Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 08, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Inuvo, Inc. | ||
Entity Central Index Key | 0000829323 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 32,350,906 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 21 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 228,956 | $ 4,084,686 |
Accounts receivable, net of allowance for doubtful accounts of $63,727 and $83,789, respectively | 6,711,595 | 10,759,250 |
Unbilled revenue | 11,754 | 4,330 |
Prepaid expenses and other current assets | 259,712 | 395,861 |
Total current assets | 7,212,017 | 15,244,127 |
Property and equipment, net | 2,123,672 | 2,306,279 |
Other assets | ||
Goodwill | 9,853,342 | 9,853,342 |
Intangible assets, net of accumulated amortization | 9,441,681 | 10,808,018 |
Other assets | 35,170 | 36,070 |
Total other assets | 19,330,193 | 20,697,430 |
Total assets | 28,665,882 | 38,247,836 |
Current liabilities | ||
Accounts payable | 9,499,541 | 13,614,053 |
Accrued expenses and other current liabilities | 2,489,834 | 2,887,816 |
Financed receivables | 1,859,853 | 0 |
Notes payable | 250,000 | 0 |
Revolving line of credit | 0 | 4,900,000 |
Total current liabilities | 14,099,228 | 21,401,869 |
Long-term liabilities | ||
Deferred tax liability | 2,339,832 | 2,331,900 |
Convertible promissory note | 1,000,000 | 0 |
Other long-term liabilities | 193,007 | 426,725 |
Total long-term liabilities | 3,532,839 | 2,758,625 |
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 28,897,616 and 25,300,189, respectively; outstanding shares 28,618,454 and 24,923,662, respectively | 32,759 | 28,996 |
Additional paid-in capital | 138,867,509 | 136,033,967 |
Accumulated deficit | (126,469,894) | (120,579,062) |
Treasury stock, at cost - 376,527 shares | (1,396,559) | (1,396,559) |
Total stockholders' equity | 11,033,815 | 14,087,342 |
Total liabilities and stockholders' equity | $ 28,665,882 | $ 38,247,836 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Allowance for doubtful accounts | $ 63,727 | $ 83,789 |
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) | 32,757,817 | 28,994,981 |
Common stock shares Outstanding (in shares) | 32,381,290 | 28,618,454 |
Treasury stock (in shares) | 376,527 | 376,527 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net revenue | $ 73,330,642 | $ 79,554,493 |
Cost of revenue | 29,921,482 | 36,669,543 |
Gross profit | 43,409,160 | 42,884,950 |
Operating expenses | ||
Marketing costs (TAC) | 31,852,190 | 28,578,401 |
Compensation | 8,524,476 | 10,200,117 |
Selling, general and administrative | 8,502,874 | 8,342,906 |
Total operating expenses | 48,879,540 | 47,121,424 |
Operating loss | (5,470,380) | (4,236,474) |
Interest expense, net | (420,452) | (318,193) |
Loss from continuing operations before taxes | (5,890,832) | (4,554,667) |
Income tax benefit | 0 | 1,498,076 |
Loss from continuing operations | (5,890,832) | (3,056,591) |
Loss from discontinued operations | 0 | (1,109) |
Net loss | $ (5,890,832) | $ (3,057,700) |
Per common share data: Basic and Diluted | ||
Net loss from continuing operations (in usd per share) | $ (0.19) | $ (0.11) |
Net income from discontinued operations (in usd per share) | 0 | 0 |
Net loss (in usd per share) | $ (0.19) | $ (0.11) |
Weighted average shares | ||
Basic (in shares) | 31,019,623 | 28,155,320 |
Diluted (in shares) | 31,019,623 | 28,155,320 |
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, 2016 | 24,923,662 | ||||
Beginning Balance at Dec. 31, 2016 | $ 11,525,792 | $ 25,300 | $ 130,418,413 | $ (117,521,362) | $ (1,396,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (3,057,700) | (3,057,700) | |||
Stock-based compensation | 1,279,807 | 1,279,807 | |||
Stock issued for vested restricted stock awards (in shares) | 309,057 | ||||
Stock issued for vested restricted stock awards | 22,509 | $ 309 | 22,200 | ||
2017 asset acquisition (in shares) | 3,529,000 | ||||
2017 asset acquisition | 4,459,244 | $ 3,529 | 4,455,715 | ||
Taxes withheld on vested restricted stock | (97,539) | (97,539) | |||
Treasury Stock Retirement (in shares) | (143,265) | ||||
Treasury Stock Retirement | (44,771) | $ (142) | (44,629) | ||
Ending Balance (in shares) at Dec. 31, 2017 | 28,618,454 | ||||
Ending Balance at Dec. 31, 2017 | 14,087,342 | $ 28,996 | 136,033,967 | (120,579,062) | (1,396,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (5,890,832) | (5,890,832) | |||
Stock-based compensation | 915,469 | 915,469 | |||
Stock issued for vested restricted stock awards (in shares) | 527,866 | ||||
Stock issued for vested restricted stock awards | 0 | $ 528 | (528) | ||
Taxes withheld on vested restricted stock | (78,747) | (78,747) | |||
Sale of common stock (in shares) | 3,289,000 | ||||
Sale of common stock | 2,000,583 | $ 3,289 | 1,997,294 | ||
Cancellation of common stock (in shares) | (54,030) | ||||
Cancellation of common stock | 0 | $ (54) | 54 | ||
Ending Balance (in shares) at Dec. 31, 2018 | 32,381,290 | ||||
Ending Balance at Dec. 31, 2018 | $ 11,033,815 | $ 32,759 | $ 138,867,509 | $ (126,469,894) | $ (1,396,559) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net loss | $ (5,890,832) | $ (3,057,700) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 3,181,619 | 3,029,801 |
Stock based compensation | 915,469 | 1,279,807 |
Amortization of financing fees | 40,382 | 25,600 |
Deferred income taxes | 7,931 | (1,406,600) |
(Recovery)/Provision for doubtful accounts | (20,062) | 60,789 |
Write-off of publisher payable | 0 | 315,137 |
Adjustment of European liabilities related to discontinued operations | 0 | 1,109 |
Change in operating assets and liabilities: | ||
Accounts receivable and unbilled revenue | 4,058,591 | (1,216,611) |
Prepaid expenses and other assets | 139,031 | 52,687 |
Accounts payable | (4,114,512) | 437,241 |
Accrued expenses and other liabilities | (417,784) | (669,541) |
Net cash used in operating activities | (2,100,167) | (1,148,281) |
Investing activities: | ||
Purchases of equipment and capitalized development costs | (1,634,919) | (1,558,693) |
Net cash received from NetSeer asset acquisition | 0 | 235,763 |
Net cash used in investing activities | (1,634,919) | (1,322,930) |
Financing activities: | ||
Net proceeds from sale of common stock | 2,000,583 | 0 |
Proceeds from financed receivables | 1,859,853 | 0 |
Proceeds from convertible promissory note | 1,000,000 | 0 |
Proceeds from note payable | 250,000 | 0 |
Net proceeds on revolving line of credit | (4,900,000) | 4,900,000 |
Payments on capital leases | (211,671) | (158,782) |
Net taxes paid on RSU grants exercised | (77,044) | (97,376) |
Prepaid financing fees | (42,365) | 25,600 |
Payoff of NetSeer debt acquired | 0 | (2,015,577) |
Treasury Stock Repurchase | 0 | (44,772) |
Net cash (used in) provided by financing activities | (120,644) | 2,609,093 |
Net change – cash | (3,855,730) | 137,882 |
Cash, beginning of year | 4,084,686 | 3,946,804 |
Cash, end of year | 228,956 | 4,084,686 |
Supplemental information: | ||
Interest paid | 388,757 | 268,960 |
Non-cash investing and financing activities: | ||
NetSeer asset acquisition (See Note 17) | 0 | 4,459,244 |
Purchase of property and equipment under capital lease | 0 | 530,407 |
Write-down of domain names due to settlement of contingent liability | $ 0 | $ 369,506 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Company Overview Inuvo, Inc. is a technology company that provides data-driven platforms that can automatically identify and message online audiences for any product or service across devices, channels and formats, including video, mobile, connected TV, display, social and native. These capabilities allow Inuvo’s clients to engage with their customers and prospects in a manner that drives engagement from the first contact with the consumer. Inuvo facilitates over a billion marketing messages to consumers every single month and counts among its clients numerous world-renowned names in industries that have included retail, automotive, insurance, health care, technology, telecommunications and finance. Inuvo counts among its many contractual relationships, three clients who collectively manage over 50% of all U.S. digital media budgets. Inuvo’s solution incorporates a proprietary form of artificial intelligence, or AI, branded the IntentKey. This sophisticated machine learning technology uses interactions with Internet content as a source of information from which to predict consumer intent. The AI includes a continually updated database of over 500 million machine profiles which Inuvo utilizes to deliver highly aligned online audiences to its clients. Inuvo earns revenue when consumers view or click on its client’s messages. Inuvo’s business scales through account management activity with existing clients and by adding new clients through sales activity. As part of Inuvo’s technology strategy, it owns a collection of websites like alot.com and earnspendlive.com, where Inuvo creates content in health, finance, travel, careers, auto, education and living categories. These sites provide the means to test Inuvo’s technologies, while also delivering high quality consumers to clients through the interaction with proprietary content in the form of images, videos, slideshows and articles. There are many barriers to entry to Inuvo’s business that would require proficiency in large scale data center management, software development, data products, analytics, artificial intelligence, integration to the internet of things, or IOT, the relationships required to execute within the IOT and the ability to process tens of billions of transactions daily. Inuvo’s intellectual property is protected by 15 issued and 8 pending patents. Liquidity On October 11, 2018, we entered into the Amended and Restated Business Financing Agreement (the “Amended and Restated Financing Agreement”) with Western Alliance Bank. The Amended and Restated Financing Agreement, which is secured by all of our assets, superseded in its entirety the prior the Business Financing Agreement, as amended, that we entered into on March 1, 2012 with Bridge Bank, N.A. which is now owned by Western Alliance Bank. The Amended and Restated Financing Agreement does not have a term and either party may terminate upon notice to the other party. During the third quarter of 2017, we filed an S-3 registration statement with the Securities and Exchange Commission ("SEC") to replace an existing, expiring S-3 "shelf" registration statement, which permits us to offer and sell up to $15 million of our securities from time to time in one or more offerings. In May 2018, we took down from this shelf registration statement approximately $2.3 million in the underwritten public offering. The underwritten public offering of 2,860,000 shares of our common stock at a public offering price of $. 70 per share and an additional 429,000 shares to cover overallotments in connection with the offering. The net proceeds were $2.0 million after deducting the underwriting discounts, commissions and offering expenses payable. For the year ended December 31, 2018, our revenues declined 7.8% from the prior year. The lower revenue in 2018 is principally responsible for our $5.9 million net loss in 2018. Of the $5.9 million loss, approximately $4.1 million was depreciation, amortization and stock-based compensation expense. Further, we had roughly $500 thousand of merger related costs and an additional $175 thousand dollars in other non-cash accruals. Since our credit facility is dependent upon receivables, and we do not know when, if ever, that our revenues will return to historic levels or if we will be able to replace those lost revenues with revenues from other sources, the combination of lower credit availability and recent negative cash flows generated from operating activities introduces potential risk of operation without interruption. As described earlier in this report, on November 2, 2018, we entered into the Merger Agreement. At the closing the Merger, which is subject to a number of conditions precedent, the Company will become a wholly-owned subsidiary of CPT. In addition, on November 1, 2018, we borrowed $1 million from an affiliate of CPT which we are using for working capital, and on November 2, 2018, four directors of the Company lent us $62,500 each, for an aggregate of $250,000 , to cover certain costs associated with the pending Merger. In March 2019, we sold an aggregate of $1,440,000 Original Issue Discount Unsecured Subordinated Convertible Notes due September 1, 2020 in a private placement and received $1,200,000 in proceeds which we are using for working capital. Subject to the terms of the Merger Agreement and the credit facility with the additional borrowing, together with this additional capital raise, we believe we will have sufficient cash and credit to operate until the Merger closes. There are no assurances we will be successful in our efforts to generate revenues, report profitable operations or close the Merger in which case we would need to find additional sources of credit and make substantial reductions to operating expense. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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 - In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted this guidance on January 1, 2018 using the modified retrospective approach and elected to apply the new guidance only to contracts that were not complete as of the date of adoption. The cumulative impact to retained earnings was not material. 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. Effective January 1, 2018, revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We also recognize revenue from serving impressions when we complete all or a part of an order from an advertiser. The revenue is recognized in the period that the impression is served. The below table is the proportion of revenue that is generated through advertisements on our partners sites and owned sites: For the Years Ended December 31, 2018 2017 Partners $ 52,087,368 71.0 % $ 59,745,179 75.1 % Owned Sites 21,243,274 29.0 % 19,809,314 24.9 % Total $ 73,330,642 100 % $ 79,554,493 100 % The following table presents our revenue disaggregated by channel: For the Years Ended December 31, 2018 2017 Mobile $ 50,785,680 $ 49,216,065 Desktop 21,398,065 29,392,347 Other 1,146,897 946,081 Total $ 73,330,642 $ 79,554,493 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 or Traffic Acquisition Costs ("TAC") 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 in 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 consolidated 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 $1,815,281 and $1,503,449 , respectively, for the years ended December 31, 2018 and 2017 . 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 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, the amount it exceeds fair value is equivalent to the amount of impairment loss. We determined there was no impairment of goodwill during 2018 and 2017 . 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. 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 2021. 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 2018 and 2017 fiscal years, we again engaged a third party valuation service to reassess the fair value of the acquired assets. We recorded no impairment of intangible assets during 2018 or 2017 . 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. All our deferred tax assets and liabilities are recorded as long-term assets and liabilities in the consolidated balance sheets. In 2017, we recognized an income tax benefit of $1,498,076 due to the passing of the Tax Cuts and Jobs Act in December 2017. The new law reduced corporate income tax rates from 35% to 21%. As a result, the deferred tax assets and liabilities recorded in the 2017 consolidated balance sheet were reevaluated at the new tax rates. Both the deferred tax assets and the deferred tax liabilities were reduced. The decrease in the deferred tax liability resulted in the one-time tax benefit. 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, 2018 and 2017 . 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 12, 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. As of December 31, 2018, there were 39 employees in Arkansas, eleven employees under the required 50 . As such, we recorded a contingent liability $55,000 . 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 2018 and 2017 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 - In accordance with ASC 280 - Segment reporting , segment information reported is built on the basis of internal management data used for performance analysis of businesses and for the allocation of resources. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, its chief executive officer, reviews financial information presented on a consolidated basis and no expense or operating income is evaluated at a segment level. Given the consolidated level of review by the Company’s chief executive officer, the Company operates as one reportable segment. Most net revenue is earned in the United States and all long-lived assets are located in the United States. Concentration of credit risk - We are exposed to concentrations of risk primarily in cash and accounts receivable, which are generally not collateralized. Our policy is to place our cash with high credit quality financial institutions in order to limit the amount of credit exposure. At times, deposits may exceed FDIC limits. 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. Customer concentrations - At December 31, 2018 , 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 71.1% of our gross accounts receivable balance as of December 31, 2018 . The same two customers accounted for 81.8% of our revenue for the year ended December 31, 2018 . In 2017, 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 71.3% of our gross accounts receivable balance as of December 31, 2017 . The same two customers accounted for 76.1% of our revenue for the year ended and December 31, 2017 . 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. Additional accounting pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We will adopt the new standard effective January 1, 2019 on a modified retrospective basis and will not restate comparative periods. We will elect the package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. We do not expect the new standard to have a material impact on our consolidated financial statements. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 : 2018 2017 Balance at the beginning of the year $ 83,789 $ 23,000 (Recoveries)/provision for bad debts (14,000 ) 63,000 Charge-offs (6,062 ) (2,211 ) Balance at the end of the year $ 63,727 $ 83,789 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The net carrying value of property and equipment at December 31, 2018 and 2017 was as follows: 2018 2017 Furniture and fixtures $ 293,152 $ 288,536 Equipment 1,527,054 1,509,464 Software 9,142,075 7,582,181 Leasehold improvements 421,016 455,850 Subtotal $ 11,383,297 $ 9,836,031 Less: accumulated depreciation and amortization (9,259,625 ) (7,529,752 ) Total $ 2,123,672 $ 2,306,279 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The following is a schedule of intangible assets and goodwill as of December 31, 2018 : Term Carrying Value Accumulated Amortization and Impairment Net Carrying Value 2018 Amortization Customer list, Google 20 years $ 8,820,000 $ (3,013,500 ) $ 5,806,500 $ 441,000 Technology, NetSeer 5 years 3,600,000 (1,380,000 ) 2,220,000 720,000 Customer list, all other 10 years 1,610,000 (1,100,194 ) 509,806 161,004 Customer relationships, NetSeer 20 years 570,000 (54,625 ) 515,375 28,500 Trade names, web properties (1) - 390,000 — 390,000 — Brand, NetSeer 1 year 121,000 (121,000 ) — 10,083 Non-competition agreements, NetSeer 1 year 69,000 (69,000 ) — 5,750 Intangible assets classified as long-term $ 15,180,000 $ (5,738,319 ) $ 9,441,681 $ 1,366,337 Goodwill, total $ 9,853,342 $ — $ 9,853,342 $ — The following is a schedule of intangible assets and goodwill as of December 31, 2017 : Term Carrying Value Accumulated Amortization Net Carrying Value 2017 Amortization Customer list, Google 20 years $ 8,820,000 $ (2,572,500 ) $ 6,247,500 $ 441,000 Technology, NetSeer 5 years 3,600,000 (660,000 ) 2,940,000 660,000 Customer list, all other 10 years 1,610,000 (939,190 ) 670,810 161,004 Trade names, ALOT 5 years 960,000 (960,000 ) — 32,000 Customer relationships, NetSeer 20 years 570,000 (26,125 ) 543,875 26,125 Domain websites (2) 5 years 300,001 (300,001 ) — 32,056 Tradenames, web properties (1) - 390,000 — 390,000 — Brand, NetSeer 1 year 121,000 (110,917 ) 10,083 110,917 Non-competition agreements, NetSeer 1 year 69,000 (63,250 ) 5,750 63,250 Intangible assets classified as long-term $ 16,440,001 $ (5,631,983 ) $ 10,808,018 $ 1,526,352 Goodwill, total $ 9,853,342 $ — $ 9,853,342 $ — ___________ (1) The trade names related to our web properties have an indefinite life, and as such are not amortized. (2) In May 2015, we purchased two domain websites with a fair value of $715,874 . We determined they should be amortized over 5 years. In May 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. In 2017, we determined that the seller would not meet the specific performance target for the second and third years and therefore, we adjusted the carrying value of the intangible asset and associated contingent liability by $369,506 . Our amortization expense over the next five years and thereafter is as follows: 2019 $ 1,350,504 2020 1,350,504 2021 1,350,504 2022 556,294 2023 469,500 Thereafter 3,974,375 Total $ 9,051,681 |
Bank Debt
Bank Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Bank Debt | Bank Debt The following table summarizes our outstanding bank debt balances: December 31, 2018 December 31, 2017 Revolving credit line - 5.25 percent at December 31, 2017 (prime plus 0.75 percent), due September 29, 2018 - current portion $ — $ 4,900,000 Financed receivables - 6.5 percent at December 31, 2018 (prime plus 1 percent) on invoice receivables; 7.5 percent at December 31, 2018 (prime plus 2 percent) on uninvoiced receivables 1,859,853 — Total $ 1,859,853 $ 4,900,000 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 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 85% of eligible accounts receivable balances 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. On April 18, 2018, we entered into the Tenth Business Financing Modification Agreement with Western Alliance Bank the parent company of Bridge Bank, N.A., our original lender, that modified the existing agreement. The modified terms require a monthly quick ratio of not less than .60 to 1.00 from February 1, 2018 through November 30, 2018; and a monthly quick ratio of not less than .70 to 1.00 on and after December 31, 2018; and the quarterly consolidated Adjusted EBITDA shall not negatively deviate from financial projections by more than $18,000 for the quarter ending March 31, 2018, $57,000 for the quarter ending June 30, 2018, $191,000 for the quarter ended September 30, 2018 and $496,000 for the quarter ended December 31, 2018, or with respect to any quarter in 2019 and beyond, by more than 25% from projections. In addition, the finance charge for outstanding advances is equal to Prime Rate plus one basis point. On September 19, 2018, we entered into the Eleventh Business Financing Modification Agreement with Western Alliance Bank that modified the existing agreement by extending the maturity date to October 20, 2018. On October 11, 2018, we entered into the Amended and Restated Business Financing Agreement with Western Alliance Bank and superseded the Business Financing Agreement, as amended, entered into on March 1, 2012 with Bridge Bank, N.A. which is now owned by Western Alliance Bank. The Amended and Restated Financing Agreement may be terminated by either party upon notice to the other party. The material terms of the Amended and Restated Financing Agreement include financing eligible invoiced receivables at an advance rate of 85% and an interest rate of prime plus 1% and a sub-limit of up to $2.5 million of uninvoiced eligible receivables at an advance rate of 75% and an interest rate of prime plus 2% . The sub-limit provision expires at the end of April 2019. The Amended and Restated Financing Agreement includes certain fees; a facility fee of $11,765 due at closing; an annual facility fee of 0.25% of the account balance due beginning on April 20, 2019; a monthly maintenance fee of 0.125% of the ending daily account balance; a $30,000 fee in lieu of a warrant; and $80,000 due upon termination of the agreement or repayment of our obligations under the agreement. The Amended and Restated Financing Agreement is secured by all of our assets. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable On November 2, 2018, each of Messrs. Richard K. Howe, the Company’s Chief Executive Officer and member of our board of directors, and Charles D. Morgan, G. Kent Burnett and Gordon Cameron, members of the Company’s board of directors, lent the Company $62,500 , for an aggregate of $250,000 , under the terms of 10% Promissory Notes. The Company is using the proceeds from these notes to pay certain costs associated with the pending Merger. The notes are unsecured, bear interest at 10% per annum and the principal and accrued interest is due on November 2, 2019, subject to acceleration upon an Event of Default or Change of Control (as both terms are defined in the note) (see Note 18 - Related Party Transactions). |
Convertible Promissory Note
Convertible Promissory Note | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Note | Convertible Promissory Note On November 1, 2018, the Company and ConversionPoint Investments, LLC., an affiliate of CPT (the "Noteholder") entered into a Securities Purchase Agreement for up to $2 million pursuant to which the Company issued and sold a $1,000,000 principal amount 10% senior unsecured subordinated convertible promissory note ("the Subordinated Promissory Note") to the Noteholder which we are using for working capital. The Subordinated Promissory Note, which bears interest at the rate of 10% per annum, and the principal and accrued interest is due on November 1, 2021. In the event Merger Agreement is terminated, and providing that the shares issuable upon the possible conversion of the Subordinated Promissory Note have been approved for listing on the NYSE American, the Noteholder may, upon 15 days written notice to the Company, elect to convert all or any portion of the principal and accrued and unpaid interest due under the Subordinated Promissory Note into shares of the Company’s common stock (see Note 19 - ConversionPoint Merger). The conversion portion of the Subordinated Promissory Note was analyzed for derivative accounting and is deemed immaterial. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following at December 31, 2018 and 2017 : 2018 2017 Accrued marketing costs (TAC) $ 1,509,843 $ 1,107,404 Accrued expenses and other 461,823 624,688 Accrued payroll and commission liabilities 200,290 867,634 Capital leases, current portion 198,769 209,940 Arkansas grant contingency 55,000 2,245 Accrued sales allowance 50,000 50,000 Accrued taxes, current portion 14,109 25,905 Total $ 2,489,834 $ 2,887,816 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consist of the following at December 31, 2018 and 2017 : 2018 2017 Deferred rent $ 98,276 $ 131,493 Capital leases, less current portion 80,969 281,470 Accrued taxes, less current portion 13,762 13,762 Total $ 193,007 $ 426,725 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes consists of the following at December 31, 2018 and 2017 : 2018 2017 Current tax provision $ — $ (91,477 ) Deferred tax benefit — (1,406,599 ) Total tax benefit $ — $ (1,498,076 ) In 2017, we recognized an income tax benefit of $1,498,076 due to the passing of the Tax Cuts and Jobs Act in December 2017. The new law reduced corporate income tax rates from 35% to 21%. As a result, the deferred tax assets and liabilities recorded in the consolidated balance sheets were reevaluated at the new tax rates. Both the deferred tax assets and the deferred tax liabilities were reduced. The decrease in the deferred tax liability resulted in the one-time income tax benefit. A reconciliation of the expected Federal statutory rate to our actual rate as reported for each of the periods presented is as follows: 2018 2017 Federal statutory rate 21 % 34 % State income tax rate, net of federal benefit (1 %) 4 % Permanent differences (2 %) (2 %) Impact in changes in tax law — % 22 % Change in valuation allowance (18 %) (25 %) — % 33 % 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, 2018 and 2017 . The following is a schedule of the deferred tax assets and liabilities as of December 31, 2018 and 2017 : 2018 2017 Deferred tax assets: Net operating loss carry forward $ 31,473,506 $ 29,622,135 Intangible assets 863,400 1,278,900 Stock based expenses — 1,176,900 Accrued expense 142,000 362,000 Deferred rent 27,000 33,400 Allowance for doubtful accounts 17,500 23,200 Other 140,300 7,200 Subtotal 32,663,706 32,503,735 Less valuation allowance (32,663,706 ) (32,503,735 ) Total — — Deferred tax liabilities: Intangible assets and property and equipment 2,162,500 2,307,600 Other 177,332 24,300 Total 2,339,832 2,331,900 Total deferred tax liabilities $ (2,339,832 ) $ (2,331,900 ) The net operating losses amounted to approximately $89,272,000 and expire beginning 2021 through 2038. 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, 2015 through 2017. 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, 2018 and 2017 . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
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”) and the 2017 Equity Compensation Plan ("2017 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 $915,469 and $1,279,807 for the years ended December 31, 2018 and 2017 , respectively. Total compensation cost not yet recognized at December 31, 2018 was $944,426 to be recognized over a weighted-average recognition period of 1.6 years . Award Information and Activity The following table summarizes the stock grants outstanding under our 2005 Long-Term Incentive Plan ("2005 LTIP"), 2010 ECP and 2017 ECP plans as of December 31, 2018 : Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2017 ECP — 733,500 41,664 1,524,836 2,300,000 2010 ECP 250,498 838,364 3,380,919 612,237 5,082,018 2005 LTIP (*) 13,748 — 950,085 — 963,833 Total 264,246 1,571,864 4,372,668 2,137,073 8,345,851 (*) 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, 2018 , the 2005 LTIP and 2010 ECP plans had 264,246 outstanding 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 2.1 years . The following table summarizes our stock option activity under the 2005 LTIP and 2010 ECP plans during 2018 : Options Weighted Average Exercise Price Outstanding, beginning of year 264,246 $ 2.84 Granted — $ — Forfeited, expired or cancelled — $ — Exercised — $ — Outstanding, end of year 264,246 $ 2.84 Exercisable, end of year 264,246 $ 2.84 No options were granted during 2018 or 2017 . 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 2018 : Restricted Stock Weighted Average Fair Value Outstanding, beginning of year 1,071,538 $ 1.84 Granted 1,664,266 $ 0.76 Exercised 641,843 $ 2.26 Forfeited 522,097 $ 1.04 Outstanding, end of year 1,571,864 $ 0.79 |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders Equity | Stockholders Equity Earnings per Share During the 2018 and 2017, we generated a net loss from continuing operations and as a result, all of our shares are anti-dilutive. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
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 made it necessary to have 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 of December 31, 2017 , we recorded a net income of $1,109 due primarily to the adjustment of certain accrued liabilities. |
Retirement Plan Costs
Retirement Plan Costs | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Plan [Abstract] | |
Retirement Plan Costs | Retirement Plan Costs We provide a 401(k) plan to help our employees prepare for retirement where we matched each employee's contributions to the plan up to the first four percent of the employee's annual salary. Effective October 31, 2018, the employer match was suspended. The matching contribution for the years ended December 31, 2018 and 2017 was $222,083 and $255,366 , respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
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 was $411,135 and $431,949 for the year ended December 31, 2018 and 2017 , respectively. Minimum lease payments under non-cancelable operating leases for the periods ended December 31: Lease Payments 2019 $ 477,319 2020 405,606 2021 242,558 2022 $ 163,284 Total $ 1,288,767 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 lease is for 12,245 square feet and will cost approximately $171,000 during its first year. Thereafter, the lease payment increases by 2% . As part of the 2017 asset acquisition, Inuvo assumed the office space lease and a lease obligation in Sunnyvale, CA. The lease was for 15,717 square feet and cost approximately $95,000 for the remaining term of the lease which expired in July 2017. In June 2017, we entered into an agreement to lease 4,801 square feet of office space in San Jose, CA commencing on July 17, 2017. The lease has a term of five years and will cost approximately $216,000 during its first year. Thereafter, the lease payments increase by 3% . In June 2017, we entered into an agreement with Dell Financial Services to lease computer equipment for our data centers. The lease has a term of three years and will cost approximately $173,000 over the life of the lease. Capital lease obligations and future minimum lease payments under non-cancelable capital leases as of December 31, 2018 are: Lease Payments 2019 $ 213,879 2020 82,405 Total payments under capital lease obligations 296,284 Less amount representing interest (16,546 ) Present value of capital lease obligations 279,738 Current portion of capital lease obligations (198,769 ) Capital lease obligations, net of current portion $ 80,969 Assets acquired under capital lease obligations are included in property and equipment in the accompanying consolidated balance sheets. Cost and related accumulated depreciation as of December 31, 2018 and 2017 are as follows: 2018 2017 Equipment $ 707,264 $ 707,264 Less accumulated depreciation (441,084 ) (242,169 ) Equipment, net $ 266,180 $ 465,095 Depreciation expense on assets under capital lease obligations was $198,914 and $173,097 for the years ended December 31, 2018 and 2017, respectively and is included in the consolidated statements of operations. In February 2017, we acquired the assets and certain liabilities of NetSeer, Inc. including the capital lease for computer equipment with a remaining value at that time of $88,575 . In June 2017, we entered into an agreement with Dell Financial Services to lease computer equipment for our data centers. The lease has a term of three years and will cost approximately $516,000 over the life of the lease. |
NetSeer Acquisition
NetSeer Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
NetSeer Acquisition | NetSeer Acquisition On February 6, 2017, we entered into an Asset Purchase Agreement to acquire the assets of NetSeer, Inc. Under the terms of the agreement, we acquired substantially all of the assets of NetSeer, and assumed certain liabilities and personnel obligations, in exchange for 3,529,000 shares of our common stock. Of this amount, 529,350 shares were deposited into escrow with our counsel under the terms of an escrow agreement pending possible post-closing adjustments in the purchase price related to working capital and audited financial statement adjustments, as well as in connection with possible indemnification claims post-closing. In August 2017, these shares were released from escrow and delivered to the sellers in accordance with the terms of the Asset Purchase Agreement. The operating results of this acquisition have been included in the consolidated statements of operations since the acquisition date. As a result of the business acquisition, the Company recognized goodwill in the amount of $4,013,034 . The factors contributing to the recognition of the amount of goodwill are based on strategic benefits that are expected to be realized from the asset acquisition. The Company incurred approximately $350,000 in acquisition related costs, which are recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations. Total consideration paid in common stock (with marketability discount applied) $ 4,459,244 Fair value of assets acquired: Accounts receivable, net (2,292,485 ) Prepaid expenses and other current assets (236,163 ) Property and equipment, net (119,101 ) Goodwill (4,013,034 ) Intangible assets (4,360,000 ) Fair value of liabilities assumed: Accounts payable $ 3,579,787 Accrued expenses and other current liabilities 1,152,789 Other long-term liabilities 49,149 Debt 2,015,577 Cash received in acquisition $ 235,763 In accordance with ASC guidance related to business combinations, net consideration was first allocated to the fair value of assets acquired, including specifically identifiable intangible assets and liabilities assumed, with the excess being recorded as goodwill. Goodwill related to this acquisition is not deductible for tax purposes and is not amortized, but instead is subject to periodic impairment tests. The purchase includes the assumption of gross customer accounts receivable totaling $2,292,485 . The Company has collected most of these receivables and has recorded them at their fair value, the gross contractual amount. Specifically identifiable intangible assets consist of $4,360,000 and are amortized on a straight-line basis over the estimated useful life. Additionally, revenue totaling approximately $15.8 million from the 2017 asset acquisition is included in the consolidated statements of operations as of December 31, 2017. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In 2018 and 2017, the Company received a total of $31,500 and $117,385 , respectively from First Orion Corp., which is partially owned by two directors and shareholders of Inuvo, for providing IT services. On November 2, 2018, each of Messrs. Richard K. Howe, the Company’s Chief Executive Officer and member of our board of directors, and Charles D. Morgan, G. Kent Burnett and Gordon Cameron, members of the Company’s board of directors, lent the Company $62,500 , for an aggregate of $250,000 , under the terms of 10% Promissory Notes. The Company is using the proceeds from these notes to pay certain costs associated with the pending Merger. The notes are unsecured, bear interest at 10% per annum and the principal and accrued interest is due on November 2, 2019, subject to acceleration upon an Event of Default or Change of Control (as both terms are defined in the note) (see Note 7 - Notes Payable). |
ConversionPoint Merger
ConversionPoint Merger | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ConversionPoint Merger | ConversionPoint Merger On November 2, 2018, the Company entered into the Merger Agreement with CPT, ConversionPoint Holdings, Inc., a wholly-owned subsidiary of CPT (“Parent”), CPT Merger Sub, Inc., a wholly-owned subsidiary of Parent (“CPT Merger Sub”), and CPT Cigar Merger Sub, Inc., a wholly-owned subsidiary of Parent (“Inuvo Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, the Company will merge with and into Inuvo Merger Sub with the Company as the surviving corporation in the Inuvo Merger (the “Inuvo Merger”), and CPT merging with and into CPT Merger Sub with CPT as the surviving corporation in the CPT Merger (the “CPT Merger” and collectively with the Inuvo Merger, the “Merger”). Upon consummation of the Merger, CPT and Inuvo will be wholly-owned subsidiaries of Parent. The Merger Agreement was unanimously approved by the Board of Directors of each of the Company, CPT, Parent, CPT Merger Sub, and Inuvo Merger Sub. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger the Company’s shareholders will be entitled to receive $0.45 in cash and 0.18877 shares of Parent common stock for each share of common stock of the Company, and CPT’s stockholders will be entitled to receive 0.9840 shares of Parent common stock for each share of common stock of CPT. Each outstanding option to acquire a share of the Company’s common stock will be converted into an option to acquire 0.2370 shares of Parent’s common stock. In addition, unvested restricted stock units will vest in full immediately prior to consummation of the Merger and will be entitled to receive the merger consideration. No fractional shares of Parent common stock will be issued in the Merger and Parent stockholders and CPT stockholders will receive cash in lieu of any fractional interests. The Merger Agreement contains customary representations and warranties from each party to the agreement, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of the CPT’s and the Company’s businesses during the interim period between the execution of the Merger Agreement and the closing of the Merger, (2) the Company’s obligations to facilitate its shareholders’ consideration of, and voting upon, the Merger Agreement and the Inuvo Merger, (3) CPT’s obligations to facilitate its stockholders’ consideration of, and voting upon, the Merger Agreement and the CPT Merger, (4) the recommendation by the Board of Directors of the Company in favor of approval of the Merger Agreement and the Inuvo Merger by the Company’s shareholders, and (5) the Company’s non-solicitation obligations relating to alternative business combination transactions. The completion of the Merger is subject to (1) the approval of CPT’s stockholders and the Company’s shareholders, (2) regulatory approvals, (3) the closing of financing to the Parent of $36,000,000 (the “Financing”), (4) the approval of the listing of shares of Parent’s common stock on NASDAQ and conditional approval for listing on the TSX, (5) the delivery of customary opinions from counsel to the CPT and the Company to the effect that the Merger will qualify as a tax-free exchange for federal income tax purposes (6) Parent entering into separation agreements with Mr. Howe, the Company Chief Executive Officer, Mr. Ruiz, the Company’s Chief Financial Officer and Secretary, and Mr. Pisaris, the Company’s General Counsel, and (7) other customary closing conditions. Immediately following the Merger, Richard K. Howe will serve as non-executive chairman of the board of directors of the Parent and an additional individual appointed by Inuvo shall serve on the seven member board of directors of the Parent. The Merger Agreement contains customary termination rights for both the Company and CPT and further provides that (1) a termination payment of approximately $2.8 million will be payable by the Company to CPT in certain circumstances; and (2) a termination payment of approximately $2.8 million will be payable by CPT to the Company in certain circumstances, including if the Parent fails to consummate the Financing by May 31, 2019. On November 1, 2018, the Company and CPT Investments, LLC., an affiliate of CPT (the "Noteholder") entered into a Securities Purchase Agreement for up to $2 million pursuant to which the Company issued and sold a $1,000,000 principal amount 10% senior unsecured subordinated convertible promissory note ("the Subordinated Promissory Note") to the Noteholder which we are using for working capital. The Subordinated Promissory Note, which bears interest at the rate of 10% per annum, and the principal and accrued interest is due on November 1, 2021. The maturity date of the Subordinated Promissory Note is subject to acceleration in the event (i) the Closing (as that term is defined in the Merger Agreement) occur pursuant to the Merger Agreement, in which event the maturity date is accelerated to the fifth day after the Closing Date (as that term is defined in the Merger Agreement) and (ii) immediately upon an Event of Default (as that term is defined in the Subordinated Promissory Note). The Company has the right to prepay the amounts due under the Subordinated Promissory Note at any time, upon 15 days prior written notice to the Noteholder, subject to the term of the note and Noteholder consent. The Company’s obligations under the Subordinated Promissory Note are unsecured and subordinate to its obligations to Western Alliance Bank, the Company’s secured lender. In the event Merger Agreement is terminated, and providing that the shares issuable upon the possible conversion of the Subordinated Promissory Note have been approved for listing on the NYSE American, the Noteholder may, upon 15 days written notice to the Company, elect to convert all or any portion of the principal and accrued and unpaid interest due under the Subordinated Promissory Note into shares of the Company’s common stock at a conversion price of $0.44 per share, or $0.35 per share if the Merger Agreement is terminated for any reason other than in connection with a Superior Proposal (as defined in the Merger Agreement). The conversion prices are subject to proportional adjustment in the event of stock split or adjustments. The Subordinated Promissory Note also contains a provision limiting the Company’s ability to issue any shares of our common stock upon any voluntary conversion by the Noteholder which, when aggregated with all shares of its common stock issued pursuant to a conversion of the Subordinated Promissory Note, would exceed 19.99% of our issued and outstanding shares of common stock immediately preceding the issuance of the note without first obtaining stockholder approval in accordance with the rules of the NYSE American. On November 1, 2018 the Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Noteholder covering the shares of its common stock which may be issued upon a conversion of the Subordinated Promissory Note. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Effective February 1, 2019, the Amended and Restated Business Financing Agreement with Western Alliance Bank was amended with the First Amendment to Amended and Restated Business Financing Agreement. The amendment extended the $2.5 million sublimit for unbilled eligible receivables to April 30, 2019 and increased the Success Fee from $75,000 to $80,000 . On March 1, 2019, we entered into a Securities Purchase Agreement with three accredited investors for the purchase and sale of an aggregate of $1,440,000 of principal of Original Issue Discount Unsecured Subordinated Convertible Notes (“Notes”) due September 1, 2020 to fund working capital and additional expenses resulting from the delay in closing associated with the government shut down. The proceeds from the offering were $1,200,000 . We did not pay any commissions or finders fees in connection with the sale of the Notes. Other than the original issue discount, no additional interest accrues on the Notes, except during the existence of an event of default under the Notes, where interest accrues at the lesser of (i) the rate of 15% per annum, or (ii) the maximum amount permitted by law. The initial conversion price of the Notes is $1.08 per share. Assuming no adjustment to the conversion price, the Note holders would receive 1,333,333 unregistered shares of our common stock. The shares of common stock issuable upon conversion are restricted, subject to resale under Rule 144. If the Mergers (see Note 19), however, are not completed or a change of control does not occur within six months of the issuance of the Notes, each holder has the right to immediately convert any portion of the Note at the greater of (a) a 20% discount from the average VWAP for the 10 trading days prior to giving notice of conversion, or (b) $0.44 per share. Should the Mergers fail to close and the note to CPT Investments, LLC (see Note 8) is converted into our common stock, the holders are then permitted to immediately convert any portion of the Note at $0.44 per share. On March 1, 2019, we entered into Amendment No. 1 to the Agreement and Plan of Merger dated November 2, 2018 (the “ Amendment ”) to (i) due to the delays in the SEC’s ability to review and declare effective securities filings because of the government shutdown, extend the outside date for New Parent to receive funding in a financing from May 31, 2019 to July 12, 2019, and extend the outside termination date for closing of the Mergers from June 30, 2019, to August 5, 2019, (ii) permit the issuances of the above described Notes and permit us to issue up to 3,272,728 shares of common stock or securities convertible into up to 3,272,728 shares of our common stock, and waive any breach of our representations, warranties, or covenants that would be caused by the stock issuance. Our exchange ratio of 0.18877 shares of New Parent common stock for each share of our common stock for the stock portion of the merger consideration is adjusted downward to account for the dilutive effect of the stock issuance, and (iii) permit us to amend our articles of incorporation to increase the amount of its authorized shares of common stock from 40,000,000 to 60,000,000 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 - In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted this guidance on January 1, 2018 using the modified retrospective approach and elected to apply the new guidance only to contracts that were not complete as of the date of adoption. The cumulative impact to retained earnings was not material. 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. Effective January 1, 2018, revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We also recognize revenue from serving impressions when we complete all or a part of an order from an advertiser. The revenue is recognized in the period that the impression is served. The below table is the proportion of revenue that is generated through advertisements on our partners sites and owned sites: For the Years Ended December 31, 2018 2017 Partners $ 52,087,368 71.0 % $ 59,745,179 75.1 % Owned Sites 21,243,274 29.0 % 19,809,314 24.9 % Total $ 73,330,642 100 % $ 79,554,493 100 % The following table presents our revenue disaggregated by channel: For the Years Ended December 31, 2018 2017 Mobile $ 50,785,680 $ 49,216,065 Desktop 21,398,065 29,392,347 Other 1,146,897 946,081 Total $ 73,330,642 $ 79,554,493 |
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 or Traffic Acquisition Costs ("TAC") 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 in 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 consolidated 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 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, the amount it exceeds fair value is equivalent to the amount of impairment loss. |
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. 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 2021. 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 2018 and 2017 fiscal years, we again engaged a third party valuation service to reassess the fair value of the acquired assets. We recorded no impairment of intangible assets during 2018 or 2017 . |
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. All our deferred tax assets and liabilities are recorded as long-term assets and liabilities in the consolidated balance sheets. In 2017, we recognized an income tax benefit of $1,498,076 due to the passing of the Tax Cuts and Jobs Act in December 2017. The new law reduced corporate income tax rates from 35% to 21%. As a result, the deferred tax assets and liabilities recorded in the 2017 consolidated balance sheet were reevaluated at the new tax rates. Both the deferred tax assets and the deferred tax liabilities were reduced. The decrease in the deferred tax liability resulted in the one-time tax benefit. 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, 2018 and 2017 . 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. |
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 2018 and 2017 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 - In accordance with ASC 280 - Segment reporting , segment information reported is built on the basis of internal management data used for performance analysis of businesses and for the allocation of resources. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, its chief executive officer, reviews financial information presented on a consolidated basis and no expense or operating income is evaluated at a segment level. Given the consolidated level of review by the Company’s chief executive officer, the Company operates as one reportable segment. Most net revenue is earned in the United States and all long-lived assets are located in the United States. |
Concentration of credit risk | Concentration of credit risk - We are exposed to concentrations of risk primarily in cash and accounts receivable, which are generally not collateralized. Our policy is to place our cash with high credit quality financial institutions in order to limit the amount of credit exposure. At times, deposits may exceed FDIC limits. 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. |
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. |
Additional accounting pronouncements | Additional accounting pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We will adopt the new standard effective January 1, 2019 on a modified retrospective basis and will not restate comparative periods. We will elect the package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. We do not expect the new standard to have a material impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table presents our revenue disaggregated by channel: For the Years Ended December 31, 2018 2017 Mobile $ 50,785,680 $ 49,216,065 Desktop 21,398,065 29,392,347 Other 1,146,897 946,081 Total $ 73,330,642 $ 79,554,493 The below table is the proportion of revenue that is generated through advertisements on our partners sites and owned sites: For the Years Ended December 31, 2018 2017 Partners $ 52,087,368 71.0 % $ 59,745,179 75.1 % Owned Sites 21,243,274 29.0 % 19,809,314 24.9 % Total $ 73,330,642 100 % $ 79,554,493 100 % |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 : 2018 2017 Balance at the beginning of the year $ 83,789 $ 23,000 (Recoveries)/provision for bad debts (14,000 ) 63,000 Charge-offs (6,062 ) (2,211 ) Balance at the end of the year $ 63,727 $ 83,789 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Net Carrying value of Property and Equipment | The net carrying value of property and equipment at December 31, 2018 and 2017 was as follows: 2018 2017 Furniture and fixtures $ 293,152 $ 288,536 Equipment 1,527,054 1,509,464 Software 9,142,075 7,582,181 Leasehold improvements 421,016 455,850 Subtotal $ 11,383,297 $ 9,836,031 Less: accumulated depreciation and amortization (9,259,625 ) (7,529,752 ) Total $ 2,123,672 $ 2,306,279 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets from Continuing Operations | The following is a schedule of intangible assets and goodwill as of December 31, 2018 : Term Carrying Value Accumulated Amortization and Impairment Net Carrying Value 2018 Amortization Customer list, Google 20 years $ 8,820,000 $ (3,013,500 ) $ 5,806,500 $ 441,000 Technology, NetSeer 5 years 3,600,000 (1,380,000 ) 2,220,000 720,000 Customer list, all other 10 years 1,610,000 (1,100,194 ) 509,806 161,004 Customer relationships, NetSeer 20 years 570,000 (54,625 ) 515,375 28,500 Trade names, web properties (1) - 390,000 — 390,000 — Brand, NetSeer 1 year 121,000 (121,000 ) — 10,083 Non-competition agreements, NetSeer 1 year 69,000 (69,000 ) — 5,750 Intangible assets classified as long-term $ 15,180,000 $ (5,738,319 ) $ 9,441,681 $ 1,366,337 Goodwill, total $ 9,853,342 $ — $ 9,853,342 $ — The following is a schedule of intangible assets and goodwill as of December 31, 2017 : Term Carrying Value Accumulated Amortization Net Carrying Value 2017 Amortization Customer list, Google 20 years $ 8,820,000 $ (2,572,500 ) $ 6,247,500 $ 441,000 Technology, NetSeer 5 years 3,600,000 (660,000 ) 2,940,000 660,000 Customer list, all other 10 years 1,610,000 (939,190 ) 670,810 161,004 Trade names, ALOT 5 years 960,000 (960,000 ) — 32,000 Customer relationships, NetSeer 20 years 570,000 (26,125 ) 543,875 26,125 Domain websites (2) 5 years 300,001 (300,001 ) — 32,056 Tradenames, web properties (1) - 390,000 — 390,000 — Brand, NetSeer 1 year 121,000 (110,917 ) 10,083 110,917 Non-competition agreements, NetSeer 1 year 69,000 (63,250 ) 5,750 63,250 Intangible assets classified as long-term $ 16,440,001 $ (5,631,983 ) $ 10,808,018 $ 1,526,352 Goodwill, total $ 9,853,342 $ — $ 9,853,342 $ — ___________ (1) The trade names related to our web properties have an indefinite life, and as such are not amortized. (2) In May 2015, we purchased two domain websites with a fair value of $715,874 . We determined they should be amortized over 5 years. In May 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. In 2017, we determined that the seller would not meet the specific performance target for the second and third years and therefore, we adjusted the carrying value of the intangible asset and associated contingent liability by $369,506 . |
Schedule of Amortization Expense | Our amortization expense over the next five years and thereafter is as follows: 2019 $ 1,350,504 2020 1,350,504 2021 1,350,504 2022 556,294 2023 469,500 Thereafter 3,974,375 Total $ 9,051,681 |
Bank Debt (Tables)
Bank Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Credit Line | The following table summarizes our outstanding bank debt balances: December 31, 2018 December 31, 2017 Revolving credit line - 5.25 percent at December 31, 2017 (prime plus 0.75 percent), due September 29, 2018 - current portion $ — $ 4,900,000 Financed receivables - 6.5 percent at December 31, 2018 (prime plus 1 percent) on invoice receivables; 7.5 percent at December 31, 2018 (prime plus 2 percent) on uninvoiced receivables 1,859,853 — Total $ 1,859,853 $ 4,900,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following at December 31, 2018 and 2017 : 2018 2017 Accrued marketing costs (TAC) $ 1,509,843 $ 1,107,404 Accrued expenses and other 461,823 624,688 Accrued payroll and commission liabilities 200,290 867,634 Capital leases, current portion 198,769 209,940 Arkansas grant contingency 55,000 2,245 Accrued sales allowance 50,000 50,000 Accrued taxes, current portion 14,109 25,905 Total $ 2,489,834 $ 2,887,816 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consist of the following at December 31, 2018 and 2017 : 2018 2017 Deferred rent $ 98,276 $ 131,493 Capital leases, less current portion 80,969 281,470 Accrued taxes, less current portion 13,762 13,762 Total $ 193,007 $ 426,725 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consists of the following at December 31, 2018 and 2017 : 2018 2017 Current tax provision $ — $ (91,477 ) Deferred tax benefit — (1,406,599 ) Total tax benefit $ — $ (1,498,076 ) |
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: 2018 2017 Federal statutory rate 21 % 34 % State income tax rate, net of federal benefit (1 %) 4 % Permanent differences (2 %) (2 %) Impact in changes in tax law — % 22 % Change in valuation allowance (18 %) (25 %) — % 33 % |
Schedule of Deferred Tax Assets and Liabilities | The following is a schedule of the deferred tax assets and liabilities as of December 31, 2018 and 2017 : 2018 2017 Deferred tax assets: Net operating loss carry forward $ 31,473,506 $ 29,622,135 Intangible assets 863,400 1,278,900 Stock based expenses — 1,176,900 Accrued expense 142,000 362,000 Deferred rent 27,000 33,400 Allowance for doubtful accounts 17,500 23,200 Other 140,300 7,200 Subtotal 32,663,706 32,503,735 Less valuation allowance (32,663,706 ) (32,503,735 ) Total — — Deferred tax liabilities: Intangible assets and property and equipment 2,162,500 2,307,600 Other 177,332 24,300 Total 2,339,832 2,331,900 Total deferred tax liabilities $ (2,339,832 ) $ (2,331,900 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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"), 2010 ECP and 2017 ECP plans as of December 31, 2018 : Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2017 ECP — 733,500 41,664 1,524,836 2,300,000 2010 ECP 250,498 838,364 3,380,919 612,237 5,082,018 2005 LTIP (*) 13,748 — 950,085 — 963,833 Total 264,246 1,571,864 4,372,668 2,137,073 8,345,851 (*) Expired June 2015 |
Schedule of Stock Options | The following table summarizes our stock option activity under the 2005 LTIP and 2010 ECP plans during 2018 : Options Weighted Average Exercise Price Outstanding, beginning of year 264,246 $ 2.84 Granted — $ — Forfeited, expired or cancelled — $ — 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 2018 : Restricted Stock Weighted Average Fair Value Outstanding, beginning of year 1,071,538 $ 1.84 Granted 1,664,266 $ 0.76 Exercised 641,843 $ 2.26 Forfeited 522,097 $ 1.04 Outstanding, end of year 1,571,864 $ 0.79 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum lease payments under non-cancelable operating leases for the periods ended December 31: Lease Payments 2019 $ 477,319 2020 405,606 2021 242,558 2022 $ 163,284 Total $ 1,288,767 |
Capital Lease Obligations and Future Minimum Lease Payments | Capital lease obligations and future minimum lease payments under non-cancelable capital leases as of December 31, 2018 are: Lease Payments 2019 $ 213,879 2020 82,405 Total payments under capital lease obligations 296,284 Less amount representing interest (16,546 ) Present value of capital lease obligations 279,738 Current portion of capital lease obligations (198,769 ) Capital lease obligations, net of current portion $ 80,969 |
Schedule of Capital Leased Assets | Cost and related accumulated depreciation as of December 31, 2018 and 2017 are as follows: 2018 2017 Equipment $ 707,264 $ 707,264 Less accumulated depreciation (441,084 ) (242,169 ) Equipment, net $ 266,180 $ 465,095 |
NetSeer Acquisition (Tables)
NetSeer Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of business acquisitions | Total consideration paid in common stock (with marketability discount applied) $ 4,459,244 Fair value of assets acquired: Accounts receivable, net (2,292,485 ) Prepaid expenses and other current assets (236,163 ) Property and equipment, net (119,101 ) Goodwill (4,013,034 ) Intangible assets (4,360,000 ) Fair value of liabilities assumed: Accounts payable $ 3,579,787 Accrued expenses and other current liabilities 1,152,789 Other long-term liabilities 49,149 Debt 2,015,577 Cash received in acquisition $ 235,763 |
Organization and Business (Deta
Organization and Business (Details) $ / shares in Units, machine_profile in Millions | Mar. 07, 2019USD ($) | Nov. 02, 2018USD ($)director | May 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)machine_profilepatentclient | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Number of clients who collectively manage US digital advertising budgets | client | 3 | |||||
Percentage of all US digital advertising budgets managed | 50.00% | |||||
Number of machine profiles in database | machine_profile | 500 | |||||
Number of issued patents | patent | 15 | |||||
Number of pending patents | patent | 8 | |||||
Debt Instrument [Line Items] | ||||||
Net proceeds from sale of common stock | $ 2,000,000 | $ 2,000,583 | $ 0 | |||
Change in revenues from prior period | 7.80% | |||||
Net loss | $ 5,890,832 | 3,057,700 | ||||
Depreciation, amortization, and stock-based compensation | 4,100,000 | |||||
Acquisition related costs | 500,000 | |||||
Increase (decrease) in other accrued liabilities | 175,000 | |||||
Number Of directors provided funding | director | 4 | |||||
Proceeds from convertible promissory note | $ 1,000,000 | $ 0 | ||||
Shelf Registration Statement | ||||||
Debt Instrument [Line Items] | ||||||
Shares authorized amount | $ 15,000,000 | |||||
Consideration received on transaction | $ 2,300,000 | |||||
Secondary Public Offering | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares issued in transaction | shares | 2,860,000 | |||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 70 | |||||
Over-Allotment Option | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares issued in transaction | shares | 429,000 | |||||
Conversion Point Technologies Inc | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from lines of credit | $ 1,000,000 | |||||
Funding From Directors | ||||||
Debt Instrument [Line Items] | ||||||
Related party transaction, amount | 250,000 | |||||
Funding From Directors | Director | ||||||
Debt Instrument [Line Items] | ||||||
Related party transaction, amount | $ 62,500 | |||||
Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from convertible promissory note | $ 1,200,000 | |||||
Subsequent Event | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 1,440,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 73,330,642 | $ 79,554,493 |
Percentage of total revenue | 100.00% | 100.00% |
Mobile | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 50,785,680 | $ 49,216,065 |
Desktop | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 21,398,065 | 29,392,347 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,146,897 | 946,081 |
Partners | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 52,087,368 | $ 59,745,179 |
Percentage of total revenue | 71.00% | 75.10% |
Owned Sites | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 21,243,274 | $ 19,809,314 |
Percentage of total revenue | 29.00% | 24.90% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2012USD ($) | Dec. 31, 2018USD ($)segmentcustomeremployee | Dec. 31, 2017USD ($)customer | |
Schedule of Significant Accounting Policies [Line Items] | |||
Depreciation and amortization | $ 1,815,281 | $ 1,503,449 | |
Impairment of goodwill | 0 | 0 | |
Income tax expense (benefit) | 0 | (1,498,076) | |
Impairment of finite-lived intangible assets | $ 0 | 0 | |
Employees employed under grant | employee | 39 | ||
Employees under required amount | employee | 11 | ||
Employees required to be employed | employee | 50 | ||
Arkansas grant contingency | $ 55,000 | $ 2,245 | |
Number of reportable segments | segment | 1 | ||
Customer Concentration Risk | Accounts Receivable | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Concentration risk, number of customers | customer | 2 | 2 | |
Customer Concentration Risk | Accounts Receivable | Yahoo and Google | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 71.10% | 71.30% | |
Customer Concentration Risk | Net Revenue | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Concentration risk, number of customers | customer | 2 | 2 | |
Customer Concentration Risk | Net Revenue | Yahoo and Google | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 81.80% | 76.10% | |
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 |
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 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at the beginning of the year | $ 83,789 | $ 23,000 |
(Recoveries)/provision for bad debts | (14,000) | 63,000 |
Charge-offs | (6,062) | (2,211) |
Balance at the end of the year | $ 63,727 | $ 83,789 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 11,383,297 | $ 9,836,031 |
Less: accumulated depreciation and amortization | (9,259,625) | (7,529,752) |
Total | 2,123,672 | 2,306,279 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 293,152 | 288,536 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,527,054 | 1,509,464 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 9,142,075 | 7,582,181 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 421,016 | $ 455,850 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Goodwill and Intangible Assets (Details) | 1 Months Ended | 12 Months Ended | |||
May 31, 2016USD ($) | May 31, 2015USD ($)website | Mar. 31, 2012USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Net Carrying Value | $ 9,051,681 | ||||
Intangible assets classified as long-term | |||||
Carrying Value | 15,180,000 | $ 16,440,001 | |||
Accumulated Amortization and Impairment | (5,738,319) | (5,631,983) | |||
Net Carrying Value | 9,441,681 | 10,808,018 | |||
Amortization | 1,366,337 | 1,526,352 | |||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||||
Carrying Value | 9,853,342 | 9,853,342 | |||
Accumulated Amortization and Impairment | 0 | 0 | |||
Net Carrying Value | 9,853,342 | 9,853,342 | |||
Tradenames, web properties | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Carrying Value | 390,000 | 390,000 | |||
Accumulated Amortization and Impairment | 0 | 0 | |||
Net Carrying Value | 390,000 | 390,000 | |||
Amortization | $ 0 | $ 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 and Impairment | (3,013,500) | (2,572,500) | |||
Net Carrying Value | 5,806,500 | 6,247,500 | |||
Amortization | $ 441,000 | $ 441,000 | |||
Technology, NetSeer | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 5 years | 5 years | |||
Carrying Value | $ 3,600,000 | $ 3,600,000 | |||
Accumulated Amortization and Impairment | (1,380,000) | (660,000) | |||
Net Carrying Value | 2,220,000 | 2,940,000 | |||
Amortization | $ 720,000 | $ 660,000 | |||
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 and Impairment | (1,100,194) | (939,190) | |||
Net Carrying Value | 509,806 | 670,810 | |||
Amortization | $ 161,004 | $ 161,004 | |||
Trade names, ALOT | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 5 years | ||||
Carrying Value | $ 960,000 | ||||
Accumulated Amortization and Impairment | (960,000) | ||||
Net Carrying Value | 0 | ||||
Amortization | $ 32,000 | ||||
Customer relationships, NetSeer | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 20 years | 20 years | |||
Carrying Value | $ 570,000 | $ 570,000 | |||
Accumulated Amortization and Impairment | (54,625) | (26,125) | |||
Net Carrying Value | 515,375 | 543,875 | |||
Amortization | 28,500 | $ 26,125 | |||
Domain websites | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 5 years | 5 years | |||
Carrying Value | $ 715,874 | $ 300,001 | |||
Accumulated Amortization and Impairment | (300,001) | ||||
Net Carrying Value | 0 | ||||
Amortization | $ 32,056 | ||||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||||
Number of finite-lived intangible assets purchased | website | 2 | ||||
Carrying value adjustment | $ 46,000 | $ 369,506 | |||
Brand, NetSeer | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 1 year | 1 year | |||
Carrying Value | $ 121,000 | $ 121,000 | |||
Accumulated Amortization and Impairment | (121,000) | (110,917) | |||
Net Carrying Value | 0 | 10,083 | |||
Amortization | $ 10,083 | $ 110,917 | |||
Non-competition agreements, NetSeer | |||||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | |||||
Term | 1 year | 1 year | |||
Carrying Value | $ 69,000 | $ 69,000 | |||
Accumulated Amortization and Impairment | (69,000) | (63,250) | |||
Net Carrying Value | 0 | 5,750 | |||
Amortization | $ 5,750 | $ 63,250 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Amortization Expense (Details) | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 1,350,504 |
2020 | 1,350,504 |
2021 | 1,350,504 |
2022 | 556,294 |
2023 | 469,500 |
Thereafter | 3,974,375 |
Net Carrying Value | $ 9,051,681 |
Bank Debt - Schedule of Revolvi
Bank Debt - Schedule of Revolving Credit Line (Details) - USD ($) | Oct. 11, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Total | $ 1,859,853 | $ 4,900,000 | |
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit line | $ 0 | 4,900,000 | |
Stated interest rate | 5.25% | ||
Revolving Credit Facility | Line of Credit | Prime Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Amended And Restated Financing Agreement | Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit line | $ 1,859,853 | $ 0 | |
Amended And Restated Financing Agreement | Revolving Credit Facility | Line of Credit | Prime Rate | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.50% | ||
Basis spread on variable rate | 1.00% | 1.00% | |
Amended And Restated Financing Agreement Uninvoiced Eligible Invoices [Member] | Revolving Credit Facility | Line of Credit | Prime Rate | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 7.50% | ||
Basis spread on variable rate | 2.00% | 2.00% |
Bank Debt - Narrative (Details)
Bank Debt - Narrative (Details) - Line of Credit - Revolving Credit Facility - USD ($) | Oct. 11, 2018 | Mar. 27, 2017 | Mar. 01, 2012 | Dec. 31, 2018 |
Bridge Bank – Revolving Credit Line - March 1, 2012 | Bridge Bank, N.A. | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 | |||
Percentage of eligible accounts receivable under allowable borrowings | 85.00% | |||
Period for eligible accounts receivable | 90 days | |||
Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Adjusted EBITDA quarterly consolidated revenue projections maximum deviation percentage | 25.00% | |||
Amended And Restated Financing Agreement | ||||
Debt Instrument [Line Items] | ||||
Eligible invoiced receivables advance rate | 85.00% | |||
Eligible uninvoiced receivables sub limit | $ 2,500,000 | |||
Eligible uninvoiced receivables advance rate | 75.00% | |||
Commitment fee amount | $ 11,765 | |||
Commitment fee percentage | 0.25% | |||
Monthly maintenance fee | 0.125% | |||
Fee in lieu of warrant | $ 30,000 | |||
Fee due upon termination | $ 80,000 | |||
Period From February 1, 2018 Through November 30, 2018 | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Minimum monthly quick ratio | 0.60 | |||
Period From December 31, 2018 And After | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Minimum monthly quick ratio | 0.70 | |||
Quarter Ending March 31, 2018 | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Maximum decline in AEBITDA from projected amount | $ 18,000 | |||
Quarter Ending June 30, 2018 | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Maximum decline in AEBITDA from projected amount | 57,000 | |||
Quarter Ending September 30, 2018 | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Maximum decline in AEBITDA from projected amount | 191,000 | |||
Quarter Ending December 31, 2018 | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Maximum decline in AEBITDA from projected amount | $ 496,000 | |||
Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
Prime Rate | Eighth Business Financing Modification Agreement with Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.10% | |||
Prime Rate | Amended And Restated Financing Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | 1.00% | ||
Prime Rate | Amended And Restated Financing Agreement Uninvoiced Eligible Invoices [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.00% | 2.00% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Nov. 02, 2018 | Nov. 01, 2018 |
Funding From Directors | ||
Debt Instrument [Line Items] | ||
Related party transaction, amount | $ 250,000 | |
Funding From Directors | Director | ||
Debt Instrument [Line Items] | ||
Related party transaction, amount | $ 62,500 | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 10.00% | 10.00% |
Convertible Promissory Note (De
Convertible Promissory Note (Details) - Line of Credit - USD ($) | Nov. 02, 2018 | Nov. 01, 2018 |
Debt Instrument [Line Items] | ||
Stated interest rate | 10.00% | 10.00% |
Conversion Point Holdings Inc | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | $ 2,000,000 |
Proceeds from lines of credit | $ 1,000,000 | $ 1,000,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued marketing costs (TAC) | $ 1,509,843 | $ 1,107,404 |
Accrued expenses and other | 461,823 | 624,688 |
Accrued payroll and commission liabilities | 200,290 | 867,634 |
Capital leases, current portion | 198,769 | 209,940 |
Arkansas grant contingency | 55,000 | 2,245 |
Accrued sales allowance | 50,000 | 50,000 |
Accrued taxes, current portion | 14,109 | 25,905 |
Total | $ 2,489,834 | $ 2,887,816 |
Other Long-Term Liabilities - S
Other Long-Term Liabilities - Summary of Other Long-Term Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 98,276 | $ 131,493 |
Capital leases, less current portion | 80,969 | 281,470 |
Accrued taxes, less current portion | 13,762 | 13,762 |
Total | $ 193,007 | $ 426,725 |
Other Long-Term Liabilities - N
Other Long-Term Liabilities - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
May 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | May 31, 2015 | |
Class of Warrant or Right [Line Items] | |||||
Cost of lease | $ 1,288,767 | ||||
Domain websites | |||||
Class of Warrant or Right [Line Items] | |||||
Fair value of intangible assets | $ 300,001 | $ 715,874 | |||
Impairment of finite-lived intangible assets | $ 46,000 | $ 369,506 | |||
Computer Equipment Lease | |||||
Class of Warrant or Right [Line Items] | |||||
Leasing arrangement contract term | 3 years | ||||
Cost of lease | $ 516,000 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current tax provision | $ 0 | $ (91,477) |
Deferred tax benefit | 0 | (1,406,599) |
Total tax benefit | $ 0 | $ (1,498,076) |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 34.00% |
State income tax rate, net of federal benefit | (1.00%) | 4.00% |
Permanent differences | (2.00%) | (2.00%) |
Impact in changes in tax law | 0.00% | 22.00% |
Change in valuation allowance | (18.00%) | (25.00%) |
Effective income tax rate | 0.00% | 33.00% |
Income Taxes - Schedule of the
Income Taxes - Schedule of the Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 31,473,506 | $ 29,622,135 |
Intangible assets | 863,400 | 1,278,900 |
Stock based expenses | 0 | 1,176,900 |
Accrued expense | 142,000 | 362,000 |
Deferred rent | 27,000 | 33,400 |
Allowance for doubtful accounts | 17,500 | 23,200 |
Other | 140,300 | 7,200 |
Subtotal | 32,663,706 | 32,503,735 |
Less valuation allowance | (32,663,706) | (32,503,735) |
Total | 0 | 0 |
Deferred tax liabilities: | ||
Intangible assets and property and equipment | 2,162,500 | 2,307,600 |
Other | 177,332 | 24,300 |
Total | 2,339,832 | 2,331,900 |
Total deferred tax liabilities | $ (2,339,832) | $ (2,331,900) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax Cuts and Jobs Act Of 2017, income tax expense (benefit) | $ (1,498,076) | |
Operating loss carryforwards | $ 89,272,000 | |
Income tax penalties and interest expense | $ 0 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Compensation Expense | ||
Stock based compensation | $ 915,469 | $ 1,279,807 |
Compensation cost related to non vested awards not yet recognized | $ 944,426 | |
Average remaining expense recognition period | 1 year 7 months | |
Award Information and Activity | ||
Number of options outstanding (in shares) | 264,246 | 264,246 |
Number of options exercisable (in shares) | 264,246 | |
Intrinsic value of options exercisable | $ 0 | |
Weighted average exercise price (in usd per share) | $ 2.84 | |
Weighted average remaining contractual term | 2 years 1 month 5 days | |
Granted in period | 0 | 0 |
Expected dividend yield | 0.00% | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option and restricted stock unit vesting period | 3 years | |
Award Information and Activity | ||
Expected forfeiture rate | 0.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Grants (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 264,246 | 264,246 |
RSUs Outstanding (in shares) | 1,571,864 | |
Options and RSUs Exercised (in shares) | 4,372,668 | |
Available Shares (in shares) | 2,137,073 | |
Total (in shares) | 8,345,851 | |
2017 ECP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 0 | |
RSUs Outstanding (in shares) | 733,500 | |
Options and RSUs Exercised (in shares) | 41,664 | |
Available Shares (in shares) | 1,524,836 | |
Total (in shares) | 2,300,000 | |
2010 ECP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 250,498 | |
RSUs Outstanding (in shares) | 838,364 | |
Options and RSUs Exercised (in shares) | 3,380,919 | |
Available Shares (in shares) | 612,237 | |
Total (in shares) | 5,082,018 | |
2005 LTIP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 13,748 | |
RSUs Outstanding (in shares) | 0 | |
Options and RSUs Exercised (in shares) | 950,085 | |
Available Shares (in shares) | 0 | |
Total (in shares) | 963,833 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||
Outstanding, beginning of year (in shares) | 264,246 | |
Granted (in shares) | 0 | 0 |
Forfeited, expired or cancelled (in shares) | 0 | |
Exercised (in shares) | 0 | |
Outstanding, end of year (in shares) | 264,246 | 264,246 |
Exercisable, end of year (in shares) | 264,246 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of year (in usd per share) | $ 2.84 | |
Granted (in usd per share) | 0 | |
Forfeited, expired or cancelled (in usd per share) | 0 | |
Exercised (in usd per share) | 0 | |
Outstanding, end of year (in usd per share) | 2.84 | $ 2.84 |
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, 2018$ / sharesshares | |
Restricted Stock | |
Outstanding, end of year (in shares) | 1,571,864 |
Restricted Stock | |
Restricted Stock | |
Outstanding, beginning of year (in shares) | 1,071,538 |
Granted (in shares) | 1,664,266 |
Exercised (in shares) | 641,843 |
Forfeited (in shares) | 522,097 |
Outstanding, end of year (in shares) | 1,571,864 |
Weighted Average Fair Value | |
Outstanding, beginning of year (in usd per share) | $ / shares | $ 1.84 |
Granted (in usd per share) | $ / shares | 0.76 |
Exercised (in usd per share) | $ / shares | 2.26 |
Forfeited (in usd per share) | $ / shares | 1.04 |
Outstanding, end of year (in usd per share) | $ / shares | $ 0.79 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Loss from discontinued operations | $ 0 | $ (1,109) |
Retirement Plan Costs (Details)
Retirement Plan Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | ||
Maximum annual contribution per employee, percent | 4.00% | |
Employer matching contribution amount | $ 222,083 | $ 255,366 |
Leases (Details)
Leases (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)ft² | Jun. 30, 2017USD ($)ft² | Feb. 28, 2017USD ($) | Apr. 30, 2015USD ($)ft² | |
Leases [Abstract] | |||||
Operating leases rent expense | $ 411,135 | $ 431,949 | |||
Operating Lease Payments | |||||
2019 | 477,319 | ||||
2020 | 405,606 | ||||
2021 | 242,558 | ||||
2022 | 163,284 | ||||
Total | 1,288,767 | ||||
Operating Leased Assets [Line Items] | |||||
Depreciation expense on assets under capital lease | 198,914 | 173,097 | |||
Capital Leases, Future Minimum Payments, Net Present Value [Abstract] | |||||
2019 | 213,879 | ||||
2020 | 82,405 | ||||
Total payments under capital lease obligations | 296,284 | ||||
Less amount representing interest | (16,546) | ||||
Present value of capital lease obligations | 279,738 | ||||
Current portion of capital lease obligations | (198,769) | (209,940) | |||
Capital leases, less current portion | 80,969 | $ 281,470 | |||
Office space lease | |||||
Operating Leased Assets [Line Items] | |||||
Leasing arrangement contract term | 5 years | 5 years | |||
Property square footage | ft² | 15,717 | 4,801 | 12,245 | ||
Total amount of lease | $ 95,000 | $ 216,000 | $ 171,000 | ||
Annual lease payment increase, percentage | 3.00% | 2.00% | |||
Computer Equipment Lease | |||||
Operating Lease Payments | |||||
Total | $ 516,000 | ||||
Operating Leased Assets [Line Items] | |||||
Leasing arrangement contract term | 3 years | ||||
Total amount of lease | $ 173,000 | ||||
Equipment | |||||
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract] | |||||
Equipment | 707,264 | 707,264 | |||
Less accumulated depreciation | (441,084) | (242,169) | |||
Equipment, net | $ 266,180 | $ 465,095 | |||
NetSeer | Assets Held under Capital Leases | |||||
Operating Leased Assets [Line Items] | |||||
Acquired capital lease | $ 88,575 |
NetSeer Acquisition - Narrative
NetSeer Acquisition - Narrative (Details) - USD ($) | Feb. 06, 2017 | Dec. 31, 2017 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 9,853,342 | $ 9,853,342 | |
Acquisition related costs | $ 500,000 | ||
NetSeer | |||
Business Acquisition [Line Items] | |||
Shares issued in asset purchase agreement (in shares) | 3,529,000 | ||
Shares deposited into escrow (in shares) | 529,350 | ||
Goodwill | $ 4,013,034 | ||
Accounts receivable | 2,292,485 | ||
Intangible assets | 4,360,000 | ||
Revenue of acquired entity since acquisition date | $ 15,800,000 | ||
NetSeer | Selling, General and Administrative Expenses | |||
Business Acquisition [Line Items] | |||
Acquisition related costs | $ 350,000 |
NetSeer Acquisition - Schedule
NetSeer Acquisition - Schedule of Assets and Liabilities Acquired (Details) - USD ($) | Feb. 06, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value of assets acquired: | |||
Goodwill | $ (9,853,342) | $ (9,853,342) | |
NetSeer | |||
Business Acquisition [Line Items] | |||
Total consideration paid in common stock (with marketability discount applied) | $ 4,459,244 | ||
Fair value of assets acquired: | |||
Accounts receivable, net | (2,292,485) | ||
Prepaid expenses and other current assets | (236,163) | ||
Property and equipment, net | (119,101) | ||
Goodwill | (4,013,034) | ||
Intangible assets | (4,360,000) | ||
Fair value of liabilities assumed: | |||
Accounts payable | 3,579,787 | ||
Accrued expenses and other current liabilities | 1,152,789 | ||
Other long-term liabilities | 49,149 | ||
Debt | 2,015,577 | ||
Cash received in acquisition | $ 235,763 |
Related Party Transactions (Det
Related Party Transactions (Details) | Nov. 02, 2018USD ($) | Dec. 31, 2018USD ($)director | Dec. 31, 2017USD ($) | Nov. 01, 2018 |
Related Party Transaction [Line Items] | ||||
Number of directors with partial ownership in affiliated entity | director | 2 | |||
First Orion Corp. | ||||
Related Party Transaction [Line Items] | ||||
Revenue received from related party | $ 31,500 | $ 117,385 | ||
Funding From Directors | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amount | $ 250,000 | |||
Funding From Directors | Director | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amount | $ 62,500 | |||
Line of Credit | ||||
Related Party Transaction [Line Items] | ||||
Stated interest rate | 10.00% | 10.00% |
ConversionPoint Merger (Details
ConversionPoint Merger (Details) | Nov. 02, 2018USD ($)$ / shares | Nov. 01, 2018USD ($) | Dec. 31, 2018USD ($) |
Convertible Subordinated Debt | Subordinated Promissory Note | |||
Restructuring Cost and Reserve [Line Items] | |||
Conversion price | $ / shares | $ 0.44 | ||
Shares pursuant to conversion to shares issued and outstanding, percentage | 0.1999 | ||
Convertible Subordinated Debt | Subordinated Promissory Note, Merger Termination | |||
Restructuring Cost and Reserve [Line Items] | |||
Conversion price | $ / shares | $ 0.35 | ||
Line of Credit | |||
Restructuring Cost and Reserve [Line Items] | |||
Stated interest rate | 10.00% | 10.00% | |
Conversion Point Holdings Inc | |||
Restructuring Cost and Reserve [Line Items] | |||
Face amount | $ 36,000,000 | ||
Conversion Point Holdings Inc | Line of Credit | |||
Restructuring Cost and Reserve [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 2,000,000 | $ 2,000,000 | |
Proceeds from lines of credit | $ 1,000,000 | $ 1,000,000 | |
Merger With ConversionPoint Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Merger Agreement, consideration price per share | $ / shares | $ 0.45 | ||
Merger Agreement, consideration shares per share | 0.18877 | ||
Termination fee | $ 2,800,000 | ||
Merger With ConversionPoint Technologies | Conversion Point Holdings Inc | |||
Restructuring Cost and Reserve [Line Items] | |||
Merger Agreement, consideration shares per share | 0.9840 | ||
Merger Agreement, consideration shares per option | 0.2370 | ||
Termination fee | $ 2,800,000 |
Subsequent Event (Details)
Subsequent Event (Details) | Mar. 07, 2019USD ($) | Mar. 01, 2019USD ($)sharesaccredited_investorday$ / shares | Feb. 01, 2019USD ($) | Jan. 31, 2019USD ($) | Oct. 11, 2018USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Nov. 02, 2018 |
Subsequent Event [Line Items] | ||||||||
Proceeds from convertible promissory note | $ 1,000,000 | $ 0 | ||||||
Common stock shares authorized (in shares) | shares | 40,000,000 | 40,000,000 | ||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from convertible promissory note | $ 1,200,000 | |||||||
Common stock shares authorized (in shares) | shares | 60,000,000 | |||||||
Convertible Debt | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Face amount | $ 1,440,000 | |||||||
Convertible Debt | Original Issue Discount Unsecured Subordinated Convertible Notes | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of accredited investors | accredited_investor | 3 | |||||||
Face amount | $ 1,440,000 | |||||||
Proceeds from convertible promissory note | $ 1,200,000 | |||||||
Stated interest rate | 15.00% | |||||||
Conversion price | $ / shares | $ 0.44 | |||||||
Number of equity instruments (in shares) | shares | 1,333,333 | |||||||
Discount of share price | 20.00% | |||||||
Threshold trading days | day | 10 | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Subsequent Event [Line Items] | ||||||||
Stated interest rate | 5.25% | |||||||
Revolving Credit Facility | Line of Credit | First Amendment to Amended And Restated Financing Agreement | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Eligible uninvoiced receivables sub limit | $ 2,500,000 | |||||||
Fee due upon termination | $ 80,000 | |||||||
Revolving Credit Facility | Line of Credit | Amended And Restated Financing Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Eligible uninvoiced receivables sub limit | $ 2,500,000 | |||||||
Fee due upon termination | $ 80,000 | |||||||
Revolving Credit Facility | Line of Credit | Amended And Restated Financing Agreement | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Fee due upon termination | $ 75,000 | |||||||
Merger With Conversion Point Technologies Amendment No 1 | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares approved for issuance (in shares) | shares | 3,272,728 | |||||||
Merger With ConversionPoint Technologies | ||||||||
Subsequent Event [Line Items] | ||||||||
Merger Agreement, consideration shares per share | 0.18877 | |||||||
Initial Conversion | Convertible Debt | Original Issue Discount Unsecured Subordinated Convertible Notes | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion price | $ / shares | $ 1.08 |