x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 37-1530765 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
480 N. Orlando Avenue, Suite 200 Winter Park, FL | 32789 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.0001 per share | The Nasdaq Capital Market |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer x | Smaller reporting company x | |
Emerging growth company o |
Page | |
PART I | |
PART II | |
PART III | |
PART IV | |
• | our ability to raise additional funding; |
• | our ability to issue shares to settle future acquisition costs payable; |
• | customer cancellations; |
• | our ability to maintain and grow our business; |
• | variability of operating results; |
• | our ability to establish effective disclosure controls and procedures and internal control over financial reporting; |
• | our ability to satisfy the requirements for continued listing of our common stock on the Nasdaq Capital Market; |
• | our ability to maintain and enhance our brand; |
• | our development and introduction of new products and services; |
• | the successful integration of acquired companies, technologies and assets into our portfolio of software and services; |
• | marketing and other business development initiatives; |
• | competition in the industry; |
• | general government regulation; |
• | economic conditions; |
• | dependence on key personnel; |
• | the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of our customers; |
• | our ability to protect our intellectual property; |
• | the potential liability with respect to actions taken by our existing and past employees; |
• | risks associated with international sales; |
• | and the other risks and uncertainties described in the Risk Factors section of this Annual Report. |
• | improve existing, and implement new, operational, financial and management controls, reporting systems and procedures; |
• | install enhanced management information systems; and |
• | train, motivate and manage our employees. |
• | incorporating new technologies into our existing business infrastructure; |
• | consolidating corporate and administrative functions; |
• | coordinating our sales and marketing functions to incorporate the new company, technology or assets; |
• | maintaining morale, retaining and integrating key employees to support the new business or technology and managing our expansion in capacity; |
• | maintaining standards, controls, procedures and policies (including effective internal control over financial reporting and disclosure controls and procedures); and |
• | expanding controls, procedures and policies to support expansion into new products or geographies. |
• | influencer marketing is, by its nature, limited in content relative to other media (less time or fewer words are able to be used to convey meaning); |
• | companies may be reluctant or slow to adopt social sponsorship that replaces, limits or competes with their existing direct marketing efforts; |
• | companies may prefer other forms of advertising we do not offer, including certain forms of search engine placements; |
• | companies may not utilize social sponsorship due to concerns of “click-fraud” particularly related to search engine placements in which a person or computer program imitates a legitimate user by clicking on an advertisement for the purpose of generating a charge per click without having an actual interest in the target of the advertisement's link; and |
• | regulatory actions may negatively impact certain business practices that we currently rely on to generate a portion of our revenue and profitability. |
• | truth-in-advertising; |
• | user privacy; |
• | taxation; |
• | right to access personal information; |
• | copyrights; |
• | distribution; and |
• | characteristics and quality of services. |
• | changes in our industry; |
• | competitive pricing pressures; |
• | our ability to obtain working capital financing; |
• | additions or departures of key personnel; |
• | limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market prices of our common stock; |
• | expiration of any Rule 144 holding periods or registration of unregistered securities issued by us; |
• | sales of our common stock; |
• | our ability to execute our business plan; |
• | operating results that fall below expectations; |
• | loss of any strategic relationship; |
• | regulatory developments; and |
• | economic and other external factors. |
Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||
Revenue | $ | 20,099,695 | $ | 24,437,649 | $ | (4,337,954 | ) | (18 | )% | ||||
Costs and expenses: | |||||||||||||
Cost of revenue (exclusive of amortization) | 9,042,155 | 11,585,316 | (2,543,161 | ) | (22 | )% | |||||||
Sales and marketing | 6,484,320 | 7,593,197 | (1,108,877 | ) | (15 | )% | |||||||
General and administrative | 8,683,911 | 9,218,565 | (534,654 | ) | (6 | )% | |||||||
Depreciation and amortization | 1,298,359 | 1,516,807 | (218,448 | ) | (14 | )% | |||||||
Total costs and expenses | 25,508,745 | 29,913,885 | (4,405,140 | ) | (15 | )% | |||||||
Loss from operations | (5,409,050 | ) | (5,476,236 | ) | 67,186 | (1 | )% | ||||||
Other income (expense): | |||||||||||||
Interest expense | (269,473 | ) | (64,950 | ) | (204,523 | ) | 315 | % | |||||
Change in fair value of derivatives, net | (11,794 | ) | 39,269 | (51,063 | ) | (130 | )% | ||||||
Other income (expense), net | (28,090 | ) | 34,218 | (62,308 | ) | (182 | )% | ||||||
Total other income (expense), net | (309,357 | ) | 8,537 | (317,894 | ) | (3,724 | )% | ||||||
Net loss | $ | (5,718,407 | ) | $ | (5,467,699 | ) | $ | (250,708 | ) | 5 | % |
Twelve Months Ended December 31, | |||||||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||||||
Managed Services Revenue | $ | 17,594,124 | 88 | % | $ | 23,836,236 | 98 | % | $ | (6,242,112 | ) | (26 | )% | ||||
Legacy Workflow Fees | 216,173 | 1 | % | 350,648 | 1 | % | (134,475 | ) | (38 | )% | |||||||
Marketplace Spend Fees | 1,080,609 | 5 | % | — | — | % | 1,080,609 | 100 | % | ||||||||
License Fees | 1,151,242 | 6 | % | 67,344 | — | % | 1,083,898 | 1,609 | % | ||||||||
SaaS Services Revenue | 2,448,024 | 12 | % | 417,992 | 1 | % | 2,030,032 | 486 | % | ||||||||
Other Revenue | 57,547 | — | % | 183,421 | 1 | % | (125,874 | ) | (69 | )% | |||||||
Total Revenue | $ | 20,099,695 | 100 | % | $ | 24,437,649 | 100 | % | $ | (4,337,954 | ) | (18 | )% |
• | Legacy Workflow revenue represents self-service transactions through the Ebyline platform for professional custom content workflow. Revenue from Legacy Workflow represents our net margins received on this business, which averaged approximately 7% for the twelve months ended December 31, 2018. This revenue is declining year over year due to the ongoing consolidation and cutbacks in the newspaper industry. Revenue from Legacy Workflow transactions decreased to $216,173 for the twelve months ended December 31, 2018, compared to $350,648 for same period in 2017. With the addition of TapInfluence and its SaaS revenue model and our modifications to IZEAx which now allows marketers to purchase custom content, in addition to sponsored posts, we have shifted our focus away from this platform and its content generated primarily for newspapers and traditional publishers, and expect Legacy Workflow revenue to continue to decline going forward. |
• | Marketplace Spend Fees revenue primarily results from marketers and partners using the IZEAx, and beginning in July 2018, the TapInfluence platforms on a SaaS basis to distribute content for marketing and influencer marketing campaigns. We added revenue from Marketplace Spend Fees of $1,080,609 for the twelve months ended December 31, 2018, primarily as a result of our merger with TapInfluence, which accounted for approximately $1,043,000 of the consolidated Marketplace Spend Fees revenue for the period. Revenue from Marketplace Spend Fees represents our net margins received on this business, which averaged approximately 13% for the twelve months ended December 31, 2018. |
• | License and Support Fees revenue are generated primarily through the granting of limited, non-exclusive, non-transferable licenses to customers for the use of the IZEAx and TapInfluence technology platforms for an agreed-upon subscription period. Customers license the platforms to manage their own influencer marketing campaigns. Fees for subscription or licensing services are recognized straight-line over the term of the service. License Fees revenue increased significantly during the twelve months ended December 31, 2018 to $1,151,242, primarily as a result of the merger with TapInfluence, compared to $67,344 in the same period of the prior year. |
Twelve Months Ended December 31, | |||||||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||||||
Managed Services Revenue | $ | 17,594,124 | 59 | % | $ | 23,836,236 | 82 | % | $ | (6,242,112 | ) | (26 | )% | ||||
Legacy Workflow | 3,048,503 | 10 | % | 5,094,973 | 17 | % | (2,046,470 | ) | (40 | )% | |||||||
Marketplace Spend | 8,127,774 | 27 | % | — | — | % | 8,127,774 | 100 | % | ||||||||
License Fees | 1,151,242 | 4 | % | 67,344 | — | % | 1,083,898 | 1,609 | % | ||||||||
SaaS Services Gross Billings | 12,327,519 | 41 | % | 5,162,317 | 17 | % | 7,165,202 | 139 | % | ||||||||
Other Revenue | 57,547 | — | % | 183,421 | 1 | % | (125,874 | ) | (69 | )% | |||||||
Total Gross Billings | $ | 29,979,190 | 100 | % | $ | 29,181,974 | 100 | % | $ | 797,216 | 3 | % |
Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||
Revenue | $ | 20,099,695 | $ | 24,437,649 | $ | (4,337,954 | ) | (18 | )% | ||||
Plus payments made to third-party creators (1) | 9,879,495 | 4,744,325 | 5,135,170 | 108 | % | ||||||||
Gross billings | $ | 29,979,190 | $ | 29,181,974 | $ | 797,216 | 3 | % |
• | does not include stock-based compensation expense, which is a non-cash expense, but has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; |
• | does not include stock issued for payment of services, which is a non-cash expense, but has been, and is expected to be for the foreseeable future, an important means for us to compensate our directors, vendors and other parties who provide us with services; |
• | does not include changes in acquisition cost estimates as a result of the allocation of acquisition costs payable to compensation expense or changes in the estimate of contingent acquisition costs payable, which may or may not ever be paid, but may be a significant recurring expense for our business if we continue to make business acquisitions; |
• | does not include gains or losses on the settlement of acquisition costs payable or liabilities when the stock value, as agreed upon in the agreement, varies from the market price of our stock on the settlement date. This is a non-cash expense, but will continue to be a recurring expense for our business on certain business contracts where the amounts can vary; |
• | does not include unusual or expected non-recurring items such as large litigation reserves; |
• | does not include depreciation and intangible assets amortization expense, impairment charges and gains or losses on disposal of equipment, which is not always a current period cash expense, but the assets being depreciated and amortized may have to be replaced in the future; and |
• | does not include changes in fair value of derivatives, interest expense and other gains, losses, and expenses that we believe are not indicative of our ongoing core operating results, but these items may represent a reduction or increase in cash available to us. |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Net loss | $ | (5,718,407 | ) | $ | (5,467,699 | ) | |
Non-cash stock-based compensation | 580,693 | 635,427 | |||||
Non-cash stock issued for payment of services | 125,000 | 181,995 | |||||
(Gain) loss on disposal of equipment | 156 | (8,757 | ) | ||||
(Gain) loss on settlement of acquisition costs payable | (84,938 | ) | (10,491 | ) | |||
Increase (decrease) in value of acquisition costs payable | (615,845 | ) | 583,010 | ||||
Depreciation and amortization | 1,298,359 | 1,516,807 | |||||
Legal expense accrual | 500,000 | — | |||||
Interest expense | 269,473 | 64,950 | |||||
Change in fair value of derivatives | 11,794 | (39,269 | ) | ||||
Adjusted EBITDA | $ | (3,633,715 | ) | $ | (2,544,027 | ) | |
Revenue | $ | 20,099,695 | $ | 24,437,649 | |||
Adjusted EBITDA as a % of Revenue | (18 | )% | (10 | )% |
• | The estimates involve matters that are highly uncertain at the time the accounting estimate is made; and |
• | different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results of operations. |
Twelve Months Ended | Total Options Granted | Weighted Average Exercise Price | Weighted Average Expected Term | Weighted Average Volatility | Weighted Average Risk-Free Interest Rate | Weighted Average Grant Date Fair Value | |||||||
December 31, 2017 | 141,246 | $3.49 | 6.0 years | 50.16% | 2.06% | $1.76 | |||||||
December 31, 2018 | 156,084 | $1.60 | 6.0 years | 108.49% | 2.71% | $0.96 |
Twelve Months Ended | Total Restricted Stock Units Granted | Weighted Average Exercise Price | Weighted Average Expected Term | Weighted Average Volatility | Weighted Average Risk-Free Interest Rate | Weighted Average Grant Date Fair Value | |||||||
December 31, 2017 | — | n/a | — | —% | —% | $— | |||||||
December 31, 2018 | 160,000 | n/a | 1 year | 151.41% | 2.62% | $1.04 |
December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current: | |||||||
Cash and cash equivalents | $ | 1,968,403 | $ | 3,906,797 | |||
Accounts receivable, net | 7,071,815 | 3,647,025 | |||||
Prepaid expenses | 527,968 | 389,104 | |||||
Other current assets | 39,203 | 9,140 | |||||
Total current assets | 9,607,389 | 7,952,066 | |||||
Property and equipment, net | 272,239 | 286,043 | |||||
Goodwill | 8,316,722 | 3,604,720 | |||||
Intangible assets, net | 3,149,949 | 667,909 | |||||
Software development costs, net | 1,428,604 | 967,927 | |||||
Security deposits | 143,174 | 148,638 | |||||
Total assets | $ | 22,918,077 | $ | 13,627,303 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,618,103 | $ | 1,756,841 | |||
Accrued expenses | 1,968,589 | 1,592,356 | |||||
Contract liabilities | 4,957,869 | 3,070,502 | |||||
Line of credit | 1,526,288 | 500,550 | |||||
Current portion of deferred rent | 17,420 | 45,127 | |||||
Current portion of acquisition costs payable | 4,611,493 | 741,155 | |||||
Total current liabilities | 15,699,762 | 7,706,531 | |||||
Deferred rent, less current portion | — | 17,419 | |||||
Acquisition costs payable, less current portion | — | 609,768 | |||||
Total liabilities | 15,699,762 | 8,333,718 | |||||
Commitments and Contingencies (Note 6) | — | — | |||||
Stockholders’ equity: | |||||||
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding | — | — | |||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 12,075,708 and 5,733,981, respectively, issued and outstanding | 1,208 | 573 | |||||
Additional paid-in capital | 60,311,756 | 52,570,432 | |||||
Accumulated deficit | (53,094,649 | ) | (47,277,420 | ) | |||
Total stockholders’ equity | 7,218,315 | 5,293,585 | |||||
Total liabilities and stockholders’ equity | $ | 22,918,077 | $ | 13,627,303 |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 20,099,695 | $ | 24,437,649 | |||
Costs and expenses: | |||||||
Cost of revenue (exclusive of amortization) | 9,042,155 | 11,585,316 | |||||
Sales and marketing | 6,484,320 | 7,593,197 | |||||
General and administrative | 8,683,911 | 9,218,565 | |||||
Depreciation and amortization | 1,298,359 | 1,516,807 | |||||
Total costs and expenses | 25,508,745 | 29,913,885 | |||||
Loss from operations | (5,409,050 | ) | (5,476,236 | ) | |||
Other income (expense): | |||||||
Interest expense | (269,473 | ) | (64,950 | ) | |||
Change in fair value of derivatives, net | (11,794 | ) | 39,269 | ||||
Other income (expense), net | (28,090 | ) | 34,218 | ||||
Total other income (expense), net | (309,357 | ) | 8,537 | ||||
Net loss | $ | (5,718,407 | ) | $ | (5,467,699 | ) | |
Weighted average common shares outstanding – basic and diluted | 8,541,725 | 5,674,901 | |||||
Basic and diluted loss per common share | $ | (0.67 | ) | $ | (0.96 | ) |
Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | |||||||||||||||
Balance, December 31, 2016 | 5,456,118 | $ | 545 | $ | 50,797,039 | $ | (41,809,721 | ) | $ | 8,987,863 | |||||||||
Stock issued for payment of acquisition liability | 200,542 | 20 | 928,021 | — | 928,041 | ||||||||||||||
Stock purchase plan issuances | 16,168 | 2 | 26,247 | — | 26,249 | ||||||||||||||
Stock issued for payment of services | 48,879 | 5 | 154,995 | — | 155,000 | ||||||||||||||
Stock issuance costs | — | — | (12,353 | ) | — | (12,353 | ) | ||||||||||||
Stock-based compensation | 12,274 | 1 | 676,483 | — | 676,484 | ||||||||||||||
Net loss | — | — | — | (5,467,699 | ) | (5,467,699 | ) | ||||||||||||
Balance, December 31, 2017 | 5,733,981 | $ | 573 | $ | 52,570,432 | $ | (47,277,420 | ) | $ | 5,293,585 | |||||||||
Cumulative effect of change in accounting policy to ASC 606 | — | — | — | (98,822 | ) | (98,822 | ) | ||||||||||||
Sale of securities | 4,963,333 | 497 | 5,666,503 | — | 5,667,000 | ||||||||||||||
Stock issued for payment of acquisition liability | 1,248,765 | 125 | 1,896,658 | — | 1,896,783 | ||||||||||||||
Stock purchase plan issuances | 21,366 | 2 | 17,251 | — | 17,253 | ||||||||||||||
Stock issued for payment of services | 30,265 | 3 | 124,997 | — | 125,000 | ||||||||||||||
Stock issuance costs | — | — | (712,345 | ) | — | (712,345 | ) | ||||||||||||
Stock-based compensation | 77,998 | 8 | 748,260 | — | 748,268 | ||||||||||||||
Net loss | — | — | — | (5,718,407 | ) | (5,718,407 | ) | ||||||||||||
Balance, December 31, 2018 | 12,075,708 | $ | 1,208 | $ | 60,311,756 | $ | (53,094,649 | ) | $ | 7,218,315 |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (5,718,407 | ) | $ | (5,467,699 | ) | |
Adjustments to reconcile net loss to net cash used for operating activities: | |||||||
Depreciation and amortization | 222,912 | 211,769 | |||||
Amortization of software development costs and other intangible assets | 1,075,447 | 1,305,038 | |||||
(Gain) loss on disposal of equipment | 156 | (8,757 | ) | ||||
Provision for losses on accounts receivable | 93,378 | 40,302 | |||||
Stock-based compensation | 580,693 | 635,427 | |||||
Fair value of stock issued for payment of services | 125,000 | 181,995 | |||||
(Decrease)/increase in fair value of contingent acquisition costs payable | (485,747 | ) | 234,565 | ||||
Gain on settlement of acquisition costs payable | (84,938 | ) | (10,491 | ) | |||
Change in fair value of derivatives, net | 11,794 | (39,269 | ) | ||||
Changes in operating assets and liabilities, net of effects of business acquired: | |||||||
Accounts receivable | (280,420 | ) | 58,368 | ||||
Prepaid expenses and other current assets | 14,784 | (10,596 | ) | ||||
Accounts payable | 710,446 | 318,452 | |||||
Accrued expenses | (1,784,084 | ) | 730,179 | ||||
Contract liabilities | (18,368 | ) | (245,061 | ) | |||
Deferred rent | (45,126 | ) | (34,291 | ) | |||
Net cash used for operating activities | (5,582,480 | ) | (2,100,069 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of equipment | (170,175 | ) | (28,405 | ) | |||
Software development costs | (755,164 | ) | (174,379 | ) | |||
Merger with TapInfluence, Inc. net of cash acquired | 11,266 | — | |||||
Security deposits | 5,464 | 13,098 | |||||
Net cash used for investing activities | (908,609 | ) | (189,686 | ) | |||
Cash flows from financing activities: | |||||||
Payments on acquisition liabilities | (120,930 | ) | (266,898 | ) | |||
Proceeds from sale of securities | 5,667,000 | — | |||||
Proceeds from line of credit, net of repayments | (298,283 | ) | 500,550 | ||||
Proceeds from stock purchase plan issuances | 17,253 | 26,249 | |||||
Stock issuance costs | (712,345 | ) | (12,353 | ) | |||
Net cash from financing activities | 4,552,695 | 247,548 | |||||
Net decrease in cash and cash equivalents | (1,938,394 | ) | (2,042,207 | ) | |||
Cash and cash equivalents, beginning of year | 3,906,797 | 5,949,004 | |||||
Cash and cash equivalents, end of period | $ | 1,968,403 | $ | 3,906,797 | |||
Supplemental cash flow information: | |||||||
Cash paid for interest | $ | 150,900 | $ | 37,898 | |||
Non-cash financing and investing activities: | |||||||
Common stock issued for payment of acquisition liability | $ | 1,896,783 | $ | 928,041 | |||
Fair value of common stock issued for future services, net | $ | 449,925 | $ | 155,000 | |||
Acquisition costs payable for assets acquired | $ | 4,384,584 | $ | — |
Computer Equipment | 3 years |
Software Costs | 3 - 5 years |
Office Equipment | 3 - 10 years |
Furniture and Fixtures | 5 - 10 years |
• | Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities. |
• | Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. |
• | Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. |
Twelve Months Ended | |||
2011 Equity Incentive Plans Assumptions | December 31, 2018 | December 31, 2017 | |
Expected term | 6 years | 6 years | |
Weighted average volatility | 108.49% | 50.16% | |
Weighted average risk-free interest rate | 2.71% | 2.06% | |
Expected dividends | — | — |
Twelve Months Ended | |||
2011 Equity Incentive Plans Assumptions | December 31, 2018 | December 31, 2017 | |
Expected term | 1 year | 0 | |
Weighted average volatility | 151.41% | —% | |
Weighted average risk-free interest rate | 2.62% | —% | |
Expected dividends | — | — |
Estimated Gross Purchase Consideration | Estimated Initial Present and Fair Value | Estimated Remaining Present and Fair Value | |||||||
7/26/2018 | 7/26/2018 | 12/31/2018 | |||||||
Cash paid at closing (a) | $ | 1,500,000 | $ | 1,500,000 | $ | — | |||
Stock paid at closing (a) | 1,759,500 | 1,759,500 | — | ||||||
Purchase price adjustment (b) | (439,610 | ) | (555,026 | ) | (115,416 | ) | |||
First deferred purchase price installment (c) | 1,000,000 | 970,576 | 995,097 | ||||||
Second deferred purchase price installment (c) | 3,500,000 | 3,271,028 | 3,366,433 | ||||||
Total estimated consideration | $ | 7,319,890 | $ | 6,946,078 | $ | 4,246,114 | |||
Current portion of acquisition costs payable | $ | 4,246,114 | |||||||
Long-term portion of acquisition costs payable | — | ||||||||
Total acquisition costs payable | $ | 4,246,114 |
(a) | The aggregate consideration paid at closing for the acquisition of TapInfluence consisted of a cash payment of $1,500,000 and the issuance of 1,150,000 shares of IZEA common stock valued at $1,759,500, or $1.53 per share. |
(b) | Per the terms of the Merger Agreement, the initial cash payment due at closing of $1,500,000 was to be adjusted as follows: reduced for seller transaction expenses and closing date indebtedness, increased by closing date cash and cash equivalents of TapInfluence, and reduced or increased by an estimated working capital amount. These adjustments resulted in a net reduction in the purchase price of $439,610, which included a negative estimated working capital adjustment of $181,633. |
(c) | Aggregate post-acquisition date consideration consists of additional payments totaling $4,500,000, less any remaining adjustment related to the final working capital adjustment calculation. The payments will be made in the form of cash, common stock or a combination thereof, at IZEA’s option, in two installments - $1,000,000 six months after the closing date of the merger and $3,500,000 twelve months after the closing date of the merger. Stock issuances, if any, will be determined based on the 30-trading day volume-weighted average price per share of IZEA's common stock prior to the payment date. Future cash payments and stock issuances may be withheld from the six month or twelve month payment for post closing working capital adjustments and to satisfy indemnifiable claims made by IZEA with respect to any misrepresentations or breaches of warranty under the Merger Agreement by TapInfluence or the stockholders of TapInfluence within 12 months after the closing date of the merger. Post closing, IZEA calculated the final working capital as of the closing date as a negative $297,049, which was $115,416 lower than the original estimate of negative $181,633. Therefore, the purchase price was reduced by an additional $115,416, which was deducted from the six-month installment payment paid in January 2019. |
Estimated Approximate Fair Value | |||
7/26/2018 | |||
Current assets | $ | 4,337,334 | |
Property and equipment | 39,089 | ||
Identifiable intangible assets | 3,263,000 | ||
Goodwill | 4,712,002 | ||
Current liabilities | (4,071,730 | ) | |
Long-term debt | (1,333,617 | ) | |
Total net assets acquired | 6,946,078 | ||
Less: cash acquired | (1,071,656 | ) | |
Net purchase consideration | $ | 5,874,422 |
Pro Forma | ||||||
Twelve Months Ended December 31, | ||||||
12/31/2018 | 12/31/2017 | |||||
Pro forma revenue | $ | 22,645,356 | $ | 30,316,579 | ||
Pro forma cost of revenue | $ | 9,418,297 | $ | 12,187,631 | ||
Pro forma gross profit | $ | 32,063,653 | $ | 42,504,210 | ||
Pro forma net loss prior to adjustments | $ | (7,070,224 | ) | $ | (9,035,903 | ) |
Pro forma adjustment to net loss: | ||||||
Difference in amortization of acquired identifiable intangible assets | (569,139 | ) | (1,035,667 | ) | ||
Difference in depreciation of acquired property and equipment | 8,835 | 127,308 | ||||
Acquisition-related expenses | 158,795 | (158,795 | ) | |||
Pro forma net loss combined | $ | (7,471,733 | ) | $ | (10,103,057 | ) |
Estimated Gross Purchase Consideration | Initial Present and Fair Value | Remaining Present and Fair Value | Remaining Present and Fair Value | |||||||||
7/31/2016 | 7/31/2016 | 12/31/2017 | 12/31/2018 | |||||||||
Cash paid at closing (a) | $ | 400,000 | $ | 400,000 | $ | — | $ | — | ||||
Stock paid at closing (a) | 600,000 | 600,000 | — | — | ||||||||
Guaranteed purchase price (b) | 933,565 | 566,547 | 606,413 | 321,740 | ||||||||
Contingent performance payments (c) | 2,500,000 | 230,000 | 744,510 | 43,639 | ||||||||
Total estimated consideration | $ | 4,433,565 | $ | 1,796,547 | $ | 1,350,923 | $ | 365,379 | ||||
Current portion of acquisition costs payable | $ | 741,155 | $ | 365,379 | ||||||||
Long-term portion of acquisition costs payable | 609,768 | — | ||||||||||
Total acquisition costs payable | $ | 1,350,923 | $ | 365,379 |
(a) | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. |
(b) | Aggregate post-acquisition date consideration consists of (i) three equal annual installment payments totaling $1,000,000, commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment (“guaranteed purchase price”), and (ii) contingent performance payments up to an aggregate of $2,500,000 over the three consecutive 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if ZenContent’s co-founder was terminated by IZEA for cause or if she terminated her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $30,208 and $162,500 for the twelve months ended December 31, 2018 and 2017, respectively. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% (5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable |
(c) | The contingent performance payments were subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment was to be in the form of cash and the remainder of such payment was to be in the form of either cash or additional shares of IZEA common stock, at the Company's option. The value of the Company's common stock would be valued using a thirty (30) trading day volume-weighted average closing price as reported by the Nasdaq Capital Market. These contingent performance payments were subject to downward adjustment of up to 30% if ZenContent's co-founder was terminated by IZEA for cause or she terminated her employment without good reason. On July 31, 2016, the Company initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments was required to be revalued each quarter and was calculated using a Monte-Carlo simulation to simulate revenue over the future periods. Since the contingent consideration has an option like structure, a risk-neutral framework was considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 17%) and assumed it would follow geometric Brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% at the time of valuation. The Company revised its estimate of the contingent performance payments, based on the fixed payments agreed upon in the second amendment to the ZenContent Stock Purchase Agreement, and determined that current fair value of the remaining contingent performance payments as of December 31, 2018 was $43,639 compared to $744,510 as of December 31, 2017. The change in the estimated fair value of contingent performance payable resulted in a $646,053 decrease in general and administrative expense in the Company's consolidated statement of operations during the twelve months ended December 31, 2018. Of this amount, $160,306 was allocated to reduce compensation expense and a gain of $485,747 was allocated as a change in the fair value of the contingent performance payments. The Company revalued its estimate of the contingent performance payment as of December 31, 2017 based on actual results and projections at the time and determined that current fair value of the contingent performance payments was $744,510 as of December 31, 2017 compared to $324,000 as of December 31, 2016. The 2017 change in the estimated fair value of contingent performance payable resulted in a $420,510 increase to general and administrative expense in the Company's consolidated statement of operations during the twelve months ended December 31, 2017. Of this amount, $185,945 was allocated to increase compensation expense and an expense of $234,565 was allocated as a change in the fair value of the contingent performance payments. |
December 31, 2018 | December 31, 2017 | ||||||
Furniture and fixtures | $ | 293,777 | $ | 254,099 | |||
Office equipment | 77,194 | 74,627 | |||||
Computer equipment | 561,812 | 415,928 | |||||
Leasehold improvements | 338,018 | 331,418 | |||||
Total | 1,270,801 | 1,076,072 | |||||
Less accumulated depreciation and amortization | (998,562 | ) | (790,029 | ) | |||
Property and equipment, net | $ | 272,239 | $ | 286,043 |
Balance | Accumulated Amortization | Balance | Accumulated Amortization | Useful Life (in years) | ||||||||||
December 31, 2018 | December 31, 2017 | |||||||||||||
Content provider networks | $ | 160,000 | $ | 160,000 | $ | 160,000 | $ | 122,083 | 2 | |||||
Trade names | 87,000 | 66,583 | 52,000 | 52,000 | 1 | |||||||||
Developed technology | 1,130,000 | 396,167 | 530,000 | 240,167 | 5 | |||||||||
Self-service content customers | 2,810,000 | 571,111 | 210,000 | 204,167 | 3 | |||||||||
Managed content customers | 2,140,000 | 2,071,945 | 2,140,000 | 1,905,555 | 3 | |||||||||
Domains | 166,469 | 99,881 | 166,469 | 66,588 | 5 | |||||||||
Embedded non-compete provision | 28,000 | 5,833 | — | — | 2 | |||||||||
Total identifiable intangible assets | $ | 6,521,469 | $ | 3,371,520 | $ | 3,258,469 | $ | 2,590,560 |
December 31, 2018 | December 31, 2017 | ||||||
Ebyline Intangible Assets | $ | 2,370,000 | $ | 2,370,000 | |||
ZenContent Intangible Assets | 722,000 | 722,000 | |||||
TapInfluence Intangible Assets | 3,263,000 | — | |||||
Domains | 166,469 | 166,469 | |||||
Total Intangible Assets | 6,521,469 | 3,258,469 | |||||
Accumulated amortization | (3,371,520 | ) | (2,590,560 | ) | |||
Intangible Assets, net | $ | 3,149,949 | $ | 667,909 |
Year ending December 31: | Amortization Expense | ||
2019 | $ | 1,228,433 | |
2020 | 1,079,127 | ||
2021 | 652,389 | ||
2022 | 120,000 | ||
2023 | 70,000 | ||
Total | $ | 3,149,949 |
Amount | |||
Balance on January 1, 2017 and December 31, 2017 | $ | 3,604,720 | |
Acquired during 2018 | 4,712,002 | ||
Balance on December 31, 2018 | $ | 8,316,722 |
December 31, 2018 | December 31, 2017 | ||||||
Software development costs | $ | 2,316,515 | $ | 1,561,351 | |||
Less accumulated depreciation and amortization | (887,911 | ) | (593,424 | ) | |||
Software development costs, net | $ | 1,428,604 | $ | 967,927 |
Year ending December 31: | Software Amortization Expense | ||
2019 | $ | 377,972 | |
2020 | 344,644 | ||
2021 | 303,248 | ||
2022 | 233,924 | ||
Thereafter | 168,816 | ||
$ | 1,428,604 |
Year ending December 31: | Operating Leases | ||
2019 | 248,236 | ||
Total minimum lease payments | $ | 248,236 |
Restricted Stock | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest | |||
Nonvested at January 1, 2017 | — | $ | — | |||
Granted | 61,153 | 3.24 | ||||
Vested | (49,354 | ) | 3.72 | |||
Forfeited | — | — | ||||
Nonvested at December 31, 2017 | 11,799 | $ | 4.52 | 3.8 | ||
Granted | 115,763 | 4.24 | ||||
Vested | (62,078 | ) | 4.51 | |||
Forfeited | (7,500 | ) | 5.52 | |||
Nonvested at December 31, 2018 | 57,984 | $ | 3.70 | 1.4 |
Restricted Stock Units | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest | |||
Nonvested at December 31, 2017 | — | |||||
Granted | 160,000 | |||||
Vested | — | |||||
Forfeited | — | |||||
Nonvested at December 31, 2018 | 160,000 | $ | 1.04 | 1.0 |
Options Outstanding | Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (Years) | |||||
Outstanding at January 1, 2017 | 959,864 | $ | 8.11 | 6.4 | ||||
Granted | 141,246 | 3.49 | ||||||
Exercised | — | — | ||||||
Expired | (15,590 | ) | 112.44 | |||||
Forfeited | (36,017 | ) | 7.02 | |||||
Outstanding at December 31, 2017 | 1,049,503 | $ | 5.97 | 6.0 | ||||
Granted | 156,084 | 1.60 | ||||||
Exercised | — | — | ||||||
Expired | (63,013 | ) | 6.29 | |||||
Forfeited | (102,097 | ) | 6.66 | |||||
Outstanding at December 31, 2018 | 1,040,477 | $ | 5.23 | 6.5 | ||||
Exercisable at December 31, 2018 | 739,967 | $ | 6.08 | 4.8 |
Nonvested Options | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest | |||||
Nonvested at January 1, 2017 | 414,306 | $ | 3.60 | 2.6 | ||||
Granted | 141,246 | 1.76 | ||||||
Vested | (205,469 | ) | 3.36 | |||||
Forfeited | (27,006 | ) | 3.12 | |||||
Nonvested at December 31, 2017 | 323,077 | $ | 2.64 | 2.7 | ||||
Granted | 156,084 | 0.96 | ||||||
Vested | (137,206 | ) | 2.80 | |||||
Forfeited | (41,445 | ) | 2.88 | |||||
Nonvested at December 31, 2018 | 300,510 | $ | 0.80 | 2.4 |
Twelve Months Ended | |||||||
December 31, 2018 | December 31, 2017 | ||||||
Net loss | $ | (5,718,407 | ) | $ | (5,467,699 | ) | |
Weighted average shares outstanding - basic and diluted | 8,541,725 | 5,674,901 | |||||
Basic and diluted loss per common share | $ | (0.67 | ) | $ | (0.96 | ) |
Twelve Months Ended | |||||
December 31, 2018 | December 31, 2017 | ||||
Stock options | 1,042,644 | 990,152 | |||
Restricted stock units | 5,260 | — | |||
Warrants | 480,886 | 531,969 | |||
Total excluded shares | 1,528,790 | 1,522,121 |
As Reported 12/31/17 | Adjustments | As Adjusted 1/1/2018 | |||||||
Assets | |||||||||
Current: | |||||||||
Cash and cash equivalents | $ | 3,906,797 | $ | 3,906,797 | |||||
Accounts receivable, net | 3,647,025 | 92,405 | 3,739,430 | ||||||
Prepaid expenses | 389,104 | 389,104 | |||||||
Other current assets | 9,140 | 9,140 | |||||||
Total current assets | 7,952,066 | 92,405 | 8,044,471 | ||||||
Property and equipment, net | 286,043 | 286,043 | |||||||
Goodwill | 3,604,720 | 3,604,720 | |||||||
Intangible assets, net | 667,909 | 667,909 | |||||||
Software development costs, net | 967,927 | 967,927 | |||||||
Security deposits | 148,638 | 148,638 | |||||||
Total assets | $ | 13,627,303 | $ | 92,405 | $ | 13,719,708 |
Liabilities and Stockholders’ Equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 1,756,841 | $ | 1,756,841 | |||||
Accrued expenses | 1,592,356 | 1,592,356 | |||||||
Contract liabilities | 3,070,502 | 191,227 | 3,261,729 | ||||||
Line of credit | 500,550 | 500,550 | |||||||
Current portion of deferred rent | 45,127 | 45,127 | |||||||
Current portion of acquisition costs payable | 741,155 | 741,155 | |||||||
Total current liabilities | 7,706,531 | 191,227 | 7,897,758 | ||||||
Deferred rent, less current portion | 17,419 | 17,419 | |||||||
Acquisition costs payable, less current portion | 609,768 | 609,768 | |||||||
Total liabilities | 8,333,718 | 191,227 | 8,524,945 | ||||||
Stockholders’ equity: | |||||||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,733,981 issued and outstanding | 573 | 573 | |||||||
Additional paid-in capital | 52,570,432 | 52,570,432 | |||||||
Accumulated deficit | (47,277,420 | ) | (98,822 | ) | (47,376,242 | ) | |||
Total stockholders’ equity | 5,293,585 | (98,822 | ) | 5,194,763 | |||||
Total liabilities and stockholders’ equity | $ | 13,627,303 | $ | 92,405 | $ | 13,719,708 |
As Reported (ASC 606) | Adjustments | Previous GAAP (ASC 605) | |||||||
Balance Sheet: | |||||||||
Accounts receivable, net | $ | 7,071,815 | $ | 220,842 | $ | 7,292,657 | |||
Contract liabilities | 4,957,869 | (4,957,869 | ) | — | |||||
Unearned revenue | — | 4,792,317 | 4,792,317 | ||||||
Accumulated deficit | (53,094,649 | ) | 386,394 | (52,708,255 | ) | ||||
Statements of Operations: | |||||||||
Revenue: | |||||||||
Twelve months ended December 31, 2018 | $ | 20,099,695 | 287,572 | 20,387,267 |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Managed Services Revenue | $ | 17,594,124 | $ | 23,836,236 | |||
Legacy Workflow Fees | 216,173 | 350,648 | |||||
Marketplace Spend Fees | 1,080,609 | — | |||||
License Fees | 1,151,242 | 67,344 | |||||
SaaS Services Revenue | 2,448,024 | 417,992 | |||||
Other Revenue | 57,547 | 183,421 | |||||
Total Revenue | $ | 20,099,695 | $ | 24,437,649 |
December 31, 2018 | January 1, 2018 | ||||||
Accounts receivable, net | $ | 7,071,815 | $ | 3,739,430 | |||
Contract liabilities (unearned revenue) | $ | 4,957,869 | $ | 3,261,729 |
• | Managed Services, which includes services to marketers to provide custom content, influencer marketing, amplification or other consulting services using the Company's internal resources, its network of creators and/or its technology platforms. |
• | SaaS Services, which includes services generated by the self-service use of the Company's technology platforms by marketers to manage their own influencer marketing campaigns, as well as license subscriptions to access the IZEAx and TapInfluence platforms. SaaS Services are associated with the following revenue types: |
◦ | Marketplace Spend Fees |
◦ | License Fees |
◦ | Legacy Workflow Fees |
Twelve Months Ended | |||||||
December 31, 2018 | December 31, 2017 | ||||||
Managed Services Segment Revenue | $ | 17,594,124 | $ | 23,836,236 | |||
SaaS Services Segment Revenue | 2,448,024 | 417,992 | |||||
Other Revenue | 57,547 | 183,421 | |||||
Total | $ | 20,099,695 | $ | 24,437,649 |
Twelve Months Ended | |||||
December 31, 2018 | December 31, 2017 | ||||
United States | 18,082,218 | 22,403,721 | |||
Canada | 2,017,477 | 2,033,928 | |||
Total | 20,099,695 | 24,437,649 |
December 31, 2018 | December 31, 2017 | |||||
Deferred tax assets: | ||||||
Net operating loss carry forwards | $ | 19,731,000 | $ | 19,362,000 | ||
Change in federal tax rate | — | (6,329,000 | ) | |||
Accrued expenses | 292,000 | 270,000 | ||||
Stock option and warrant expenses | 479,000 | 698,000 | ||||
Accounts receivable | 73,000 | 67,000 | ||||
Deferred rent | 6,000 | 24,000 | ||||
Other | — | 1,000 | ||||
Total deferred tax assets | 20,581,000 | 14,093,000 | ||||
Valuation allowance | (19,749,000 | ) | (13,860,000 | ) | ||
Net deferred tax assets | 832,000 | 233,000 | ||||
Deferred tax liabilities: | ||||||
Fixed and tangible assets | (832,000 | ) | (233,000 | ) | ||
Total deferred tax liabilities | (832,000 | ) | (233,000 | ) | ||
Total deferred tax assets (liabilities) | $ | — | $ | — |
Twelve Months Ended December 31, | ||||
2018 | 2017 | |||
Federal income tax at statutory rates | (21.0 | )% | (34.0 | )% |
Change in deferred tax asset valuation allowance | 19.1 | % | (81.7 | )% |
Deferred state taxes | (2.1 | )% | (3.3 | )% |
Non-deductible expenses: | ||||
Change in value of acquisition liability | 1.8 | % | 3.7 | % |
Change in fair value of warrants | — | % | — | % |
ISO stock compensation | 1.7 | % | 1.6 | % |
Change in state & federal deferred rate | — | % | 112.1 | % |
Other | 0.5 | % | 1.6 | % |
Income taxes (benefit) at effective rates | — | % | — | % |
Name | Age | Position | ||
Edward H. (Ted) Murphy | 42 | Founder, Chairman of the Board, President and Chief Executive Officer | ||
Ryan S. Schram | 38 | Chief Operating Officer and Director | ||
Troy J. Vanke | 47 | Chief Financial Officer | ||
Brian W. Brady | 60 | Director | ||
John H. Caron | 61 | Director | ||
Lindsay A. Gardner | 58 | Director, Compensation Committee Chairman | ||
Jill M. Golder | 57 | Director, Audit Committee Chairman | ||
Daniel R. Rua | 50 | Director | ||
Patrick J. Venetucci | 50 | Director |
• | the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
• | convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
• | subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or |
• | found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading SEC to have violated a federal or state securities or commodities law. |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compen-sation ($) | All Other Compen-sation ($) (2) | Total ($) | |||||||
Edward H. (Ted) Murphy | 2018 | 242,261 | — | 46,715 | 62,975 | 126,521 | 814 | 479,286 | |||||||
President and Chief Executive Officer | 2017 | 233,010 | — | 36,411 | 175,250 | 91,002 | 814 | 536,487 | |||||||
Ryan S. Schram | 2018 | 258,412 | — | 35,960 | 22,498 | 165,134 | 305 | 482,309 | |||||||
Chief Operating Officer | 2017 | 248,544 | 1,000 | 6,446 | 42,126 | 228,512 | 305 | 526,933 | |||||||
LeAnn C. Hitchcock (3) | 2018 | 147,752 | — | 13,800 | — | 5,153 | 407 | 167,112 | |||||||
Former Chief Financial Officer | 2017 | 196,154 | 1,000 | — | — | 25,684 | 376 | 223,214 | |||||||
Michael Heald (4) | 2018 | 76,188 | — | — | 13,305 | 2,103 | — | 91,596 | |||||||
Chief Financial Officer |
(2) | Represents insurance premiums paid by IZEA with respect to life insurance for the benefit of the Named Executive Officer. |
(3) | LeAnn C. Hitchcock served as our Chief Financial Officer until her resignation date effective as of August 15, 2018. |
(4) | Michael Heald was appointed as our Chief Financial Officer as of August 15, 2018, and served as our Chief Financial Officer until his resignation date effective as of January 31, 2019. |
Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Number of Securities Underlying Unexercised Options: Unexercisable (#) | Option Exercise Price ($) (1) | Option Expiration Date | ||||||||
Edward H. (Ted) Murphy | 25,000 | — | $ | 5.00 | 3/1/2023 | |||||||
President and Chief Executive Officer | 9,384 | — | $ | 5.00 | 3/1/2023 | |||||||
219,949 | — | $ | 5.00 | 8/15/2023 | ||||||||
70,858 | — | $ | 7.30 | 9/9/2019 | ||||||||
40,000 | — | $ | 5.20 | 12/26/2024 | ||||||||
6,844 | 456 | (3) | $ | 7.80 | 4/1/2025 | |||||||
2,720 | 388 | (3) | $ | 8.40 | 7/1/2025 | |||||||
2,687 | 620 | (3) | $ | 8.00 | 10/1/2025 | |||||||
28,820 | 8,568 | (4) | $ | 7.80 | 11/30/2025 | |||||||
5,704 | 2,593 | (3) | $ | 6.91 | 3/30/2026 | |||||||
3,577 | 1,962 | (3) | $ | 5.75 | 5/16/2026 | |||||||
4,701 | 3,357 | (3) | $ | 7.22 | 8/16/2026 | |||||||
3,281 | 3,018 | (3) | $ | 4.72 | 11/17/2026 | |||||||
20,833 | 19,167 | (4) | $ | 4.75 | 11/30/2026 | |||||||
6,234 | 8,015 | (5) | $ | 4.20 | 3/31/2027 | |||||||
4,706 | 7,181 | (5) | $ | 2.75 | 5/12/2027 | |||||||
9,371 | 18,742 | (3) | $ | 1.95 | 8/14/2027 | |||||||
10,833 | 29,167 | (4) | $ | 4.65 | 11/30/2027 | |||||||
1,578 | 11,042 | (3) | $ | 1.34 | 6/5/2028 | |||||||
1,565 | 17,214 | (3) | $ | 1.10 | 8/16/2028 | |||||||
179 | 8,422 | (3) | $ | 1.46 | 11/16/2028 | |||||||
833 | 39,167 | (4) | $ | 1.33 | 11/30/2028 | |||||||
Ryan S. Schram | 5,000 | — | $ | 5.00 | 3/1/2023 | |||||||
Chief Operating Officer | 3,750 | — | $ | 5.00 | 3/1/2023 | |||||||
10,000 | — | $ | 5.40 | 5/20/2019 | ||||||||
6,667 | — | $ | 5.60 | 1/2/2025 | ||||||||
1,141 | 76 | (3) | $ | 7.80 | 4/1/2025 | |||||||
447 | 64 | (3) | $ | 8.40 | 7/1/2025 | |||||||
455 | 105 | (3) | $ | 8.00 | 10/1/2025 | |||||||
4,766 | 1,589 | (4) | $ | 7.60 | 1/1/2026 | |||||||
951 | 432 | (3) | $ | 6.91 | 3/30/2026 | |||||||
596 | 327 | (3) | $ | 5.75 | 5/16/2026 | |||||||
783 | 560 | (3) | $ | 7.22 | 8/16/2026 | |||||||
547 | 503 | (3) | $ | 4.72 | 11/17/2026 | |||||||
3,334 | 3,333 | (4) | $ | 4.51 | 1/1/2027 | |||||||
1,039 | 1,336 | (3) | $ | 4.20 | 3/31/2027 | |||||||
955 | 1,457 | (3) | $ | 2.75 | 5/12/2027 | |||||||
1,418 | 2,837 | (3) | $ | 1.95 | 8/14/2027 | |||||||
1,667 | 5,000 | (4) | $ | 4.52 | 1/1/2028 | |||||||
350 | 2,452 | (3) | $ | 1.34 | 6/5/2028 | |||||||
270 | 2,971 | (3) | $ | 1.10 | 8/16/2028 | |||||||
13 | 611 | (3) | $ | 1.46 | 11/16/2028 | |||||||
Michael R. Heald | — | 20,000 | $ | 1.08 | 8/15/2028 | |||||||
Chief Financial Officer | ||||||||||||
LeAnn C. Hitchcock (2) | 125 | — | $ | 5.00 | 3/1/2023 | |||||||
Former Chief Financial Officer | 5,000 | — | $ | 5.40 | 5/20/2019 |
(1) | Unless otherwise indicated, the option exercise price represents the closing price of our common stock on the date of grant. |
(2) | Ms. Hitchcock served as our Chief Financial Officer until her resignation date effective as of August 15, 2018. Therefore, all of her unvested awards and awards related to her service as our Chief Financial Officer were forfeited prior to December 31, 2018. |
(3) | Represents the unvested portion of annual or quarterly bonus awards based on Key Performance Indicators, vesting in equal monthly installments over four years subsequent to the grant date. Each of these grants has a ten-year term, indicating that the grant date was 10 years prior to the indicated Option Expiration Date. |
(4) | Represents the unvested portion of non-qualified stock options granted pursuant to an employment agreement and vesting in equal monthly installments over four years subsequent to the grant date. |
(5) | As a result of quarterly and annual bonus awards based on Key Performance Indicators, Mr. Murphy received incentive stock options on March 31, 2017 and May 12, 2017, totaling 26,136 shares. These options were subject to the approval of an increase in shares in our Equity Incentive Plan, which was approved on June 21, 2017. These options vested as to 1,139 shares on June 30, 2017. The remainder of the incentive stock options granted on March 31, 2017 vest over 45 equal monthly installments of approximately 297 shares thereafter, and the remainder of the incentive stock options granted on May 12, 2017 vest over 27 equal monthly installments of approximately 248 shares thereafter. |
Stock Awards | |||||||
Name | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||
Edward H. (Ted) Murphy (1) | 1,875 | $ | 1,838 | ||||
President and Chief Executive Officer | 5,501 | $ | 5,391 | ||||
18,023 | $ | 17,663 | |||||
Ryan S. Schram (2) | 442 | $ | 433 | ||||
Chief Operating Officer | 918 | $ | 900 | ||||
2,500 | $ | 2,450 | |||||
3,225 | $ | 3,161 | |||||
Michael R. Heald | — | $ | — | ||||
Chief Financial Officer | |||||||
LeAnn C. Hitchcock (3) | — | $ | — | ||||
Former Chief Financial Officer |
(1) | We issued 2,812 shares and 7,543 shares of restricted stock to Mr. Murphy for stock amounts owed on his second and third quarter 2017 performance bonus on August 14, 2017 and November 9, 2017, respectively. The stock was initially valued at $36,411 and vests in equal monthly installments over 48 months from issuance. We issued 21,628 shares of restricted stock to Mr. Murphy for stock amounts owed on his annual 2017 performance bonus on May 3, 2018. The stock was initially valued at $46,715 and vests in equal monthly installments over 48 months from issuance. As of December 31, 2018, 25,399 shares of the 31,983 issued shares of restricted stock are unvested with a total market value of $24,891 based on the closing stock price of $$0.98 on December 31, 2018. |
(2) | We issued 662 shares and 1,257 shares of restricted stock on August 14, 2017 and November 9, 2017, respectively, to Mr. Schram for stock amounts owed on his second and third quarter 2017 performance bonus. The stock was initially valued at $6,446 and vests in equal monthly installments over 48 months from issuance. We issued 5,000 shares of restricted stock to Mr. Schram as an incentive award on January 11, 2018. The stock was initially valued at $27,600 and vests in equal quarterly installments over two years beginning with the initial vesting on March 31, 2018. We issued 3,870 shares of restricted stock to Mr. Schram for stock amounts owed on his annual 2017 performance bonus on May 3, 2018. The stock was initially valued at $8,360 and vests in equal monthly installments over 48 months from issuance. As of December 31, 2018, 7,085 shares of the 10,789 issued shares of restricted stock are unvested with a total market value of $6,943 based on the closing stock price of $0.98 on December 31, 2018. |
(3) | We issued 10,000 shares of restricted stock to Ms. Hitchcock as an incentive award on January 11, 2018. The stock was initially valued at $55,200 and vests in equal quarterly installments over two years beginning with the initial vesting on March 31, 2018. Ms. Hitchcock forfeited 7,500 shares of unvested restricted common stock with an initial value of $41,400 in the fourth quarter of 2018. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||
(a) | (b) | (c)(1) | |||||
Equity compensation plans approved by security holders | 1,040,477 | $ | 5.23 | 1,722,389 | |||
Equity compensation plans not approved by security holders | — | — | — | ||||
Total | 1,040,477 | $ | 5.23 | 1,722,389 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Total ($) | ||||
Brian W. Brady (1) | 26,000 | 25,000 | — | 51,000 | ||||
John H. Caron (2) | 30,000 | 25,000 | — | 55,000 | ||||
Lindsay A. Gardner (3) | 26,000 | 25,000 | — | 51,000 | ||||
Jill M. Golder (4) | 30,000 | 25,000 | — | 55,000 | ||||
Daniel R. Rua (5) | 30,000 | 25,000 | — | 55,000 | ||||
Patrick J. Venetucci (6) | — | — | 1,714 | 1,714 |
(1) | On August 7, 2012, we appointed Brian W. Brady to our Board. In 2018, Mr. Brady received 6,053 shares of restricted stock originally valued at $25,000 upon issuance. The value of these shares was expensed as the shares vested in equal monthly installments from January through December 2018. Mr. Brady also received cash compensation of $26,000 in accordance with the non-employee director compensation program effected in March 2013. |
(2) | On April 13, 2015, we appointed John H. Caron to our Board. In 2017, Mr. Caron received 6,053 shares of restricted stock originally valued at $25,000 upon issuance. The value of these shares was expensed as the shares vested in |
(3) | On December 10, 2013, we appointed Lindsay A. Gardner to our Board. In 2017, Mr. Gardner received 6,053 shares of restricted stock originally valued at $25,000 upon issuance. The value of these shares was expensed as the shares vested in equal monthly installments from January through December 2018. Mr. Gardner also received cash compensation of $26,000 in accordance with the non-employee director compensation program effected in March 2013. |
(4) | On May 26, 2015, we appointed Jill M. Golder to our Board. In 2017, Ms. Golder received 6,053 shares of restricted stock originally valued at $25,000 upon issuance. The value of these shares was expensed as the shares vested in equal monthly installments from January through December 2018. Ms. Golder also received cash compensation of $30,000 in accordance with the non-employee director compensation program effected in March 2013. |
(5) | On July 31, 2012, we reappointed Daniel R. Rua to our Board. In 2017, Mr. Rua received 6,053 shares of restricted stock originally valued at $25,000 upon issuance. The value of these shares was expensed as the shares vested in equal monthly installments from January through December 2018. Mr. Rua also received cash compensation of $30,000 in accordance with the non-employee director compensation program effected in March 2013. |
(6) | On December 18, 2018, we appointed Patrick J. Venetucci to our Board. On the date of his appointment, Mr. Venetucci received options exercisable for 2,500 shares of common stock originally valued at $1,714 upon issuance, which vest in 12 equal monthly installments. |
• | An annual board retainer fee of $25,000 to be paid in restricted stock each calendar year earned equally over the year of service. |
• | A cash retainer fee of $20,000 per year, payable in cash or restricted stock. |
• | Reimbursement of actual and necessary travel and related expenses in connection with attending in-person Board meetings. |
• | A $1,000 per meeting fee for all meetings of the Board, subject to a $6,000 annual cap. |
• | A $1,000 per Audit Committee meeting fee, subject to a $4,000 annual cap. |
• | each person or group of affiliated persons, known to us to beneficially own more than 5% of our outstanding common stock; |
• | each of our directors and named executive officers; and, |
• | all of our directors and executive officers as a group. |
Name of Beneficial Owner | Shares Beneficially Owned | Percentage of Common Stock Beneficially Owned (1) | ||||
Executive Officers and Directors: | ||||||
Edward H. (Ted) Murphy (2) | 673,236 | 5.1 | % | |||
Ryan S. Schram (3) | 67,088 | * | ||||
Michael R. Heald (4) | — | * | ||||
LeAnn C. Hitchcock (5) | 13,557 | * | ||||
Brian W. Brady (6) | 1,449,463 | 11.3 | % | |||
John H. Caron (7) | 57,942 | * | ||||
Lindsay A. Gardner (8) | 118,533 | * | ||||
Jill M. Golder (9) | 39,604 | * | ||||
Daniel R. Rua (10) | 53,609 | * | ||||
Patrick J. Venetucci (11) | 18,335 | — | % | |||
All executive officers and directors as a group (11 persons) (12) | 2,491,367 | 18.6 | % |
(1) | Applicable percentage of ownership for each holder is based on 12,824,602 shares outstanding as of March 26, 2019. |
(2) | Includes 164,140 shares and exercisable stock options to purchase 506,706 shares of common stock under our May 2011 Equity Incentive Plan. |
(3) | Includes 18,159 shares and exercisable stock options to purchase 48,596 shares of common stock under our May 2011 Equity Incentive Plan. |
(4) | Michael R. Heald was appointed as our Chief Financial Officer as of August 15, 2018, and served as our Chief Financial Officer until his resignation date effective as of January 31, 2019. |
(5) | LeAnn C. Hitchcock resigned as our Chief Financial Officer on August 15, 2018. Includes 8,432 shares and exercisable stock options to purchase 5,125 shares of common stock under our May 2011 Equity Incentive Plan. |
(6) | Includes 1,438,956 shares, exercisable stock options to purchase 10,507 shares of common stock under our May 2011 Equity Incentive Plan. |
(7) | Includes 55,442 shares and exercisable stock options to purchase 2,500shares of common stock under our May 2011 Equity Incentive Plan. |
(8) | Includes 117,379 shares, exercisable stock options to purchase 1,154 shares of common stock under our May 2011 Equity Incentive Plan. |
(9) | Includes 37,104 shares, exercisable stock options to purchase 2,500 shares of common stock under our May 2011 Equity Incentive Plan. |
(10) | Includes 44,019 shares, exercisable stock options to purchase 9,590 shares of common stock under our May 2011 Equity Incentive Plan. |
(11) | Includes 14,793 shares, exercisable stock options to purchase 3,333 shares of common stock under our May 2011 Equity Incentive Plan. |
(12) | For all executive officers and directors as a group, this amount includes 1,164,668 shares and exercisable stock options to purchase 590,011 shares of common stock under our Equity Incentive Plans as further detailed in footnotes (2) through (12) above. |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Audit Fees (1) | $ | 301,220 | $ | 158,036 | |||
Audit-Related Fees (2) | 33,000 | 33,161 | |||||
Tax Fees (3) | 25,414 | 25,623 | |||||
All Other Fees (4) | — | — | |||||
Total | $ | 359,634 | $ | 216,820 |
(1) | “Audit Fees” means the aggregate fees billed by the principal accountant for each of the last two fiscal years for professional services rendered for the audit and review of financial statements. |
(2) | “Audit-Related Fees” means the aggregate fees billed by the principal accountant in each of the last two fiscal years for assurance and related services reasonably related to the performance of the audit or review of financial statements. |
(3) | “Tax Fees” means the aggregate fees billed by the principal accountant in each of the last two fiscal years for professional services for tax compliance. No tax advice or tax planning services were rendered by the principal accountant. |
(4) | “All Other Fees” means the aggregate fees billed by the principal accountant in each of the last two fiscal years for products and services other than those reported above. |
(a) | The following documents are filed as part of this Annual Report: |
(1) | Financial Statements (see “Consolidated Financial Statements and Supplementary Data” at Item 8 and incorporated herein by reference). |
(2) | Financial Statement Schedules (Schedules to the Financial Statements have been omitted because the information required to be set forth therein is not applicable or is shown in the accompanying Financial Statements or notes thereto). |
(3) | Exhibits |
Exhibit Number | Description | |
2.1 | ||
2.2 | ||
2.3 | ||
2.4 | ||
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
3.7 | ||
3.8 | ||
3.9 | ||
10.1 | (a) |
10.2 | ||
10.3 | (a) | |
10.4 | (a) | |
10.5 | (a) | |
10.6 | (a) | |
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | (a) | |
10.11 | ||
10.12 | (a) | |
21.1 | * | |
23.1 | * | |
31.1 | * | |
31.2 | * | |
32.1 | * (b) | |
32.2 | * (b) | |
101 | * (c) | The following materials from IZEA Worldwide, Inc.'s Annual Report for the year ended December 31, 2018 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Stockholders' Equity, (iv) the Consolidated Statements of Cash Flow, and (iv) Notes to the Consolidated Financial Statements. |
* | Filed or furnished herewith. |
(a) | Denotes management contract or compensatory plan or arrangement. |
(b) | In accordance with Item 601of Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. |
(c) | In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other |
IZEA Worldwide, Inc. a Nevada corporation | ||
March 28, 2019 | By: | /s/ Edward H. Murphy |
Edward H. Murphy Chairman, President and Chief Executive Officer (Principal Executive Officer) | ||
March 28, 2019 | By: | /s/ Troy J. Vanke |
Troy J. Vanke Chief Financial Officer (Principal Financial and Accounting Officer) |
/s/ Edward H. Murphy | March 28, 2019 | |
Edward H. Murphy | ||
President, Chief Executive Officer and Chairman of the Board | ||
(Principal Executive Officer) | ||
/s/ Troy J. Vanke | March 28, 2019 | |
Troy J. Vanke | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) | ||
/s/ Ryan S. Schram | March 28, 2019 | |
Ryan S. Schram | ||
Chief Operating Officer and Director | ||
/s/ Brian W. Brady | March 28, 2019 | |
Brian W. Brady | ||
Director | ||
/s/ John H. Caron | March 28, 2019 | |
John H. Caron | ||
Director | ||
/s/ Lindsay A. Gardner | March 28, 2019 | |
Lindsay A. Gardner | ||
Director | ||
/s/ Jill M. Golder | March 28, 2019 | |
Jill M. Golder | ||
Director | ||
/s/ Daniel R. Rua | March 28, 2019 | |
Daniel R. Rua | ||
Director | ||
/s/ Patrick J. Venetucci | March 28, 2019 | |
Patrick J. Venetucci | ||
Director |
/s/ Edward H. Murphy | |
Edward H. Murphy | |
Chairman, President and Chief Executive Officer | |
(Principal Executive Officer) |
/s/ Troy J. Vanke | |
Troy J. Vanke | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
/s/ Edward H. Murphy | |
Edward H. Murphy Chairman, President and Chief Executive Officer (Principal Executive Officer) |
/s/ Troy J. Vanke | |
Troy J. Vanke Chief Financial Officer (Principal Financial and Accounting Officer) |
Document and Entity Information Document - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Mar. 26, 2019 |
Jun. 29, 2018 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | IZEA Worldwide, Inc. | ||
Entity Central Index Key | 0001495231 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | Q4 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 12,824,602 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 4,426,599 |
Consolidated Balance Sheets Parentheticals - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Parentheticals - Balance Sheet [Abstract] | ||
Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares, issued (shares) | 12,075,708 | 5,733,981 |
Common stock, shares outstanding (shares) | 12,075,708 | 5,733,981 |
Consolidated Statements of Operations - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Statement [Abstract] | ||
Revenue | $ 20,099,695 | $ 24,437,649 |
Costs and expenses: | ||
Cost of revenue (exclusive of amortization) | 9,042,155 | 11,585,316 |
Sales and marketing | 6,484,320 | 7,593,197 |
General and administrative | 8,683,911 | 9,218,565 |
Depreciation and amortization | 1,298,359 | 1,516,807 |
Total costs and expenses | 25,508,745 | 29,913,885 |
Loss from operations | (5,409,050) | (5,476,236) |
Other income (expense): | ||
Interest expense | (269,473) | (64,950) |
Change in fair value of derivatives, net | (11,794) | 39,269 |
Other income (expense), net | (28,090) | 34,218 |
Total other income (expense), net | (309,357) | 8,537 |
Net loss | $ (5,718,407) | $ (5,467,699) |
Weighted average common shares outstanding – basic and diluted | 8,541,725 | 5,674,901 |
Basic and diluted loss per common share | $ (0.67) | $ (0.96) |
Company and Summary of Significant Accounting Policies (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business IZEA Worldwide, Inc. (together with its wholly-owned subsidiaries, “we,” “us,” “our,” “IZEA” or the “Company”) was founded in February 2006 under the name PayPerPost, Inc. and became a public company incorporated in the state of Nevada in May 2011. In January 2015, IZEA purchased all of the outstanding shares of capital stock of Ebyline, Inc. (“Ebyline”). In July 2016, IZEA purchased all the outstanding shares of capital stock of ZenContent, Inc. (“ZenContent”). The legal entity of ZenContent was dissolved in December 2017 after all assets and transactions were transferred to IZEA. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary, incorporated in Ontario, Canada to operate as a sales and support office for IZEA's Canadian customers. On July 26, 2018, the Company merged with TapInfluence, Inc. ("TapInfluence") pursuant to the terms of an Agreement and Plan of Merger dated as of July 11, 2018, and amended July 20, 2018. Effective August 20, 2018, the Company changed its name from IZEA, Inc. to IZEA Worldwide, Inc. The Company is headquartered near Orlando, Florida with additional offices in California, Colorado, Illinois, New York and Canada. The Company creates and operates online marketplaces that connect marketers with content creators. The creators are compensated by IZEA for producing and distributing unique content such as long and short form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs, and social media channels. Marketers receive influential consumer content and engaging, shareable stories that drive awareness. The Company's primary technology platform, The IZEA Exchange (“IZEAx”), enables transactions to be completed at scale through the management of custom content workflow, creator search and targeting, bidding, analytics, and payment processing. IZEAx is designed to provide a unified ecosystem that enables the creation and publication of multiple types of custom content through a creator's personal websites, blogs, or social media channels including Twitter, Facebook, Instagram, and YouTube among others. In addition to IZEAx, the Company operates the Ebyline and TapInfluence technology platforms. The Ebyline platform was originally designed as a self-service content marketplace to replace editorial newsrooms in the news agencies with a “virtual newsroom” to handle their content workflow. The TapInfluence platform performs in a similar manner to IZEAx and is being utilized by the majority of its customers as a self-service platform via a licensing arrangement, allowing access to the platform and its creators for self-managed marketing campaigns. Liquidity and Going Concern The Company’s financial statements are prepared using GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant net losses and negative cash flow from operations for most periods since its inception, which has resulted in a total accumulated deficit of $53,094,649 as of December 31, 2018. For the year ended December 31, 2018, the Company had a net loss of $5,718,407. The Company's cash balance as of December 31, 2018 was $1,968,403 and the Company's operating activities used cash of $5,582,480 for the year ended December 31, 2018. As further discussed in Note 7, the Company received net proceeds of $3,140,647 and $1,820,965 from two separate underwritten public offerings on July 2, 2018 and September 21, 2018, respectively. The Company used a portion of the July 2, 2018 proceeds to finance its merger with TapInfluence. As of December 31, 2018, the Company has the obligation to pay former TapInfluence stockholders an additional $3,500,000 in the form of cash, common stock or a combination thereof, at IZEA’s option, in July 2019. With the cash on hand after our July 2018 and September 2018 common stock offerings and the expected additional revenue potential and operational efficiencies after our merger with TapInfluence in July 2018, along with our available credit line with Western Alliance Bank, we expect to have sufficient cash reserves and financing sources available to cover expenses at least one year from the issuance of this Annual Report. However, we do not currently have enough cash to pay our future obligations relating to our acquisitions of ZenContent and TapInfluence as they become due in July 2019. We intend to rely on our ability to issue shares of our common stock as payment, but if we are limited in our ability to issue shares, cannot raise additional cash through our operations, borrowing on our credit facilities, or through a sale of our equity or equity linked securities to pay for these future obligations, we will need to significantly slow or pause our business activities and reduce expenses until such time as we are able to raise additional capital or perhaps even cease the operation of our business. Principles of Consolidation The consolidated financial statements include the accounts of IZEA Worldwide, Inc. and its wholly-owned subsidiaries, subsequent to the subsidiaries' individual acquisition, merger or formation dates, as applicable. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline, ZenContent and TapInfluence. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase to be cash equivalents. Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Management considers an account to be delinquent when the customer has not paid an amount due by its associated due date. Uncollectibility of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to develop or share content on behalf of a marketer. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on its best estimate of the uncollectible portion of the account. Management determines the collectibility of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $278,190 and $189,000, for doubtful accounts as of December 31, 2018 and 2017, respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the twelve months ended December 31, 2018 and 2017. Concentrations of credit risk with respect to accounts receivable were typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. However, with the Company's acquisition of TapInfluence, it has increased credit exposure on certain customers who carry significant credit balances related to their Marketplace Spend. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers, but generally does not require collateral to support accounts receivable. The Company had two customers that together accounted for 36% of total accounts receivable at December 31, 2018 and no customer that accounted for more than 10% at December 31, 2017. The Company had no customer that accounted for more than 10% of its revenue during either of the twelve months ended December 31, 2018 or December 31, 2017. Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows:
Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. Goodwill and Business Combinations Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill in connection with its acquisitions of Ebyline, ZenContent and TapInfluence. Goodwill is not amortized but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill as of October 1 of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that it has two reporting units as of December 31, 2018. See further discussion regarding segment reporting in Note 10. For the twelve months ended December 31, 2018 and 2017, there were no impairment charges to goodwill. Intangible Assets The Company acquired the majority of its intangible assets through its acquisitions of Ebyline, ZenContent and TapInfluence. The Company is amortizing the identifiable intangible assets over periods of 12 to 60 months. See Note 4 for further details. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the twelve months ended December 31, 2018 and 2017, there were no impairment charges associated with the Company's long-lived assets. Software Development Costs In accordance with ASC 350-40, Internal Use Software, the Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the research and planning stage and in the post-implementation stage of software development, or other maintenance and development expenses that do not meet the qualification for capitalization, are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. These software development and acquired technology costs are amortized on a straight-line basis over the estimated useful life of five years upon initial release of the software or additional features. See Note 5 for further details. Revenue Recognition The Company generates revenue from five primary sources: (1) revenue from its managed services when a marketer (typically a brand, agency or partner) pays the Company to provide custom content, influencer marketing, amplification or other consulting services (“Managed Services”); (2) revenue from fees charged to self-service customers on their marketplace spend within the Company's IZEAx and TapInfluence platforms (“Marketplace Spend Fees”); (3) revenue from fees charged to access the IZEAx, Ebyline, and TapInfluence platforms (“License Fees”) (4) revenue from transactions generated by the self-service use of the Company's Ebyline platform for professional custom content workflow (“Legacy Workflow Fees”); and (5) revenue derived from other fees such as inactivity fees, early cash-out fees, and plan fees charged to users of the Company's platforms (“Other”). On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method, under which comparative periods were not restated and the cumulative effect of applying the standard was recognized at the date of initial adoption on January 1, 2018. Under the modified retrospective method, the Company only applied the new standard to contracts that were not completed as of January 1, 2018. Under ASC 606, revenue is recognized based on a five-step model and, in doing so, more judgment and estimates may be required within the revenue recognition process than were required under the former rules. The Company has reviewed its sources of revenue in accordance with each of the five steps in the model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue is recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations. The Company also determines whether it acts as an agent or a principal for each identified performance obligation. The determination of whether the Company acts as the principal or the agent is highly subjective and requires the Company to evaluate a number of indicators individually and as a whole in order to make its determination. For transactions in which the Company acts as a principal, revenue is reported on a gross basis as the amount paid by the marketer for the purchase of content or sponsorship, promotion and other related services and the Company records the amounts it pays to third-party creators as cost of revenue. For transactions in which the Company acts as an agent, revenue is reported on a net basis as the amount the Company charged to the self-service marketer using the Company's platforms, less the amounts paid to the third-party creators providing the service. The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. Payment terms are typically 30 days from the invoice date. The agreement typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. The allocation of the transaction price to the performance obligations in the contract is based on a cost-plus methodology. For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase influencer marketing services for the purpose of providing public awareness or advertising buzz regarding the marketer's brand and they purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that may range from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied over time as the customer receives the benefits from the services. Revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress towards satisfying the overall performance obligation of the marketing campaign. The delivery of custom content represents a distinct performance obligation that is satisfied over time as the Company has no alternative for the custom content and the Company has an enforceable right to payment for performance completed to date under the contracts. The Company considers custom content to be a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, and revenue is recognized over time using an output method based on when each individual piece of content is delivered to the customer. Based on the Company's evaluations, revenue from Managed Services is reported on a gross basis, because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. For Marketplace Spend and Legacy Workflow Revenue, the self-service customer instructs creators found through the Company's platforms to provide and/or distribute custom content for an agreed upon transaction price. The Company's platforms control the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies or marketers to control the outsourcing of their content and advertising needs. The Company charges the self-service customer the transaction price plus a fee based on the contract. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Based on the Company's evaluations, Marketplace Spend Fee revenue is reported on a net basis since the Company is acting as an agent solely arranging for the third-party creator or influencer to provide the services directly to the self-service customer through the platform, and is typically recognized upon publishing or purchase of the marketplace spend by the creator and verification of the publishing by the marketer. License Fee revenue is generated through the granting of limited, non-exclusive, non-transferable licenses to customers for the use of the IZEAx and TapInfluence technology platforms for an agreed-upon subscription period. Customers license the platforms to manage their own influencer marketing campaigns. Fees for subscription or licensing services are recognized straight-line over the term of the service. Other Fee revenue is generated when fees are charged to customers primarily related to monthly plan fees, inactivity fees, and early cash-out fees. Plan fees are recognized within the month they relate to, and inactivity and early cash-out fees are recognized at a point in time when the account is deemed inactive or a cash-out below certain minimum thresholds is requested. The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to obtain its customer contracts as these amounts generally would be recognized over a period of less than one year and are not material. See Note 9 for further details on the Company's adoption and disclosures related to ASC 606. Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the twelve months ended December 31, 2018 and 2017 were approximately $470,000 and $324,000, respectively. Advertising costs are included in sales and marketing expense in the accompanying consolidated statements of operations. Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease terms. The Company accounts for rental expense on a straight-line basis over the lease terms. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying consolidated balance sheets. Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in four states, which is included in general and administrative expense in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2015, 2016 and 2017. Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value:
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) as of December 31, 2018 and 2017. Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying values of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, and accrued expenses. Unless otherwise disclosed, the fair values of the Company’s long-term debt obligations approximate their carrying value based upon current rates available to the Company. Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and the 2011 B Equity Incentive Plan (together, the “2011 Equity Incentive Plans”) (see Note 7) is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period on a straight-line basis. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The Company uses the closing stock price of its common stock on the date of the grant as the associated fair value of its common stock. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for stock options granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Weighted average expected forfeiture rates on stock options were 4.73% and 8.58% during the twelve months ended December 31, 2018 and 2017, respectively. The Company used the following assumptions for restricted stock units granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
The weighted average expected forfeiture rate applied on restricted stock units was 0.00% during the twelve months ended December 31, 2018 since this was the first year of restricted stock unit issuances and the Company does not have a history of forfeitures. The Company may issue shares of restricted stock or restricted stock units which vest over future periods. The value of shares issued to non-employees is required to be adjusted over the vesting period. See Note 7 for additional information related to these shares. Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded in the accompanying consolidated statements of operations. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. Segment Information Prior to its merger with TapInfluence, the Company managed its operations as one segment for reporting purposes and evaluated operations and made business decisions based on consolidated results. Effective in the quarter ended September 30, 2018, and primarily as a result of the merger with TapInfluence, the Company has significantly expanded its operations related to license fees and marketplace spend fees. As a result, Company management is now actively evaluating operations under two reportable business segments (see Note 10). Use of Estimates The preparation of financial statements in conformity with GAAP 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. Actual results could differ from those estimates. Reclassifications Certain items have been reclassified in the 2017 financial statements to conform to the 2018 presentation. In the Statements of Cash Flows, the Company has reclassified payments on acquisition liabilities as financing activities rather than as a change in accrued expenses in operating activities. Recent Accounting Pronouncements Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Since the issuance of the original standard, the FASB has issued a subsequent update, ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842, which provides a practical expedient for land easements. The Company currently expects to elect the package of practical expedients, which permit it to carryforward its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company currently expects to adopt the practical expedient that allows comparative periods to be reported under current lease accounting guidance consistent with previously issued financial statements. The Company also does not currently expect to record leases on the balance sheet that at the commencement date have a lease term of twelve months or less. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company will adopt the new standard effective January 1, 2019 and has elected to apply the guidance as of the adoption date. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Based upon the relative small size and short duration of its lease portfolio, the Company expects that the initial adoption of this standard will result in recording a right-to-use asset and associated lease liability on its balance sheet of less than $500,000. The Company expects that this standard will not have an impact on its statements of operations or cash flows. Earnings Per Share: In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480 because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements. Derivatives and Hedging: In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The amendments in this ASU better align the risk management activities and financial reporting for these hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements. Stock Compensation: In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee ShareBased Payment Accounting. The amendments in the new guidance specify that Topic 718 applies to all sharebased payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing sharebased payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements and believes that the impact will not be material. Fair Value Measurements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for the Company beginning January 1, 2020, with early adoption permitted upon issuance of this updated guidance. The Company does not plan to early adopt this ASU, and it is currently evaluating the impact of adopting this guidance. Collaborative Arrangements: In November 2018, the FASB issued ASU No 2018-18, Collaborative Arrangements (Topic 808): Clarifying the interaction between Topic 808 and Topic 606. The guidance makes targeted improvements to GAAP for collaborative arrangements including: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adding unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and (iii) requiring that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied retrospectively to the date of initial application of ASC 606. An entity may elect to apply the amendments in this ASU retrospectively either to all contracts or only to contracts that are not completed at the date of initial application of ASC 606. An entity should disclose its election. An entity may elect to apply the practical expedient for contract modifications that is permitted for entities using the modified retrospective transition method in ASC 606. The Company is currently assessing the effect the adoption of this standard will have on its financial statements. |
Business Acquisitions (Notes) |
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Business Combination Disclosure [Text Block] | BUSINESS ACQUISITIONS TAPINFLUENCE, INC. On July 26, 2018, IZEA completed its merger with TapInfluence, Inc., pursuant to the terms of the Agreement and Plan of Merger, dated as of July 11, 2018, by and among IZEA, IZEA Merger Sub, Inc., TapInfluence, certain stockholders of TapInfluence and the stockholders’ representative, as amended by Amendment No. 1 thereto, dated as of July 20, 2018 (the "Merger Agreement"). The merger was consummated, in part, to further consolidate the influencer marketing industry for IZEA, and for IZEA to obtain benefits from the acquisition of the TapInfluence technology platform and existing customer base, particularly from TapInfluence's self-service customers. At closing, IZEA paid to TapInfluence stockholders the sum of $1,500,000 in cash, less an estimated closing working capital adjustment of $181,633, along with other adjustments as defined in the Merger Agreement, and issued 1,150,000 shares of IZEA's common stock valued at $1,759,500 based on the $1.53 closing market price of IZEA's common stock on July 26, 2018. IZEA has agreed to pay TapInfluence stockholders an additional $4,500,000 in the form of cash, common stock or a combination thereof, at IZEA’s option, in two installments - $1,000,000 six months after the closing date of the merger and $3,500,000 twelve months after the closing date of the merger. Stock issuances, if any, will be determined based on the 30-trading day volume-weighted average price per share of IZEA's common stock prior to the payment date. Future cash payments and stock issuances may be withheld from the six month or twelve month payment for post-closing working capital adjustments and to satisfy indemnifiable claims made by IZEA with respect to any misrepresentations or breaches of warranty under the Merger Agreement by TapInfluence or the stockholders of TapInfluence within 12 months after the closing date of the merger. Following the closing of the merger, IZEA calculated the final working capital as of the closing date to be $297,049. Therefore, the purchase price was reduced by an additional $115,416 that was deducted from the six-month installment payment made in January 2019. Purchase Price and Acquisition Costs Payable
The following table summarizes the preliminary amounts of net assets acquired at the merger date:
For the twelve months ended December 31, 2018, $1,991,548 of the Company's consolidated revenue was associated with TapInfluence operations. The Company is unable to determine net loss specifically related to TapInfluence operations as the majority of operational resources were shared with IZEA. The following unaudited pro forma summary presents consolidated information of the Company as if the business combination with TapInfluence had occurred on January 1, 2017:
The business combination was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, IZEA is in the process of finalizing its estimated fair value of TapInfluence’s assets acquired and liabilities assumed and conforming the accounting policies of TapInfluence to its own accounting policies. The Company does not expect there to be any material changes to its acquisition accounting based upon its final review procedures. However, differences between these preliminary estimates and the final purchase price accounting may occur, and these differences could have a material impact on the Company's consolidated financial statements. ZENCONTENT, INC. On July 31, 2016, the Company purchased all of the outstanding shares of capital stock of ZenContent pursuant to the terms of a Stock Purchase Agreement, by and among IZEA, ZenContent and the stockholders of ZenContent (the “ZenContent Stock Purchase Agreement”) for a maximum purchase price to be paid over three years of $4,500,000. Upon closing, the Company paid a cash payment of $400,000 and issued 86,207 shares of the Company's common stock valued at $600,000. The ZenContent Stock Purchase Agreement also requires (i) three equal annual installment payments totaling $1,000,000, subject to a working capital adjustment, commencing 12 months following the closing and (ii) contingent performance payments of up to an aggregate of $2,500,000 over the three consecutive 12-month periods following the closing, based upon ZenContent achieving certain minimum revenue thresholds. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of the Company's common stock (determined at the Company's option). Additionally, these payments were subject to a downward adjustment of up to 30% if ZenContent's co-founder was terminated by IZEA for cause or she terminated her employment without good reason. The Company amended the ZenContent Stock Purchase Agreement on October 21, 2016, to clarify definitions surrounding contingent performance payments and to provide for a contingent cash commission of 1% on certain IZEA legacy clients for which the Company used ZenContent technology to produce content for its Managed Services in the future. The Company entered into a second amendment to the ZenContent Stock Purchase Agreement on July 17, 2018 to further amend the terms of the contingent performance payments. The parties agreed to pay approximately $9,818 related to the historical 1% commission on IZEA legacy client calculations and to fix the amount payable for any further contingent performance payments at $90,000, of which $45,000 was paid in cash on November 1, 2018, and $45,000 is due on November 1, 2019 and is payable in cash or stock at the Company's option. In return for the fixed valuation of the contingent performance payments, the Company waived its rights to reduce the future guaranteed annual and contingent performance payments in the event that ZenContent's co-founder terminated her employment, after which she terminated her employment with the Company on July 20, 2018. Purchase Price and Acquisition Costs Payable
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Property and Equipment (Notes) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | PROPERTY AND EQUIPMENT Property and equipment consists of the following:
Depreciation expense on property and equipment recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $222,912 and $211,769 for the twelve months ended December 31, 2018 and 2017, respectively. |
Intangible Assets (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | INTANGIBLE ASSETS The identifiable intangible assets, other than Goodwill, consists of the following assets:
Total identifiable intangible assets, other than Goodwill, from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following:
The Company is amortizing the identifiable intangible assets over a weighted average period of three years. Amortization expense recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $780,960 and $994,627 for the twelve months ended December 31, 2018 and 2017, respectively. The portion of this amortization expense specifically related to the costs of acquired technology for its platforms that is presented separately from cost of revenue was $156,000 and $106,000 for the twelve months ended December 31, 2018 and 2017, respectively. As of December 31, 2018, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule:
Our goodwill balance changed as follows:
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Software Development Costs (Notes) |
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Research, Development, and Computer Software Disclosure [Text Block] | SOFTWARE DEVELOPMENT COSTS Software development costs consists of the following:
The Company developed its web-based advertising and content exchange platform, IZEAx, to enable native advertising campaigns on a greater scale. The Company continues to add new features and additional functionality to IZEAx to facilitate the contracting, workflow, and delivery of direct content as well as provide for invoicing, collaborating, and direct payments for the Company's self-service customers. Research and planning phase costs are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. The Company incurred and capitalized software development costs of $755,164 and $174,379 during the twelve months ended December 31, 2018 and 2017, respectively. As a result, the Company has capitalized a total of $2,316,515 in direct materials, consulting, payroll and benefit costs to its internal use software development costs in the consolidated balance sheet as of December 31, 2018. The Company amortizes its software development costs, upon initial release of the software or additional features, on a straight-line basis over the estimated the useful life of five years, which is consistent with the amount of time its legacy platforms were in service. Amortization expense on software development costs that is presented separately from cost of revenue and recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $294,487 and $310,411 for the twelve months ended December 31, 2018 and 2017, respectively. As of December 31, 2018, future estimated amortization expense related to software development costs is set forth in the following schedule:
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Commitments and Contingencies (Notes) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS & CONTINGENCIES Credit Agreement The Company has a secured credit facility agreement with Western Alliance Bank, the parent company of Bridge Bank, N.A. of San Jose, California, which it obtained on March 1, 2013 and expanded on April 13, 2015. Effective August 30, 2018, as a result of IZEA's merger with TapInfluence, the Company entered into a Business Financing Modification Agreement and Consent with Western Alliance Bank to add TapInfluence as an additional borrower on the credit facility. In connection with the August 30, 2018 amendment, the Company incurred approximately $8,400 of costs which have been capitalized and are being amortized through interest expense over 12 months. Pursuant to the credit facility agreement, as amended, the Company may submit requests for funding up to 80% of its eligible accounts receivable up to a maximum credit limit of $5 million. This agreement is secured by the Company's accounts receivable and substantially all of the Company's other assets. The agreement automatically renews in April of each year and requires the Company to pay an annual facility fee of $20,000 (0.4% of the credit limit) and an annual due diligence fee of $1,000. Interest accrued on the advances at the rate of prime plus 2% per annum through August 29, 2018, at which time the rate was amended to prime plus 1.5% per annum in conjunction with the August 30, 2018 modification agreement. The default rate of interest is prime plus 7%. The Company had $1,526,288 and $500,550 outstanding under this line of credit agreement as of December 31, 2018 and 2017. These balances outstanding were secured by gross accounts receivable balances of $1,907,860 and $625,687 as of December 31, 2018 and 2017, respectively. As of December 31, 2018, the Company had a net accounts receivable balance of $7,071,815. Assuming that all of the Company's accounts receivable balance was eligible for funding, it had $3,473,712 in remaining available credit under the agreement as of December 31, 2018. The annual fees are capitalized in the Company's consolidated balance sheet within other current assets and are amortized to interest expense over one year. The Company amortized $25,215 and $21,000 of the credit facility costs through interest expense during the twelve months ended December 31, 2018 and 2017, respectively. The remaining value of the capitalized loan costs related to the Bridge Bank credit agreement as of December 31, 2018 is $11,214. This amount will be amortized to interest expense over the next four months. Lease Commitments The Company has no obligations under capital leases as of December 31, 2018 and 2017. Operating Leases The corporate headquarters are located at 480 N. Orlando Avenue, Suite 200 in Winter Park, Florida. The Company occupies this office pursuant to a sixty-five month sublease agreement that expires in April 2019, but is renewable for one additional year until April 30, 2020. This lease covers approximately 15,500 square feet based on an annually increasing rate of $17.50 to $22.50 per square foot over the lease term. The Company also occupies flexible office space under monthly membership contracts in Los Angeles, San Francisco, Denver, Chicago, New York City and Toronto. A summary of future minimum lease payments under the Company's non-cancelable leases as of December 31, 2018 is as follows:
Total rent expense recorded in general and administrative expense in the accompanying consolidated statements of operations was approximately $667,718 and $579,346 for the twelve months ended December 31, 2018 and 2017 respectively. Retirement Plans In December 2007, the Company introduced a 401(k) plan that covered all eligible employees. The Company matches participant contributions in an amount equal to 50% of each participant's contribution up to 8% of the participant's salary. The participants become vested in 20% annual increments after two years of service. During the twelve months ended December 31, 2018 and 2017, the Company incurred $219,563 and $201,003, respectively, in expense for matching employer contributions. Litigation A securities class action lawsuit, Julian Perez, individually, and on behalf of all others similarly situated v. IZEA, Inc., et al., case number 2:18-cv-02784-SVW-GJS was instituted April 4, 2018 in the U.S. District Court for the Central District of California against the Company and certain of its executive officers on behalf of certain purchasers of its common stock. The plaintiffs seek to recover damages for investors under federal securities laws. The Company believes that the plaintiffs’ allegations are without merit and intends to continue to vigorously defend against the claims. However, based upon currently available information and review with outside counsel, the Company has estimated and accrued a potential loss of $500,000 representing its deductible on the associated insurance coverage. On July 3, 2018, a shareholder derivative lawsuit, Korene Stuart v. Edward H. Murphy et al., case number A-18-777135-C was instituted in the Eighth Judicial District Court of the State of Nevada, Clark County against certain executive officers and members of the Board of Directors for IZEA. IZEA has been named as a nominal defendant. The plaintiff seeks to recover damages on behalf of the company for purported breaches of the individual defendants’ fiduciary duties as directors and/or officers of IZEA, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets in violation of state common law. Additionally, on October 19, 2018, a shareholder derivative lawsuit, Dennis E. Emond v. Edward H. Murphy et al., case number 2:18-cv-9040, was instituted in the U.S. District Court for the Central District of California against certain executive officers and members of the Board of Directors for IZEA. IZEA has been named as a nominal defendant. An amended complaint was filed on October 31, 2018. The plaintiff seeks to recover damages on behalf of the company for purported breaches of the individual defendants’ fiduciary duties as directors and/or officers of IZEA, and gross mismanagement, and under federal securities laws. On March 6, 2019, a stipulation of settlement was filed in the United States District Court for the Central District of California that contained settlement terms as agreed upon by the parties to the Stuart and Emond shareholder derivative lawsuits described above. The settlement terms as agreed upon by the parties include that IZEA will direct its insurers to make a payment of $300,000 as a fee and service award to the plaintiffs and their counsel in the Emond and Stuart lawsuits and further that IZEA will enact certain corporate governance reforms. The settlement is subject to approval by the United States District Court for the Central District of California, and the plaintiff has filed a motion for preliminary approval of the settlement which is scheduled to be heard by the Court on May 6, 2019. Upon final approval by the Court, the settlement will require that both the Emond and Stuart lawsuits be dismissed with prejudice. In the event that the Court does not approve the settlement, the Company intends to vigorously defend against the claims. From time to time, the Company may become involved in various other lawsuits and legal proceedings that arise in the ordinary course of its business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company's business. The Company is currently not aware of any other legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on us. Regardless of final outcomes, however, any such proceedings or claims may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary interim rulings. |
Stockholders' Equity (Notes) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | STOCKHOLDERS' EQUITY Authorized Shares The Company has 200,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock, each with a par value of $0.0001 per share. Stock Issued for Acquisitions On January 30, 2017, the Company issued 200,542 shares of its common stock to satisfy the final annual guaranteed purchase price payment of $938,532 per the terms of a Stock Purchase Agreement dated as of January 27, 2015, by and among IZEA, Ebyline and the stockholders of Ebyline (the “Ebyline Stock Purchase Agreement”). The Company recorded a $10,491 gain on the settlement of the acquisition costs payable for the year ended December 31, 2017 in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30-day average price of the stock required by the Ebyline Stock Purchase Agreement. The guaranteed purchase price consideration was originally recorded on the Company's balance sheet discounted to present value using the Company's borrowing rate of prime plus 2%. Interest expense imputed on the remaining acquisition costs payable was $3,804 in the accompanying consolidated statements of operations for the year ended December 31, 2017 prior to the final guaranteed payment made on January 30, 2017. On July 26, 2018, pursuant to its merger agreement with TapInfluence (see Note 2) the Company issued 1,150,000 shares of common stock valued at $1,759,500 based on the $1.53 closing market price of its common stock on July 26, 2018. Underwritten Public Offerings of Common Stock July 2, 2018 Public Offering On July 2, 2018, the Company completed an underwritten public offering of 3,556,000 shares of the Company's common stock at a public offering price of $1.00 per share. The net proceeds for all shares sold in the public offering were approximately $3.1 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company totaling approximately $418,000. Mr. Edward Murphy, the Company's Chief Executive Officer and a Company director, Mr. Brian Brady, a Company director, and Mr. Lindsay Gardner, a Company director participated in the public offering and purchased 100,000, 500,000 and 20,000 shares of stock, respectively. September 21, 2018 Public Offering On September 21, 2018, the Company completed an underwritten public offering of 1,407,333 shares of the Company's common stock at a public offering price of $1.50 per share. The net proceeds for all shares sold in the public offering were approximately $1.8 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company totaling approximately $290,000. Mr. Edward Murphy, the Company's Chief Executive Officer and a Company director, participated in the public offering and purchased 3,000 shares of stock. The above offerings were made pursuant to a shelf registration statement on Form S-3 (File No. 333-212247) filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 24, 2016, which became effective on June 30, 2016. Equity Incentive Plans In May 2011, the Company's Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA, Inc. (the “May 2011 Plan”). At the Company's 2018 Annual Meeting of Stockholders held on December 18, 2018, the stockholders approved an amendment and restatement of the May 2011 Plan which increased the number of shares of common stock available for issuance under the May 2011 Plan. The amended and restated May 2011 Plan allows the Company to award restricted stock, restricted stock units and stock options, covering up to 2,500,000 shares of common stock as incentive compensation for its employees and consultants. As of December 31, 2018, the Company had 1,120,786 shares of common stock available for issuance pursuant to future grants under the May 2011 Plan. On August 22, 2011, the Company adopted the 2011 B Equity Incentive Plan (the “August 2011 Plan”) reserving 4,375 shares of common stock for issuance under the August 2011 Plan. As of December 31, 2018, the Company had 4,375 shares of common stock available for future grants under the August 2011 Plan. Restricted Stock Under both the May 2011 Plan and the August 2011 Plan (together, the “2011 Equity Incentive Plans”), the Board determines the terms and conditions of each restricted stock issuance, including any future vesting restrictions. During the twelve months ended December 31, 2017, the Company issued its five independent directors a total of 41,770 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vested in equal monthly installments from January through December 2017. On February 12, 2017, the Company issued 7,109 shares valued at $30,000 as compensation for services a contractor provided. The Company issued 2,812 shares and 7,543 shares of restricted stock on August 14, 2017 and November 9, 2017, respectively, to Mr. Edward Murphy, its Chief Executive Officer, for amounts owed on his second and third quarter performance bonus. The stock was initially valued at $36,411 and vests in equal monthly installments over 48 months from issuance. The Company issued 662 shares and 1,257 shares of restricted stock on August 14, 2017 and November 9, 2017, respectively, to Mr. Ryan Schram, its Chief Operating Officer, for amounts owed on his second and third quarter performance bonus. The stock was initially valued at $6,446 and vests in equal monthly installments over 48 months from issuance. During the twelve months ended December 31, 2018, the Company issued its five independent directors a total of 30,265 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vested in equal monthly installments from January through December 2018. On January 11, 2018, the Company issued seventeen employees a total of 55,000 shares of restricted common stock initially valued at $303,600 as incentive compensation for their continued future service. Of these 55,000 shares, 10,000 shares were issued to Ms. LeAnn Hitchcock, the Company's then-current Chief Financial Officer, and 5,000 shares were issued to Mr. Schram. The stock vests in equal quarterly installments over two years with the initial vesting on March 31, 2018. There were 7,500 shares of unvested restricted common stock with an initial value of $41,400 forfeited during the twelve months ended December 31, 2018. The Company issued 21,628 shares and 3,870 shares of restricted stock on May 3, 2018 to Mr. Murphy and Mr. Schram, respectively, related to amounts owed for their first quarter performance bonus. The stock was valued at $46,715 and $8,360, respectively, and vests in equal monthly installments over 48 months from issuance. On May 25, 2018, the Company issued 5,000 shares of restricted common stock valued at $7,650 to an employee as incentive compensation for future services vesting in two equal annual installments in May 2019 and 2020. The following table contains summarized information about restricted stock issued during the twelve months ended December 31, 2018 and 2017:
Expense recognized on restricted stock issued to non-employees for services during the twelve months ended December 31, 2018 and 2017 was $125,000 and $181,995, respectively. Expense recognized on restricted stock issued to employees during the twelve months ended December 31, 2018 and 2017 was $157,350 and $1,800, respectively. The fair value of services to non-employees is based on the value of the Company's common stock as it vests over the term of service, which may be different than the value of the stock upon issuance. The change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting results in a change in the fair value of derivatives during the period. As such, the Company recognized a loss of $11,794 and a gain of $39,269, and as a change in the fair value of derivatives during the twelve months ended December 31, 2018 and 2017, respectively. Future compensation expense related to issued, but nonvested restricted stock awards as of December 31, 2018 is $209,113, and it is included in prepaid expenses in the accompanying consolidated balance sheet. This value is estimated to be recognized over the weighted-average vesting period of approximately 1.4 years. Restricted Stock Units The Board determines the terms and conditions of each restricted stock unit award issued under the May 2011 Plan. The following table contains summarized information about restricted stock units during the twelve months ended December 31, 2018:
There were no grants of restricted stock units prior to December 31, 2017. The fair value of the Company's common stock on December 31, 2018 was $0.98 per share. The intrinsic value on the non-vested restricted units as of December 31, 2018 was $156,800. Expense recognized on restricted stock units issued to employees during the twelve months ended December 31, 2018 was $4,680. As of December 31, 2018, future compensation related to restricted stock units expected to vest of $161,720 is estimated to be recognized over the weighted-average vesting period of approximately one year. Stock Options Under the 2011 Equity Incentive Plans, the Board determines the exercise price to be paid for the option shares, the period within which each option may be exercised, and the terms and conditions of each option. The exercise price of incentive and non-qualified stock options may not be less than 100% of the fair market value per share of the Company’s common stock on the grant date. If an individual owns stock representing more than 10% of the outstanding shares, the price of each share of an incentive stock option must be equal to or exceed 110% of fair market value. Unless otherwise determined by the Board at the time of grant, the purchase exercise price is set at the fair market value of the Company’s common stock on the grant date (or the last trading day prior to the grant date, if it is awarded on a non-trading day). Additionally, the term is set at ten years and the option typically vests on a straight-line basis over the requisite service period as follows: 25% one year from the date of grant with the remaining vesting monthly, in equal increments over the following three years. The Company issues new shares for any stock awards or options exercised under its 2011 Equity Incentive Plans. A summary of option activity under the 2011 Equity Incentive Plans for the twelve months ended December 31, 2018 and 2017, is presented below:
During the twelve months ended December 31, 2018 and 2017, no options were exercised. The fair value of the Company's common stock on December 31, 2018 was $0.98 per share. The intrinsic value on outstanding options as of December 31, 2018 was $150. The intrinsic value on exercisable options as of December 31, 2018 was $0. A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the twelve months ended December 31, 2018 and 2017, is presented below:
Expense recognized on stock options issued to employees during the twelve months ended December 31, 2018 and 2017 was $390,760 and $618,204, respectively. Future compensation related to nonvested awards as of December 31, 2018 expected to vest of $425,617 is estimated to be recognized over the weighted-average vesting period of approximately two years, five months. Employee Stock Purchase Plan At the Company's 2018 Annual Meeting of Stockholders held on December 18, 2018, stockholders holding a majority of the Company's outstanding shares of common stock, upon previous recommendation and approval of the Board, adopted the amended and restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”), which provides for the issuance of up to 500,000 shares of the Company's common stock thereunder. Any employee regularly employed by the Company for 90 days or more on a full-time or part-time basis (20 hours or more per week on a regular schedule) is eligible to participate in the ESPP. The ESPP operates in successive six months offering periods commencing at the beginning of each fiscal year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock not to exceed $21,250 annually or 2,000 shares per offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last day of the offering period. The ESPP will continue until January 1, 2024, unless otherwise terminated by the Board. Employees paid $17,253 to purchase 21,366 shares of common stock during the twelve months ended December 31, 2018. Employees paid $26,249 to purchase 16,168 shares of common stock during the twelve months ended December 31, 2017. Expense recognized on shares issued under the ESPP during the twelve months ended December 31, 2018 and 2017 was $27,903 and $15,423, respectively. As of December 31, 2018, the Company had 437,228 remaining shares of common stock available for future grants under the ESPP. Stock-based compensation cost related to all awards granted to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions stated in Note 1. Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options and stock purchase plan issuances during the twelve months ended December 31, 2018 and 2017 was $580,693 and $635,427, respectively. Stock-based compensation expense was recorded as $19,344 to cost of revenue, $73,776 to sales and marketing, and $487,573 to general and administrative expense in the Company's consolidated statement of operations during the twelve months ended December 31, 2018. Stock-based compensation expense was recorded as $13,381 to cost of revenue, $48,708 to sales and marketing, and $573,338 to general and administrative expense in the Company's consolidated statement of operations during the twelve months ended December 31, 2017. |
Loss Per Common Share (Notes) |
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Earnings Per Share [Text Block] | R COMMON SHARE Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted loss per share is computed by dividing the net income or loss by the sum of the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises.
The Company excluded the following weighted average items from the above computation of diluted loss per common share, as their effect would be anti-dilutive:
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Revenue (Notes) |
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Revenue from Contract with Customer [Text Block] | REVENUE Except for the changes below, the Company has consistently applied its accounting policies to all periods presented in the consolidated financial statements. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method, under which comparative periods will not be restated and the cumulative effect of applying the standard will be recognized at the date of initial adoption on January 1, 2018. As a result, the opening balance of retained earnings as of January 1, 2018 decreased by $98,822 and the comparative information in prior year periods continues to be reported under ASC 605. Initial Adoption Change The effects to the condensed consolidated balance sheet as of December 31, 2017, as adjusted for the adoption of ASC 606 on January 1, 2018, are as follows:
Dual Reporting The effects to the condensed consolidated financial statements as of December 31, 2018, as a result of applying ASC 606, rather than previous GAAP for revenue ("ASC 605") are as follows:
The changes reflected above were primarily due to the Company's delivery of its managed services related to influencer marketing services. Under ASC 605, these were recognized as separate elements at a point in time as services were delivered to the customer and under ASC 606, these are recognized as a single performance obligation over time based on an input model utilizing cost-to-cost methodology. Disaggregation of Revenue The following table illustrates the Company's revenue by product service type:
Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not have contract assets, because it does not capitalize costs to obtain its customer contracts as these amounts generally would be recognized over a period of less than one year and are not material. Contract receivables are recognized when the receipt of consideration is unconditional. The increase in contract receivables was primarily due to timing of billings, increased revenue during the period, and the addition of TapInfluence accounts. The Company did not recognize any contract assets as of December 31, 2018 or January 1, 2018. Contract liabilities relate to advance consideration received from customers under the terms of the Company's contracts, which will be earned in future periods. The increase in contract liabilities is due to additional orders received during the quarter that are billed in advance and fulfilled throughout the year. During the twelve months ended December 31, 2018, the Company recognized revenue of $3,261,729 relating to amounts that were included as a contract liability at January 1, 2018. As a practical expedient, the Company expenses the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length in the period incurred. Remaining Performance Obligations The Company typically enters into contracts that are one year or less in length. As such, the remaining performance obligations at December 31, 2018 are equal to the contract liabilities disclosed above. The Company expects to recognize the full balance of the unearned revenue at December 31, 2018 within the next year. |
Business Segments (Notes) |
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Segment Reporting Disclosure [Text Block] | BUSINESS SEGMENTS Prior to its merger with TapInfluence, the Company managed its operations as one segment for reporting purposes and evaluated operations and made business decisions based on consolidated results. Effective in the quarter ended September 30, 2018, and primarily as a result of the merger with TapInfluence, the Company has significantly expanded its operations related to license fees and marketplace spend fees. As a result, Company management is now actively evaluating operations under the following two reportable business segments:
The Company's reportable segments are strategic business units that may offer similar services, but under different revenue recognition guidance. They are managed separately because each segment requires marketing and oversight strategies, however, the Company's chief operating decision maker for each segment is currently evaluating operations on the basis of revenue only as the Company does not currently allocate specific cost of revenue, other operating costs, or assets to each segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that Company management evaluates performance based primarily on gross revenue and gross margin for all revenue streams, including revenue externally reported on a net basis for the Company's SaaS Services segment. The following table provides the Company's measure of revenue for each reportable segment, and other. The chief operating decision maker for each segment is not provided, and does not review, other measures related to profit or assets. All other measures of Company profit and assets are reviewed on a consolidated basis.
The following table provides the Company's revenues as determined by the country of domicile:
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Income Taxes (Notes) |
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Income Tax Disclosure [Text Block] | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”), was signed into law resulting in significant changes to U.S. tax law, generally effective for tax years beginning after December 31, 2017. Among other changes, the Tax Act reduces the U.S. corporate income tax rate to 21 percent from a maximum rate of 34 percent; implements a new system of taxation for non-U.S. earnings, including imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries, permitting deductions for certain dividends from non-U.S. subsidiaries, and expanding income inclusions from controlled foreign corporations; imposes significant additional limitations on the deductibility of interest; and allows for the expensing of certain capital expenditures. In the absence of guidance on various ambiguities in the application of certain provisions of the Tax Act, the Company used what it believes are reasonable interpretations and assumptions in applying the Tax Act. It is possible, however, that the U.S. Internal Revenue Service will issue subsequent guidance or take positions that differ from the Company's interpretations and assumptions, which could have a material adverse effect on its deferred tax assets and liabilities, results of operations, and financial condition. Because the Company's deferred tax assets and liabilities are fully reserved, there was no impact of the Tax Act on the consolidated financial statements for the twelve months ended December 31, 2017. However, deferred tax balances and related valuation allowances were re-measured to reflect the future tax benefit at the new enacted corporate tax rate of 21%. The U.S. deferred tax assets were reduced by $6.3 million and the valuation allowance was also reduced by $6.3 million as of December 31, 2017. This re-measurement resulted in no net impact to the effective tax rate for the year ended December 31, 2017. The components of the Company’s net deferred income taxes are as follows (rounded):
The following summary reconciles differences from taxes at the federal statutory rate with the effective rate:
The Company has incurred net losses for tax purposes every year since inception. At December 31, 2018, the Company had approximately $54,801,147 in net operating loss carryforwards for U.S. federal income tax purposes and $67,600,412 in net operating loss carryforwards for state income tax purposes, which in the aggregate expire in various amounts between the years of 2026 and 2037. The Company's ability to deduct its historical net operating losses may be limited in the future due to IRC Section 382 as a result of the substantial issuances of common stock in 2012 through 2015. Certain of the Company's net operating losses acquired in connection with the Ebyline and TapInfluence acquisitions also may be limited by IRC Section 382. The change in valuation allowance for the twelve months ended December 31, 2018 was an increase of $5,889,000 resulting primarily from net operating losses generated during the period. The change in valuation allowance for the twelve months ended December 31, 2017 was a decrease of $(4,615,000), from the reduction in the future corporate tax rate offset by net operating losses during the period. |
Subsequent Events (Notes) |
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS In January 2019, the Company announced that it had entered into a non-binding letter of intent for the proposed purchase by IZEA of all of the outstanding shares of FLUVIP Ventures, SL, ("FLUVIP") a leading influencer marketing company in Latin America. The Company is currently in the process of conducting due diligence related to this letter of intent in order to establish an acquisition purchase price for such shares and other material terms and conditions, which have not yet been formalized and are likely to require changes from the preliminary, non-binding terms previously contained in the letter of intent. Consummation of the proposed FLUVIP acquisition is subject to the execution and delivery of a definitive share purchase agreement and the satisfaction of multiple closing conditions which will be included therein. There can be no assurance that the Company will be able to reach agreement with FLUVIP and its shareholders on definitive terms, or enter into definitive documentation, for the proposed acquisition at this time. On January 26, 2019, pursuant to its Merger Agreement with TapInfluence (see Note 2), the Company paid 660,136 shares of its common stock valued at $884,584, or $1.34 per share, using a thirty (30) trading day volume-weighted average closing price as reported by the Nasdaq Capital Market prior to the issuance date. The Company recorded a $191,439 loss on the settlement of this acquisition cost payable as a result of the difference between the actual closing market price of the common stock of $1.63 on the settlement date and the 30-day average price of the common stock of $1.34 required by the Merger Agreement. Our corporate headquarters are located at 480 N. Orlando Avenue, Suite 200 in Winter Park, Florida. The Company occupies this office pursuant to a sixty-five month sublease agreement that originally expired in April 2019. In January 2019, the Company exercised its option to extend this lease for one additional year until April 2020. On March 6, 2019, a stipulation of settlement was filed in the United States District Court for the Central District of California that contained settlement terms as agreed upon by the parties to the Stuart and Emond shareholder derivative lawsuits as further discussed in Note 6. |
Company and Summary of Significant Accounting Policies (Policies) |
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Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of IZEA Worldwide, Inc. and its wholly-owned subsidiaries, subsequent to the subsidiaries' individual acquisition, merger or formation dates, as applicable. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline, ZenContent and TapInfluence. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase to be cash equivalents. |
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Receivables, Policy [Policy Text Block] | Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Management considers an account to be delinquent when the customer has not paid an amount due by its associated due date. Uncollectibility of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to develop or share content on behalf of a marketer. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on its best estimate of the uncollectible portion of the account. Management determines the collectibility of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $278,190 and $189,000, for doubtful accounts as of December 31, 2018 and 2017, respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the twelve months ended December 31, 2018 and 2017. |
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of credit risk with respect to accounts receivable were typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. However, with the Company's acquisition of TapInfluence, it has increased credit exposure on certain customers who carry significant credit balances related to their Marketplace Spend. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers, but generally does not require collateral to support accounts receivable. The Company had two customers that together accounted for 36% of total accounts receivable at December 31, 2018 and no customer that accounted for more than 10% at December 31, 2017. The Company had no customer that accounted for more than 10% of its revenue during either of the twelve months ended December 31, 2018 or December 31, 2017. |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows:
Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. |
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill and Business Combinations Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill in connection with its acquisitions of Ebyline, ZenContent and TapInfluence. Goodwill is not amortized but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill as of October 1 of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that it has two reporting units as of December 31, 2018. See further discussion regarding segment reporting in Note 10. For the twelve months ended December 31, 2018 and 2017, there were no impairment charges to goodwill. |
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Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets The Company acquired the majority of its intangible assets through its acquisitions of Ebyline, ZenContent and TapInfluence. The Company is amortizing the identifiable intangible assets over periods of 12 to 60 months. See Note 4 for further details. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the twelve months ended December 31, 2018 and 2017, there were no impairment charges associated with the Company's long-lived assets. |
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Software Development Costs, Policy [Policy Text Block] | Software Development Costs In accordance with ASC 350-40, Internal Use Software, the Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the research and planning stage and in the post-implementation stage of software development, or other maintenance and development expenses that do not meet the qualification for capitalization, are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. These software development and acquired technology costs are amortized on a straight-line basis over the estimated useful life of five years upon initial release of the software or additional features. See Note 5 for further details. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company generates revenue from five primary sources: (1) revenue from its managed services when a marketer (typically a brand, agency or partner) pays the Company to provide custom content, influencer marketing, amplification or other consulting services (“Managed Services”); (2) revenue from fees charged to self-service customers on their marketplace spend within the Company's IZEAx and TapInfluence platforms (“Marketplace Spend Fees”); (3) revenue from fees charged to access the IZEAx, Ebyline, and TapInfluence platforms (“License Fees”) (4) revenue from transactions generated by the self-service use of the Company's Ebyline platform for professional custom content workflow (“Legacy Workflow Fees”); and (5) revenue derived from other fees such as inactivity fees, early cash-out fees, and plan fees charged to users of the Company's platforms (“Other”). On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method, under which comparative periods were not restated and the cumulative effect of applying the standard was recognized at the date of initial adoption on January 1, 2018. Under the modified retrospective method, the Company only applied the new standard to contracts that were not completed as of January 1, 2018. Under ASC 606, revenue is recognized based on a five-step model and, in doing so, more judgment and estimates may be required within the revenue recognition process than were required under the former rules. The Company has reviewed its sources of revenue in accordance with each of the five steps in the model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue is recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations. The Company also determines whether it acts as an agent or a principal for each identified performance obligation. The determination of whether the Company acts as the principal or the agent is highly subjective and requires the Company to evaluate a number of indicators individually and as a whole in order to make its determination. For transactions in which the Company acts as a principal, revenue is reported on a gross basis as the amount paid by the marketer for the purchase of content or sponsorship, promotion and other related services and the Company records the amounts it pays to third-party creators as cost of revenue. For transactions in which the Company acts as an agent, revenue is reported on a net basis as the amount the Company charged to the self-service marketer using the Company's platforms, less the amounts paid to the third-party creators providing the service. The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. Payment terms are typically 30 days from the invoice date. The agreement typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. The allocation of the transaction price to the performance obligations in the contract is based on a cost-plus methodology. For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase influencer marketing services for the purpose of providing public awareness or advertising buzz regarding the marketer's brand and they purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that may range from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied over time as the customer receives the benefits from the services. Revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress towards satisfying the overall performance obligation of the marketing campaign. The delivery of custom content represents a distinct performance obligation that is satisfied over time as the Company has no alternative for the custom content and the Company has an enforceable right to payment for performance completed to date under the contracts. The Company considers custom content to be a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, and revenue is recognized over time using an output method based on when each individual piece of content is delivered to the customer. Based on the Company's evaluations, revenue from Managed Services is reported on a gross basis, because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. For Marketplace Spend and Legacy Workflow Revenue, the self-service customer instructs creators found through the Company's platforms to provide and/or distribute custom content for an agreed upon transaction price. The Company's platforms control the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies or marketers to control the outsourcing of their content and advertising needs. The Company charges the self-service customer the transaction price plus a fee based on the contract. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Based on the Company's evaluations, Marketplace Spend Fee revenue is reported on a net basis since the Company is acting as an agent solely arranging for the third-party creator or influencer to provide the services directly to the self-service customer through the platform, and is typically recognized upon publishing or purchase of the marketplace spend by the creator and verification of the publishing by the marketer. License Fee revenue is generated through the granting of limited, non-exclusive, non-transferable licenses to customers for the use of the IZEAx and TapInfluence technology platforms for an agreed-upon subscription period. Customers license the platforms to manage their own influencer marketing campaigns. Fees for subscription or licensing services are recognized straight-line over the term of the service. Other Fee revenue is generated when fees are charged to customers primarily related to monthly plan fees, inactivity fees, and early cash-out fees. Plan fees are recognized within the month they relate to, and inactivity and early cash-out fees are recognized at a point in time when the account is deemed inactive or a cash-out below certain minimum thresholds is requested. The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to obtain its customer contracts as these amounts generally would be recognized over a period of less than one year and are not material. See Note 9 for further details on the Company's adoption and disclosures related to ASC 606. |
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Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the twelve months ended December 31, 2018 and 2017 were approximately $470,000 and $324,000, respectively. Advertising costs are included in sales and marketing expense in the accompanying consolidated statements of operations. |
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Deferred Charges, Policy [Policy Text Block] | Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease terms. The Company accounts for rental expense on a straight-line basis over the lease terms. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying consolidated balance sheets. |
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Income Tax, Policy [Policy Text Block] | Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in four states, which is included in general and administrative expense in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2015, 2016 and 2017. |
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Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value:
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) as of December 31, 2018 and 2017. Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying values of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, and accrued expenses. Unless otherwise disclosed, the fair values of the Company’s long-term debt obligations approximate their carrying value based upon current rates available to the Company. |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and the 2011 B Equity Incentive Plan (together, the “2011 Equity Incentive Plans”) (see Note 7) is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period on a straight-line basis. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The Company uses the closing stock price of its common stock on the date of the grant as the associated fair value of its common stock. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for stock options granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Weighted average expected forfeiture rates on stock options were 4.73% and 8.58% during the twelve months ended December 31, 2018 and 2017, respectively. The Company used the following assumptions for restricted stock units granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
The weighted average expected forfeiture rate applied on restricted stock units was 0.00% during the twelve months ended December 31, 2018 since this was the first year of restricted stock unit issuances and the Company does not have a history of forfeitures. The Company may issue shares of restricted stock or restricted stock units which vest over future periods. The value of shares issued to non-employees is required to be adjusted over the vesting period. See Note 7 for additional information related to these shares. |
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Non-Employee Stock-Based Compensation [Policy Text Block] | Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded in the accompanying consolidated statements of operations. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. |
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Segment Reporting, Policy [Policy Text Block] | Segment Information Prior to its merger with TapInfluence, the Company managed its operations as one segment for reporting purposes and evaluated operations and made business decisions based on consolidated results. Effective in the quarter ended September 30, 2018, and primarily as a result of the merger with TapInfluence, the Company has significantly expanded its operations related to license fees and marketplace spend fees. As a result, Company management is now actively evaluating operations under two reportable business segments (see Note 10). |
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Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP 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. Actual results could differ from those estimates. |
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Reclassification, Policy [Policy Text Block] | Reclassifications Certain items have been reclassified in the 2017 financial statements to conform to the 2018 presentation. In the Statements of Cash Flows, the Company has reclassified payments on acquisition liabilities as financing activities rather than as a change in accrued expenses in operating activities. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Since the issuance of the original standard, the FASB has issued a subsequent update, ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842, which provides a practical expedient for land easements. The Company currently expects to elect the package of practical expedients, which permit it to carryforward its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company currently expects to adopt the practical expedient that allows comparative periods to be reported under current lease accounting guidance consistent with previously issued financial statements. The Company also does not currently expect to record leases on the balance sheet that at the commencement date have a lease term of twelve months or less. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company will adopt the new standard effective January 1, 2019 and has elected to apply the guidance as of the adoption date. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Based upon the relative small size and short duration of its lease portfolio, the Company expects that the initial adoption of this standard will result in recording a right-to-use asset and associated lease liability on its balance sheet of less than $500,000. The Company expects that this standard will not have an impact on its statements of operations or cash flows. Earnings Per Share: In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480 because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements. Derivatives and Hedging: In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The amendments in this ASU better align the risk management activities and financial reporting for these hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements. Stock Compensation: In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee ShareBased Payment Accounting. The amendments in the new guidance specify that Topic 718 applies to all sharebased payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing sharebased payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements and believes that the impact will not be material. Fair Value Measurements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for the Company beginning January 1, 2020, with early adoption permitted upon issuance of this updated guidance. The Company does not plan to early adopt this ASU, and it is currently evaluating the impact of adopting this guidance. Collaborative Arrangements: In November 2018, the FASB issued ASU No 2018-18, Collaborative Arrangements (Topic 808): Clarifying the interaction between Topic 808 and Topic 606. The guidance makes targeted improvements to GAAP for collaborative arrangements including: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adding unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and (iii) requiring that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied retrospectively to the date of initial application of ASC 606. An entity may elect to apply the amendments in this ASU retrospectively either to all contracts or only to contracts that are not completed at the date of initial application of ASC 606. An entity should disclose its election. An entity may elect to apply the practical expedient for contract modifications that is permitted for entities using the modified retrospective transition method in ASC 606. The Company is currently assessing the effect the adoption of this standard will have on its financial statements. |
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Schedule Of Estimated Useful Lives Of Property Plant And Equipment [Table Text Block] | Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company used the following assumptions for stock options granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company used the following assumptions for restricted stock units granted under the 2011 Equity Incentive Plans during the twelve months ended December 31, 2018 and 2017:
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Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma summary presents consolidated information of the Company as if the business combination with TapInfluence had occurred on January 1, 2017:
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TapInfluence, Inc. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table summarizes the preliminary amounts of net assets acquired at the merger date:
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Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | Purchase Price and Acquisition Costs Payable
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ZenContent [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | Purchase Price and Acquisition Costs Payable
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment consists of the following:
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Intangible Assets (Tables) |
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The identifiable intangible assets, other than Goodwill, consists of the following assets:
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Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets, other than Goodwill, from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following:
Software development costs consists of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of December 31, 2018, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule:
As of December 31, 2018, future estimated amortization expense related to software development costs is set forth in the following schedule:
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Schedule of Goodwill [Table Text Block] | Our goodwill balance changed as follows:
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Software Development Costs (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets, other than Goodwill, from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following:
Software development costs consists of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of December 31, 2018, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule:
As of December 31, 2018, future estimated amortization expense related to software development costs is set forth in the following schedule:
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Commitments and Contingencies - (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | A summary of future minimum lease payments under the Company's non-cancelable leases as of December 31, 2018 is as follows:
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Stockholders' Equity (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table contains summarized information about restricted stock issued during the twelve months ended December 31, 2018 and 2017:
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Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | The following table contains summarized information about restricted stock units during the twelve months ended December 31, 2018:
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Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of option activity under the 2011 Equity Incentive Plans for the twelve months ended December 31, 2018 and 2017, is presented below:
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the twelve months ended December 31, 2018 and 2017, is presented below:
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Loss Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted loss per share is computed by dividing the net income or loss by the sum of the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises.
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The Company excluded the following weighted average items from the above computation of diluted loss per common share, as their effect would be anti-dilutive:
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Table Text Block] | The effects to the condensed consolidated balance sheet as of December 31, 2017, as adjusted for the adoption of ASC 606 on January 1, 2018, are as follows:
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Dual Reporting The effects to the condensed consolidated financial statements as of December 31, 2018, as a result of applying ASC 606, rather than previous GAAP for revenue ("ASC 605") are as follows:
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Disaggregation of Revenue [Table Text Block] | Disaggregation of Revenue The following table illustrates the Company's revenue by product service type:
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Contract with Customer, Asset and Liability [Table Text Block] | Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
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Business Segments (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | The following table provides the Company's measure of revenue for each reportable segment, and other. The chief operating decision maker for each segment is not provided, and does not review, other measures related to profit or assets. All other measures of Company profit and assets are reviewed on a consolidated basis.
The following table provides the Company's revenues as determined by the country of domicile:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of the Company’s net deferred income taxes are as follows (rounded):
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The following summary reconciles differences from taxes at the federal statutory rate with the effective rate:
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Company and Summary of Significant Accounting Policies - Liquidity and Going Concern (Details) |
12 Months Ended | ||||||
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Sep. 21, 2018
USD ($)
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Jul. 26, 2018
USD ($)
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Jul. 02, 2018
USD ($)
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Dec. 31, 2018
USD ($)
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Dec. 31, 2017
USD ($)
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Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | $ (53,094,649) | $ (47,277,420) | |||||
Net Income (Loss) Attributable to Parent | (5,718,407) | $ (5,467,699) | |||||
Payments for Operating Activities | $ 5,582,480 | ||||||
Underwritten Public Offering [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Number of underwritten public offerings | 2 | ||||||
Sale of stock, consideration received on transaction | $ 1,820,965 | $ 3,140,647 | |||||
TapInfluence, Inc. [Member] | Installment payment made twelve months after closing date of business acquisition [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [1] | $ 3,500,000 | |||||
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Company and Summary of Significant Accounting Policies - Accounts Receivable and Concentration of Credit Risk (Details Textual) - USD ($) |
12 Months Ended | |
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Dec. 31, 2018 |
Dec. 31, 2017 |
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Concentration Risk [Line Items] | ||
Allowance for doubtful accounts receivable | $ 278,190 | $ 189,000 |
Bad debt expense percentage of revenues (percentage) | 1.00% | 1.00% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, customer | 2 | 0 |
Revenue, major customer (percentage) | 36.00% | 10.00% |
Revenue from Contract with Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, customer | 0 | 0 |
Revenue, major customer (percentage) | 10.00% |
Company and Summary of Significant Accounting Policies - Goodwill (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
operating_units
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Dec. 31, 2017
USD ($)
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Accounting Policies [Abstract] | ||
Number of reporting units after TapInfluence merger | operating_units | 2 | |
Goodwill, Impairment Loss | $ | $ 0 | $ 0 |
Company and Summary of Significant Accounting Policies - Intangible Assets (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
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Finite-Lived Intangible Assets [Line Items] | ||
Other Asset Impairment Charges | $ 0 | $ 0 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 12 months | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 60 months |
Company and Summary of Significant Accounting Policies - Software Development Costs (Details Textual) |
12 Months Ended |
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Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | |
Amortization period of software development costs (in years) | 5 years |
Company and Summary of Significant Accounting Policies - Advertising Costs (Details Textual) - USD ($) |
12 Months Ended | |
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Dec. 31, 2018 |
Dec. 31, 2017 |
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Selling and Marketing Expense [Member] | ||
Significant Accounting Policies [Line Items] | ||
Advertising costs | $ 470,000 | $ 324,000 |
Company and Summary of Significant Accounting Policies - Derivative Financial Instruments (Details) - September 2012 Public Offering [Member] |
Sep. 30, 2017
USD ($)
shares
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Significant Accounting Policies [Line Items] | |
Warrant shares issued | shares | 5,502 |
Value of expired warrants | $ | $ 0 |
Company and Summary of Significant Accounting Policies - Stock-Based Compensation (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Significant Accounting Policies [Line Items] | ||
Weighted average expected forfeiture rate applied to restricted stock units | 0.00% | |
Current average expected forfeiture rate (percentage) | 4.73% | 8.58% |
Equity Incentive 2011 Plan [Member] | ||
Significant Accounting Policies [Line Items] | ||
Expected term (in years) | 6 years | 6 years |
Weighted average volatility (percentage) | 108.49% | 50.16% |
Weighted average risk free interest rate (percentage) | 2.71% | 2.06% |
Expected dividends | 0.00% | 0.00% |
Restricted Stock Units (RSUs) [Member] | Equity Incentive 2011 Plan [Member] | ||
Significant Accounting Policies [Line Items] | ||
Expected term (in years) | 1 year | 0 years |
Weighted average volatility (percentage) | 151.41% | 0.00% |
Weighted average risk free interest rate (percentage) | 2.62% | 0.00% |
Expected dividends | 0.00% | 0.00% |
Company and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) |
Dec. 31, 2018
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
Operating Lease, Right-of-Use Asset | $ 500,000 |
Business Acquisitions - Tapinfluence, Inc. (Details Textual) - TapInfluence, Inc. [Member] - USD ($) |
9 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2018 |
Sep. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
||||||
Business Acquisition [Line Items] | |||||||||
Total estimated consideration | [1] | $ 1,500,000 | |||||||
Business Combination, Contingent Consideration, Liability | $ 4,500,000 | ||||||||
Business acquisition, equity interest issued or issuable, number of shares | 1,150,000 | ||||||||
Business acquisition, pro forma cost of revenue | $ 9,418,297 | $ 12,187,631 | |||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 1,991,548 | ||||||||
Business acquisition, final working capital adjustment | $ 297,049 | ||||||||
Installment payment made six months after closing date of business acquisition [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [2] | 1,000,000 | |||||||
Installment payment made twelve months after closing date of business acquisition [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [2] | $ 3,500,000 | |||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | $ 115,416 | ||||||||
|
Business Acquisitions - Purchase Price and Acquisition Costs Payable Tapinfluence, Inc. (Details) - USD ($) |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
||||||||
Business Acquisition [Line Items] | ||||||||||
Current portion of acquisition costs payable | $ 4,611,493 | $ 741,155 | ||||||||
Acquisition costs payable, less current portion | 0 | $ 609,768 | ||||||||
TapInfluence, Inc. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition equity interest issued or issuable, value assigned | [1] | $ 1,759,500 | ||||||||
Total estimated consideration | [1] | 1,500,000 | ||||||||
Business Combination, Contingent Consideration, Liability | 4,500,000 | |||||||||
TapInfluence, Inc. [Member] | Estimated Initial Present and Fair Value [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash paid at closing | [1] | 1,500,000 | 0 | |||||||
Current portion of acquisition costs payable | 4,246,114 | |||||||||
Acquisition costs payable, less current portion | 0 | |||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 1,759,500 | 0 | |||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | [2] | (555,026) | (115,416) | |||||||
Business Combination, Contingent Consideration, Liability | 6,946,078 | 4,246,114 | ||||||||
TapInfluence, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | [2] | (439,610) | ||||||||
Business Combination, Contingent Consideration, Liability | 7,319,890 | |||||||||
Installment payment made twelve months after closing date of business acquisition [Member] | TapInfluence, Inc. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [3] | 3,500,000 | ||||||||
Installment payment made twelve months after closing date of business acquisition [Member] | TapInfluence, Inc. [Member] | Estimated Initial Present and Fair Value [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Contingent Consideration, Liability | [3] | 3,271,028 | 3,366,433 | |||||||
Installment payment made six months after closing date of business acquisition [Member] | TapInfluence, Inc. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [3] | 1,000,000 | ||||||||
Installment payment made six months after closing date of business acquisition [Member] | TapInfluence, Inc. [Member] | Estimated Initial Present and Fair Value [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Contingent Consideration, Liability | [3] | $ 970,576 | 995,097 | |||||||
Total acquisition costs payable | $ 4,246,114 | |||||||||
|
Business Acquisitions - Purchase Price and Acquisition Cost Payable Tapinfluence, Inc (Detail Textual) - TapInfluence, Inc. [Member] - USD ($) |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2018 |
Sep. 30, 2018 |
||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, consideration transferred | [1] | $ 1,500,000 | |||||||
Working capital adjustment | $ 181,633 | ||||||||
Business acquisition, equity interest issued or issuable, number of shares | 1,150,000 | ||||||||
Business acquisition equity interest issued or issuable, value assigned | [1] | $ 1,759,500 | |||||||
Business acquisition share price | $ 1.53 | ||||||||
Business Combination, Contingent Consideration, Liability | $ 4,500,000 | ||||||||
Business acquisition, final working capital adjustment | 297,049 | ||||||||
Installment payment made six months after closing date of business acquisition [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [2] | 1,000,000 | |||||||
Installment payment made twelve months after closing date of business acquisition [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | [2] | 3,500,000 | |||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | $ 115,416 | ||||||||
Estimated Gross Purchase Consideration [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | [3] | (439,610) | |||||||
Business Combination, Contingent Consideration, Liability | $ 7,319,890 | ||||||||
|
Business Acquisitions - Proforma Schedule Tapinfluence, Inc. (Details) - TapInfluence, Inc. [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Business Acquisition [Line Items] | ||
Business acquisition, pro forma revenue | $ 22,645,356 | $ 30,316,579 |
Business acquisition, pro forma cost of revenue | 9,418,297 | 12,187,631 |
Business acquisition, proforma gross profit | 32,063,653 | 42,504,210 |
Business acquisition, pro forma net income (loss) prior to adjustments | (7,070,224) | (9,035,903) |
Business acquisition proforma adjustment amortization of identifiable intangible assets | (569,139) | (1,035,667) |
Business acquisition proforma adjustment depreciation of acquired property and equipment | 8,835 | 127,308 |
Business acquisition proforma adjustment acquisition-related expenses | 158,795 | (158,795) |
Business acquisition, pro forma net income (loss) | $ (7,471,733) | $ (10,103,057) |
Business Acquisitions - Purchase Price and Acquisition Costs Payable - ZenContent (Details) - USD ($) |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
||||||||
Business Acquisition [Line Items] | ||||||||||
Current portion of acquisition costs payable | $ 4,611,493 | $ 741,155 | ||||||||
Acquisition costs payable, less current portion | 0 | 609,768 | ||||||||
ZenContent [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, consideration transferred | $ 400,000 | |||||||||
Current portion of acquisition costs payable | 365,379 | 741,155 | ||||||||
Acquisition costs payable, less current portion | 0 | 609,768 | ||||||||
Total acquisition costs payable | 365,379 | 1,350,923 | ||||||||
Estimated Gross Purchase Consideration [Member] | ZenContent [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | [1] | 400,000 | ||||||||
Business combination, consideration transferred, equity interests issued and issuable | 600,000 | |||||||||
Guaranteed purchase price | [2] | 933,565 | ||||||||
Contingent performance payments | [3] | 2,500,000 | ||||||||
Business combination, consideration transferred | 4,433,565 | |||||||||
Initial Present Value [Member] | ZenContent [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | [1] | 400,000 | ||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||||||||
Guaranteed purchase price | [2] | 566,547 | ||||||||
Contingent performance payments | [3] | 230,000 | ||||||||
Business combination, consideration transferred | $ 1,796,547 | |||||||||
Remaining Present and Fair Value [Member] | ZenContent [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | [1] | 0 | 0 | |||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 0 | 0 | |||||||
Guaranteed purchase price | [2] | 321,740 | 606,413 | |||||||
Contingent performance payments | [3] | 43,639 | 744,510 | |||||||
Business combination, consideration transferred | $ 365,379 | $ 1,350,923 | ||||||||
|
Business Acquisitions - Purchase Price and Acquisition Costs Payable - ZenContent (Detail Textual) - USD ($) |
12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2016 |
Jul. 31, 2019 |
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2017 |
Jul. 31, 2017 |
Dec. 31, 2016 |
Jul. 17, 2018 |
Oct. 21, 2016 |
||||||
ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, contingent consideration arrangements, description | three equal annual installment payments totaling $1,000,000 | |||||||||||||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 30.00% | |||||||||||||||
Business combination guarantee fee reduction amount | $ 300,000 | |||||||||||||||
Compensation expense, acquisition guaranteed payments | 30,208 | $ 162,500 | ||||||||||||||
Guarantee purchase price basis spread on variable rate | 2.00% | |||||||||||||||
Fair value inputs, discount rate | 5.50% | |||||||||||||||
Interest expense, acquisition costs | 18,452 | 28,463 | ||||||||||||||
Business combination, consideration transferred | $ 400,000 | |||||||||||||||
Business Combination, Contingent Consideration, Liability | $ 1,000,000 | $ 1,000,000 | $ 90,000 | |||||||||||||
Business combination, consideration transferred, liabilities incurred, installment payments | $ 111,112 | |||||||||||||||
Business combination, consideration transferred, value of stock paid on second installment payments | $ 222,221 | |||||||||||||||
Business combination, consideration transferred, shares, stock paid on second installment payments | 98,765 | |||||||||||||||
Business combination, consideration transferred, price per share on stock paid on second installment payments | $ 2.25 | |||||||||||||||
Number of months to maintain minimum revenue thresholds | 36 months | |||||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 3,500,000 | $ 2,500,000 | ||||||||||||||
Business combination, contingent consideration, percentage paid in cash | 33.00% | 33.00% | 1.00% | |||||||||||||
Fair value assumptions, risk adjusted discount | 17.00% | |||||||||||||||
Number of simulation trials | 250,000 | |||||||||||||||
Simulation volatility rate | 45.00% | |||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | $ (485,747) | $ 324,000 | ||||||||||||||
Compensation expense, acquisition contingent payments | (160,306) | |||||||||||||||
Increase in the fair value of the contingent performance payments | 234,565 | |||||||||||||||
ZenContent [Member] | General and Administrative Expense [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | (646,053) | |||||||||||||||
Increase in the fair value of the contingent performance payments | 420,510 | |||||||||||||||
ZenContent [Member] | Compensation Expense [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Increase in the fair value of the contingent performance payments | 185,945 | |||||||||||||||
Estimated Gross Purchase Consideration [Member] | ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Payments to Acquire Businesses, Gross | [1] | $ 400,000 | ||||||||||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | |||||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 600,000 | |||||||||||||||
Contingent performance payments | [2] | 2,500,000 | ||||||||||||||
Business combination, consideration transferred | 4,433,565 | |||||||||||||||
Initial Present Value [Member] | ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Payments to Acquire Businesses, Gross | [1] | 400,000 | ||||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||||||||||||||
Contingent performance payments | [2] | 230,000 | ||||||||||||||
Business combination, consideration transferred | $ 1,796,547 | |||||||||||||||
Remaining Present and Fair Value [Member] | ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Payments to Acquire Businesses, Gross | [1] | 0 | 0 | |||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 0 | 0 | |||||||||||||
Contingent performance payments | [2] | 43,639 | 744,510 | |||||||||||||
Business combination, consideration transferred | 365,379 | $ 1,350,923 | ||||||||||||||
Working Capital Adjustment [Member] | ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | $ 66,435 | |||||||||||||||
First Installment Payment [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, consideration transferred | 266,898 | |||||||||||||||
Business Combination, Contingent Consideration, Liability | 333,333 | 333,333 | ||||||||||||||
Working capital adjustment | $ 66,435 | $ 66,435 | ||||||||||||||
Subsequent Event [Member] | ZenContent [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 4,500,000 | |||||||||||||||
|
Property and Equipment (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,270,801 | $ 1,076,072 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (998,562) | (790,029) |
Property and equipment, net | 272,239 | 286,043 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 293,777 | 254,099 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 77,194 | 74,627 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 561,812 | 415,928 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 338,018 | 331,418 |
Depreciation and Amortization Expense [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 222,912 | $ 211,769 |
Intangible Assets (Details 2) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 6,521,469 | $ 3,258,469 |
Accumulated amortization | (3,371,520) | (2,590,560) |
Intangible assets, net | 3,149,949 | 667,909 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 166,469 | 166,469 |
Accumulated amortization | (99,881) | (66,588) |
Ebyline, Inc. [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 2,370,000 | 2,370,000 |
ZenContent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 722,000 | 722,000 |
TapInfluence, Inc. [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 3,263,000 | $ 0 |
Intangible Assets (Details 3) |
Dec. 31, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, 2019 | $ 1,228,433 |
Finite-Lived Intangible Assets, 2020 | 1,079,127 |
Finite-Lived Intangible Assets, 2021 | 652,389 |
Finite-Lived Intangible Assets, 2022 | 120,000 |
Finite-Lived Intangible Assets, 2023 | 70,000 |
Finite-Lived Intangible Assets, Net | $ 3,149,949 |
Intangible Assets (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life (years) | 3 years | |
Amortization of intangible assets | $ 1,075,447 | $ 1,305,038 |
Cost of Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 156,000 | 106,000 |
Depreciation and Amortization Expense [Member] | Ebyline and ZenContent related identifiable intangible assets[Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 780,960 | $ 994,627 |
Intangible Assets Details 4 (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, balance on January 1, 2017 and December 31, 2017 | $ 3,604,720 |
Goodwill, Acquired During Period | 4,712,002 |
Goodwill, balance on December 31, 2018 | $ 8,316,722 |
Software Development Costs (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Research and Development [Abstract] | ||
Software development costs | $ 1,561,351 | |
Less accumulated depreciation and amortization | $ (887,911) | (593,424) |
Software development costs, net | $ 1,428,604 | $ 967,927 |
Software Development Costs (Details 1) |
Dec. 31, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 1,228,433 |
Software Amortization Expense, 2020 | 1,079,127 |
Software Amortization Expense, 2021 | 652,389 |
Software Amortization Expense, 2023 | 120,000 |
Software Amortization Expense, Thereafter | 70,000 |
Software Amortization Expense, Net | 3,149,949 |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 377,972 |
Software Amortization Expense, 2020 | 344,644 |
Software Amortization Expense, 2021 | 303,248 |
Software Amortization Expense, 2023 | 233,924 |
Software Amortization Expense, Thereafter | 168,816 |
Software Amortization Expense, Net | $ 1,428,604 |
Software Development Costs (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized Software Development Costs for Software Sold to Customers | $ 755,164 | $ 174,379 |
Capitalized computer software, gross | 1,561,351 | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 60 months | |
Software Development [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 5 years | |
Depreciation and Amortization Expense [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized computer software, amortization | $ 294,487 | $ 310,411 |
Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized computer software, gross | $ 2,316,515 |
Commitments and Contingencies - (Details) |
Dec. 31, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Minimum lease payments, 2019 | $ 248,236 |
Total minimum lease payments | $ 248,236 |
Stockholders' Equity - Authorized Shares (Details Textual) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Stockholders' Equity [Abstract] | ||
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Series A Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Series A Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Stockholders' Equity - Underwritten Public Offerings of Common Stock (Details Textual) - Underwritten Public Offering [Member] - USD ($) |
Sep. 21, 2018 |
Jul. 02, 2018 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, number of shares issued in transaction | 1,407,333 | 3,556,000 |
Sale of stock, price per share | $ 1.50 | $ 1.00 |
Proceeds from underwritten public offering | $ 1.8 | |
Sale of stock, consideration received on transaction | 1,820,965 | $ 3,140,647 |
Payments of stock issuance costs | $ 290,000 | $ 418,000 |
Chief Executive Officer [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, number of shares issued in transaction | 3,000 | 100,000 |
Mr. Brian Brady, Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, number of shares issued in transaction | 500,000 | |
Mr. Lindsay Gardner, Director [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, number of shares issued in transaction | 20,000 |
Stockholders' Equity - Equity Incentive Plan (Details) |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
May 25, 2018
USD ($)
shares
|
May 03, 2018
USD ($)
shares
|
Jan. 11, 2018
USD ($)
employee
shares
|
Nov. 09, 2017
shares
|
Aug. 14, 2017
USD ($)
shares
|
Feb. 12, 2017
USD ($)
shares
|
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Dec. 31, 2017
USD ($)
shares
|
Jun. 21, 2017
shares
|
Aug. 22, 2011
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of independent directors | 5 | |||||||||
Stock issued for payment of services | $ 125,000 | $ 155,000 | ||||||||
Number of employees issued restricted common stock | employee | 17 | |||||||||
Stock issued during period, vesting period | 48 months | |||||||||
Fair value of common stock issued for future services, net | 449,925 | 155,000 | ||||||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 125,000 | 181,995 | ||||||||
Stock issued for payment of services | $ 8,360 | |||||||||
Shares issued, shares, incentive compensation for future services | shares | 5,000 | |||||||||
Stock issued during period, shares, restricted stock award, forfeited | shares | 7,500 | |||||||||
Stock Issued during period, value, share-based compensation, forfeited | $ 41,400 | |||||||||
Derivative, gain on derivative | $ 39,269 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year 5 months | 3 years 9 months | ||||||||
Restricted stock or unit expense | $ 157,350 | $ 1,800 | ||||||||
Derivative, Loss on Derivative | $ (11,794) | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation arrangement by share-based payment award, equity instrument other than option, nonvested, intrinsic value | $ / shares | $ 156,800 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year | |||||||||
Restricted stock or unit expense | $ 4,680 | |||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, future compensation expected to vest over weighted average vesting period | $ 161,720 | |||||||||
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term | 1 year | |||||||||
Equity Incentive 2011 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, capital shares reserved for future issuance (shares) | shares | 1,120,786 | |||||||||
Equity Incentive B 2011 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, capital shares reserved for future issuance (shares) | shares | 4,375 | 4,375 | ||||||||
Investor Relations Services [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, capital shares reserved for future issuance (shares) | shares | 2,500,000 | |||||||||
Prepaid Expenses [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Fair value of common stock issued for future services, net | $ 209,113 | |||||||||
Five Directors [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 30,265 | 41,770 | ||||||||
Stock issued for payment of services | $ 125,000 | |||||||||
Contractor [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 7,109 | |||||||||
Stock issued for payment of services | $ 30,000 | |||||||||
Chief Executive Officer [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 21,628 | 7,543 | 2,812 | |||||||
Stock issued for payment of services | $ 36,411 | |||||||||
Stock issued during period, vesting period | 48 months | |||||||||
Chief Operating Officer [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 3,870 | 5,000 | 1,257 | 662 | ||||||
Stock issued for payment of services | $ 46,715 | $ 6,446 | ||||||||
Stock issued during period, vesting period | 48 months | |||||||||
Shares issued, value, incentive compensation for future services | $ 7,650 | |||||||||
Employees [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 55,000 | |||||||||
Stock issued for payment of services | $ 303,600 | |||||||||
Vesting period of stock issued to employees | 2 years | |||||||||
Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock issued for payment of services (shares) | shares | 10,000 |
Stockholders' Equity - Schedule of Non-Vested Restricted Stock (Details) - Restricted Stock [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Restricted stock units, nonvested beginning of period | 11,799 | 0 |
Restricted stock units, nonvested grants in period | 115,763 | 61,153 |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period | (62,078) | (49,354) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (7,500) | 0 |
Restricted stock units, nonvested ending of period | 57,984 | 11,799 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 4.52 | $ 0.00 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 4.24 | 3.24 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 4.51 | 3.72 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 5.52 | 0.00 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 3.70 | $ 4.52 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year 5 months | 3 years 9 months |
Stockholders' Equity - Restricted Stock Units Schedule (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units, nonvested beginning of period | 0 | |
Restricted stock units, nonvested grants in period | 160,000 | 0 |
Restricted stock units, nonvested vested in period | 0 | |
Restricted stock units, nonvested forfeited in period | 0 | |
Restricted stock units, nonvested ending of period | 160,000 | 0 |
Restricted stock units, nonvested weighted average grant date fair value | $ 1.04 | |
Restricted stock units, nonvested weighted average remaining contractual terms | 1 year |
Stockholders' Equity - Restricted Stock Units (Detail Textual) - Restricted Stock Units (RSUs) [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, equity instrument other than option, nonvested, intrinsic value | $ 156,800 | |
Restricted stock units, nonvested grants in period | 160,000 | 0 |
Restricted stock or unit expense | $ 4,680 | |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, future compensation expected to vest over weighted average vesting period | $ 161,720 | |
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term | 1 year |
Stockholders' Equity - Stock Options (Details Textual) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Aug. 22, 2011 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | |||
Stock or Unit Option Plan Expense | $ 390,760 | $ 618,204 | ||
Percentage of individual ownership of common stock (percentage) | 10.00% | |||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 150 | |||
Equity Incentive 2011 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||
Fair value of common stock | $ 0.98 | |||
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 0 | |||
May 2011 and August 2011 Equity Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair market value of incentive stock options (percentage) | 100.00% | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 425,617 | |||
Individual Stock Ownership in Excess of 10 Percent [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair market value of incentive stock options (percentage) | 110.00% | |||
Twelve Months After Grant Date [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option vesting period from grant date | 1 year | |||
Percentage of individual ownership of common stock (percentage) | 25.00% | |||
Monthly in equal installments [Member] | Employee Stock Option [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period (in years) | 3 years |
Stockholders' Equity - Schedule of Options Outstanding (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Common shares, exercised | 0 | |||
Common shares, expired | (63,013) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price,expired | $ 6.29 | |||
Equity Incentive 2011 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock | $ 0.98 | |||
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Common shares, outstanding beginning of period | 1,049,503 | 959,864 | ||
Common shares, granted | 156,084 | 141,246 | ||
Common shares, exercised | 0 | 0 | ||
Common shares, expired | (15,590) | |||
Common shares, forfeited | (102,097) | (36,017) | ||
Common shares, outstanding end of period | 1,040,477 | 1,049,503 | 959,864 | |
Common shares, exercisable at end of period | 739,967 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price, beginning of period | $ 5.97 | $ 8.11 | ||
Weighted average exercise price, granted | 1.60 | 3.49 | ||
Weighted average exercise price, exercised | 0.00 | 0.00 | ||
Weighted average exercise price,expired | 112.44 | |||
Weighted average exercise price, forfeited | 6.66 | 7.02 | ||
Weighted average exercise price, end of period | $ 5.97 | $ 8.11 | $ 8.11 | $ 5.23 |
Weighted average exercise price, exercisable | $ 6.08 | |||
Weighted average remaining life (years), outstanding | 6 years 6 months | 6 years | 6 years 5 months | |
Weighted average remaining life (years), exercisable | 4 years 9 months |
Stockholders' Equity - Schedule of Nonvested Stock Option (Details) - Equity Incentive 2011 Plan [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |||
Common shares, nonvested beginning of period | 323,077 | 414,306 | |
Common shares, granted | 156,084 | 141,246 | |
Common shares, vested | (137,206) | (205,469) | |
Common shares, forfeited | (41,445) | (27,006) | |
Common shares, nonvested end of period | 300,510 | 323,077 | 414,306 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Weighted average grant date fair value, nonvested beginning of period | $ 2.64 | $ 3.60 | |
Weighted average grant date fair value, granted | 0.96 | 1.76 | |
Weighted average grant date fair value, vested | 2.80 | 3.36 | |
Weighted average grant date fair value, forfeited | 2.88 | 3.12 | |
Weighted average grant date fair value, nonvested end of period | $ 0.80 | $ 2.64 | $ 3.60 |
Weighted average remaining years to vest | 2 years 5 months | 2 years 8 months | 2 years 7 months |
Stockholders' Equity - Employee Stock Purchase Plan (Details Textual) |
12 Months Ended | ||
---|---|---|---|
Apr. 16, 2014
USD ($)
shares
|
Dec. 31, 2018
USD ($)
shares
|
Dec. 31, 2017
USD ($)
shares
|
|
2014 Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, capital shares reserved for future issuance (shares) | shares | 500,000 | 437,228 | |
Share-based compensation arrangement by share-based payment award, award vesting period (in days) | 90 days | ||
Minimum hour requirement for employees participation in the ESSP (hours) | 20 | ||
Employee stock ownership plan (ESOP), successive offering period | 6 months | ||
Annual compensation limit percentage, employee stock purchase plan (percentage) | 10.00% | ||
Annual compensation limit, employee stock purchase plan (dollars) | $ 21,250 | ||
Shares issuance limit per offering period, employee stock purchase plan | shares | 2,000 | ||
Fair market value of shares available for issuance (percentage) | 85.00% | ||
Stock issued during period, value, employee stock ownership plan | $ 17,253 | $ 26,249 | |
Stock issued during period, shares, employee stock ownership plan | shares | 21,366 | 16,168 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 580,693 | $ 635,427 | |
Cost of revenue [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | 19,344 | 13,381 | |
Selling and Marketing Expense [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | 73,776 | 48,708 | |
General and Administrative Expense [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 487,573 | $ 573,338 |
Loss Per Common Share (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Earnings Per Share [Abstract] | ||
Net loss | $ (5,718,407) | $ (5,467,699) |
Weighted average common shares outstanding – basic and diluted | 8,541,725 | 5,674,901 |
Basic and diluted loss per common share | $ (0.67) | $ (0.96) |
Loss Per Common Share (Details 1) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 1,528,790 | 1,522,121 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 1,042,644 | 990,152 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 480,886 | 531,969 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 5,260 | 0 |
Revenue (Detail Textual) - USD ($) |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | $ (53,094,649) | $ (47,277,420) | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | $ 386,394 | $ (98,822) |
Revenue - Initial Adoption Change (Details) - USD ($) |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | $ 1,968,403 | $ 3,906,797 | $ 5,949,004 | |
Accounts receivable, net | 7,071,815 | $ 3,739,430 | 3,647,025 | |
Prepaid expenses | 527,968 | 389,104 | ||
Other current assets | 39,203 | 9,140 | ||
Assets, Current | 9,607,389 | 7,952,066 | ||
Property and equipment, net | 272,239 | 286,043 | ||
Goodwill | 8,316,722 | 3,604,720 | ||
Intangible assets, net | 3,149,949 | 667,909 | ||
Software development costs, net | 1,428,604 | 967,927 | ||
Security deposits | 143,174 | 148,638 | ||
Assets | 22,918,077 | 13,627,303 | ||
Accounts payable | 2,618,103 | 1,756,841 | ||
Accrued expenses | 1,968,589 | 1,592,356 | ||
Contract liabilities | 0 | 3,070,502 | ||
Line of credit | 500,550 | |||
Current portion of deferred rent | 17,420 | 45,127 | ||
Current portion of acquisition costs payable | 4,611,493 | 741,155 | ||
Total current liabilities | 15,699,762 | 7,706,531 | ||
Deferred rent, less current portion | 0 | 17,419 | ||
Acquisition costs payable, less current portion | 0 | 609,768 | ||
Liabilities | 15,699,762 | 8,333,718 | ||
Common stock, $.0001 par value; 200,000,000 shares authorized; 12,075,708 and 5,733,981, respectively, issued and outstanding | 1,208 | 573 | ||
Additional paid-in capital | 60,311,756 | 52,570,432 | ||
Accumulated deficit | (53,094,649) | (47,277,420) | ||
Total stockholders’ equity | 7,218,315 | 5,293,585 | $ 8,987,863 | |
Total liabilities and stockholders’ equity | 22,918,077 | $ 13,627,303 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts receivable, net | 220,842 | 92,405 | ||
Assets, Current | 92,405 | |||
Assets | 92,405 | |||
Contract liabilities | 4,792,317 | 191,227 | ||
Total current liabilities | 191,227 | |||
Liabilities | 191,227 | |||
Accumulated deficit | 386,394 | (98,822) | ||
Total stockholders’ equity | (98,822) | |||
Total liabilities and stockholders’ equity | 92,405 | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash and cash equivalents | 3,906,797 | |||
Accounts receivable, net | 7,292,657 | 3,739,430 | ||
Prepaid expenses | 389,104 | |||
Other current assets | 9,140 | |||
Assets, Current | 8,044,471 | |||
Property and equipment, net | 286,043 | |||
Goodwill | 3,604,720 | |||
Intangible assets, net | 667,909 | |||
Software development costs, net | 967,927 | |||
Security deposits | 148,638 | |||
Assets | 13,719,708 | |||
Accounts payable | 1,756,841 | |||
Accrued expenses | 1,592,356 | |||
Contract liabilities | 4,792,317 | 3,261,729 | ||
Line of credit | 500,550 | |||
Current portion of deferred rent | 45,127 | |||
Current portion of acquisition costs payable | 741,155 | |||
Total current liabilities | 7,897,758 | |||
Deferred rent, less current portion | 17,419 | |||
Acquisition costs payable, less current portion | 609,768 | |||
Liabilities | 8,524,945 | |||
Common stock, $.0001 par value; 200,000,000 shares authorized; 12,075,708 and 5,733,981, respectively, issued and outstanding | 573 | |||
Additional paid-in capital | 52,570,432 | |||
Accumulated deficit | $ (52,708,255) | (47,376,242) | ||
Total stockholders’ equity | 5,194,763 | |||
Total liabilities and stockholders’ equity | $ 13,719,708 |
Revenue - Dual Reporting (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Jan. 01, 2018 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net | $ 7,071,815 | $ 3,647,025 | $ 3,739,430 |
Contract liabilities (unearned revenue) | 4,957,869 | 3,261,729 | |
Unearned revenue | 0 | 3,070,502 | |
Accumulated deficit | (53,094,649) | (47,277,420) | |
Revenue from Contract with Customer, Excluding Assessed Tax | 20,099,695 | $ 24,437,649 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net | 220,842 | 92,405 | |
Contract liabilities (unearned revenue) | 4,957,869 | ||
Unearned revenue | 4,792,317 | 191,227 | |
Accumulated deficit | 386,394 | (98,822) | |
Revenue from Contract with Customer, Excluding Assessed Tax | 287,572 | ||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net | 7,292,657 | 3,739,430 | |
Contract liabilities (unearned revenue) | 0 | ||
Unearned revenue | 4,792,317 | 3,261,729 | |
Accumulated deficit | (52,708,255) | $ (47,376,242) | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 20,387,267 |
Revenue - Disaggregation of Revenue (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 20,099,695 | $ 24,437,649 |
Managed Services Segment Revenue [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 17,594,124 | 23,836,236 |
SaaS Services Segment Revenue [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,448,024 | 417,992 |
Legacy Workflow Fees [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 216,173 | 350,648 |
Marketplace Spend Fees, net [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,080,609 | 0 |
License Fees [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,151,242 | 67,344 |
Other Revenue [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 57,547 | $ 183,421 |
Revenue - Contract Balances (Details) - USD ($) |
Dec. 31, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 7,071,815 | $ 3,739,430 | $ 3,647,025 |
Contract liabilities (unearned revenue) | $ 4,957,869 | $ 3,261,729 |
Business Segments (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 20,099,695 | $ 24,437,649 |
UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 18,082,218 | 22,403,721 |
CANADA | ||
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,017,477 | 2,033,928 |
Managed Services Segment Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 17,594,124 | 23,836,236 |
SaaS Services Segment Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,448,024 | 417,992 |
Other Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 57,547 | $ 183,421 |
Income Taxes (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carry forwards | $ 19,731,000 | $ 19,362,000 |
Change in federal tax rate | 0 | (6,329,000) |
Accrued expenses | 292,000 | 270,000 |
Stock option and warrant expenses | 479,000 | 698,000 |
Accounts receivable | 73,000 | 67,000 |
Deferred rent | 6,000 | 24,000 |
Other | 0 | 1,000 |
Total deferred tax assets | 20,581,000 | 14,093,000 |
Valuation allowance | (19,749,000) | (13,860,000) |
Net deferred tax assets | 832,000 | 233,000 |
Deferred tax liabilities: | ||
Fixed and tangible assets | (832,000) | (233,000) |
Total deferred tax liabilities | (832,000) | (233,000) |
Total deferred tax assets (liabilities) | $ 0 | $ 0 |
Income Taxes (Details 1) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Federal income tax at statutory rates | (21.00%) | (34.00%) |
Change in deferred tax asset valuation allowance | 19.10% | (81.70%) |
Deferred state taxes | (2.10%) | (3.30%) |
Non-deductible expenses: | ||
Change in value of acquisition liability | 1.80% | 0.00% |
Change in fair value of warrants | 0.00% | 0.00% |
ISO stock compensation | 1.70% | 1.60% |
Change in state & federal deferred rate | 0.00% | 112.10% |
Other | 0.50% | 1.60% |
Income taxes (benefit) at effective rates | 0.00% | 0.00% |
Income Taxes (Details Textual) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Examination [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, percent (percentage) | 0.00% | 21.00% |
Effective income tax rate reconciliation, change in deferred tax assets, amount | $ 6,300,000 | |
Tax act impact on deferred tax assets and liabilities | 0 | |
Effective income tax rate reconciliation, prior year income taxes, percent (percentage) | 34.00% | |
Effective income tax rate reconciliation, change in deferred tax assets valuation allowance, amount | 6,300,000 | |
Minimum [Member] | ||
Income Tax Examination [Line Items] | ||
Year net operating carryforwards expires (year) | 2026 | |
Maximum [Member] | ||
Income Tax Examination [Line Items] | ||
Year net operating carryforwards expires (year) | 2037 | |
Ebyline, Inc. [Member] | ||
Income Tax Examination [Line Items] | ||
Effective income tax rate reconciliation, change in deferred tax assets valuation allowance, amount | $ 5,889,000 | $ (4,615,000) |
Domestic Tax Authority [Member] | ||
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | 54,801,147 | |
State and Local Jurisdiction [Member] | ||
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | $ 67,600,412 |
Subsequent Events (Detail Textuals) - USD ($) |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 26, 2019 |
Jul. 26, 2018 |
Jan. 31, 2019 |
Dec. 31, 2018 |
|||
Subsequent Event [Line Items] | ||||||
Length of rental sublease agreement (lease term) | sixty-five month | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Length of rental sublease agreement (lease term) | sixty-five month sublease agreement that originally expired in April 2019 | |||||
Lessee operating lease renewal term | 1 year | |||||
TapInfluence, Inc. [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Business acquisition, equity interest issued or issuable, number of shares | 1,150,000 | |||||
Business acquisition equity interest issued or issuable, value assigned | [1] | $ 1,759,500 | ||||
Business acquisition share price | $ 1.53 | |||||
TapInfluence, Inc. [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Business acquisition, equity interest issued or issuable, number of shares | 660,136 | |||||
Business acquisition equity interest issued or issuable, value assigned | $ 884,584 | |||||
Business acquisition share price | $ 1.34 | |||||
Loss on settlement of acquisition payments | $ 191,439 | |||||
Actual closing market price of common stock on settlement date | $ 1.63 | |||||
Actual closing market price of common stock | $ 1.34 | |||||
|
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