Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | SPYR, Inc. | |
Entity Central Index Key | 829,325 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 156,187,859 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 3,865,074 | $ 6,903,887 |
Accounts receivable, net | 22,018 | 7,701 |
Inventory | 10,228 | 12,957 |
Prepaid expenses | 82,021 | 55,533 |
Trading securities, at market value | 330,631 | 324,444 |
Total Current Assets | 4,309,972 | 7,304,522 |
Property and equipment, net | 237,290 | 274,886 |
Intangible assets, net | 18,606 | 21,307 |
Capitalized licensing rights, net | 267,500 | 80,000 |
Deposit on acquisition | 471,574 | |
Other assets | 22,299 | 22,299 |
TOTAL ASSETS | 5,327,241 | 7,703,014 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 183,028 | 104,871 |
Related party accounts payable | 7,506 | |
Total Current Liabilities | 183,028 | 112,377 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of September 30, 2016 and 2015; 20,000 Class E shares issued and outstanding as of September 30, 2016 and 2015 | 13 | 13 |
Common Stock, $0.0001 par value, 250,000,000 shares authorized 154,708,712 and 151,508,127 shares issued and outstanding as of September 30, 2016 and 2015 | 15,470 | 15,151 |
Additional paid-in capital | 32,798,442 | 31,269,822 |
Accumulated deficit | (27,669,712) | (23,694,349) |
Total Stockholders' Equity | 5,144,213 | 7,590,637 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 5,327,241 | 7,703,014 |
Class A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of September 30, 2016 and 2015; 20,000 Class E shares issued and outstanding as of September 30, 2016 and 2015 | 11 | 11 |
Total Stockholders' Equity | 11 | 11 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 11 | 11 |
Class E Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of September 30, 2016 and 2015; 20,000 Class E shares issued and outstanding as of September 30, 2016 and 2015 | 2 | 2 |
Total Stockholders' Equity | 2 | 2 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2 | $ 2 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 154,708,712 | 151,508,127 |
Common stock, shares outstanding | 154,708,712 | 151,508,127 |
Class A Preferred Stock [Member] | ||
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 107,636 | 107,636 |
Preferred stock, shares outstanding | 107,636 | 107,636 |
Class E Preferred Stock [Member] | ||
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 20,000 | 20,000 |
Preferred stock, shares outstanding | 20,000 | 20,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 431,242 | $ 450,547 | $ 1,137,974 | $ 1,223,675 |
Cost of sales | 131,210 | 155,083 | 323,830 | 358,248 |
Gross Margin | 300,032 | 295,464 | 814,144 | 865,427 |
Expenses | ||||
Labor and related expenses | 411,639 | 270,583 | 1,301,897 | 1,303,417 |
Rent | 98,938 | 101,327 | 295,169 | 242,504 |
Depreciation and amortization | 34,872 | 24,828 | 110,617 | 66,812 |
Professional fees | 952,222 | 166,474 | 1,493,006 | 2,288,397 |
Other general and administrative | 619,778 | 238,781 | 1,378,023 | 608,661 |
Total Operating Expenses | 2,117,449 | 801,993 | 4,578,712 | 4,509,791 |
Operating Loss | (1,817,417) | (506,529) | (3,764,568) | (3,644,364) |
Other Income (Expense) | ||||
Interest and dividend income | 4,442 | 5,712 | 14,257 | 16,699 |
Unrealized gain (loss) on trading securities | (210,877) | (227,554) | (295,270) | (1,314,931) |
Gain (loss) on sale of marketable securities | 302 | (485,928) | 74,712 | (971,257) |
Total Other Expense | (206,133) | (707,770) | (206,301) | (2,269,489) |
Loss from continuing operations | (2,023,550) | (1,214,299) | (3,970,869) | (5,913,853) |
Loss from discontinued operations | (377,222) | (4,494) | (603,309) | |
Net Loss | $ (2,023,550) | $ (1,591,521) | $ (3,975,363) | $ (6,517,162) |
Loss from continuing operations | ||||
Basic and Diluted earnings per share | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.04) |
Loss on discontinued operations | ||||
Basic and Diluted earnings per share | ||||
Net Loss | ||||
Basic and Diluted earnings per share | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.04) |
Weighted Average Common Shares | ||||
Basic and Diluted | 154,466,661 | 153,241,052 | 153,202,982 | 151,840,448 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) | Class A Preferred Stock [Member] | Class E Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance preferred stock, shares at Dec. 31, 2015 | 107,636 | 20,000 | ||||
Balance common stock, shares at Dec. 31, 2015 | 151,508,127 | 151,508,127 | ||||
Balance, value at Dec. 31, 2015 | $ 11 | $ 2 | $ 15,151 | $ 31,269,822 | $ (23,694,349) | $ 7,590,637 |
Fair value of common stock issued for employee compensation, shares | 1,443,987 | |||||
Fair value of common stock issued for employee compensation, value | $ 144 | 231,868 | 232,012 | |||
Fair value of common stock issued for professional fees, shares | 1,981,598 | |||||
Fair value of common stock issued for professional fees, value | $ 198 | 533,635 | 533,833 | |||
Common stock issued for cash, shares | 100,000 | |||||
Common stock issued for cash, value | $ 10 | 18,990 | 19,000 | |||
Fair value of options granted for acquisition option | 471,574 | 471,574 | ||||
Fair value of options granted to employees | 25,020 | 25,020 | ||||
Common stock cancelled upon employee resignation, shares | (325,000) | |||||
Common stock cancelled upon employee resignation, value | $ (33) | 33 | ||||
Vesting of shares of common stock issued for services | 225,917 | 225,917 | ||||
Vesting of shares of common stock issued to employees | 21,583 | 21,583 | ||||
Net loss | (3,975,363) | $ (3,975,363) | ||||
Balance preferred stock , shares at Sep. 30, 2016 | 107,636 | 20,000 | ||||
Balance common stock, shares at Sep. 30, 2016 | 154,708,712 | 154,708,712 | ||||
Balance, value at Sep. 30, 2016 | $ 11 | $ 2 | $ 15,470 | $ 32,798,442 | $ (27,669,712) | $ 5,144,213 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities: | ||
Net loss for the period | $ (3,975,363) | $ (6,517,162) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on discontinued operations | (4,494) | (603,309) |
Depreciation and amortization | 110,618 | 66,812 |
Fair value of vesting warrants and options | 25,020 | 16,564 |
Common stock issued for employee compensation | 253,595 | 879,183 |
Common stock issued for professional fees | 537,833 | 1,280,550 |
Vesting of shares of common stock issued for services | 225,917 | 47,850 |
Unrealized loss on trading securities | (295,270) | (1,314,931) |
(Gain) loss on sale of trading securities | 74,712 | (971,257) |
(Increase) decrease in accounts receivables | 14,317 | 2,614 |
Decrease in inventory | (2,729) | (3,414) |
(Increase) decrease in prepaid expenses | 26,488 | 553 |
Increase in other assets | 7,299 | |
Increase (decrease) in accounts payable and accrued liabilities | 78,157 | 84,702 |
Decrease in related party accounts payable | (7,506) | (270,000) |
Net Cash Used in Operating Activities from Continuing Operations | (2,564,753) | (1,529,056) |
Net Cash Used in Operating Activities from Discontinued Operations | (4,494) | (601,157) |
Net Cash Used in Operating Activities | (2,569,247) | (2,130,213) |
Cash Flows From Investing Activities: | ||
Purchase of licensing rights | 210,000 | |
Purchases of trading securities | 510,000 | |
Proceeds from sale of trading securities | 283,255 | 2,576,667 |
Purchase of property and equipment | 47,821 | 163,995 |
Purchase of intangible assets | 20,202 | |
Net Cash (Used in) Provided by Investing Activities | (484,566) | 2,392,470 |
Cash Flows From Financing Activities: | ||
Proceeds from sale of common stock | 15,000 | |
Net Cash Provided by Financing Activities | 15,000 | |
Net increase (decrease) in Cash | (3,038,813) | 262,257 |
Cash and cash equivalents at beginning of period | 6,903,887 | 6,994,180 |
Cash and cash equivalents at end of period | 3,865,074 | 7,256,437 |
Supplemental Disclosure of Interest and Income Taxes Paid: | ||
Interest paid during the period | ||
Income taxes paid during the period | ||
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Common stock options granted for acquisition option | 471,574 | |
Common stock issued for acquisition of Franklin Networks, Inc. | $ 1,700,000 |
Organization And Summary Of Sig
Organization And Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Organization And Summary Of Significant Accounting Policies | |
Organization and Summary of Significant Accounting Policies | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2015 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Organization The Company was incorporated as Conceptualistics, Inc. on January 6, 1988 in Delaware. Subsequent to its incorporation, the Company changed its name to Eat at Joe’s, Ltd. In February 2015, the Company changed its name to SPYR, Inc. and adopted a new ticker symbol “SPYR” effective March 12, 2015. Nature of Business The primary focus of SPYR, Inc. (the “Company”) is to act as a holding company and develop a portfolio of profitable subsidiaries, not limited by any particular industry or business. We currently own three operating subsidiaries, two in the digital technology industry and, one in the restaurant industry, each having their own particular focus. Through our wholly owned subsidiaries, SPYR APPS, LLC and SPYR APPS Oy, we operate our mobile games and applications business. The focus of the SPYR APPS subsidiaries is the development and publication of our own mobile games as well as the publication of games developed by third-party developers. Through our other wholly owned subsidiary, E.A.J.: PHL Airport, Inc., we own and operate the restaurant “Eat at Joe’s” ®, which is located in the Philadelphia International Airport and has been in operations since 1997. Principles of Consolidation The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, and SPYR APPS, Oy, a Finnish Limited Liability Company, and E.A.J.: PHL, Airport Inc., a Pennsylvania corporation. Intercompany accounts and transactions have been eliminated. Revenue Recognition The Company generates revenues from its wholly owned subsidiaries, which operate separate and distinct businesses. The following is a summary of our revenue recognition policies. Through our wholly owned subsidiary SPYR APPS, LLC, we develop, publish and co-publish mobile games, and then generate revenue through those games by way of advertising and in-app purchases. The Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured, which is typically after receipt of payment and delivery. Though our wholly owned subsidiary E.A.J.: PHL, Airport, Inc. we generate revenue from the sale of food and beverage products through our restaurant. Revenue from the restaurant is recognized upon sale to a customer and receipt of payment. Income Taxes The Company accounts for income taxes under the provisions of ASC 740 “Accounting for Income Taxes,” which requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and cause a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for fixed assets, intangible assets, amounts of potential liabilities and valuation of issuance of equity securities. Actual results could differ from those estimates. Earnings (Loss) Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. In computing diluted EPS, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. The basic and fully diluted shares for the three and nine months ended September 30, 2016 are the same because the inclusion of the potential shares (Non-vested Common – 83,333, Class A – 26,909,028, Class E – 163,415, Options – 11,250,000) would have had an anti-dilutive effect due to the Company generating a loss for the three and nine months ended September 30, 2016. The basic and fully diluted shares for the three and nine months ended September 30, 2015 are the same because the inclusion of the potential shares (Non-vested Common – 416,666, Class A – 26,909,028, Class E – 436,681, Warrants – 250,000) would have had an anti-dilutive effect due to the Company generating a loss for the three and nine months ended September 30, 2015. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Company's stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant, and is recognized as expense over the period which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, and accounts payable and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s trading securities are measured at fair value using level 1 fair values. Software Licensing Costs Software licensing publishing costs pertain to non-refundable payments made to independent gaming software developers pursuant to licensing agreements. The payments are intended to assist gaming software developers in the marketing and further development of two gaming software applications. Software licensing costs were $760,000 for the nine months ended September 30, 2016 and was reflected as part of Other General and Administrative Expenses on the accompanying consolidated statements of operations. There were no such costs in 2015. Capitalized Licensing Rights Capitalized licensing rights represent fees paid to intellectual property rights holders for use of their trademarks, copyrights, software, technology, music or other intellectual property or proprietary rights in the development of our products. Depending upon the agreement with the rights holder, we may obtain the right to use the intellectual property in multiple products over a number of years, or alternatively, for a single product. Significant management judgments and estimates are utilized in assessing the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional costs to be incurred. If revised forecasted or actual product sales are less than the originally forecasted amounts utilized in the initial recoverability analysis, the net realizable value may be lower than originally estimated in any given quarter, which could result in an impairment charge. Material differences may result in the amount and timing of expenses for any period if management makes different judgments or utilizes different estimates in evaluating these qualitative factors. As of December 31, 2015, the Company capitalized $80,000 as a result of the acquisition of licensing rights for two gaming applications. During the nine months ended September 30, 2016, the Company capitalized an additional $210,000 and amortized $22,500. As of September 30, 2016, the unamortized capitalized licensing rights amounted to $267,500. The Company estimates that the two gaming applications will have an estimated life ranging from two to five years, which approximates the term of the respective licenses. Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718) Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Trading Securities
Trading Securities | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Trading Securities | NOTE 2 – TRADING SECURITIES Trading securities are purchased with the intent of selling them in the short term. Trading securities are recorded at market value and the difference between market value and cost of the securities is recorded as an unrealized gain or loss in the statement of operations. Gains from the sales of such marketable securities will be utilized to fund payment of obligations and to provide working capital for operations and to finance future growth, including, but not limited to: conducting our ongoing business, conducting strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and research and development and implementation of the Company’s business plans generally. The Company’s securities investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value based on quoted market price (level 1) on the balance sheet in current assets, with the change in fair value during the period included in earnings. Investments in securities are summarized as follows: Year Fair Value at Purchases Proceeds from Gain on Unrealized Fair Value at 2016 $ 324,444 $ 510,000 $ (283,255 ) $ 74,712 $ (295,270 ) $ 330,631 Realized gains and losses are determined on the basis of specific identification. During the nine months ended September 30, 2016 and 2015, sales proceeds and gross realized gains and losses on trading securities were: September 30, 2016 September 30, 2015 Sales proceeds $ 283,255 $ 2,576,667 Gross realized (losses) $ — $ (971,257 ) Gross realized gains 74,712 — Gain (loss) on sale of trading securities $ 74,712 $ (971,257 ) The following table discloses the assets measured at fair value on a recurring basis and the methods used to determine fair value: Fair Value Measurements at Reporting Date Using Significant Quoted Prices Other Significant Fair Value at in Active Observable Unobservable September 30, 2016 Markets Inputs Inputs Trading securities $ 330,631 $ 330,631 $ — $ — Money market funds 36,255 36,255 — — Total $ 366,886 $ 366,886 $ — $ — Fair Value Measurements at Reporting Date Using Significant Quoted Prices Other Significant Fair Value at in Active Observable Unobservable December 31, 2015 Markets Inputs Inputs Trading securities $ 324,444 $ 324,444 $ — $ — Money market funds 332,706 332,706 — — Total $ 657,150 $ 657,150 $ — $ — Generally, for all trading securities and available-for-sale securities, fair value is determined by reference to quoted market prices (level 1). |
Property And Equipment
Property And Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: September 30, 2016 December 31, 2015 (Unaudited) Equipment $ 151,082 $ 131,821 Furniture & fixtures 115,503 86,943 Leasehold improvements 381,450 381,450 648,035 600,214 Less: accumulated depreciation and amortization (410,745 ) (325,328 ) Property and Equipment, Net $ 237,290 $ 274,886 Depreciation and amortization expense for the nine months ended September 30, 2016 and 2015 was $85,417 and $66,812, respectively. |
Deposit On Acquisition
Deposit On Acquisition | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Deposit on Acquisition | NOTE 4 – DEPOSIT ON ACQUISITION In January 2016, the Company started publishing an electronic game called Pocket Starships through an exclusive publishing agreement (the “Publishing Agreement”) with Spectacle Games Publishing (“Spectacle”). The exclusive Publishing Agreement runs for a term of five years, expiring on December 17, 2020. Spectacle is a California corporation, holding the exclusive rights to publish and market Pocket Starships, including the ability to sublicense these rights to other parties, pursuant to an agreement with MMOJoe UG. MMOJoe UG, a German limited liability company (“MMOJoe”) is the owner and developer of all intellectual property that relates or pertains to the real-time, cross-platform, massively multiplayer on-line electronic game know as Pocket Starships. In June 2016, the Company obtained an exclusive option to purchase all of MMOJoe’s assets including but not limited to all assets pertaining to Pocket Starships (the “Option”). Should the Company decide to exercise the Option, it will purchase MMOJoe for cash of $5,000,000 plus $10,000,000 worth of shares of the Company’s common stock, valued at the time of closing of the purchase. This exclusive Option is exercisable by the Company at any time, in the Company’s sole discretion, through December 31, 2020. In exchange for the Option, the Company granted MMOJoe stock options to purchase an aggregate of 3.75 million shares of the Company’s common stock. The stock options are fully vested, exercisable at a price per share of $1.00, $2.50 and $5.00 and will expire starting in December 31, 2017 through December 31, 2019. Total fair value of the options amounted to $471,574 using the Black-Scholes Option Pricing Model. The Company accounted for the entire fair value of $471,574 at grant date as a deposit on acquisition based upon the Company’s determination that the acquisition of MMOJoe will occur on or before June 30, 2017, otherwise, the amount will be reflected as an expense if the acquisition will not occur. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Equity Transactions | NOTE 5 – EQUITY TRANSACTIONS Common Stock: During the nine months ended September 30, 2016, the Company issued an aggregate of 1,443,987 shares of common stock to employees with a total fair value of $232,012 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $232,012 upon issuance. The shares issued were valued at the date of the respective agreements. During the nine months ended September 30, 2016, the Company issued an aggregate of 1,981,598 shares of restricted common stock to consultants with a total fair value of $533,833. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $533,833 upon issuance. The shares issued were valued at the date of the respective agreements. During the nine months ended September 30, 2016, the Company issued an aggregate of 100,000 shares of restricted common stock to consultants for cash of $15,000. The common shares had a fair value of $19,000 at the date of grant, and as a result, the Company reflected an expense of $4,000 upon issuance. The shares issued were valued at the date of the respective agreements. Common Stock with Vesting Terms: In August 2015, the Company granted and issued 100,000 shares of its restricted common stock to an employee pursuant to an employment agreement. The 100,000 shares vest over a period of one year with a fair value of $37,000 at the date of grant. In February 2015, the Company granted and issued 500,000 shares of its restricted common stock to a consultant pursuant to a consulting agreement. The 500,000 shares are forfeitable and are deemed earned upon completion of service over a period of twenty-four months. The Company recognizes the fair value of these shares as they vest. As of December 31, 2015, 270,833 of these shares had vested. During the nine months ended September 30, 2016, another 245,834 of these shares vested and as a result, the Company recognized compensation cost of $247,500. As of September 30, 2016, total unvested shares totaled 83,333 shares with unearned compensation costs of $54,350 which will be recognized in the remainder of fiscal year 2016 and in fiscal 2017. When calculating basic net income (loss) per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date. The following table summarizes common stock with vesting terms activity: Weighted Average Number of Grant Date Shares Fair Value Non-vested, December 31, 2015 329,167 $ 0.47 Granted — — Vested (245,834 ) 0..47 Forfeited — — Non-vested, September 30, 2016 83,333 $ 0.50 Options In June 2016, the Company granted options to purchase 3.75 million shares of common stock pursuant to the planned acquisition of MMOJoe (see Note 4). The stock options are fully vested, exercisable at a price per share of $1.00, $2.50 and $5.00 and will expire starting in December 31, 2017 through December 31, 2019. In August 2016, the Company granted an employee option to purchase a total of 7.5 million shares of common stock with an exercise price of $1.00, $2.50 and $5.00. The options are fully vested upon grant but are only exercisable in three tranches starting in January 2017, 2018 and 2019. These options will expire starting in December 2017 through December 2019. Total fair value of the options at grant date amounted to $200,575 computed using the Black-Scholes Option Pricing Model. The Company determined the appropriate treatment is to recognize the fair value of the options over the service period, which would be when the options are fully exercisable. During the period ended September 30, 2016, the Company recognized compensation expense of $25,020. As of September 30, 2016, future unamortized costs amounted to approximately $176,000. The following table summarizes common stock options activity: Weighted Average Options Exercise Price December 31, 2015 — $ — Granted 11,250,000 3.97 Exercised — — Forfeited — — Outstanding September 30, 2016 11,250,000 3.97 Exercisable, September 30, 2016 3,750,000 $ 3.97 The weighted average exercise prices, remaining lives for options granted, and exercisable as of September 30, 2016, were as follows: Outstanding Options Exercisable Options Options Weighted Weighted Exercise Price Life Average Exercise Average Exercise Per Share Shares (Years) Price Shares Price $ 1.00 1,500,000 1.42 - 1.5 $ 1.00 500,000 $ 1.00 $ 2.50 2,250,000 2.42 - 2.5 $ 2.50 750,000 $ 2.50 $ 5.00 7,500,000 3.42 - 3.5 $ 5.00 2,500,000 $ 5.00 11,250,000 $ 3.97 3,750,000 $ 3.97 At September 30, 2016, the Company’s closing stock price was $0.65 per share. As all outstanding options had an exercise price greater than $0.65 per share, the aggregate intrinsic value of the options outstanding at September 30, 2016 was $0. The table below represents the average assumptions used in valuing the stock options granted in fiscal 2016: Nine-Months Ended September 30, 2016 Expected life in years 0.71 – 3.5 Stock price volatility 132 % - 141% Risk free interest rate 0.64 % - 1.08% Expected dividends — Forfeiture rate — The assumptions used in the Black Scholes models referred to above are based upon the following data: (1) the contractual life of the underlying non-employee options is the expected life. The expected life of the employee option is estimated by considering the contractual term of the option, the vesting period of the option, the employees’ expected exercise behavior and the post-vesting employee turnover rate. (2) The expected stock price volatility was based upon the Company’s historical stock price over the expected term of the option. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying options. (4) The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future. (5) The expected forfeiture rate is based on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 6 – SEGMENT REPORTING The Company operated in one segment as of the beginning of 2015, but concurrent with the organization of SPYR APPS, LLC on March 24, 2015, it operates in two segments: Digital Media and Restaurant, which provide different products or services. Digital Media Segment Restaurant Segment - Revenue and expenses earned and charged between segments are eliminated in consolidation. Corporate expenses, interest income, interest expense, gains and losses on trading or marketable securities and income taxes are managed on a total company basis. Information related to these segments is as follows: REPORTABLE SEGMENTS NINE MONTHS ENDED SEPTEMBER 30, 2016 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 88,232 $ 1,049,742 $ — $ 1,137,974 Cost of sales — 323,830 — 323,830 General and administrative 1,522,486 703,359 2,242,250 4,468,095 Depreciation and amortization 22,986 52,165 35,466 110,617 Operating loss $ (1,457,240 ) $ (29,612 ) $ (2,277,716 ) $ (3,764,568 ) Current assets $ 78,950 $ 327,253 $ 3,903,769 $ 4,309,972 Property and equipment, net 6,096 44,559 186,635 237,290 Intangible assets — — 18,606 18,606 Deposit on acquisition 471,574 — — 471,574 Other non-current assets 267,500 16,610 5,689 289,799 Total assets $ 824,120 $ 388,422 $ 4,114,699 $ 5,327,241 REPORTABLE SEGMENTS (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 6,040 $ 1,217,635 $ — $ 1,223,675 Cost of sales — 358,248 — 358,248 General and administrative 237,950 676,125 3,528,904 4,442,979 Depreciation and amortization — 55,720 11,092 66,812 Operating income (loss) $ (231,910 ) $ 127,542 $ (3,539,996 ) $ (3,644,364 ) Current assets $ 28,374 $ 271,126 $ 8,185,228 $ 8,484,728 Property and equipment, net 6,715 115,445 129,826 251,986 Intangible assets — — 25,202 25,202 Other non-current assets — 16,610 5,689 22,299 Total assets $ 35,089 $ 403,181 $ 8,345,945 $ 8,784,215 REPORTABLE SEGMENTS THREE MONTHS ENDED SEPTEMBER 30, 2016 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 23,313 407,929 $ — $ 431,242 Cost of sales — 131,210 — 131,210 General and administrative 698,900 235,192 1,148,485 2,082,577 Depreciation and amortization 7,693 15,164 12,015 34,872 Operating income (loss) $ (683,280 ) $ 26,363 $ (1,160,500 ) $ (1,817,417 ) REPORTABLE SEGMENTS THREE MONTHS ENDED SEPTEMBER 30, 2015 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 6,040 $ 444,507 $ — $ 450,547 Cost of sales — 155,083 — 155,083 General and administrative 143,379 254,207 379,579 777,165 Depreciation and amortization — 19,146 5,682 24,828 Operating income (loss) $ (137,339 ) $ 16,071 $ (385,261 ) $ (506,529 ) |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Discontinued Operations | NOTE 7 – DISCONTINUED OPERATIONS On February 23, 2015 the Company entered into an agreement whereby, the Company issued an aggregate of 2.5 million shares of its restricted common stock valued at $1,700,000, in exchange for all of the issued and outstanding shares of Franklin Networks, Inc., a Tennessee corporation (“Franklin”), an internet company that began operations in September 2014. The acquisition of Franklin had been accounted for as a purchase and the operations of Franklin have been consolidated since the date of the acquisition. The $1.7 million purchase price was allocated based upon the fair value of the acquired assets which consisted of intangible assets of $671,131, deferred tax liability of $117,741 and goodwill of $1,146,610, as determined by management with the assistance of an independent valuation firm. On December 31, 2015, the Company and the former owners of Franklin agreed to unwind the agreement and return the original consideration exchanged in the contract. Pursuant to ASC 2014-08, Reporting of Discontinued Operations, the Company reported the gain (loss) from operations as a gain (loss) from discontinued operations in the accompanying statements of operations since the Company considered its decision to rescind the Franklin acquisition as a strategic shift that has a major effect in the Company’s operations and financial results. During the nine months ended September 30, 2016, the Company incurred additional expenses of $4,494 related to the winding-up of Franklin. During the nine months ended September 30, 2015, Franklin generated a loss from operations of $603,309. The following table provides additional detail of these losses which are reflected as a loss on discontinued operations. September 30, 2016 September 30, 2015 Revenues $ — $ 386,513 General and administrative 4,494 989,822 Loss from discontinued operations $ (4,494 ) $ (603,309 ) |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 – COMMITMENTS AND CONTINGENCIES Legal Proceedings We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. A material legal proceeding that is currently pending is as follows: On October 14, 2015, the Company was named as a defendant in a case filed in the United States District Court for the District of Delaware case: Zakeni Limited v. SPYR, Inc., f/k/a Eat at Joe’s., Ltd. The suit relates to the Company’s issuance of two convertible debentures in the aggregate principal amount of $1,500,000 in 1998. The plaintiff is seeking payment or conversion of said convertible debentures together with accrued interest and unspecified damages. The Company believes the claim is not a valid debt and is vigorously defending this lawsuit. On December 4, 2015, the Company filed a motion to dismiss the suit based on the statute of limitations. In evaluating a motion to dismiss, the Court is only allowed to view the allegations set forth in the plaintiff’s complaint and documents referenced therein, must assume that those allegations are true, and must construe all evidence contained in the referenced documents in a light most favorable to the plaintiff. On August 24, 2016, under this standard, the Court determined that the legal requirements to grant the motion to dismiss had not been fully satisfied and denied the Company’s Motion to Dismiss. Accordingly, no final determinations regarding liability have been made, the case will proceed to be litigated in the normal course, and, if the Company elects, it will have the ability to again present its arguments for dismissal prior to trial through a motion for summary judgment, which will allow for a determination to be made based on a legal standard that is slightly less favorable to the plaintiff. If that motion is denied, the Company will still have the opportunity to present all of its arguments and defenses at trial, at which Zakeni will have to prove its case by a preponderance of the evidence. The case is scheduled for trial on January 8, 2018. Based upon available information at this very early stage of litigation, it is still the opinion of management and belief of in-house counsel that the Company will obtain a favorable ruling and no amount will be awarded to the plaintiff in this action. Accordingly, Management believes the likelihood of material loss resulting from this lawsuit to be remote. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS Subsequent to September 30, 2016, the Company issued an aggregate of 1,479,147 shares of common stock to consultants and employees with a total fair value of $872,918 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. |
Organization And Summary Of S16
Organization And Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization And Summary Of Significant Accounting Policies Policies | |
Interim Financial Statements | Interim Financial Statements The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2015 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Organization | Organization The Company was incorporated as Conceptualistics, Inc. on January 6, 1988 in Delaware. Subsequent to its incorporation, the Company changed its name to Eat at Joe’s, Ltd. In February 2015, the Company changed its name to SPYR, Inc. and adopted a new ticker symbol “SPYR” effective March 12, 2015. |
Nature of Business | Nature of Business The primary focus of SPYR, Inc. (the “Company”) is to act as a holding company and develop a portfolio of profitable subsidiaries, not limited by any particular industry or business. We currently own three operating subsidiaries, two in the digital technology industry and, one in the restaurant industry, each having their own particular focus. Through our wholly owned subsidiaries, SPYR APPS, LLC and SPYR APPS Oy, we operate our mobile games and applications business. The focus of the SPYR APPS subsidiaries is the development and publication of our own mobile games as well as the publication of games developed by third-party developers. Through our other wholly owned subsidiary, E.A.J.: PHL Airport, Inc., we own and operate the restaurant “Eat at Joe’s” ®, which is located in the Philadelphia International Airport and has been in operations since 1997. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, and SPYR APPS, Oy, a Finnish Limited Liability Company, and E.A.J.: PHL, Airport Inc., a Pennsylvania corporation. Intercompany accounts and transactions have been eliminated. |
Revenue Recognition | Revenue Recognition The Company generates revenues from its wholly owned subsidiaries, which operate separate and distinct businesses. The following is a summary of our revenue recognition policies. Through our wholly owned subsidiary SPYR APPS, LLC, we develop, publish and co-publish mobile games, and then generate revenue through those games by way of advertising and in-app purchases. The Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured, which is typically after receipt of payment and delivery. Though our wholly owned subsidiary E.A.J.: PHL, Airport, Inc. we generate revenue from the sale of food and beverage products through our restaurant. Revenue from the restaurant is recognized upon sale to a customer and receipt of payment. |
Income Taxes | Income Taxes The Company accounts for income taxes under the provisions of ASC 740 “Accounting for Income Taxes,” which requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and cause a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for fixed assets, intangible assets, amounts of potential liabilities and valuation of issuance of equity securities. Actual results could differ from those estimates. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. In computing diluted EPS, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. The basic and fully diluted shares for the three and nine months ended September 30, 2016 are the same because the inclusion of the potential shares (Non-vested Common – 83,333, Class A – 26,909,028, Class E – 163,415, Options – 11,250,000) would have had an anti-dilutive effect due to the Company generating a loss for the three and nine months ended September 30, 2016. The basic and fully diluted shares for the three and nine months ended September 30, 2015 are the same because the inclusion of the potential shares (Non-vested Common – 416,666, Class A – 26,909,028, Class E – 436,681, Warrants – 250,000) would have had an anti-dilutive effect due to the Company generating a loss for the three and nine months ended September 30, 2015. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Company's stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant, and is recognized as expense over the period which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, and accounts payable and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s trading securities are measured at fair value using level 1 fair values. |
Software Licensing Costs | Software Licensing Costs Software licensing publishing costs pertain to non-refundable payments made to independent gaming software developers pursuant to licensing agreements. The payments are intended to assist gaming software developers in the marketing and further development of two gaming software applications. Software licensing costs were $760,000 for the nine months ended September 30, 2016 and was reflected as part of Other General and Administrative Expenses on the accompanying consolidated statements of operations. There were no such costs in 2015. |
Capitalized Licensing Rights | Capitalized Licensing Rights Capitalized licensing rights represent fees paid to intellectual property rights holders for use of their trademarks, copyrights, software, technology, music or other intellectual property or proprietary rights in the development of our products. Depending upon the agreement with the rights holder, we may obtain the right to use the intellectual property in multiple products over a number of years, or alternatively, for a single product. Significant management judgments and estimates are utilized in assessing the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional costs to be incurred. If revised forecasted or actual product sales are less than the originally forecasted amounts utilized in the initial recoverability analysis, the net realizable value may be lower than originally estimated in any given quarter, which could result in an impairment charge. Material differences may result in the amount and timing of expenses for any period if management makes different judgments or utilizes different estimates in evaluating these qualitative factors. As of December 31, 2015, the Company capitalized $80,000 as a result of the acquisition of licensing rights for two gaming applications. During the nine months ended September 30, 2016, the Company capitalized an additional $210,000 and amortized $22,500. As of September 30, 2016, the unamortized capitalized licensing rights amounted to $267,500. The Company estimates that the two gaming applications will have an estimated life ranging from two to five years, which approximates the term of the respective licenses. |
Recent Accounting Standards | Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718) Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Trading Securities (Tables)
Trading Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Trading Securities Tables | |
Schedule of Change in Investment in Securities | Investments in securities are summarized as follows: Year Fair Value at Purchases Proceeds from Gain on Unrealized Fair Value at 2016 $ 324,444 $ 510,000 $ (283,255 ) $ 74,712 $ (295,270 ) $ 330,631 |
Schedule of Gross Realized Gain\Loss on Securities | Realized gains and losses are determined on the basis of specific identification. During the nine months ended September 30, 2016 and 2015, sales proceeds and gross realized gains and losses on trading securities were: September 30, 2016 September 30, 2015 Sales proceeds $ 283,255 $ 2,576,667 Gross realized (losses) $ — $ (971,257 ) Gross realized gains 74,712 — Gain (loss) on sale of trading securities $ 74,712 $ (971,257 ) |
Schedule of Fair Value of Assets Measured on Recurring Basis | The following table discloses the assets measured at fair value on a recurring basis and the methods used to determine fair value: Fair Value Measurements at Reporting Date Using Significant Quoted Prices Other Significant Fair Value at in Active Observable Unobservable September 30, 2016 Markets Inputs Inputs Trading securities $ 330,631 $ 330,631 $ — $ — Money market funds 36,255 36,255 — — Total $ 366,886 $ 366,886 $ — $ — Fair Value Measurements at Reporting Date Using Significant Quoted Prices Other Significant Fair Value at in Active Observable Unobservable December 31, 2015 Markets Inputs Inputs Trading securities $ 324,444 $ 324,444 $ — $ — Money market funds 332,706 332,706 — — Total $ 657,150 $ 657,150 $ — $ — |
Property And Equipment (Tables)
Property And Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: September 30, 2016 December 31, 2015 (Unaudited) Equipment $ 151,082 $ 131,821 Furniture & fixtures 115,503 86,943 Leasehold improvements 381,450 381,450 648,035 600,214 Less: accumulated depreciation and amortization (410,745 ) (325,328 ) Property and Equipment, Net $ 237,290 $ 274,886 |
Equity Transactions (Tables)
Equity Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity Transactions Tables | |
Summarizes Common Stock with Vesting Terms Activity | The following table summarizes common stock with vesting terms activity: Weighted Average Number of Grant Date Shares Fair Value Non-vested, December 31, 2015 329,167 $ 0.47 Granted — — Vested (245,834 ) 0..47 Forfeited — — Non-vested, September 30, 2016 83,333 $ 0.50 |
Summarizes Common Stock Options Activity | The following table summarizes common stock options activity: Weighted Average Options Exercise Price December 31, 2015 — $ — Granted 11,250,000 3.97 Exercised — — Forfeited — — Outstanding September 30, 2016 11,250,000 3.97 Exercisable, September 30, 2016 3,750,000 $ 3.97 |
Schedule of Weighted Average Excerise Price Range | The weighted average exercise prices, remaining lives for options granted, and exercisable as of September 30, 2016, were as follows: Outstanding Options Exercisable Options Options Weighted Weighted Exercise Price Life Average Exercise Average Exercise Per Share Shares (Years) Price Shares Price $ 1.00 1,500,000 1.42 - 1.5 $ 1.00 500,000 $ 1.00 $ 2.50 2,250,000 2.42 - 2.5 $ 2.50 750,000 $ 2.50 $ 5.00 7,500,000 3.42 - 3.5 $ 5.00 2,500,000 $ 5.00 11,250,000 $ 3.97 3,750,000 $ 3.97 |
Schedule of Assumptions Used in Valuing the Stock Options | The table below represents the average assumptions used in valuing the stock options granted in fiscal 2016: Nine-Months Ended September 30, 2016 Expected life in years 0.71 – 3.5 Stock price volatility 132 % - 141% Risk free interest rate 0.64 % - 1.08% Expected dividends — Forfeiture rate — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Information related to these segments is as follows: REPORTABLE SEGMENTS NINE MONTHS ENDED SEPTEMBER 30, 2016 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 88,232 $ 1,049,742 $ — $ 1,137,974 Cost of sales — 323,830 — 323,830 General and administrative 1,522,486 703,359 2,242,250 4,468,095 Depreciation and amortization 22,986 52,165 35,466 110,617 Operating loss $ (1,457,240 ) $ (29,612 ) $ (2,277,716 ) $ (3,764,568 ) Current assets $ 78,950 $ 327,253 $ 3,903,769 $ 4,309,972 Property and equipment, net 6,096 44,559 186,635 237,290 Intangible assets — — 18,606 18,606 Deposit on acquisition 471,574 — — 471,574 Other non-current assets 267,500 16,610 5,689 289,799 Total assets $ 824,120 $ 388,422 $ 4,114,699 $ 5,327,241 REPORTABLE SEGMENTS (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 6,040 $ 1,217,635 $ — $ 1,223,675 Cost of sales — 358,248 — 358,248 General and administrative 237,950 676,125 3,528,904 4,442,979 Depreciation and amortization — 55,720 11,092 66,812 Operating income (loss) $ (231,910 ) $ 127,542 $ (3,539,996 ) $ (3,644,364 ) Current assets $ 28,374 $ 271,126 $ 8,185,228 $ 8,484,728 Property and equipment, net 6,715 115,445 129,826 251,986 Intangible assets — — 25,202 25,202 Other non-current assets — 16,610 5,689 22,299 Total assets $ 35,089 $ 403,181 $ 8,345,945 $ 8,784,215 REPORTABLE SEGMENTS THREE MONTHS ENDED SEPTEMBER 30, 2016 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 23,313 407,929 $ — $ 431,242 Cost of sales — 131,210 — 131,210 General and administrative 698,900 235,192 1,148,485 2,082,577 Depreciation and amortization 7,693 15,164 12,015 34,872 Operating income (loss) $ (683,280 ) $ 26,363 $ (1,160,500 ) $ (1,817,417 ) REPORTABLE SEGMENTS THREE MONTHS ENDED SEPTEMBER 30, 2015 (Unaudited) Digital Media Restaurants Corporate Consolidated Revenues $ 6,040 $ 444,507 $ — $ 450,547 Cost of sales — 155,083 — 155,083 General and administrative 143,379 254,207 379,579 777,165 Depreciation and amortization — 19,146 5,682 24,828 Operating income (loss) $ (137,339 ) $ 16,071 $ (385,261 ) $ (506,529 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations Tables | |
Schedule of Loss on Discontinued Operations | The following table provides additional detail of these losses which are reflected as a loss on discontinued operations. September 30, 2016 September 30, 2015 Revenues $ — $ 386,513 General and administrative 4,494 989,822 Loss from discontinued operations $ (4,494 ) $ (603,309 ) |
Trading Securities (Schedule Of
Trading Securities (Schedule Of Change In Investment In Securities) (Details) - Trading Securities [Member] | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair Value at Beginning of Year | $ 324,444 |
Purchases | 510,000 |
Proceeds from Sale | (283,255) |
Gain on Sale | 74,712 |
Unrealized Loss | (295,270) |
Fair Value at September 30, 2016 | $ 330,631 |
Trading Securities (Schedule 23
Trading Securities (Schedule Of Gross Realized Gain/Loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Trading Securities Schedule Of Gross Realized Gainloss Details | ||||
Sales proceeds | $ 283,255 | $ 2,576,667 | ||
Gross realized (losses) | 971,257 | |||
Gross realized gains | 74,712 | |||
Gain (loss) on sale of trading securities | $ 302 | $ (485,928) | $ 74,712 | $ (971,257) |
Trading Securities (Schedule 24
Trading Securities (Schedule Of Fair Value Of Assets) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | $ 330,631 | $ 324,444 |
Fair Value Measurements At Reporting Date Using Quoted Prices in Active Markets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 330,631 | 324,444 |
Money market funds | 36,255 | 332,706 |
Total | 366,886 | 657,150 |
Fair Value Measurements At Reporting Date Using Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | ||
Money market funds | ||
Total | ||
Fair Value Measurements At Reporting Date Using Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | ||
Money market funds | ||
Total | ||
Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 330,631 | 324,444 |
Money market funds | 36,255 | 332,706 |
Total | $ 366,886 | $ 657,150 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Property And Equipment Details | |||
Equipment | $ 151,082 | $ 131,821 | |
Furniture & fixtures | 115,503 | 86,943 | |
Leasehold improvements | 381,450 | 381,450 | |
Property and Equipment, Gross | 648,035 | 600,214 | |
Less: accumulated depreciation and amortization | 410,745 | 325,328 | |
Property and Equipment, Net | $ 237,290 | $ 274,886 | $ 251,986 |
Equity Transactions (Summarizes
Equity Transactions (Summarizes Common Stock With Vesting Terms Activity) (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Non-vested, December 31, 2015 | 329,167 | |
Granted | ||
Vested | (245,834) | (270,833) |
Forfeited | ||
Non-vested, September 30, 2016 | 83,333 | 329,167 |
Weighted Average Grant Date Fair Value | ||
Non-vested, December 31, 2015 | $ 0.47 | |
Granted | ||
Vested | 0.47 | |
Forfeited | ||
Non-vested, September 30, 2016 | $ 0.50 | $ 0.47 |
Equity Transactions (Summariz27
Equity Transactions (Summarizes Common Stock Options Activity) (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Options | |
Outstanding, December 31, 2015 | shares | |
Granted | shares | 11,250,000 |
Exercised | shares | |
Forfeited | shares | |
Outstanding, September 30, 2016 | shares | 11,250,000 |
Exercisable, September 30, 2016 | shares | 3,750,000 |
Weighted Average Exercise Price | |
Outstanding, December 31, 2015 | $ / shares | |
Granted | $ / shares | 3.97 |
Exercised | $ / shares | |
Forfeited | $ / shares | |
Outstanding, September 30, 2016 | $ / shares | 3.97 |
Exercisable, September 30, 2016 | $ / shares | $ 3.97 |
Equity Transactions (Schedule O
Equity Transactions (Schedule Of Weighted Average Excerise Price Range) (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Shares | shares | 11,250,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 3.97 |
Exercisable Options, Shares | shares | 3,750,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 3.97 |
Stock Options [Member] | Exercise Price Per Share $1.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Shares | shares | 1,500,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1 |
Exercisable Options, Shares | shares | 500,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 1 |
Stock Options [Member] | Exercise Price Per Share $1.00 [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 1 year 5 months 1 day |
Stock Options [Member] | Exercise Price Per Share $1.00 [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 1 year 6 months |
Stock Options [Member] | Exercise Price Per Share $2.50 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Shares | shares | 2,250,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 2.50 |
Exercisable Options, Shares | shares | 750,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 2.50 |
Stock Options [Member] | Exercise Price Per Share $2.50 [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 2 years 5 months 1 day |
Stock Options [Member] | Exercise Price Per Share $2.50 [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 2 years 6 months |
Stock Options [Member] | Exercise Price Per Share $5.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Shares | shares | 7,500,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 5 |
Exercisable Options, Shares | shares | 2,500,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 5 |
Stock Options [Member] | Exercise Price Per Share $5.00 [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 3 years 5 months 1 day |
Stock Options [Member] | Exercise Price Per Share $5.00 [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Options, Life (Years) | 3 years 6 months |
Equity Transactions (Schedule29
Equity Transactions (Schedule Of Assumptions Used In Valuing The Stock Options) (Details) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2016 | |
Assumptions - Black Scholes Model: | |
Expected dividends | |
Forfeiture rate | |
Minimum [Member] | |
Assumptions - Black Scholes Model: | |
Expected life in years | 8 months 6 days |
Stock price volatility | 132.00% |
Risk free interest rate | 0.64% |
Maximum [Member] | |
Assumptions - Black Scholes Model: | |
Expected life in years | 3 years 6 months |
Stock price volatility | 141.00% |
Risk free interest rate | 1.08% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Revenues | $ 431,242 | $ 450,547 | $ 1,137,974 | $ 1,223,675 | |
Cost of sales | 131,210 | 155,083 | 323,830 | 358,248 | |
General and administrative | 2,082,577 | 777,165 | 4,468,095 | 4,442,979 | |
Depreciation and amortization | 34,872 | 24,828 | 110,617 | 66,812 | |
Operating income (loss) | (1,817,417) | (506,529) | (3,764,568) | (3,644,364) | |
Current assets | 4,309,972 | 8,484,728 | 4,309,972 | 8,484,728 | $ 7,304,522 |
Property and equipment, net | 237,290 | 251,986 | 237,290 | 251,986 | 274,886 |
Intangible assets | 18,606 | 25,202 | 18,606 | 25,202 | 21,307 |
Deposit on acquisition | 471,574 | 471,574 | |||
Other non-current assets | 289,799 | 22,299 | 289,799 | 22,299 | |
Total assets | 5,327,241 | 8,784,215 | 5,327,241 | 8,784,215 | $ 7,703,014 |
Operating Segments [Member] | Digital Media [Member] | |||||
Revenues | 23,313 | 6,040 | 88,232 | 6,040 | |
Cost of sales | |||||
General and administrative | 698,900 | 143,379 | 1,522,486 | 237,950 | |
Depreciation and amortization | 7,693 | 22,986 | |||
Operating income (loss) | (683,280) | (137,339) | (1,457,240) | (231,910) | |
Current assets | 78,950 | 28,374 | 78,950 | 28,374 | |
Property and equipment, net | 6,096 | 6,715 | 6,096 | 6,715 | |
Intangible assets | |||||
Deposit on acquisition | 471,574 | 471,574 | |||
Other non-current assets | 267,500 | 267,500 | |||
Total assets | 824,120 | 35,089 | 824,120 | 35,089 | |
Operating Segments [Member] | Restaurants [Member] | |||||
Revenues | 407,929 | 444,507 | 1,049,742 | 1,217,635 | |
Cost of sales | 131,210 | 155,083 | 323,830 | 358,248 | |
General and administrative | 235,192 | 254,207 | 703,359 | 676,125 | |
Depreciation and amortization | 15,164 | 19,146 | 52,165 | 55,720 | |
Operating income (loss) | 26,363 | 16,071 | (29,612) | 127,542 | |
Current assets | 327,253 | 271,126 | 327,253 | 271,126 | |
Property and equipment, net | 44,559 | 115,445 | 44,559 | 115,445 | |
Intangible assets | |||||
Deposit on acquisition | |||||
Other non-current assets | 16,610 | 16,610 | 16,610 | 16,610 | |
Total assets | 388,422 | 403,181 | 388,422 | 403,181 | |
Operating Segments [Member] | Corporate [Member] | |||||
Revenues | |||||
Cost of sales | |||||
General and administrative | 1,148,485 | 379,579 | 2,242,250 | 3,528,904 | |
Depreciation and amortization | 12,015 | 5,682 | 35,466 | 11,092 | |
Operating income (loss) | (1,160,500) | (385,261) | (2,277,716) | (3,539,996) | |
Current assets | 3,903,769 | 8,185,228 | 3,903,769 | 8,185,228 | |
Property and equipment, net | 186,635 | 129,826 | 186,635 | 129,826 | |
Intangible assets | 18,606 | 25,202 | 18,606 | 25,202 | |
Deposit on acquisition | |||||
Other non-current assets | 5,689 | 5,689 | 5,689 | 5,689 | |
Total assets | $ 4,114,699 | $ 8,345,945 | $ 4,114,699 | $ 8,345,945 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | $ 431,242 | $ 450,547 | $ 1,137,974 | $ 1,223,675 |
General and administrative | 2,082,577 | 777,165 | 4,468,095 | 4,442,979 |
Loss from discontinued operations | $ (377,222) | (4,494) | (603,309) | |
Discontinued Operations - Franklin [Member] | ||||
Revenues | 386,513 | |||
General and administrative | 4,494 | 989,822 | ||
Loss from discontinued operations | $ (4,494) | $ (603,309) |
Organization And Summary Of S32
Organization And Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Two Gaming Applications [Member] | |||||
Capitalized licensing rights | $ 267,500 | $ 267,500 | $ 80,000 | ||
Capitalized licensing rights, additions | 210,000 | ||||
Licensing rights, amortization | $ 22,500 | ||||
Two Gaming Applications [Member] | Minimum [Member] | |||||
Estimated useful life of gaming applications | 2 years | ||||
Two Gaming Applications [Member] | Maximum [Member] | |||||
Estimated useful life of gaming applications | 5 years | ||||
Other General And Administrative Expense [Member] | |||||
Software licensing cost | $ 760,000 | ||||
Non-Vested Common [Member] | |||||
Antidilutive shares excluded from computation of basic earnings per share | 83,333 | 416,666 | 83,333 | 416,666 | |
Class A Preferred Stock [Member] | |||||
Antidilutive shares excluded from computation of basic earnings per share | 26,909,028 | 26,909,028 | 26,909,028 | 26,909,028 | |
Class E Preferred Stock [Member] | |||||
Antidilutive shares excluded from computation of basic earnings per share | 163,415 | 436,681 | 163,415 | 436,681 | |
Stock Options [Member] | |||||
Antidilutive shares excluded from computation of basic earnings per share | 11,250,000 | 11,250,000 | |||
Warrants [Member] | |||||
Antidilutive shares excluded from computation of basic earnings per share | 250,000 | 250,000 |
Property And Equipment (Narrati
Property And Equipment (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Property And Equipment Narrative Details | |
Depreciation and amortization | $ 85,417 |
Deposit On Acquisition (Narrati
Deposit On Acquisition (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Stock options granted | 11,250,000 | |||
Fair value of options granted for deposit on acquisition | $ 471,574 | |||
Stock Options [Member] | ||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Stock options terms | Exercise price of $1.00, $2.50 and $5.00. The options are fully vested upon grant but are only exercisable in three tranches starting in January 2017, 2018 and 2019. These options will expire starting in December 2017 through December 2019. | |||
Publishing Agreement With MMOJoe UG. [Member] | ||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Terms of acquisition agreement | In June 2016, the Company obtained an exclusive option to purchase all of MMOJoe’s assets including but not limited to all assets pertaining to Pocket Starships (the “Option”). Should the Company decide to exercise the Option, it will purchase MMOJoe for cash of $5,000,000 plus $10,000,000 worth of shares of the Company’s common stock, valued at the time of closing of the purchase. This exclusive Option is exercisable by the Company at any time, in the Company’s sole discretion, through December 31, 2020. | |||
Publishing Agreement With MMOJoe UG. [Member] | Stock Options [Member] | ||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Stock options granted | 3,750,000 | |||
Stock options terms | The stock options are fully vested, exercisable at a price per share of $1.00, $2.50 and $5.00 and will expire starting in December 31, 2017 through December 31, 2019. | |||
Fair value of options granted for deposit on acquisition | $ 471,574 |
Common Stock Transactions (Narr
Common Stock Transactions (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Aug. 31, 2016 | Aug. 31, 2015 | Feb. 28, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock issued to consultants for services, value | $ 533,833 | ||||
Share based compensation | 253,595 | $ 879,183 | |||
Common stock issued for cash, value | $ 19,000 | ||||
No of shares vested | 245,834 | ||||
Recognized compensation expense | $ 247,500 | ||||
Unvested compensation shares not yet recognized | 83,333 | ||||
Unvested compensation costs not yet recognized | $ 54,350 | ||||
Unvested compensation expected recognition period | It will be recognized in the remainder of fiscal year 2016 and in fiscal 2017. | ||||
Stock options granted | |||||
Stock Options [Member] | |||||
Fair value of stock option at grant date | $ 200,575 | ||||
Recognized compensation expense | $ 25,020 | ||||
Stock options granted | 7,500,000 | ||||
Stock options terms | Exercise price of $1.00, $2.50 and $5.00. The options are fully vested upon grant but are only exercisable in three tranches starting in January 2017, 2018 and 2019. These options will expire starting in December 2017 through December 2019. | ||||
Future unamortized cost | $ 176,000 | ||||
Closing stock price | $ 0.65 | ||||
Exercise price terms | As all outstanding options had an exercise price greater than $0.65 per share. | ||||
Intrinsic value of stock price | $ 0 | ||||
Restricted Common Stock [Member] | Employment Agreement [Member] | |||||
Fair value of stock at grant date | $ 37,000 | ||||
No of stock or warrants granted | 100,000 | ||||
Stock or warrants vesting period | 1 year | ||||
Restricted Common Stock [Member] | Consultants [Member] | |||||
Stock issued to consultants for services, shares | 1,981,598 | ||||
Stock issued to consultants for services, value | $ 533,833 | ||||
Share based compensation | 533,833 | ||||
Restricted Common Stock [Member] | Consultants [Member] | |||||
Share based compensation | $ 4,000 | ||||
Common stock issued for cash, shares | 100,000 | ||||
Common stock issued for cash, value | $ 15,000 | ||||
Fair value of stock option at grant date | $ 19,000 | ||||
Restricted Common Stock [Member] | Consulting Agreement [Member] | |||||
No of stock or warrants granted | 500,000 | ||||
Stock or warrants vesting period | 24 months |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - USD ($) | Feb. 23, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Restructuring Cost and Reserve [Line Items] | |||||
Common stock issued for acquisition of Franklin Networks, Inc, value | $ 1,700,000 | ||||
Loss from discontinued operations | $ (377,222) | (4,494) | (603,309) | ||
Discontinued Operations - Franklin [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Loss from discontinued operations | $ (4,494) | $ (603,309) | |||
Acquisition Agreement With Franklin Networks, Inc [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Fair value of intangible assets acquired in acquisition | $ 671,131 | ||||
Fair value of deferred tax liability acquired in acquisition | 117,741 | ||||
Fair value of goodwill acquired in acquisition | $ 1,146,610 | ||||
Acquisition Agreement With Franklin Networks, Inc [Member] | Restricted Common Stock [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Common stock issued for acquisition of Franklin Networks, Inc, shares | 2,500,000 | ||||
Common stock issued for acquisition of Franklin Networks, Inc, value | $ 1,700,000 |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) - Suit Relates To Issuance Of Convertible Debentures [Member] | Oct. 14, 2015USD ($) |
Loss Contingencies [Line Items] | |
Defendant name | SPYR, Inc., f/k/a Eat at Joes., Ltd |
Plaintiff name | Zakeni Limited |
Domicile of litigation | Case filed in the United States District Court for the District of Delaware case |
Sought damages value | $ 1,500,000 |
Sought damages description | The plaintiff is seeking payment or conversion of said convertible debentures together with accrued interest and unspecified damages. |
Trial commencement month and year | 2018-01 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Nov. 14, 2016 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | ||
Stock issued to consultants and employees for services, value | $ 533,833 | |
Common Stock [Member] | ||
Subsequent Event [Line Items] | ||
Stock issued to consultants and employees for services, shares | 1,981,598 | |
Stock issued to consultants and employees for services, value | $ 198 | |
Subsequent Event [Member] | Common Stock [Member] | ||
Subsequent Event [Line Items] | ||
Stock issued to consultants and employees for services, shares | 1,479,147 | |
Stock issued to consultants and employees for services, value | $ 872,918 |