of restricted stock awards is based on the market price of our common stock on the date of the grant. To value stock option awards, we use the Black-Scholes-Merton option pricing model. This model involves assumptions including the expected life of the option, stock price volatility, risk-free interest rate, dividend yield and exercise price. We recognize compensation expense in earnings over the requisite service period, applying a forfeiture rate to account for expected forfeitures of awards. See Note 10, Stock-Based Compensation, for further details on our stock awards. Government Grant - During the first quarter of 2013, we received a grant from the state of Arkansas to relocate our corporate headquarters to Conway, AR. We recognize the grant funds into income as a reduction of the related expense in the period in which those expenses are recognized. We defer grant funds related to capitalized costs and classify them as current or long-term liabilities on the balance sheet according to the classification of the associated asset. Grant funds received are presented on the consolidated statements of cash flows as operating or investing cash flows depending on the classification of the underlying spend. Treasury Stock - The cost method was used in recording the purchase of the treasury stock. Treasury stock changes as a result of common stock we acquire in the market. Earnings per share - During the periods presented, we had securities that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. We reported a net loss for 2016 and therefore, shares associated with stock options, warrants and restricted stock are not included because they are anti-dilutive. Basic and diluted net loss per share is the same for all periods presented. For the year ended December 31, 2015 , options to purchase 312,331 shares with a weighted average exercise price of $4.51 per share and warrants to purchase 656,112 shares with a weighted average exercise price of $2.45 per share were excluded from the diluted shares calculation for 2015 because their exercise price was higher than the average stock price for the period. In addition, restricted stock units totaling 971,055 shares with a weighted average grant date price of $3.41 were also excluded because the effect of their inclusion would have been anti-dilutive. Operating segments - ASC 280 , Segment Reporting, requires disclosures of certain information about operating segments, products and services, geographic areas in which we operate, and their major customers. We have evaluated the effect of this standard and have determined that we currently operate in two segments, the Partner Network and the Owned and Operated Network. See Note 16 for additional segment information. Concentration of credit risk - We are exposed to concentrations of risk primarily in cash and cash equivalents and accounts receivable, which are generally not collateralized. Our policy is to place our cash and cash equivalents with high credit quality financial institutions in order to limit the amount of credit exposure. We do not require collateral from our customers, but our credit extension and collection policies include monitoring payments and aggressively pursuing delinquent accounts. We maintain allowances for potential credit losses. At times, deposits may exceed FDIC limits. Customer concentrations - At December 31, 2016 , we had two individual customers with accounts receivable balances greater than 10% of the gross accounts receivable from continuing operations. These customers combined owed approximately 98.6% of our gross accounts receivable balance as of December 31, 2016 and 2015 . The same two customers accounted for 98.3% and 98.0% of our revenue for the years ended December 31, 2016 and 2015 , respectively. Use of estimates - The preparation of financial statements, in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s regular evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. We regularly evaluate estimates and assumptions related to allowances for returns and redemptions, allowances for doubtful accounts, goodwill and purchased intangible asset valuations, lives of intangible assets, deferred income tax asset valuation allowances, contingent liabilities, including the Arkansas grant contingency, and stock compensation. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. Litigation and settlement costs - From time to time, we are involved in disputes, litigation and other legal actions. In accordance with ASC 450 , Contingencies , we record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred as of the date of the consolidated financial statements and (ii) the range of loss can be reasonably estimated. See Note 15 for additional information. Recent accounting pronouncements not yet adopted I n May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in Topic 605, “ Revenue Recognition ” and requires entities to recognize revenue in a way that depicts 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. In August 2015, the FASB issued ASU 2015-14, which defers by one year the effective date of ASU 2014-09. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. The Company plans to adopt this guidance on January 1, 2018. The Company is currently evaluating the effects, if any, that the adoption of this guidance will have on the Company’s financial position, results of operations and cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018, although early adoption is permitted. We believe adoption of this standard will have an impact on our Consolidated Balance Sheets. Although we have not completed our assessment, we do not expect the adoption to change the recognition, measurement or presentation of lease expenses within the results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2016-15 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Doubtful Accounts [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The activity in the allowance for doubtful accounts was as follows during the years ended December 31, 2016 and 2015 : 2016 2015 Balance at the beginning of the year $ 17,200 $ 86,722 Provision for bad debts 6,557 (6,036 ) Charge-offs (874 ) (67,126 ) Recoveries 117 3,640 Balance at the end of the year $ 23,000 $ 17,200 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The net carrying value of property and equipment at December 31, 2016 and 2015 was as follows: 2016 2015 Furniture and fixtures $ 241,876 $ 230,637 Equipment 811,948 2,815,748 Software 6,132,626 9,856,947 Leasehold improvements 441,382 436,311 Subtotal $ 7,627,832 $ 13,339,643 Less: accumulated depreciation and amortization (6,012,609 ) (11,534,082 ) Total $ 1,615,223 $ 1,805,561 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill During 2016 and 2015 , we evaluated our intangible assets and goodwill for impairment at the reporting unit level. We elected to omit the qualitative assessment of impairment factors and proceed directly to impairment testing with the assistance of a third-party valuation firm. No indication of impairment was noted. The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2016 : Term Carrying Value Accumulated Amortization Net Carrying Value 2016 Amortization Customer list, Google 20 years $ 8,820,000 $ (2,131,500 ) $ 6,688,500 $ 441,000 Customer list, all other 10 years 1,610,000 (778,186 ) 831,814 161,004 Exclusivity agreement 1 year 120,000 (120,000 ) — — Trade names, ALOT (1) 5 years 960,000 (928,000 ) 32,000 192,000 Domain websites (2) 5 years 669,507 (267,945 ) 401,562 136,704 Trade names, web properties (1) - 390,000 — 390,000 — Intangible assets classified as long-term $ 12,569,507 $ (4,225,631 ) $ 8,343,876 $ 930,708 Goodwill, Partner Network $ 1,776,544 $ — $ 1,776,544 $ — Goodwill, Owned and Operated Network 3,984,264 — 3,984,264 — Goodwill, total $ 5,760,808 $ — $ 5,760,808 $ — The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2015 : Term Carrying Value Accumulated Amortization Net Carrying Value 2015 Amortization Names database 9 months $ 17,417,397 $ (17,417,397 ) $ — $ — Bundled downloads 4.5 months 2,447,075 (2,447,075 ) — — Intangible assets classified as current 19,864,472 (19,864,472 ) — — Customer list, Google 20 years $ 8,820,000 $ (1,690,500 ) $ 7,129,500 $ 441,000 Customer list, all other 10 years 1,610,000 (617,182 ) 992,818 161,004 Exclusivity agreement 1 year 120,000 (120,000 ) — — Trade names, ALOT (1) 5 years 960,000 (736,000 ) 224,000 192,000 Domain websites (2) 5 years 715,874 (131,241 ) 584,633 131,241 Tradenames, web properties (1) - 390,000 — 390,000 — Intangible assets classified as long-term $ 12,615,874 $ (3,294,923 ) $ 9,320,951 $ 925,245 Goodwill, Partner Network $ 1,776,544 $ — $ 1,776,544 $ — Goodwill, Owned and Operated Network 3,984,264 — 3,984,264 — Goodwill, total $ 5,760,808 $ — $ 5,760,808 $ — ___________ (1) We have determined ALOT trade name should be amortized over five years and the trade names related to our web properties have an indefinite life and as such are not amortized. (2) On May 8, 2015, we purchased two domain websites with a fair value of $715,874 . We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. Our amortization expense over the next five years and thereafter is as follows: 2017 $ 764,240 2018 732,240 2019 732,240 2020 612,858 2021 602,004 Thereafter $ 4,510,294 Total $ 7,953,876 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable On March 1, 2012 we entered into a Business Financing Agreement with Bridge Bank, which is now owned by Western Alliance Bank. The agreement provided us with a $5 million term loan and access to a revolving credit line of up to $10 million which we use to help satisfy our working capital needs. We have provided Western Alliance with a first priority perfected security interest in all of our accounts and personal property as collateral for the credit facility. Available funds under the revolving credit line are 80% of eligible accounts receivable balances plus $1 million up to a limit of $10 million . Eligible accounts receivable is generally defined as those from United States based customers that are not more than 90 days from the date of the invoice. We had approximately $6.0 million available under the credit line as of December 31, 2016 . The term loan was paid in full at September 2015. In September 27, 2016, the Company entered into the Sixth Business Financing Modification Agreement with Western Alliance Bank, the parent company of Bridge Bank, our original lender, that renewed the existing Agreement and modified some terms. The modified terms require a monthly quick ratio of not less than .75 to 1.00; quarterly consolidated revenue shall not negatively deviate more than 20% from projections; and quarterly consolidated Adjusted EBITDA shall not negatively deviate more than $500,000 from projections. The renewed agreement extended the revolving line of credit to September 2018. While we periodically utilize our line of credit for operating needs, as of December 31, 2016 , the balance of the revolving line of credit was zero . We were in compliance with all bank covenants as of December 31, 2016 . |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities The accrued expenses and other current liabilities consist of the following at December 31, 2016 and 2015 : 2016 2015 Accrued marketing costs $ 1,622,737 $ 1,404,488 Accrued expenses and other 289,435 294,629 Accrued payroll and commission liabilities 250,000 643,908 Accrued sales allowance 250,000 500,000 Contingent stock due for acquired domains, current portion 222,477 238,625 Capital leases, current portion 31,210 46,313 Deferred Arkansas grant, current portion and accrued reserve 13,468 27,679 Accrued taxes 10,313 13,803 Total $ 2,689,640 $ 3,169,445 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist of the following at December 31, 2016 and 2015 : 2016 2015 Deferred rent $ 163,165 $ 198,323 Contingent stock due for acquired domains, less current portion 147,029 477,249 Accrued taxes, less current portion 13,763 — Deferred Arkansas grant, less current portion 2,471 15,940 Capital leases, less current portion — 31,210 Total $ 326,428 $ 722,722 On May 8, 2015, we purchased two domain websites with a fair value of $715,874 (see Note 5). The purchase consideration is our common stock and is contingent upon the seller attaining specific performance targets over three years. On May 8, 2016, the seller achieved the specific performance target for the first year and as a result, we issued 166,667 shares of common stock. The accrued contingent liability and the related intangible asset, domain websites, were adjusted by approximately $46 thousand to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes consists of the following: 2016 2015 Current tax provision $ 5,180 $ 4,081 Deferred tax benefit (34,440 ) (304,224 ) Total tax benefit $ (29,260 ) $ (300,143 ) A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows: 2016 2015 Federal statutory rate 34 % 34 % State income tax rate, net of federal benefit (1 %) — % Permanent differences (2 %) 1 % Temporary differences (5 %) 4 % New Jersey tax settlement and other — % 11 % Change in valuation allowance (22 %) (65 %) 4 % (15 %) Deferred Income Taxes Deferred income taxes are the result of temporary differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items and net operating loss carry-forwards. We assess temporary differences resulting from different treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded in the consolidated balance sheets. We evaluate the realizability of our deferred tax assets on a regular basis, an exercise that requires significant judgment. In the course of this evaluation we considered our recent history of tax losses, the economic conditions in which we operate, recent organizational changes and our forecasts and projections. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a valuation allowance for the net deferred tax assets that may not be realized as of December 31, 2016 and 2015 . The following is a schedule of the deferred tax assets and liabilities as of December 31, 2016 and 2015 : 2016 2015 Deferred tax assets: Net operating loss carry forward $ 27,202,348 $ 34,164,267 Intangible assets 2,239,700 3,909,300 Stock based expenses 1,484,900 1,201,800 Accrued expense 311,000 552,500 Deferred rent 69,300 2,200 Other 14,200 15,000 Allowance for doubtful accounts 9,800 6,900 Subtotal 31,331,248 39,851,967 Less valuation allowance (31,331,248 ) (39,838,347 ) Total — 13,620 Deferred tax liabilities: Intangibles and Property and Equipment 3,702,300 3,435,700 Other 36,200 363,900 Total 3,738,500 3,799,600 Total deferred tax assets (liabilities) $ (3,738,500 ) $ (3,785,980 ) The net operating losses amounted to approximately $78,678,000 and expire beginning 2021 through 2036. Pursuant to Internal Revenue Service Code Section 382, the use of certain of the Company’s net operating loss carry forwards are limited due to a cumulative change in ownership. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2013 through 2015. Our state income tax returns are open to audit under the statute of limitations for the same periods. We recognize interest and penalties related to income taxes in income tax expense. We have incurred no penalties and interest for the years ended December 31, 2016 and 2015 . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. Currently, we grant options and restricted stock units ("RSUs") from the 2010 Equity Compensation Plan (“2010 ECP”). Option and restricted stock unit vesting periods are generally up to three years. Compensation Expense We recorded stock-based compensation expense for all equity incentive plans of approximately $1,264,266 and $707,544 for the years ended December 31, 2016 and 2015 , respectively. Total compensation cost not yet recognized at December 31, 2016 was $1,616,631 to be recognized over a weighted-average recognition period of 1.2 years . Significant Grants and Cancellations 2016 On April 1, 2016, we granted members of our board of directors a total of 63,160 RSUs with a weighted average fair value of $1.90 a share which fully vest on March 31, 2017. On November 1, 2016 we granted two new members of our board of directors a total of 22,936 RSUs with a weighted average fair value of $1.02 a share which fully vest on March 31, 2017. 2015 On April 20, 2015, we granted members of our board of directors a total of 51,948 RSUs with a weighted average fair value of $2.31 a share which fully vested on March 31, 2016. On July 27, 2015 and August 4, 2015, we granted certain employees service and performance RSUs totaling 965,500 shares with a weighted average fair value $3.03 per share. The service RSUs vest annually over a three -year period, commencing in July 2016, at the rate of 25% of the grant in year one and year two and the remaining 50% of the grant vesting on the third anniversary of the grant date. The awarding of the performance RSUs in contingent upon achieving certain revenue and profit targets and vest annually, one-third upon each anniversary of the grant date. On July 27, 2016, August 4, 2016, and August 5, 2016, the first measurement period targets were achieved and the number of shares issued totaled 297,690 with a weighted average fair value of $1.32 . Award Information and Activity The following table summarizes the stock grants outstanding under our 2005 Long-Term Incentive Plan ("2005 LTIP") and 2010 ECP plans as of December 31, 2016 : Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2010 ECP 250,498 755,507 2,365,373 614,567 3,985,945 2005 LTIP (*) 13,748 — 950,085 — 963,833 Total 264,246 755,507 3,315,458 614,567 4,949,778 (*) Expired June 2015 The fair value of restricted stock units is determined using market value of the common stock on the date of the grant. The fair value of stock options is determined using the Black-Scholes-Merton valuation model. The use of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. The forfeiture rate, which is estimated at a weighted average of 0% of unvested options outstanding, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. At December 31, 2016 , the 2005 LTIP and 2010 ECP plans had outstanding options of 264,246 options and all were exercisable with an aggregate intrinsic value of $0 , a weighted average exercise price of $2.84 and a weighted average remaining contractual term of 4.2 years . The following table summarizes our stock option activity under the 2005 LTIP and 2010 ECP plans during 2016 : Options Weighted Average Exercise Price Outstanding, beginning of year 284,246 $ 2.78 Granted — $ — Forfeited, expired or cancelled (20,000 ) $ 2.05 Exercised — $ — Outstanding, end of year 264,246 $ 2.84 Exercisable, end of year 264,246 $ 2.84 We also have a separate plan which we acquired from Vertro. This plan is not authorized to issue any additional shares. During 2016 , the remaining options in the amount of 38,650 shares with a weighted average exercise price of $16.01 expired. No options were granted during 2016 or 2015 . Expected volatility is based on the historical volatility of our common stock over the period commensurate with or longer than the expected life of the options. The expected life of the options is based on the vesting schedule of the option in relation to the overall term of the option. The risk free interest rate is based on the market yield of the U.S. Treasury Bill with a term equal to the expected term of the option awarded. We do not anticipate paying any dividends so the dividend yield in the model is zero . The following table summarizes our restricted stock activity for 2016 : Restricted Stock Weighted Average Fair Value Outstanding, beginning of year 1,229,769 $ 1.02 Granted 96,096 $ 1.71 Exercised (539,612 ) $ 2.34 Forfeited (30,746 ) $ 2.10 Outstanding, end of year 755,507 $ 2.84 |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders Equity | Stockholders Equity As of December 31, 2016 , we have an outstanding warrant for the potential issuance of 51,724 shares of common stock with an exercise price of $0.87 . This warrant was issued in connection with debt issuance. The weighted average remaining contractual life of the warrant outstanding at December 31, 2016 is less than 1.0 year . Authorized Preferred Stock and Authorized Common Stock On March 1, 2012, the Secretary of State of the State of Nevada approved an amendment to the Company's Certificate of Incorporation allowing the Company to increase the number of shares of common stock outstanding from 20,000,000 shares to 40,000,000 . Treasury Stock On December 9, 2016, our Board of Directors authorized a stock repurchase program under which we may repurchase up to $500,000 of our outstanding common stock. The stock repurchase program will expire on November 30, 2017. During December, we purchased 15,883 shares of treasury stock with a weighted average exercise price of $1.42 . |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Certain of our subsidiaries previously operated in the European Union ("EU"). Though operations ceased in 2009, statutory requirements require a continued presence in the EU for varying terms until November 2015. Profits and losses generated from the remaining assets and liabilities are accounted for as discontinued operations. In the third quarter of 2016, our petition with the UK (United Kingdom) Companies House to strike off and dissolve the remaining subsidiary in the EU was approved. As a result, for the twelve months ended December 31, 2016 and December 31, 2015 , we recognized income from discontinued operations of $155,287 and $33,969 , respectively, due primarily to the adjustment of certain accrued liabilities originating in 2009 and earlier. |
Retirement Plan Costs
Retirement Plan Costs | 12 Months Ended |
Dec. 31, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Retirement Plan Costs | Retirement Plan Costs We provide a 401(k) plan to help our employees prepare for retirement. We match each employee's contributions to the plan up to the first four percent of the employee's annual salary. The matching contribution for the years ended December 31, 2016 and 2015 was $146,033 and $109,029 , respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | Leases We lease certain office space and equipment. As leases expire, it can be expected that they will be renewed or replaced in the normal course of business. Rent expense from continuing operations was approximately $175,469 and $105,446 for the year ended December 31, 2016 and December 31, 2015 , respectively. Minimum lease payments under non-cancelable operating leases as of December 31, 2016 are: Lease Payments 2017 $ 182,456 2018 183,858 2019 184,852 2020 140,749 Total $ 691,915 In 2013, we entered into an agreement to lease office space in Conway, Arkansas for two years in the total amount of $193,200 which was prepaid. The lease terminated in February 2015 and continued on a month to month basis through November 2015. First Orion Corp., the lessor of this space, is partially owned by a director and shareholder of Inuvo. In April 2015, we entered into a five -year agreement to lease office space in Little Rock, Arkansas commencing October 1, 2015, to serve as our headquarters. The new lease is for 12,245 square feet and will cost approximately $171,000 during its first year. Thereafter, the lease payment will increase by 2% . We vacated the Conway, Arkansas premises November 30, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time we may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, we are currently involved in the following litigation which is not incidental to its business: Oltean, et al. v. Think Partnership, Inc.; Edmonton, Alberta CA. On March 6, 2008, Kelly Oltean, Mike Baldock and Terry Schultz, former employees, filed a breach of employment claim against Inuvo in The Court of Queen's Bench of Alberta, Judicial District of Edmonton, Canada, claiming damages for wrongful dismissal in the amount of $200,000 for each of Kelly Oltean and Terry Schultz and $187,500 for Mike Baldock. On March 6, 2008, the same three plaintiffs filed a similar statement of claim against Vintacom Acquisition Company, ULC, a subsidiary of Inuvo, again for wrongful dismissal and claiming the same damages. In October 2009, the two actions were consolidated. On August 18, 2016, the case was dismissed by a Consent Order whereby the case was dismissed without costs to the Company. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segments | Segments We operate our business as two segments, Partner Network and Owned and Operated Network, which are described in Note 1. Listed below is a presentation of net revenue and gross profit for all reportable segments for the years ended December 31, 2016 and 2015 . We currently only track certain assets at the segment level and therefore assets by segment are not presented below. Revenue by Segment 2016 2015 $ % of Revenue $ % of Revenue Partner Network 26,011,543 36.4 % 30,298,532 43.0 % Owned and Operated Network 45,518,559 63.6 % 40,139,584 57.0 % Total net revenue 71,530,102 100.0 % 70,438,116 100.0 % Gross Profit by Segment 2016 2015 $ Gross Profit % $ Gross Profit % Partner Network 4,734,240 18.2 % 6,645,590 21.9 % Owned and Operated Network 45,431,067 99.8 % 40,070,530 99.8 % Total gross profit 50,165,307 70.1 % 46,716,120 66.3 % |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In 2016 and 2015, the Company received a total of $101,884 and $107,196 , respectively from First Orion Corp., which is partially owned by a director and shareholder of Inuvo, for providing IT services. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Google Extension Inuvo, Inc., through its wholly owned subsidiary Vertro, Inc., and Google Inc. entered into Amendment Number One to Google Services Agreement (the “Amendment”) effective as of February 1, 2017. The Amendment extends the term of the underlying Google Services Agreement through February 28, 2017. NetSeer Acquisition On February 6, 2017 we entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") by and among the Company, NetSeer Acquisition, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, and NetSeer, as seller. NetSeer provides visual monetization solutions for advertisers and publishers. Under the terms of the Asset Purchase Agreement, we acquired substantially all of the assets of NetSeer in exchange for 3,529,000 shares of our common stock and assumption of outstanding liabilities of approximately $4.2 million related to the acquired business. The total consideration was approximately $9.8 million . Under the terms of an Escrow Agreement (the " Escrow Agreement ") 529,350 shares of our common stock issued in the transaction were deposited into escrow pending possible post-closing adjustments to the purchase price related to working capital and audited financial statement adjustments, as well as in connection with possible indemnification claims post-closing. As of the year ending December 31, 2016, NetSeer reported revenue of approximately $20.9 million (unaudited) and assets of $4.5 million (unaudited). |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation - The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Cash and cash equivalents | Cash and cash equivalents - Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. |
Revenue recognition | Revenue recognition - We recognize revenue in accordance with Accounting Standards Codification (“ASC”) ASC 605-10 Revenue Recognition-General when the following criteria have been met: persuasive evidence of an arrangement exists, the fees are fixed and determinable, no significant obligations remain and collection of the related receivable is reasonably assured. Most of our revenue is generated through clicks on advertisements presented on our properties or those of our partners. We recognize revenue from clicks in the period in which the click occurs. Payments to partners who display advertisements on our behalf are recognized as cost of revenue. Revenue from data sales and commissions is recognized in the period in which the transaction occurs and the other revenue recognition criteria are met. |
Accounts receivable | Accounts receivable - Accounts receivable consists of trade receivables from customers. We record accounts receivable at its net realizable value, recognizing an allowance for doubtful accounts based on our best estimate of probable credit losses on our existing accounts receivable. Balances are written off against the allowance after all means of collection have been exhausted and the possibility of recovery is considered remote. |
Marketing costs | Marketing costs - Marketing costs include the purchase of sponsored listings from search engines and is our primary method of attracting consumers to our owned and operated applications and websites. We expense these costs as incurred and present them as a separate line item in operating expenses on the consolidated statements of operations. |
Property and equipment | Property and equipment - Property and equipment are stated at cost, net of accumulated depreciation and amortization. Major renewals and improvements are capitalized while maintenance and repairs which do not improve or extend the life of the respective assets are expensed as incurred. Costs of assets sold or retired and the related accumulated depreciation are eliminated from accounts and the net gain or loss is reflected as an operating expense in the statements of operations. Property and equipment are depreciated on a straight-line basis over three years for equipment, five to seven years for furniture and fixtures and two to three years for software. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the remaining term of the lease. |
Capitalized Software Costs | Capitalized Software Costs - We capitalize certain costs related to internally developed software and amortize these costs using the straight-line method over the estimated useful life of the software, generally two years . We do not sell internally developed software. Certain development costs not meeting the criteria for capitalization, in accordance with ASC 350-40 Internal-Use Software , are expensed as incurred. |
Goodwill | Goodwill - Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”), we test goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis or more frequently if we believe indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying value, including goodwill. We generally determine the fair value of our reporting units using the income approach methodology of valuation that includes the undiscounted cash flow method as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill (See Note 5). During 2016 and 2015 , we elected to proceed directly to the two-step testing process. |
Intangible assets | Intangible Assets - We allocate a portion of the purchase price of acquisitions to identifiable intangible assets and we amortize definite-lived assets over their estimated useful lives. We consider our indefinite-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We amortize our identifiable intangible assets, which result from acquisitions accounted for under the purchase method of accounting, using the straight-line method over their estimated useful lives. Trade names are not amortized as they are believed to have an indefinite life. Trade names are reviewed annually for impairment under ASC 350. As a result of our acquisition of Vertro, Inc. ("Vertro") in March 2012, we recognized an asset for the customer relationship with Google of $8,820,000 and assigned it a useful life of 20 years. A primary reason for acquiring Vertro was its relationship with Google. Up to the time of the acquisition, we principally had access to the Yahoo! inventory of advertisements. Among the many valuable assets acquired in the Vertro transaction was this Google relationship and the access it provided to an enormous inventory of advertisements. In addition, we acquired the ALOT brand, whose products are monetized through Google and has historically produced a better margin than monetization through Yahoo!. In determining the useful life of this asset, we considered the strategic importance of Vertro's strong relationship with Google. Vertro and its predecessor company had contracts and successful renewals with Google that date back to 2006. The Google contract has been extended through February 28, 2017. We expect the relationship with Google to continue through the 20 -year amortization period and beyond. At the time of the Vertro acquisition, we engaged a third party valuation service to determine the fair value of the acquired assets. At the close of the 2016 and 2015 fiscal years, we again engaged a third party valuation service to reassess the fair value of the acquired assets. From time to time, both search marketplaces, Google and Yahoo!, may implement policy or marketplace changes. In January 2013 Google requested changes to our agreement that impacted marketing programs for one of our ALOT products, the Appbar, the result of which was a decline in the number of product installs. Since acquiring the ALOT brand in the Vertro acquisition, we have materially expanded the brand into a number of additional owned and operated websites and applications. We expect products within the brand to ebb and flow as customer preferences change and Google adjusts its marketplace policies. At the close of 2013, we considered the Google change and decided to transition out of the Appbar product and replace it with web properties that we develop. At the close of 2014, we determined that the asset continued to be recoverable despite the impact to the Appbar product and our decision to transition away from it. We made this determination in part because during 2014 we completely replaced the revenue and margin from the Appbar product with other ALOT-branded and Google monetized products. Between websites and applications, we have launched more than 20 new ALOT-branded products beginning in 2013 and we expect to continue aggressively building out our Owned and Operated Network segment into the future. |
Income taxes | Income taxes - We utilize the liability method of accounting for income taxes as set forth in ASC 740 , Income Taxes (“ASC 740”). Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, we must project future levels of taxable income, which requires significant judgment. We examine evidence related to the history of taxable losses or income, the economic conditions in which we operate, organizational characteristics, our forecasts and projections, as well as factors affecting liquidity. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a full valuation for the net deferred tax assets as of December 31, 2016 and 2015 . We have adopted certain provisions of ASC 740. This statement clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. ASC 740 prescribes a recognition threshold of more likely than not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order to be recognized in the financial statements. |
Impairment of long-lived assets | Impairment of long-lived assets - In accordance with ASC 360 , Property, Plant and Equipment , long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of the carrying amount to future undiscounted cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value. |
Stock-based compensation | Stock-based compensation - We value stock compensation based on the fair value recognition provisions ASC 718 , Compensation – Stock Compensation, which establishes accounting for stock-based awards exchanged for employee services and requires companies to expense the estimated grant date fair value of stock awards over the requisite employee service period. The fair value of restricted stock awards is based on the market price of our common stock on the date of the grant. To value stock option awards, we use the Black-Scholes-Merton option pricing model. This model involves assumptions including the expected life of the option, stock price volatility, risk-free interest rate, dividend yield and exercise price. We recognize compensation expense in earnings over the requisite service period, applying a forfeiture rate to account for expected forfeitures of awards. |
Government Grant | Government Grant - During the first quarter of 2013, we received a grant from the state of Arkansas to relocate our corporate headquarters to Conway, AR. We recognize the grant funds into income as a reduction of the related expense in the period in which those expenses are recognized. We defer grant funds related to capitalized costs and classify them as current or long-term liabilities on the balance sheet according to the classification of the associated asset. Grant funds received are presented on the consolidated statements of cash flows as operating or investing cash flows depending on the classification of the underlying spend. |
Treasury Stock | Treasury Stock - The cost method was used in recording the purchase of the treasury stock. Treasury stock changes as a result of common stock we acquire in the market. |
Earnings per share | Earnings per share - During the periods presented, we had securities that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. We reported a net loss for 2016 and therefore, shares associated with stock options, warrants and restricted stock are not included because they are anti-dilutive. Basic and diluted net loss per share is the same for all periods presented. |
Operating segments | Operating segments - ASC 280 , Segment Reporting, requires disclosures of certain information about operating segments, products and services, geographic areas in which we operate, and their major customers. We have evaluated the effect of this standard and have determined that we currently operate in two segments, the Partner Network and the Owned and Operated Network. |
Concentration of credit risk | Concentration of credit risk - We are exposed to concentrations of risk primarily in cash and cash equivalents and accounts receivable, which are generally not collateralized. Our policy is to place our cash and cash equivalents with high credit quality financial institutions in order to limit the amount of credit exposure. We do not require collateral from our customers, but our credit extension and collection policies include monitoring payments and aggressively pursuing delinquent accounts. We maintain allowances for potential credit losses. At times, deposits may exceed FDIC limits. |
Use of estimates | Use of estimates - The preparation of financial statements, in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s regular evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. We regularly evaluate estimates and assumptions related to allowances for returns and redemptions, allowances for doubtful accounts, goodwill and purchased intangible asset valuations, lives of intangible assets, deferred income tax asset valuation allowances, contingent liabilities, including the Arkansas grant contingency, and stock compensation. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. |
Litigation and settlement costs | Litigation and settlement costs - From time to time, we are involved in disputes, litigation and other legal actions. In accordance with ASC 450 , Contingencies , we record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred as of the date of the consolidated financial statements and (ii) the range of loss can be reasonably estimated. |
Recent accounting pronouncements not yet adopted | Recent accounting pronouncements not yet adopted I n May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in Topic 605, “ Revenue Recognition ” and requires entities to recognize revenue in a way that depicts 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. In August 2015, the FASB issued ASU 2015-14, which defers by one year the effective date of ASU 2014-09. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. The Company plans to adopt this guidance on January 1, 2018. The Company is currently evaluating the effects, if any, that the adoption of this guidance will have on the Company’s financial position, results of operations and cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018, although early adoption is permitted. We believe adoption of this standard will have an impact on our Consolidated Balance Sheets. Although we have not completed our assessment, we do not expect the adoption to change the recognition, measurement or presentation of lease expenses within the results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2016-15 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations. |
Allowance for Doubtful Accoun26
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Doubtful Accounts [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The activity in the allowance for doubtful accounts was as follows during the years ended December 31, 2016 and 2015 : 2016 2015 Balance at the beginning of the year $ 17,200 $ 86,722 Provision for bad debts 6,557 (6,036 ) Charge-offs (874 ) (67,126 ) Recoveries 117 3,640 Balance at the end of the year $ 23,000 $ 17,200 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Net Carrying value of Property and Equipment | The net carrying value of property and equipment at December 31, 2016 and 2015 was as follows: 2016 2015 Furniture and fixtures $ 241,876 $ 230,637 Equipment 811,948 2,815,748 Software 6,132,626 9,856,947 Leasehold improvements 441,382 436,311 Subtotal $ 7,627,832 $ 13,339,643 Less: accumulated depreciation and amortization (6,012,609 ) (11,534,082 ) Total $ 1,615,223 $ 1,805,561 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets from Continuing Operations | The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2016 : Term Carrying Value Accumulated Amortization Net Carrying Value 2016 Amortization Customer list, Google 20 years $ 8,820,000 $ (2,131,500 ) $ 6,688,500 $ 441,000 Customer list, all other 10 years 1,610,000 (778,186 ) 831,814 161,004 Exclusivity agreement 1 year 120,000 (120,000 ) — — Trade names, ALOT (1) 5 years 960,000 (928,000 ) 32,000 192,000 Domain websites (2) 5 years 669,507 (267,945 ) 401,562 136,704 Trade names, web properties (1) - 390,000 — 390,000 — Intangible assets classified as long-term $ 12,569,507 $ (4,225,631 ) $ 8,343,876 $ 930,708 Goodwill, Partner Network $ 1,776,544 $ — $ 1,776,544 $ — Goodwill, Owned and Operated Network 3,984,264 — 3,984,264 — Goodwill, total $ 5,760,808 $ — $ 5,760,808 $ — The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2015 : Term Carrying Value Accumulated Amortization Net Carrying Value 2015 Amortization Names database 9 months $ 17,417,397 $ (17,417,397 ) $ — $ — Bundled downloads 4.5 months 2,447,075 (2,447,075 ) — — Intangible assets classified as current 19,864,472 (19,864,472 ) — — Customer list, Google 20 years $ 8,820,000 $ (1,690,500 ) $ 7,129,500 $ 441,000 Customer list, all other 10 years 1,610,000 (617,182 ) 992,818 161,004 Exclusivity agreement 1 year 120,000 (120,000 ) — — Trade names, ALOT (1) 5 years 960,000 (736,000 ) 224,000 192,000 Domain websites (2) 5 years 715,874 (131,241 ) 584,633 131,241 Tradenames, web properties (1) - 390,000 — 390,000 — Intangible assets classified as long-term $ 12,615,874 $ (3,294,923 ) $ 9,320,951 $ 925,245 Goodwill, Partner Network $ 1,776,544 $ — $ 1,776,544 $ — Goodwill, Owned and Operated Network 3,984,264 — 3,984,264 — Goodwill, total $ 5,760,808 $ — $ 5,760,808 $ — ___________ (1) We have determined ALOT trade name should be amortized over five years and the trade names related to our web properties have an indefinite life and as such are not amortized. (2) On May 8, 2015, we purchased two domain websites with a fair value of $715,874 . We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. |
Schedule of Amortization Expense | Our amortization expense over the next five years and thereafter is as follows: 2017 $ 764,240 2018 732,240 2019 732,240 2020 612,858 2021 602,004 Thereafter $ 4,510,294 Total $ 7,953,876 |
Accrued Expenses and Other Cu29
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and other Current Liabilities | The accrued expenses and other current liabilities consist of the following at December 31, 2016 and 2015 : 2016 2015 Accrued marketing costs $ 1,622,737 $ 1,404,488 Accrued expenses and other 289,435 294,629 Accrued payroll and commission liabilities 250,000 643,908 Accrued sales allowance 250,000 500,000 Contingent stock due for acquired domains, current portion 222,477 238,625 Capital leases, current portion 31,210 46,313 Deferred Arkansas grant, current portion and accrued reserve 13,468 27,679 Accrued taxes 10,313 13,803 Total $ 2,689,640 $ 3,169,445 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consist of the following at December 31, 2016 and 2015 : 2016 2015 Deferred rent $ 163,165 $ 198,323 Contingent stock due for acquired domains, less current portion 147,029 477,249 Accrued taxes, less current portion 13,763 — Deferred Arkansas grant, less current portion 2,471 15,940 Capital leases, less current portion — 31,210 Total $ 326,428 $ 722,722 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consists of the following: 2016 2015 Current tax provision $ 5,180 $ 4,081 Deferred tax benefit (34,440 ) (304,224 ) Total tax benefit $ (29,260 ) $ (300,143 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows: 2016 2015 Federal statutory rate 34 % 34 % State income tax rate, net of federal benefit (1 %) — % Permanent differences (2 %) 1 % Temporary differences (5 %) 4 % New Jersey tax settlement and other — % 11 % Change in valuation allowance (22 %) (65 %) 4 % (15 %) |
Schedule of Deferred Tax Assets and Liabilities | The following is a schedule of the deferred tax assets and liabilities as of December 31, 2016 and 2015 : 2016 2015 Deferred tax assets: Net operating loss carry forward $ 27,202,348 $ 34,164,267 Intangible assets 2,239,700 3,909,300 Stock based expenses 1,484,900 1,201,800 Accrued expense 311,000 552,500 Deferred rent 69,300 2,200 Other 14,200 15,000 Allowance for doubtful accounts 9,800 6,900 Subtotal 31,331,248 39,851,967 Less valuation allowance (31,331,248 ) (39,838,347 ) Total — 13,620 Deferred tax liabilities: Intangibles and Property and Equipment 3,702,300 3,435,700 Other 36,200 363,900 Total 3,738,500 3,799,600 Total deferred tax assets (liabilities) $ (3,738,500 ) $ (3,785,980 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Based Compensation Grants | The following table summarizes the stock grants outstanding under our 2005 Long-Term Incentive Plan ("2005 LTIP") and 2010 ECP plans as of December 31, 2016 : Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2010 ECP 250,498 755,507 2,365,373 614,567 3,985,945 2005 LTIP (*) 13,748 — 950,085 — 963,833 Total 264,246 755,507 3,315,458 614,567 4,949,778 (*) Expired June 2015 |
Schedule of Stock Options | The following table summarizes our stock option activity under the 2005 LTIP and 2010 ECP plans during 2016 : Options Weighted Average Exercise Price Outstanding, beginning of year 284,246 $ 2.78 Granted — $ — Forfeited, expired or cancelled (20,000 ) $ 2.05 Exercised — $ — Outstanding, end of year 264,246 $ 2.84 Exercisable, end of year 264,246 $ 2.84 |
Schedule of RSA Activity | The following table summarizes our restricted stock activity for 2016 : Restricted Stock Weighted Average Fair Value Outstanding, beginning of year 1,229,769 $ 1.02 Granted 96,096 $ 1.71 Exercised (539,612 ) $ 2.34 Forfeited (30,746 ) $ 2.10 Outstanding, end of year 755,507 $ 2.84 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum lease payments under non-cancelable operating leases as of December 31, 2016 are: Lease Payments 2017 $ 182,456 2018 183,858 2019 184,852 2020 140,749 Total $ 691,915 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of all reportable segments | Listed below is a presentation of net revenue and gross profit for all reportable segments for the years ended December 31, 2016 and 2015 . We currently only track certain assets at the segment level and therefore assets by segment are not presented below. Revenue by Segment 2016 2015 $ % of Revenue $ % of Revenue Partner Network 26,011,543 36.4 % 30,298,532 43.0 % Owned and Operated Network 45,518,559 63.6 % 40,139,584 57.0 % Total net revenue 71,530,102 100.0 % 70,438,116 100.0 % Gross Profit by Segment 2016 2015 $ Gross Profit % $ Gross Profit % Partner Network 4,734,240 18.2 % 6,645,590 21.9 % Owned and Operated Network 45,431,067 99.8 % 40,070,530 99.8 % Total gross profit 50,165,307 70.1 % 46,716,120 66.3 % |
Organization and Business (Deta
Organization and Business (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)operating_segment | Sep. 27, 2016USD ($) | Mar. 01, 2012USD ($) | |
Debt Instrument [Line Items] | |||
Number of operating segments | operating_segment | 2 | ||
Period of sufficient liquidity | 12 months | ||
Bridge Bank, N.A. | Line of Credit | Bridge Bank – Revolving Credit Line - March 1, 2012 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | |
Long-term debt balance | $ 0 | ||
Remaining borrowing capacity | $ 6,000,000 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Narrative (Details) | May 08, 2015USD ($)website | May 31, 2015USD ($)website | Mar. 31, 2012USD ($) | Dec. 31, 2016USD ($)customeroperating_segment | Dec. 31, 2015USD ($) | Dec. 31, 2013product | ||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Depreciation and amortization | $ 1,279,030 | $ 882,105 | ||||||
Impairment of goodwill | 0 | 0 | ||||||
Number of ALOT-branded products (more than) | product | 20 | |||||||
Impairment of finite-lived intangible assets | $ 0 | $ 0 | ||||||
Number of operating segments | operating_segment | 2 | |||||||
Customer Concentration Risk | Accounts Receivable | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, number of customers | customer | 2 | |||||||
Customer Concentration Risk | Accounts Receivable | Yahoo and Google | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 98.60% | 98.60% | ||||||
Customer Concentration Risk | Net Revenue | Yahoo and Google | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk, percentage | 98.30% | 98.00% | ||||||
Customer list | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Carrying Value | $ 8,820,000 | $ 8,820,000 | $ 8,820,000 | |||||
Useful life of finite-live intangible asset | 20 years | 20 years | 20 years | |||||
Internet Domain Names | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Carrying Value | $ 715,874 | $ 669,507 | [1] | $ 715,874 | [1] | |||
Useful life of finite-live intangible asset | 5 years | 5 years | [1] | 5 years | [1] | |||
Number of finite-lived intangible assets purchased | website | 2 | 2 | ||||||
Recorded purchase amount of finite-lived intangible assets | $ 715,874 | $ 715,874 | ||||||
Equipment | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 3 years | |||||||
Furniture and fixtures | Minimum | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 5 years | |||||||
Furniture and fixtures | Maximum | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 7 years | |||||||
Software | Minimum | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 2 years | |||||||
Software | Maximum | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 3 years | |||||||
Software Development | ||||||||
Schedule of Significant Accounting Policies [Line Items] | ||||||||
Property, plant and equipment, useful life | 2 years | |||||||
[1] | On May 8, 2015, we purchased two domain websites with a fair value of $715,874. We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, weighted average exercise price (in usd per share) | $ 2.78 | $ 2.84 |
Warrants outstanding (in shares) | 656,112 | |
Class of warrant or right, exercise price of warrants or rights (in usd per share) | $ 2.45 | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities (in shares) | 312,331 | |
Options, weighted average exercise price (in usd per share) | $ 4.51 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities (in shares) | 971,055 | |
Weighted average grant date price (in usd per share) | $ 3.41 |
Allowance for Doubtful Accoun38
Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at the beginning of the year | $ 17,200 | $ 86,722 |
Provision for bad debts | 6,557 | (6,036) |
Charge-offs | (874) | (67,126) |
Recoveries | 117 | 3,640 |
Balance at the end of the year | $ 23,000 | $ 17,200 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 7,627,832 | $ 13,339,643 |
Less: accumulated depreciation and amortization | (6,012,609) | (11,534,082) |
Total | 1,615,223 | 1,805,561 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 241,876 | 230,637 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 811,948 | 2,815,748 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 6,132,626 | 9,856,947 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 441,382 | $ 436,311 |
Intangible Assets and Goodwil40
Intangible Assets and Goodwill - Schedule of Goodwill and Intangible Assets (Details) | May 08, 2015USD ($)website | May 31, 2015USD ($)website | Mar. 31, 2012USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Net Carrying Value | $ 7,953,876 | |||||||
Intangible assets classified as current | ||||||||
Carrying Value | $ 19,864,472 | |||||||
Accumulated Amortization | (19,864,472) | |||||||
Net Carrying Value | 0 | |||||||
Amortization | 0 | |||||||
Intangible assets classified as long-term | ||||||||
Carrying Value | 12,569,507 | 12,615,874 | ||||||
Accumulated Amortization | (4,225,631) | (3,294,923) | ||||||
Net Carrying Value | 8,343,876 | 9,320,951 | ||||||
Amortization | 930,708 | 925,245 | ||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||
Carrying Value | 5,760,808 | 5,760,808 | ||||||
Accumulated Amortization | 0 | 0 | ||||||
Net Carrying Value | 5,760,808 | 5,760,808 | ||||||
Goodwill, Partner Network | ||||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||
Carrying Value | 1,776,544 | 1,776,544 | ||||||
Accumulated Amortization | 0 | 0 | ||||||
Net Carrying Value | 1,776,544 | 1,776,544 | ||||||
Goodwill, Owned and Operated Network | ||||||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||
Carrying Value | 3,984,264 | 3,984,264 | ||||||
Accumulated Amortization | 0 | 0 | ||||||
Net Carrying Value | 3,984,264 | 3,984,264 | ||||||
Tradenames, web properties | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Carrying Value | [1] | 390,000 | 390,000 | |||||
Accumulated Amortization | [1] | 0 | 0 | |||||
Net Carrying Value | [1] | 390,000 | 390,000 | |||||
Amortization | [1] | $ 0 | $ 0 | |||||
Names database | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 9 months | |||||||
Carrying Value | $ 17,417,397 | |||||||
Accumulated Amortization | (17,417,397) | |||||||
Net Carrying Value | 0 | |||||||
Amortization | $ 0 | |||||||
Bundled downloads | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 4 months 15 days | |||||||
Carrying Value | $ 2,447,075 | |||||||
Accumulated Amortization | (2,447,075) | |||||||
Net Carrying Value | 0 | |||||||
Amortization | $ 0 | |||||||
Customer list, Google | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 20 years | 20 years | 20 years | |||||
Carrying Value | $ 8,820,000 | $ 8,820,000 | $ 8,820,000 | |||||
Accumulated Amortization | (2,131,500) | (1,690,500) | ||||||
Net Carrying Value | 6,688,500 | 7,129,500 | ||||||
Amortization | $ 441,000 | $ 441,000 | ||||||
Customer list, all other | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 10 years | 10 years | ||||||
Carrying Value | $ 1,610,000 | $ 1,610,000 | ||||||
Accumulated Amortization | (778,186) | (617,182) | ||||||
Net Carrying Value | 831,814 | 992,818 | ||||||
Amortization | $ 161,004 | $ 161,004 | ||||||
Exclusivity agreement | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 1 year | 1 year | ||||||
Carrying Value | $ 120,000 | $ 120,000 | ||||||
Accumulated Amortization | (120,000) | (120,000) | ||||||
Net Carrying Value | 0 | 0 | ||||||
Amortization | $ 0 | $ 0 | ||||||
Trade names, ALOT | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | [1] | 5 years | 5 years | |||||
Carrying Value | [1] | $ 960,000 | $ 960,000 | |||||
Accumulated Amortization | [1] | (928,000) | (736,000) | |||||
Net Carrying Value | [1] | 32,000 | 224,000 | |||||
Amortization | [1] | $ 192,000 | $ 192,000 | |||||
Internet Domain Names | ||||||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||||||||
Term | 5 years | 5 years | [2] | 5 years | [2] | |||
Carrying Value | $ 715,874 | $ 669,507 | [2] | $ 715,874 | [2] | |||
Accumulated Amortization | [2] | (267,945) | (131,241) | |||||
Net Carrying Value | [2] | 401,562 | 584,633 | |||||
Amortization | [2] | $ 136,704 | $ 131,241 | |||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||||||||
Number of finite-lived intangible assets purchased | website | 2 | 2 | ||||||
Recorded purchase amount of finite-lived intangible assets | $ 715,874 | $ 715,874 | ||||||
Carrying value adjustment | $ 46,000 | |||||||
[1] | We have determined ALOT trade name should be amortized over five years and the trade names related to our web properties have an indefinite life and as such are not amortized. | |||||||
[2] | On May 8, 2015, we purchased two domain websites with a fair value of $715,874. We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill - Amortization Expense (Details) | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 764,240 |
2,018 | 732,240 |
2,019 | 732,240 |
2,020 | 612,858 |
2,021 | 602,004 |
Thereafter | 4,510,294 |
Net Carrying Value | $ 7,953,876 |
Notes Payable (Details)
Notes Payable (Details) | Sep. 27, 2016USD ($) | Mar. 01, 2012USD ($) | Dec. 31, 2016USD ($) |
Bridge Bank – Term Note Payable - March 1, 2012 | Bridge Bank, N.A. | Term Note Payable | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 5,000,000 | ||
Bridge Bank – Revolving Credit Line - March 1, 2012 | Bridge Bank, N.A. | Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 10,000,000 | $ 10,000,000 | |
Percentage of eligible accounts receivable under allowable borrowings | 80.00% | ||
Additional borrowing maximum, accounts receivable limit | $ 1,000,000 | ||
Period for eligible accounts receivable | 90 days | ||
Remaining borrowing capacity | $ 6,000,000 | ||
Long-term debt balance | 0 | ||
Western Alliance Bank - Financing Modification Agreement - September 27, 2016 | Secured Debt | |||
Debt Instrument [Line Items] | |||
Minimum monthly quick ratio | 0.75 | ||
Maximum percentage of decline in revenue from projected amount | 20.00% | ||
Maximum decline in AEBITDA from projected amount | $ 500,000 | ||
Bridge Bank – Term Note Payable - September 10, 2017 | Term Note Payable | |||
Debt Instrument [Line Items] | |||
Long-term debt balance | $ 0 |
Accrued Expenses and Other Cu43
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued marketing costs | $ 1,622,737 | $ 1,404,488 |
Accrued expenses and other | 289,435 | 294,629 |
Accrued payroll and commission liabilities | 250,000 | 643,908 |
Accrued sales allowance | 250,000 | 500,000 |
Contingent stock due for acquired domains, current portion | 222,477 | 238,625 |
Capital leases, current portion | 31,210 | 46,313 |
Deferred Arkansas grant, current portion and accrued reserve | 13,468 | 27,679 |
Accrued taxes | 10,313 | 13,803 |
Total | $ 2,689,640 | $ 3,169,445 |
Other Long-Term Liabilities - S
Other Long-Term Liabilities - Summary of Other Long-Term Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 163,165 | $ 198,323 |
Contingent stock due for acquired domains, less current portion | 147,029 | 477,249 |
Accrued taxes, less current portion | 13,763 | 0 |
Deferred Arkansas grant, less current portion | 2,471 | 15,940 |
Capital leases, less current portion | 0 | 31,210 |
Total | $ 326,428 | $ 722,722 |
Other Long-Term Liabilities - N
Other Long-Term Liabilities - Narrative (Details) | May 08, 2016shares | May 08, 2015USD ($)website | Dec. 31, 2016USD ($) | [1] | Dec. 31, 2015USD ($) | [1] |
Common Stock | Performance Shares | ||||||
Class of Warrant or Right [Line Items] | ||||||
Shares issued for performance target achievement (in shares) | shares | 166,667 | |||||
Internet Domain Names | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of finite-lived intangible assets purchased | website | 2 | |||||
Fair value of intangible assets | $ 715,874 | $ 669,507 | $ 715,874 | |||
Contingency accrual payment period | 3 years | |||||
Impairment of finite-lived intangible assets | $ 46,000 | |||||
[1] | On May 8, 2015, we purchased two domain websites with a fair value of $715,874. We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares. |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current tax provision | $ 5,180 | $ 4,081 |
Deferred tax benefit | (34,440) | (304,224) |
Total tax benefit | $ (29,260) | $ (300,143) |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 34.00% | 34.00% |
State income tax rate, net of federal benefit | (1.00%) | 0.00% |
Permanent differences | (2.00%) | 1.00% |
Temporary differences | (5.00%) | 4.00% |
New Jersey tax settlement and other | 0.00% | 11.00% |
Change in valuation allowance | (22.00%) | (65.00%) |
Effective income tax rate | 4.00% | (15.00%) |
Income Taxes - Schedule of the
Income Taxes - Schedule of the Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 27,202,348 | $ 34,164,267 |
Intangible assets | 2,239,700 | 3,909,300 |
Stock based expenses | 1,484,900 | 1,201,800 |
Accrued expense | 311,000 | 552,500 |
Deferred rent | 69,300 | 2,200 |
Other | 14,200 | 15,000 |
Allowance for doubtful accounts | 9,800 | 6,900 |
Subtotal | 31,331,248 | 39,851,967 |
Less valuation allowance | (31,331,248) | (39,838,347) |
Total | 0 | 13,620 |
Deferred tax liabilities: | ||
Intangibles and Property and Equipment | 3,702,300 | 3,435,700 |
Other | 36,200 | 363,900 |
Total | 3,738,500 | 3,799,600 |
Total deferred tax assets (liabilities) | $ (3,738,500) | $ (3,785,980) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 78,678,000 | |
Income tax penalties and interest expense | $ 0 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | Nov. 01, 2016employee$ / sharesshares | Aug. 05, 2016$ / sharesshares | Apr. 01, 2016$ / sharesshares | Aug. 04, 2015$ / sharesshares | Apr. 20, 2015$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares |
Compensation Expense | |||||||
Stock based compensation | $ | $ 1,264,266 | $ 707,544 | |||||
Compensation cost related to non vested awards not yet recognized | $ | $ 1,616,631 | ||||||
Average remaining expense recognition period | 1 year 2 months | ||||||
Award Information and Activity | |||||||
Number of options exercisable (in shares) | 264,246 | ||||||
Intrinsic value of options exercisable | $ | $ 0 | ||||||
Weighted average exercise price (in usd per share) | $ / shares | $ 2.84 | ||||||
Weighted average remaining contractual term | 4 years 2 months 1 day | ||||||
Options forfeited and expired in period (in shares) | 20,000 | ||||||
Forfeited, expired or cancelled (in usd per share) | $ / shares | $ 2.05 | ||||||
Granted in period | 0 | 0 | |||||
Expected dividend yield | 0.00% | ||||||
Vertro | |||||||
Award Information and Activity | |||||||
Options forfeited and expired in period (in shares) | 38,650 | ||||||
Forfeited, expired or cancelled (in usd per share) | $ / shares | $ 16.01 | ||||||
Options | |||||||
Award Information and Activity | |||||||
Expected forfeiture rate | 0.00% | ||||||
Restricted stock units | Board of Directors | |||||||
Significant Grants and Cancellations | |||||||
Equity instruments other than options, grants in period (in shares) | 22,936 | 63,160 | 51,948 | ||||
Granted (in usd per share) | $ / shares | $ 1.02 | $ 1.90 | $ 2.31 | ||||
Number of new members receiving grants in period | employee | 2 | ||||||
Restricted stock units | Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Option and restricted stock unit vesting period | 3 years | ||||||
Significant Grants and Cancellations | |||||||
Option and restricted stock unit vesting period | 3 years | ||||||
Performance based RSUs | Employee | |||||||
Significant Grants and Cancellations | |||||||
Equity instruments other than options, grants in period (in shares) | 965,500 | ||||||
Granted (in usd per share) | $ / shares | $ 3.03 | ||||||
Performance based RSUs | Share-based Compensation Award, Tranche One | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 33.33% | ||||||
Performance based RSUs | Share-based Compensation Award, Tranche Two | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 33.33% | ||||||
Performance based RSUs | Share-based Compensation Award, Tranche Three | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 33.33% | ||||||
Service based RSUs | Share-based Compensation Award, Tranche One | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 25.00% | ||||||
Service based RSUs | Share-based Compensation Award, Tranche Two | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 25.00% | ||||||
Service based RSUs | Share-based Compensation Award, Tranche Three | Employee | |||||||
Significant Grants and Cancellations | |||||||
Percentage of award vesting rights | 50.00% | ||||||
Restricted Stock Units (RSUs) and Performance Restricted Stock Units (RSUs) [Member] | Employee | |||||||
Significant Grants and Cancellations | |||||||
Shares issued in period (in shares) | 297,690 | ||||||
Weighted average fair value (in usd per share) | $ / shares | $ 1.32 | ||||||
Maximum | Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Option and restricted stock unit vesting period | 3 years | ||||||
Significant Grants and Cancellations | |||||||
Option and restricted stock unit vesting period | 3 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Grants (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 264,246 | 284,246 | |
RSUs Outstanding (in shares) | 755,507 | ||
Options and RSUs Exercised (in shares) | 3,315,458 | ||
Available Shares (in shares) | 614,567 | ||
Total (in shares) | 4,949,778 | ||
2010 ECP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 250,498 | ||
RSUs Outstanding (in shares) | 755,507 | ||
Options and RSUs Exercised (in shares) | 2,365,373 | ||
Available Shares (in shares) | 614,567 | ||
Total (in shares) | 3,985,945 | ||
2005 LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | [1] | 13,748 | |
RSUs Outstanding (in shares) | [1] | 0 | |
Options and RSUs Exercised (in shares) | [1] | 950,085 | |
Available Shares (in shares) | [1] | 0 | |
Total (in shares) | [1] | 963,833 | |
[1] | Expired June 2015 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Options | ||
Outstanding, beginning of year (in shares) | 284,246 | |
Granted (in shares) | 0 | 0 |
Forfeited, expired or cancelled (in shares) | (20,000) | |
Exercised (in shares) | 0 | |
Outstanding, end of year (in shares) | 264,246 | 284,246 |
Exercisable, end of year (in shares) | 264,246 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of year (in usd per share) | $ 2.78 | |
Granted (in usd per share) | 0 | |
Forfeited, expired or cancelled (in usd per share) | 2.05 | |
Exercised (in usd per share) | 0 | |
Outstanding, end of year (in usd per share) | 2.84 | $ 2.78 |
Exercisable, end of year (in usd per share) | $ 2.84 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Award Activity (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Restricted Stock | |
Outstanding, end of year (in shares) | 755,507 |
Restricted Stock | |
Restricted Stock | |
Outstanding, beginning of year (in shares) | 1,229,769 |
Granted (in shares) | 96,096 |
Exercised (in shares) | (539,612) |
Forfeited (in shares) | (30,746) |
Outstanding, end of year (in shares) | 755,507 |
Weighted Average Fair Value | |
Outstanding, beginning of year (in usd per share) | $ / shares | $ 1.02 |
Granted (in usd per share) | $ / shares | 1.71 |
Exercised (in usd per share) | $ / shares | 2.34 |
Forfeited (in usd per share) | $ / shares | 2.10 |
Outstanding, end of year (in usd per share) | $ / shares | $ 2.84 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 09, 2016 | Dec. 31, 2015 | Mar. 01, 2012 | |
Equity and Long Term Debt [Line Items] | ||||||
Warrants outstanding (in shares) | 656,112 | |||||
Class of warrant or right, exercise price of warrants or rights (in usd per share) | $ 2.45 | |||||
Weighted average contractual term of warrants | 1 year | |||||
Common stock shares outstanding (in shares) | 24,923,662 | 24,923,662 | 24,923,662 | 24,375,881 | 20,000,000 | |
Common stock shares authorized (in shares) | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | |
Common Stock | ||||||
Equity and Long Term Debt [Line Items] | ||||||
Warrants outstanding (in shares) | 51,724 | 51,724 | 51,724 | |||
Class of warrant or right, exercise price of warrants or rights (in usd per share) | $ 0.87 | $ 0.87 | $ 0.87 | |||
December 2016 Stock Repurchase Program | ||||||
Equity and Long Term Debt [Line Items] | ||||||
Maximum amount of stock repurchase | $ 500,000 | |||||
Treasury stock repurchase (in shares) | 15,883 | |||||
Treasury stock repurchase (in usd per share) | $ 1.42 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net income from discontinued operations | $ 155,287 | $ 33,969 |
Retirement Plan Costs (Details)
Retirement Plan Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | ||
Maximum annual contribution per employee, percent | 4.00% | |
Employer matching contribution amount | $ 146,033 | $ 109,029 |
Leases (Details)
Leases (Details) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2013USD ($) | |
Leases [Abstract] | ||||
Operating leases rent expense | $ 175,469 | $ 105,446 | ||
Lease Payments | ||||
2,017 | 182,456 | |||
2,018 | 183,858 | |||
2,019 | 184,852 | |||
2,020 | 140,749 | |||
Total | $ 691,915 | |||
Arkansas Democrat-Gazette, Inc. | ||||
Lease Payments | ||||
Total amount of lease | $ 171,000 | $ 193,200 | ||
Leasing arrangement contract term | 5 years | |||
Property square footage | ft² | 12,245 | |||
Percentage increase in annual lease payment | 2.00% | |||
Board of Directors | ||||
Lease Payments | ||||
Term of operating sublease | 2 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Pending Litigation | Mar. 06, 2008USD ($)plaintiff | Oct. 31, 2009legal_action |
Loss Contingencies [Line Items] | ||
Number of plaintiffs | plaintiff | 3 | |
Number of actions consolidated | legal_action | 2 | |
Oltean, et al. (Kelly Oltean) v. Think Partnership, Inc. | ||
Loss Contingencies [Line Items] | ||
Damages sought | $ 200,000 | |
Oltean, et al. (Terry Schultz) v. Think Partnership, Inc. | ||
Loss Contingencies [Line Items] | ||
Damages sought | 200,000 | |
Oltean, et al. (Mike Baldock) v. Think Partnership, Inc. | ||
Loss Contingencies [Line Items] | ||
Damages sought | $ 187,500 |
Segments - Schedule of Revenue
Segments - Schedule of Revenue by Segment (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Net Revenue | $ 71,530,102 | $ 70,438,116 |
Percent of Revenue | 100.00% | 100.00% |
Partner Network | ||
Segment Reporting Information [Line Items] | ||
Net Revenue | $ 26,011,543 | $ 30,298,532 |
Percent of Revenue | 36.40% | 43.00% |
Owned and Operated Network | ||
Segment Reporting Information [Line Items] | ||
Net Revenue | $ 45,518,559 | $ 40,139,584 |
Percent of Revenue | 63.60% | 57.00% |
Segments - Schedule of Gross Pr
Segments - Schedule of Gross Profit by Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 50,165,307 | $ 46,716,120 |
Percent of Gross Profit | 70.10% | 66.30% |
Partner Network | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 4,734,240 | $ 6,645,590 |
Percent of Gross Profit | 18.20% | 21.90% |
Owned and Operated Network | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 45,431,067 | $ 40,070,530 |
Percent of Gross Profit | 99.80% | 99.80% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
First Orion Corp. | ||
Related Party Transaction [Line Items] | ||
Revenue received from related party | $ 101,884 | $ 107,196 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event $ in Millions | Feb. 06, 2017USD ($)shares |
Subsequent Event [Line Items] | |
Number of shares issued in asset purchase agreement | shares | 3,529,000 |
Assumption of outstanding liabilities | $ 4.2 |
Total consideration | 9.8 |
Acquired entity revenues reported for the prior fiscal period | 20.9 |
Assets of entity to be acquired reported for the prior fiscal period | $ 4.5 |
Common Stock | |
Subsequent Event [Line Items] | |
Number of shares deposited into escrow in asset purchase agreement | shares | 529,350 |