10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended September 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ to _______

Commission file number 33-20432

KIWIBOX.COM, INC.

Formerly known as Magnitude Information Systems, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	75-2228828
(State or other Jurisdiction of	(IRS Employer Identification No.)
Incorporation or Organization)
330 West 42 St. Suite 3210 New York, NY 10036	(212) 239-8210
(Address of Principal Executive Office) (Zip Code)	(Registrant’s telephone number including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.:   Yes  x No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer   ¨  Accelerated filer   ¨  Non-accelerated filer   ¨  Smaller reporting company   x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes   ¨    No   x

The number of shares of Registrant’s Common Stock, $0.0001 par value, outstanding as of November 18, 2013, was 681,243,060 shares.

KIWIBOX.COM, INC.

INDEX

		Page
		Number
PART 1 - FINANCIAL INFORMATION
Item 1	Financial Statements
	Consolidated Balance Sheets - September 30, 2013 (unaudited) and December 31, 2012	3
	Consolidated Statements of Operations - Three and nine months ended September 30, 2013 and 2012 (unaudited)	4
	Consolidated Statements of Cash Flows - Nine months ended September 30, 2013 and 2012 (unaudited)	5 - 6
	Notes to Consolidated Financial Statements	7 - 19
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19 – 21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4	Controls and Procedures	22
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4T.	Submission of Matters to a Vote of Security Holders	23
Item 5.	Other information	23
Item 6.	Exhibits	24
SIGNATURES		25

 

2

 

PART I - Item 1 Financial Statements

KIWIBOX.COM, INC. and SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	September 30, 2013		December 31, 2012
	(Unaudited)
Assets
Current Assets
Cash	$	53,171	$	56,751
Accounts receivable, net of allowance for
doubtful accounts of $0		366,600		230,691
Due from related parties		-		15,468
Other receivables		10,470		2,469
Prepaid expenses and other current assets		149,399		129,010
Total Current Assets		579,640		434,389
Property and equipment, net of accumulated
depreciation of $683,370 and $621,876		60,283		120,556
Website development costs, net of accumulated
amortization of $343,830 and $284,121		48,829		108,539
Goodwill		-		6,169,426
Other assets		49117		44,213
Total Assets		737,869		6,877,123
Liabilities and Stockholders’ Equity (Impairment)
Current Liabilities
Bank overdraft		3,628		176,103
Accounts payable		285,195		230,691
Accrued expenses		2,104,965		1,442,177
Due to related parties		24,389		30,710
Obligations to be settled in stock		265,978		270,658
Dividends payable		671,576		633,129
Loans and notes payable - other		100,000		140,000
Loans and notes payable – related parties		770,804		340,000
Convertible notes payable-related parties		9,597,699		8,773,699
Convertible note payable-other, net of debt discount		-		41,667
Current maturities of long-term debt		33,529		33,529
Liability for derivative conversion features		-		51,874
Liability for derivative conversion feature –related parties		11,690,121		13,745,805
Total Current Liabilities		25,547,884		25,910,042
Commitments and Contingencies		-		-
Stockholders’ Equity (Impairment)
Preferred Stock, $0.001 par value, non-voting, 3,000,000 shares authorized; 85,890 and 85,890 shares issued and outstanding		86		86
Common Stock, $0.0001 par value, 1,400,000,000 shares authorized; issued and outstanding 681,243,060 and 679,393,060 shares		68,122		67,937
Additional paid-in capital		52,714,100		52,658,185
Accumulated deficit		(77,469,535)		(71,649,780)
Accumulated other comprehensive loss		(122,788)		(109,347)
Total Stockholders’ Equity (Impairment)		(24,810,015)		(19,032,919)
Total Liabilities and Equity (Impairment)	$	737,869	$	6,877,123

The accompanying notes are an integral part of the financial statements.

 

3

 

KIWIBOX.COM, INC. and SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Net Sales
Advertising		212,570		267,814		790,657		1,030,455
Other		(39,988)		1,449		8,559		79,459
Total Revenues	$	172,582	$	269,263	$	799,216	$	1,109,914
Cost of Sales
Website hosting expenses		177,176		180,844		613,241		741,660
Total Cost of Sales		177,176		180,844		613,241		741,660
Gross Profit (Loss)		(4,594)		88,419		185,975		368,254
Selling expenses		142,714		131,449		432,537		631,010
Impairment- goodwill		2,452,812		-		6,138,210		-
General and administrative expenses		215,008		342,603		739,530		1,064,239
Loss from Operations		(2,815,128)		(385,633)		(7,124,302)		(1,326,995)
Other Income (Expense)
Miscellaneous income		(1,767)		6,339		4,808		31,065
Foreign currency transaction gain (loss)		-		(189)		-		50,586
Change in fair value –derivative liability		(244,399)		15,396		3,831,776		663,239
Interest expense-derivative conversion		(602,819)		(583,647)		(1,724,218)		(6,917,459)
(Loss) gain on extinguishment of debt		-		-		(36,480)		-
Amortized debt discount		-		(12,500)		(8,333)		(29,167)
Interest expense		(251,873)		(230,782)		(723,641)		(524,378)
Total Other Income (Expense)		(1,100,858)		(805,383)		1,343,912		(6,726,114)
Loss before Benefit (Provision)
for Income Taxes		(3,915,986)		(1,191,016)		(5,780,390)		(8,053,109)
Benefit (Provision) for income taxes		(268)		(17,998)		(918)		(56,461)
Net Income (Loss)	$	(3,916,254)	$	(1,209,014)	$	(5,781,308)	$	(8,109,570)
Dividends on Preferred Stock		(12,815)		(12,816)		(38,447)		(38,447)
Net Income (Loss) applicable to
Common Shareholders, basic and diluted	$	(3,929,069)	$	(1,221,830)	$	(5,819,755)	$	(8,148,017)
Net Loss per Common Share, basic and diluted.	$	(0.006)	$	( 0.002)	$	(0.009)	$	(0.013)
Weighted Average Number of
Common Shares Outstanding		681,243,060		678,944,746		680,749,470		641,085,737
Comprehensive Income (Loss):
Net Income (Loss)	$	(3,916,254)	$	(1,209,014)	$	(5,781,308)	$	(8,109,570)
Foreign currency translation adjustment		87,261		276,470		(13,441)		304,141
Total Comprehensive Income (Loss)	$	(3,828,993)	$	(932,544)	$	(5,794,749)	$	(7,805,429)

All of the stock-based compensation relates to selling, general and administrative expenses.

The accompanying notes are an integral part of the consolidated financial statements.

4

KIWIBOX.COM, INC. and SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 30,
	2013		2012
Cash Flows from Operating Activities
Net Loss	$	(5,781,308)	$	(8,109,570)
Adjustments to Reconcile Net Loss to Net Cash Used by Operations
Depreciation and amortization		129,536		250,814
Value of stock for services				13,500
Change in fair value – derivative liabilities		(3,831,776)		(663,239)
Intrinsic value of beneficial conversion rights		1,724,218		6,917,460
Impairment of goodwill		6,138,210
Loss on extinguishment of debt		36,480
Foreign currency transaction gain		0		(50,586)
Deferred tax expense		0		54,864
Decreases (Increases) in Assets
Accounts receivable		(135,909)		167,158
Income taxes Receivable		0		(17,183)
Other receivables		(8,001)		67,370
Prepaid expenses		(20,389)		(50,955)
Increases (decreases) in Liabilities
Bank overdraft		(57,131)		207,457
Liabilities to be settled in stock		14,940		31,860
Accounts payable		54,504		17,554
Accrued expenses		686,759		469,504
Net Cash Used by Operating Activities		(1,049,867)		(693,992)
Cash Flows from Investing Activities
Cash outlay - website development costs		0		(58,139)
Cash proceeds (outlay) – other assets		(4,904)		5,783
Purchases of property and equipment		(1,220)		(1,953)
Net Cash Used by Investing Activities		(6,124)		(54,309)
Cash Flows from Financing Activities
Proceeds from loans and notes		825,000		745,000
Repayment on convertible note		(90,000)		0
Net proceeds (repayments) to related parties		322,165		(157,723)
Net Cash Provided by Financing Activities		1,057,165		587,277
Net Increase (Decrease) in Cash		1,174		(161,024)
Effect of exchange rates on cash		(4,754)		1,011
Cash at Beginning of Period		56,751		195,613
Cash at End of Period	$	53,171	$	35,600
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid		23,948		13,808
Income taxes paid		918		19,487

The accompanying notes are an integral part of the financial statements.

5

KIWIBOX.COM, INC. and SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Nine Months Ended September 30, 2013
Settlement of obligations with common stock	$	16,100
Year to date dividend accruals	$	38,447
Settlement of bank debt with short term loan	$	115,344
Nine Months Ended September 30, 2012
Settlement of obligations with common stock	$	16,297
Conversions of debt	$	1,413,361
Year to date dividend accruals	$	38,448
Reduction of derivatives from conversion of debt	$	1,516,384
Debt discount created from derivative instrument	$	50,000
Direct payment of acquisition indebtedness for issuance of convertible debentures	$	5,170,318

6

 

Kiwibox.Com, Inc. and Subsidiary

Notes to Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Kiwibox.Com, Inc. (the “Company”) was incorporated as a Delaware corporation on April 19, 1988 under the name Fortunistics, Inc. On November 18, 1998, the Company changed its name to Magnitude Information Systems, Inc. On December 31, 2009, the Company changed its name to Kiwibox.com, Inc.

On August 16, 2007 the Company acquired all outstanding shares of Kiwibox Media, Inc.

The Company, Magnitude, Inc. and Kiwibox Media Inc. were separate legal entities until December 31, 2009, with Kiwibox Media, Inc. being a wholly owned subsidiary. On December 31, 2009, the two subsidiaries, Magnitude, Inc. and Kiwibox Media, Inc. merged into the Company.

On September 30, 2011, Kiwibox.com acquired the German based social network Kwick! Community GmbH & Co. KG (“Kwick”), a wholly-owned subsidiary.

On September 24,2013, Kwick Community GmbH & Co. KG signed an equity purchase agreement to acquire Interscholz Internet Services GmbH and Co. KG, a German limited liability company, and all the equity of its general partner, Interscholz Beteiligungs GmbH (see Note 18).

Cash and Cash Equivalents

The Company accounts for cash and other highly liquid investments with original maturities of three months or less as cash and cash equivalents.

Principles of Consolidation

The consolidated financial statements as of and for the three months and nine months ended September 30, 2013 and as of December 31, 2012 include the accounts of Kiwibox.com, Inc. and its subsidiary, KWICK! Community GmbH & Co. KG. The activities of the Company’s subsidiary KWICK! Community GmbH & Co. KG. Any significant inter-company balances and transactions have been eliminated.

Goodwill and Intangible Assets

In 2012, the Company adopted the provisions of ASU 2011-08, Intangibles—Goodwill or Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. Under the amendments in ASU 2011-08, an entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. The Company has assessed the qualitative factors in all periods since adoption (see Note 16).

7

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Goodwill and Intangible Assets (continued)

In July 2012, the FASB issued ASU 2012-02, Intangibles- Goodwill or Other (Topic 350): Testing Indefinite-Living Tangible Assets for Impairment. ASU 2012-02 simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill by allowing an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is "more likely than not" that the asset is impaired. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of ASU 2012-02 did not have a material impact on our results of operations or our financial position.

Depreciation and Amortization

Property and equipment are recorded at cost. Depreciation on equipment, furniture and fixtures and leasehold improvements is computed on the straight-line method over the estimated useful lives of such assets between 3-10 years, or lease term for leasehold improvements, if for a shorter period. Maintenance and repairs are charged to operations as incurred.

Foreign Currency Translation

Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Gains and losses resulting from translation of financial statements of our foreign subsidiary operating in a non-hyperinflationary economy are recorded as a component of accumulated other comprehensive loss until either sale or upon complete or substantially complete liquidation by the Company of its investment in the foreign entity. Foreign currency transaction gain (loss) was $87,261 and $(13,441) for the three and nine months ended September 30, 2013. Accumulated gain or (loss) on foreign currency translation adjustment was $(122,788) through September 30, 2013.

Advertising Costs

Advertising costs are charged to operations when incurred. Advertising expense was $946 and $54,621 for the three and nine months ended September 30, 2013 and $2,173 and $10,847 for 2012, respectively.

Fair Value Measurements

The Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, which is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Under ASC 820, a framework was established for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Company accounted for certain convertible debentures issued in the year ended December 31, 2011 and the nine months ended September 30, 2012 as derivative liabilities required to be bifurcated from the host contract in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares (see Note 12).

Evaluation of Long Lived Assets

Long-lived assets are assessed for recoverability on an ongoing basis. In evaluating the fair value and future benefits of long-lived assets, their carrying value would be reduced by the excess, if any, of the long-lived asset over management’s estimate of the anticipated undiscounted future net cash flows of the related long-lived asset.

8

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Securities Issued for Services

The Company accounts for stock, stock options and stock warrants issued for services and compensation by employees under the fair value method. For non-employees, the fair market value of the Company’s stock on the date of stock issuance or option/grant is used. The Company has determined the fair market value of the warrants/options issued under the Black-Scholes Pricing Model. The Company has adopted the provisions of ASC 718, “Compensation – Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost 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 (generally the vesting period of the equity grant).

Reclassification of certain securities under ASC 815-15

Pursuant to ASC 815-15, “Contracts in Entity’s own Equity”, if a company has more than one contract subject to this Issue, and partial reclassification is required, there may be different methods that could be used to determine which contracts, or portions of contracts, should be reclassified. The Company's method for reclassification of such contracts is reclassification of contracts with the latest maturity date first.

Capitalization of Software /Website development costs

The Company capitalizes outside-contracted development work in accordance with the guidelines published under ASC 350-50, “Website Development Costs”. Under ASC 350-50, costs incurred during the planning stage are expensed, while costs relating to software used to operate a web site or for developing initial graphics should be accounted for under ASC 350-50, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, unless a plan exists or is being developed to market the software externally. Under ASC 350-50, internal and external costs incurred to develop internal-use computer software during the application development stage should be capitalized. Costs to develop or obtain software that allows for access or conversion of old data by new systems should also be capitalized, excluding training costs.

Fees incurred for web site hosting, which involve the payment of a specified, periodic fee to an Internet service provider in return for hosting the web site on its server(s) connected to the Internet, are expensed over the period of benefit, and included in cost of sales in the accompanying financial statements.

A total of $0 and $58,139 was capitalized for web-site development work during the nine months ended September 30, 2013 and 2012, respectively.

Income Taxes

The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset.

9

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Revenue Recognition

The Company’s revenue is derived from advertising on the Kiwibox.Com website. Most contracts require the Company to deliver the customer impressions, click-throughs or new customers, or some combination thereof. Accordingly, advertising revenue is estimated and recognized for the period in which customer impressions, click through or new customers are delivered. Licensing or hosting revenue consists of an annual contract with clients to provide web-site hosting and assistance.

Net Loss Per Share

Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents have not been included in this computation since the effect would be anti-dilutive. Such common stock equivalents totaled 195,560,992 common shares at September 30, 2013, comprised of 39,500,000 shares issuable upon exercise of stock purchase warrants, 5,200,000 shares issuable upon exercise of stock options, 729,537 shares exercisable upon conversion of convertible preferred shares, and 150,131,455 shares potentially issuable upon conversion of convertible debt. Such debt and the related accrued interest, convertible at the option of four debt holders at a price of 50% of the average closing price for the preceding 10 days, totals $11,339,842 which would yield approximately 6.4 billion shares if fully converted at September 30, 2013, however, the respective notes, all of which were issued to these investors, carry a stipulation whereby the number of all shares issued pursuant to a conversion, may in the aggregate not exceed a number that would increase the total share holdings beneficially owned by such investor to a level above 9.99%. At the end of the year, this clause limits any conversion to the aforementioned number of shares. All of the aforementioned conversions or exercises, as the case may be, are at the option of the holders.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2. GOING CONCERN

The ability of the Company to continue its operations is dependent on increasing sales and obtaining additional capital and financing. Our revenues during the foreseeable future are insufficient to finance our business and we are entirely dependent on the willingness of existing investors to continue supporting the Company with working capital loans and equity investments, and our ability to find new investors should the financial support from existing investors prove to be insufficient. If we were unable to obtain a steady flow of new debt or equity-based working capital we would be forced to cease operations. In their report for the fiscal year ended December 31, 2012, our auditors had expressed an opinion that, as a result of the losses incurred, there was substantial doubt regarding our ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company were unable to continue as a going concern. Management’s plans are to continue seeking equity and debt capital until cash flow from operations cover funding needs.

3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

The Company maintains cash balances in a financial institution which is insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s German subsidiary maintains cash balances in a financial institution which is insured by the German Einlagensicherungsfonds up to EUR 100,000. Balances in these accounts may, at times, exceed the respective insured limits. At September 30, 2013 and December 31, 2012, cash balances in bank accounts did not exceed this limit. The Company provides credit in the normal course of business to customers located throughout the U.S. and overseas. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

10

 

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

4. PREPAID EXPENSES

Prepaid expenses consist of the following at:	September 30, 2013		December 31, 2012
Consulting Fees	$	50,000	$	100,000
Rent		1,938		11,427
Server costs		75,221		-
Promotional supplies inventory		6,732		6,866
Business insurance		10,136		5,250
Other		5,372		5,467
	$	149,399	$	129,010

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:	September 30, 2013		December 31, 2012
Furniture	$	14,322	$	14,322
Leasehold Improvements		24,130		24,130
Computer equipment		632,062		630,842
Equipment		73,138		73,138
		743,652		742,432
Less accumulated depreciation		683,369		621,876
Total		60,283	$	120,556

Depreciation expense charged to operations was $61,493 and $125,872 in the first nine months of 2013 and 2012, respectively.

6. INTANGIBLE ASSETS

	September 30, 2013		December 31, 2012
Website development costs	$	392,659	$	392,659
Less accumulated amortization		343,830		284,120
Total	$	48,829	$	108,539

Amortization expense of intangible assets for the nine months ended September 30, 2013 and 2012 was $59,710 and $95,775, respectively. Additional amortization over the next 5 years is estimated to be as follows:

	Amortization expense
December 31, 2013	5,282
December 31, 2014	4,285
December 31, 2015	1,953
December 31, 2016	1,173
December 31, 2017	1,111
Thereafter	1,755

11

 

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

7. ACCRUED EXPENSES

Accrued expenses consisted of the following at:

	September 30, 2013		December 31, 2012
Accrued interest	$	1,903,616	$	1,203,923
Accrued payroll, payroll taxes and commissions		17,623		51,944
Accrued professional fees		132,275		150,598
Accrued rent				12,158
Accrued VAT		38,287		0
Miscellaneous accruals		13,164		23,554
Total	$	2,104,965	$	1,442,177

8. OBLIGATIONS TO BE SETTLED IN STOCK

Obligations to be settled in stock consisted of the following at

	September 30,  2013		December 31,  2012
Obligation for warrants granted for compensation	$	100,000	$	100,000
600,000 common shares issuable to a consultant who formerly was a director of the company, for services rendered.		36,000		36,000
600,000 (2013) and 500,000 shares (2012) common Shares, and 2,900,000 (2013) and 2,900,000 (2012) stock options issuable to two officers of the company pursuant to their respective employment agreement		66,518		69,608
5,100,000 (2013) and 4,200,000 (2012) stock options issuable to one director who also serves as the Company’s general counsel		53,460		44,550
1,000,000 warrants granted on the Pixunity.de asset Purchase (see Note 13)		10,000		10,000
1,050,000 shares issuable under stock grants		-		10,500
	$	265,978	$	270,658

9. LOANS PAYABLE

The Company (Formerly Magnitude, Inc.) had borrowings under short term loan agreements with the following terms and conditions at September 30, 2013 and December 31, 2012:

On December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue as of September 30, 2005 and no demand for payment has been made.	$	75,000
Total	$	75,000

12

 

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

10. NOTES PAYABLE

	September 30,		December 31,
	2013		2012
Balance of non-converted notes outstanding. Attempts to locate the holder of this note, to settle this liability, have been unsuccessful.	$	25,000	$	25,000
In January 2008 a shareholder loaned the Company $40,000 pursuant to which the Company issued a demand note bearing interest at the rate of 5% per year.		-		40,000
From September 2008 through September 2013 five creditors loaned the Company funds under the terms of the convertible notes issued, as modified in March 2009 and July 2010 and April 2011 and August 2012 (see Note 12).		9,597,699		8,773,699
During the three months ended March 2012, an individual loaned the Company funds under the terms of a convertible promissory note at interest of 5% per year (see Note 12)		-		50,000
Less: debt discount on above note		-		(8,333)
In January and again in February 2011, a shareholder loaned the Company $50,000 under a demand note at 10%. In 2011, this shareholder loaned the Company $240,000 under a demand note at 10%.		340,000		340,000
In the nine months ended September 2013,a shareholder loaned the Company $391,908 plus accrued interest of $11,386 under a demand note at 6%.		403,294		-
An affiliate loaned funds under a non-interest bearing note (see Note 14)		27,510		-
Total	$	10,393,503	$	9,220,366

11. LONG-TERM DEBT

Long-term debt as of September 30, 2013 and December 31, 2012 is comprised of the following:

Discounted present value of a non-interest bearing $70,000 settlement with a former investor of Magnitude, Inc. to be paid in 24 equal monthly payments commencing July 1, 1997. The imputed interest rate used to discount the note is 8% per annum. This obligation is in default.		33,529
Total		33,529
Less current maturities		33,529
Long-term debt, net of current maturities	$	-

13

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

12. DERIVATIVE CONVERSION FEATURES

On July 27, 2010, the Company issued two Class A Senior Convertible Revolving Promissory Notes (“Class A Notes”), one to Cambridge Services, Inc., in the principal amount of $683,996, consolidating the series of loans (and related accrued interest) made to the Company since June 26, 2009, and one to Discover Advisory Company, in the principal amount of $1,160,984, consolidating the series of loans (and related accrued interest) made to the Company since September 19, 2008 and including advances through September 30, 2010. Each of these promissory notes are due on demand, accrue interest at the rate of 10%, per annum, are convertible (including accrued interest) at the option of each lender into Common Stock of the Company at 50% of the averaged ten closing prices for the Company's Common Stock for the ten (10) trading days immediately preceding the Conversion Date but in no event less than $0.001 (the "Conversion Price"). Both promissory notes contain conversion caps, limiting conversions under these notes to a maximum beneficial ownership position of Company common stock to 9.99% for each lender. Each of these notes contains Company covenants, requiring the lenders’ prior written consent in order for the Company to merge, issue any common or preferred stock or any convertible debt instruments, declare a stock split or dividends, increase any compensation to its officers or directors by more than five (5%) during any calendar year. During the three and nine months ended September 30, 2013 no debt was converted. For the three and nine months ended September 30, 2013 Cambridge Services advanced $330,000 and $745,000, respectively. During the nine months ended September 30, 2013 Kreuzfeld LTD advanced $60,000.

The Company renegotiated certain outstanding promissory notes with its four major creditors, Discover Advisory Company of the Bahamas *(“DAC”), Kreuzfeld Ltd. of Switzerland (“Kreuzfeld”), Cambridge Services, Inc. of Panama (“CSI”) and Vermoegensverwaltungs-Gesellschaft Zurich LTD of Switzerland (“VGZ”). As of August 1, 2012, the Company authorized the issue of a new series of corporate note, the Class AA Senior Secured Convertible Revolving Promissory Notes, dated as of August 1, 2012 (the New Note(s)”) and issued New Notes: (1) to DAC, with a maximum credit facility of $5,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated July 27, 2010, in the original principal amount of $1,080,984, now cancelled, which has an outstanding balance due (including accrued interest) of $3,629,836 as of December 31,2012 and  $3,870,803     as of September 30, 2013; (2) to Kreuzfeld, with a maximum credit  facility of $5,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated September 16, 2011, in the original principal amount of $2,000,000, now cancelled, which has an outstanding balance due (including accrued interest) of $3,911,338 at December 31,2012 and $4,240,361 as of September 30, 2013; (3) to CSI, with a maximum credit facility of $2,000,000 which replaced  the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated August 1, 2011, in the original principal amount of $1,303,996, now cancelled, with an outstanding balance due (including accrued interest) of $1,412,142 as of December 31,2012 and $2,292,860 as of September 30, 2013, and; (4) to VGZ, with a maximum credit facility of $2,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated September 30, 2010, in the original principal amount of $2,000,000, now cancelled, with an outstanding balance due (including accrued interest) of $877,963 as of December 31,2013 and $935,702 as of September 30, 2013. All of the New Notes accrue interest at the rate of 10%, are convertible into common shares at the conversion rate equal to 50% of the averaged ten closing prices for the Company's Common Stock for the ten (10) trading days immediately preceding the Conversion Date but in no event less than $0.001, and are due on demand.. Pursuant to an Equity and Stock Pledge Agreement, also negotiated and executed as of August 1, 2012, the repayment of the outstanding indebtedness of the New Notes is secured by all of the limited partnership interests of the Pledgor’s wholly-owned German subsidiary, KWICK! Community GmbH & Co. KG, a private German limited partnership (“KG”), and all of its shares of the sole general partner of KG, KWICK! Community Beteiligungs GmbH.

On February 28, 2012 the Company signed a convertible note with Michael Pisani. This is a 1 year note that is convertible at $0.025 per share in the amount of $50,000. In the event that any portion of any outstanding Company promissory note, preferred share, warrant or stock option held of record by a non-affiliate of the Company is converted, exercised or exchanged for common shares of the Company at a conversion price or conversion rate less than $0.025 per one (1) common share anytime any part of the outstanding principal amount of this note is outstanding, the conversion rate of this note shall automatically be adjusted to such lower conversion rate. The Company evaluated this conversion contingency under the guidance at ASC 815-40-15 and determined that this conversion feature should be bifurcated from the host contract and measured at fair value. The Company valued this conversion feature utilizing a Black-Scholes valuation model and a probability analysis with regard to the reset provision of the conversion price. The Company determined the initial value to be $55,241, with $50,000 recorded as a debt discount and the remainder as interest expense-derivative conversion features. The discount was being amortized over the life of the note. A total of $8,333 in amortization expense was recorded during the nine months ended September 30, 2013. At September 30, 2013, $-0- of this debt plus accrued interest was still outstanding.

14

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

12. DERIVATIVE CONVERSION FEATURES (continued)

The Company accounted for the conversion features underlying these convertible debentures in accordance with ASC 815-40, Contract in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares. The Company determined the value of the derivate conversion features of these debentures issued to these holders during the nine months ended September 30, 2013 under these terms at the relevant commitment dates to be $1,724,218 utilizing a Black-Scholes valuation model. The change in fair value of the liability for the conversion feature resulted in income of $3,831,776 for the nine months ended September 30,2013, which is included in other income (expense) in the accompanying financial statements. The fair value of these derivative conversion features was determined to be $11,690,121 at September 30, 2013.

In addition, another demand note issued in 2008 and held by Michael Pisani in the amount of $40,000 was restructured to provide for a conversion option. The note was modified to be convertible into stock and five year warrants (exercisable at $0.05) at a conversion rate of $0.025 per share and per warrant. This debt modification resulted in a loss on debt extinguishment of $40,000 and a corresponding recognition of a beneficial conversion feature underlying the new note. In March 2013, the two notes due to Pisani were further restructured to provide for a structured repayment schedule, beginning with a payment of $35,000 in April 2013 and $14,000 per month thereafter until all principal, accrued interest and certain legal costs are fully paid. If the Company defaults on any of the required payments, the terms of the notes would revert back to the terms prior to the agreement. At September 30, 2013 this $40,000 note had been paid in full.

13. COMMITMENTS AND CONTINGENCIES

We maintain offices for our operations at 330 W. 42th Street, New York, New York 10036, for approximately 990 square feet. This lease requires minimum monthly rentals of $3,833 plus tenants’ share of utility/cam/property tax charges which average approximately $291 per month. During the 1^3rd quarter of 2013 the Company successfully negotiated a 5 year lease. Operating lease commitments as of September 2013 are:

2013	$	38,033
2014	$	45,996
2015	$	47,376
2016	$	48,792
2017	$	50,256

In May 2010 the Company negotiated a lease of an apartment in New York City for the CEO in order to reduce travel costs. The lease was for 12 months at $2,775 per month through May 31, 2011. In May 2011 the lease was extended through August 31, 2011 at the rate of $2,837. In August 2011 the lease was extended through December 31, 2011 at the rate of $2,837 per month. In December 2011 the lease was again extended through May 31, 2012 with no change in the base rent. In May 2012 the lease was extended through December 31, 2012 at a monthly rate of $2,943, this lease was then extended through December 31, 2013 at the same terms.

15

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

13. COMMITMENTS AND CONTINGENCIES (continued)

Kwick! has operating leases related to office space in Weinstadt, Germany along with vehicle leases. The office lease is renewable quarterly at a rate of $2,000 per month plus utilities. Kwick also has a vehicle lease which will be terminated January 31, 2014 at a rate of $1,077 per month. All operating lease contracts over 5 years contain clauses for yearly market rental reviews. Kwick has a sublease arrangement with Jaumo GmBh a related party (see note 14). Kwick’s operating leases relate to leases of land and vehicles with lease terms of between 3 and 5 years. All operating lease contracts over 5 years contain clauses for yearly market rental reviews. The Company does not have an option to purchase the leased office at the expiration of the lease period. Operating lease commitments as of September 30, 2013 are:

2013	$	6,000
2014	$	31,698
2015	$	23,672
2016	$	23,672

Our total rent expenses were $92,070 and $99,592 during the nine months ended September 30, 2013 and 2012, respectively.

During the third quarter of 2010 the Chief Technology Officer took over the position of Chief Executive Officer with no changes to the above terms, running through July 30, 2011. On October 6, 2010, the terms of the consulting agreement were modified. The new terms called for a reduced monthly consulting fee of $16,667, and for $100,000 to be prepaid on January 1, 2011 thru June 30,2011. During the fourth quarter of 2011 this agreement was extended through December 31,2012. During the fourth quarter of 2012 this agreement was again extended through December 31,2013 with the same prepayment provision. There were no changes to the stock compensation portion of any earlier agreement.

In the nine months ended September 30,2013 and September 30, 2012 this officer was granted 900,000 shares.

On March 7, 2011 the Company announced its acquisition of the assets of Pixunity.DE a German photo book community. We purchased the internet domain name, the software codes for capturing, uploading and sharing images and the list of its approximate 15,000 members. The principal reason for this purchase was to acquire the source code and technology for image sharing which could have cost us up to $100,000 to develop this technology in house. We are currently integrating the image sharing software into our Kiwibox website and do not intend to market or rely upon the pixunity brand for our business.

14. RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2013 and 2012 one outside director of the Company who also serves as The Company’s general and securities counsel, was paid an aggregate $45,000 and $45,000, respectively, for legal services. The director also received 100,000 common stock options per month during the three and nine month periods ended September 30, 2013 and 2012, valued at $2,970 and $2,790, respectively in each year.

During the three and nine months ended September 30, 2013 we incurred aggregate expenses of $155,256 and $311,579, and $66,338 and $163,751 for 2012 respectively, to companies controlled by the Chief Executive Officer, for website hosting, website development, server farm installations and technical advisory services. During the nine months ended September 30,2013 we prepaid, to companies controlled by the Chief Executive Officer, for server costs totaling $75,221,and owed $16,837 in accounts payable at September 30, 2013.The Chief Executive Officer is also party to a consulting agreement with the Company, which calls for a monthly consulting fee of $16,667 in cash plus 100,000 restricted shares. This agreement has been verbally extended through December 2013. In the nine months ended September 30, 2013 and September 30, 2012 this officer was granted 900,000 shares. The consulting fees due for the three months ended December 31, 2013 of $50,000 were prepaid prior to September 30, 2013 and are included in prepaid expenses.

16

 Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

14. RELATED PARTY TRANSACTIONS (continued)

Through September 30, 2013, the beneficial ownership in the Company’s securities held respectively, by Tell Capital AG of Switzerland and its principal, Ulrich Schuerch on a consolidated basis, was approximately 11.4% and approximately 9.9% of the voting stock was beneficially held by Discovery Advisory Company, located in the Bahamas, and Cambridge Services Inc., Kreuzfeld, LTD and Vermoegensverwaltungs-Gesellschaft Zurich LTD. (VGZ) of Switzerland. Discovery Advisory Company, Cambridge Services Inc., Kreuzfeld, LTD and VGZ are major creditors, having advanced operating capital against issuance by the Company of convertible promissory notes during 2013, 2012 and 2011. During the three and nine months ended September 30, 2013 Cambridge Services, Inc advanced an additional $330,000 and $765,000, respectively. During the three and nine months ended September 30, 2013 Kreuzfeld, LTD advanced $-0- and $60,000. At September 30, 2013, principal of $3,221,722 and $1,980,060 of such notes were outstanding and owed to Discovery Advisory Company and Cambridge Services Inc, respectively and $3,624,959 and $771,958 principal owed to Kreuzfeld, Ltd. and VGZ, respectively. 

In the nine months ended September 30, 2013, a shareholder loaned Kwick $391,908 plus accrued interest of $11,386. This loan carries an interest rate of 6% and is payable on demand. A portion of this loan was used to pay off a bank line of credit. Also, during the nine months ended September 2013 companies controlled by our Chief Executive officer loaned Kwick $11,706 and loaned Kiwibox $27,510. There are no terms on these loans and the loan to Kwick was paid back in July 2013.

15. FAIR VALUE

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables.

Effective July 1 2009, the Company adopted ASC 820, Fair Value Measurements and Disclosures. This topic defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance supersedes all other accounting pronouncements that require or permit fair value measurements. The Company accounted for the conversion features underlying certain convertible debentures in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares.

Effective July 1 2009, the Company adopted ASC 820-10-55-23A, Scope Application to Certain Non-Financial Assets and Certain Non-Financial Liabilities, delaying application for non-financial assets and non-financial liabilities as permitted. ASC 820 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange- traded securities and exchange-based derivatives.

Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges.

Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently- traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

17

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

15. FAIR VALUE (continued)

The following table reconciles, for the nine months ended September 30, 2013, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

Conversion Liability at January 1, 2013	$	13,797,679
Value of beneficial conversion features of new debentures		1,724,218
Change in value of beneficial conversion features during period		(3,831,776)
Reductions in fair value due to principal conversions		-
Conversion Liability at September 30, 2013	$	11,690,121

The fair value of the conversion features are calculated at the time of issuance and the Company records a conversion liability for the calculated value. The Company recognizes interest expense for the recognition of the conversion liability. 

16. GOODWILL FROM THE ACQUISITION OF KWICK!

The excess of purchase price over tangible net assets acquired at September 30, 2011 was initially allocated to goodwill in the amount of $6,138,210. At September 30, 2013 management determined based on qualitative and quantitative factors that there was an impairment to goodwill.

The goodwill has been tested by the management of the Company in qualitative assessments throughout the nine months ended September 30, 2013. These assessments lead management to identify impairment indicators related to goodwill. Management therefore performed the two-step impairment test for goodwill, utilizing a market approach to the valuation. In estimating the fair value of the reporting unit, Kwick, management considered comparable per user values from recent acquisitions in the industry, as well as the effect of the economic recession and continuing deterioration of the use of social networks in Germany. After applying the estimated fair value of the reporting unit of $2,660,000 to the net assets of Kwick at June 30, 2013, an implied fair value of goodwill of $2,452,812 was calculated. Based on the impairment test, during the three months ended June 30, 2013, goodwill of $3,685,398 was determined to be impaired and was written off. Management considered additional qualitative factors during the three months ended September 30, 2013, and after consideration of failures by comparable social networks, continuing operational losses and negative cash flow, the estimated value of the reporting unit created an implied fair value of goodwill of $-0-. Based on the impairment test, during the three months ended September 30, 2013, goodwill of $2,452,812 was determined to be impaired and was written off.

17. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2013, the FASB issued ASU 2013-05, Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity , which provides guidance on releasing cumulative translation adjustments out of accumulated comprehensive income into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This guidance is effective prospectively for interim and annual periods beginning on January 1, 2014. Early adoption is permitted. As the Company has not ceased to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, the adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial position, results of operations, or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

18

Kiwibox.Com, Inc. and Subsidiary

Notes to Consolidated Financial Statements

18. SUBSEQUENT EVENTS

Following the announcement, reported on Form 8-K on September 24,2013, of the signing, on September 30,2013 Kwick closed the Equity Purchase Agreement and acquired Interscholtz Internet Services GmbH and Co. KG, a German Liability company, and all of the equity of its general partner, interscholz Beteiligungs GmbH (collectively “Interscholtz:)from Andre Scholz, The president and chief executive of Kwick. Kwick issued a promissory note to Interscholtz GmbH for $1,352,000 for the Equity purchase agreement. On October 8, 2013, the German register court recognized the transfer of ownership of Interscholz GmbH and on October 10, 2013 the same court recognized the transfer of ownership of Interscholz GmbH and Co. KG. (“Interscholz”) to Kwick! Interscholz provides website hosting, website development, server farm installations and technical advisory services. All other required disclosures cannot be made at this time due to the fact that there has not yet been a US GAAP conversion done on the books of Interscholz and therefore the accounting for the business combination has not yet been completed.

Since September 30, 2013 we have received $90,000 of working capital from accredited investors, which are covered by convertible promissory notes.

19

 

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT PURSUANT TO "SAFE HARBOR" PROVISIONS OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934

The information in this annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their businesses so long as they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements other than those statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with the consolidated financial statements of Kiwibox.Com, Inc., contained herein and in the Company’s annual report for the year ended December 31, 2012 as filed on Form 10-K. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Description of Business

The company successfully acquired the German social network Kwick! in the third quarter 2011. This acquisition added more than 10 million registered members with around 1 million active users, who create more than 2 billion page impressions a month in the Kiwibox network. This community has been online since 1999 and has been cash flow positive since inception. We are continuing to optimize this website and develop mobile applications to keep these users engaged across multiple platforms. We have continued to increase the number of events sponsored in Germany as a way to bind our German members to our website.

The Company has successfully integrated Pixunity to the US market and will continue to add impressive features throughout the year. At the same time we continue to increase our market presence. Our promotional teams, both inside and outside of New York City, continue to develop  partnerships with event organizers and businesses along the East Coast of the United States and plan further expansion of these types of market alliances throughout 2013.

The Company attaches great importance to its innovative technology developments and continues to follow the top social network market leaders with technology upgrades, providing its users with an alternative social networking opportunity in the web and through mobile apps.

Based on the integration work and the financial translation overhead the operating expenses, not including stock-based compensation, are at a level of approximately $87,500 per month.

Subsequent to the date of the balance sheet Kwick acquired Interscholtz Internet Services GmbH and Co. KG, a German limited liability company. This company provides website hosting, website development, server farm installations and technical advisory services, and the acquisition is expected to reduce on going operating costs.

During the third quarter of 2013, Kiwibox experienced an increase of 100% in active users while doubling the amount of online users at any given time.. We now have over 22,000 active members per day and are registering approximately 2,000 new users per day. We have continued to release new mobil apps for the Iphone and Android devices, use of the mobil devices causes an exponential growth in viral activity drawing more users to our website.

20

Results of Operations for the Three and Nine Months Ended September 30, 2013 Compared to the Three and Nine Months Ended September 30, 2012

For the three and nine months ended September 30, 2013, total revenues amounted to $212,570 and $790,657, respectively compared to $269,263 and $1,109,914 recorded in the same periods in 2012. The reason for this decline is due to a continued downward trend in the advertising market.

Gross Profit (Loss) for the nine months ended September 30, 2013 amounted to $185,975 after accounting for $613,241 in cost of sales. For the three months ended September 30, 2013 gross profit (loss) amounted to $(4,594) after accounting for cost of sales of $177,176. The reduction in gross profit was the result of decreased advertising revenue due to market conditions.

After deducting selling and general and administrative expenses of $357,722 and $1,172,067 for the three and nine months ended September 30, 2013, compared to $474,052 and $1,695,249 recorded in the same period in 2012, along with impairment of goodwill in the amount of $2,452,812 and $6,138,210 for the three and nine months ended September 30, 2013, the Company realized operating losses of $2,815,128 and $7,124,302 for the three and nine months ended September 30, 2013 compared to operating losses of $385,633 and $1,326,995 in the same periods in 2012. The decline in selling expenses and general and administrative expenses is the result of cost cutting measures, including consolidation of staffing operations at Kwick! The company realized additional other expenses of $2,452,812 due to the impairment of goodwill.

The period concluded with a net loss of $3,916,254 for the quarter and a net loss of $5,781,308 for the first nine months of 2013. After accounting for dividends accrued on outstanding preferred stock which totaled $38,447, the net loss applicable to common shareholders for the nine months ended September 30, 2013 was $5,819,755 or $0.009 per share compared to a net loss applicable to common shareholders of $8,148,017 or $0.013 per share for the same period in 2012.

Liquidity and Capital Resources

We have financed our business with new debt since our cash flow is insufficient to provide the working capital necessary to fund our operations. We received $310,000 in cash from short-term loans from accredited private investors during the three months ended September 30, 2013. We have an ongoing and urgent need for working capital to fund our operations. If we are unable to continue to receive new equity investments or obtain loans, we will not be able to fund our operations and we will be required to close our business.

Our deficit in working capital amounted to $24,968,244 at September 30, 2013, as compared to $20,603,415 at December 31, 2012. Stockholders’ equity showed an impairment of $24,810,015 at the end of the period, compared to an impairment of $19,032,919 at the beginning of the year. The negative cash flow from operations during the nine months ended September 30, 2013, totaled $1,049,867 and was financed by new debt.

Our bank debt as of September 30, 2013 consisted of a bank overdraft of $3,628. Aside from trade payables and accruals, our remaining indebtedness at September 30, 2013 mainly consisted of certain notes and loans aggregating $10,502,032, liabilities for derivative conversion features of $11,690,121, amounts due to related parties of $24,389, and the following obligations. The position “Obligations to be settled in stock” of $265,978 accounts for common shares due under consulting agreements, and for services to be settled in common stock options and warrants, where the underlying securities had not yet been issued. Current liabilities also include $671,576 accrued unpaid dividends on outstanding preferred stock. Such dividends will be paid only if and when capital surplus and cash-flow from operations are sufficient to cover the outstanding amounts without thereby unduly impacting the Company’s ability to continue operating and growing its business.

21

Our current cash reserves and net cash flow from operations expected during the near future will be insufficient to fund our operations and website development and marketing plan over the next twelve months. We expect to fund these requirements with further investments in form of debt or equity capital and are in ongoing discussions with existing investors to secure funding. There can be no assurance, however, that we will be able to secure needed financing in the future and identify a financing source or sources, and if we do, whether the terms of such financing will be acceptable or commercially reasonable.

Absent the receipt of needed equity investment or loans, we will be compelled to severely curtail operations and possibly, close our business operations. Assuming we can receive current funds to continue to operate our businesses, we may need additional funding for marketing and website development, absent of which our website development, results of operations and financial condition could be subject to material adverse consequences.

22

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4T. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ended September 30, 2013 covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

As of September 30, 2013, management assessed, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective as more fully described below.  Based on management’s assessment over financial reporting, management believes as of September 30, 2012, the Company’s internal control over financial reporting was not effective due to the following deficiencies:

1. The Company’s control environment did not have adequate segregation of duties and lacked adequate accounting resources to address non routine and complex transactions and financial reporting matters on a timely basis.

2. The Company had only a part time chief financial officer performing all accounting related duties on site, presenting the risk that the reporting of these non routine and complex transactions during the preparation of our future financial statements and disclosures may not be accomplished in a timely manner.

Company management believes that notwithstanding the above identified deficiencies that constitute our material weakness, that the financial statements fairly present, in all material respects, the Company’s consolidated balance sheets as of September 30, 2013 and December 31, 2012 and the related statements of operations, and cash flows for the three and nine months ended September 30, 2013 and 2012, in conformity with generally accepted accounting principles.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

- When available, we will devote additional resources to supplement, where necessary, existing resources with additional qualified third party consultants;

- We are continuing to institute more stringent approval processes for financial transactions, and

- We are continuing to perform additional procedures and analyses for significant transactions as a mitigating control in the control environment due to segregation of duties issues.

Changes in Internal Controls over Financial Reporting

Other than as stated above, during the quarter ended September 30, 2013, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

23

PART II - OTHER INFORMATION

Item 1 LEGAL PROCEEDINGS

At the time of this report, the Company is not a party in any pending material legal proceedings.

Item 1A. RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

Item 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a)   Issuance of unregistered securities

During the three and nine months in 2013 the Company did sell any unregistered securities.

(b) Not applicable

(c) None

Item 3 DEFAULTS UPON SENIOR SECURITIES

The Company, as of the date of this filing, is in arrears on the payment of certain dividends on its Series A, C, and D Senior Convertible Preferred Stock. Such arrears total approximately $671,500. These dividends have been accrued, however, the Company’s management has refrained from making payments at this time because of the absence of positive equity and/or surplus funds.

Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

- None

Item 5 OTHER INFORMATION

- None

24

Item 6 EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

31.01.	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 18, 2013
31.02.	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 18, 2013.
32.01.	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 18, 2013.

(b) Reports on Form 8-K:

On September30 , 2013 the company filed a report on form 8-K with the commission announcing the equity purchase agreement to acquire interscholz Internet Services GmbH and Co. KG

On October 1, 2013, the company filed a current report on 8-K with the commission announcing growth, cost reduction and new apps.

On October 3,,2013, the Company filed a current report on Form 8-KA with the Commission, announcing an update to the 8K filed on September 30, 2013

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	Kiwibox.Com, Inc.
Date: November 18, 2013
	By:	/s/ Andre Scholz
		Andre Scholz
		Chief Executive Officer
Date: November 18, 2013	By:	/s/ Craig S. Cody
		Craig S. Cody
		Chief Financial Officer

 

EX-31.01

Exhibit 31.01

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Andre Scholz, certify that:

(1) I have reviewed the quarterly report on Form 10-Q of Kiwibox.Com, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

(4) The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted account principles;

(c) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

(5) The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

November 18, 2013	/s/ Andre Scholz
	Andre Scholz
	President, Chief Executive Officer (principal executive officer)

 

EX-31.02

Exhibit 31.02

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Craig Cody, certify that:

(1) I have reviewed the quarterly report on Form 10-Q of Kiwibox.Com, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

(4) The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted account principles;

(c) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

(5) The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

November 18, 2013	/s/ Craig Cody
	Craig Cody
	Chief Financial Officer (principal financial officer and principal accounting officer)

 

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kiwibox.Com, Inc.(the “Company”) on Form 10-Q for the period ended September 30, 2013 (the “Report”), each of the undersigned, Andre Scholz, President and Chief Executive Officer of the Company, and Craig Cody, Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 18, 2013
	By:	/s/ Andre Scholz
		Andre Scholz
		President and Chief Executive Officer
		(principal executive officer)

Date: November 18, 2013
	By:	/s/ Craig Cody
		Craig Cody
		Chief Financial Officer
		(principal financial officer and principal accounting officer)

 

XML

DERIVATIVE CONVERSION FEATURES

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE CONVERSION FEATURES

12. DERIVATIVE CONVERSION FEATURES

On July 27, 2010, the Company issued two Class A Senior Convertible Revolving Promissory Notes (“Class A Notes”), one to Cambridge Services, Inc., in the principal amount of $683,996, consolidating the series of loans (and related accrued interest) made to the Company since June 26, 2009, and one to Discover Advisory Company, in the principal amount of $1,160,984, consolidating the series of loans (and related accrued interest) made to the Company since September 19, 2008 and including advances through September 30, 2010. Each of these promissory notes are due on demand, accrue interest at the rate of 10%, per annum, are convertible (including accrued interest) at the option of each lender into Common Stock of the Company at 50% of the averaged ten closing prices for the Company's Common Stock for the ten (10) trading days immediately preceding the Conversion Date but in no event less than $0.001 (the "Conversion Price"). Both promissory notes contain conversion caps, limiting conversions under these notes to a maximum beneficial ownership position of Company common stock to 9.99% for each lender. Each of these notes contains Company covenants, requiring the lenders’ prior written consent in order for the Company to merge, issue any common or preferred stock or any convertible debt instruments, declare a stock split or dividends, increase any compensation to its officers or directors by more than five (5%) during any calendar year. During the three and nine months ended September 30, 2013  no debt was converted. For the three and nine months ended September 30, 2013 Cambridge Services advanced $330,000 and $745,000, respectively. During the nine months ended September 30, 2013 Kreuzfeld LTD advanced $60,000.

The Company renegotiated certain outstanding promissory notes with its four major creditors, Discover Advisory  Company of the Bahamas *(“DAC”), Kreuzfeld Ltd. of Switzerland (“Kreuzfeld”), Cambridge Services, Inc. of Panama (“CSI”) and Vermoegensverwaltungs-Gesellschaft Zurich LTD of Switzerland (“VGZ”). As of August 1, 2012, the Company authorized the issue of a new series of corporate note, the Class AA Senior Secured Convertible Revolving Promissory Notes, dated as of August 1, 2012 (the New Note(s)”) and issued New Notes: (1) to DAC, with a maximum credit facility of $5,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated July 27, 2010, in the original principal amount of $1,080,984, now cancelled, which has an outstanding balance due (including accrued interest) of $3,629,836 as of  December 31,2012 and   $3,870,803      as of September  30, 2013; (2) to Kreuzfeld, with a maximum credit  facility of $5,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated September 16, 2011, in the original principal amount of $2,000,000, now cancelled, which has an  outstanding  balance due (including accrued interest) of $3,911,338 at December 31,2012 and $4,240,361 as of September 30, 2013; (3) to CSI, with a maximum credit facility of $2,000,000 which replaced   the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated August 1, 2011, in the original principal amount of $1,303,996, now cancelled, with an outstanding balance due (including accrued interest) of  $1,412,142 as of December 31,2012 and  $2,292,860 as of September 30, 2013, and; (4)  to VGZ, with a maximum credit facility of $2,000,000 which replaced the Company’s outstanding Class A Senior Convertible Revolving Promissory Note, dated September 30, 2010, in the original principal amount  of $2,000,000, now cancelled, with an outstanding balance due (including accrued interest) of $877,963 as of December 31,2013 and  $935,702 as of  September 30,  2013. All of the New Notes accrue interest at the rate of 10%, are convertible into common shares at the conversion rate equal to 50% of the averaged ten closing prices for the Company's Common Stock for the ten (10) trading days  immediately preceding the Conversion Date but in no event less than $0.001, and are due on demand.. Pursuant to an  Equity and Stock Pledge Agreement, also negotiated and executed as of August 1, 2012, the repayment of the outstanding indebtedness of the New Notes is secured by all of the limited partnership interests of the Pledgor’s wholly-owned German subsidiary, KWICK! Community GmbH & Co. KG, a private German limited partnership (“KG”), and all of its shares of the sole general partner of KG, KWICK! Community Beteiligungs GmbH.

On February 28, 2012 the Company signed a convertible note with Michael Pisani. This is a 1 year note that is convertible at $0.025 per share in the amount of $50,000. In the event that any portion of any outstanding Company promissory note, preferred share, warrant or stock option held of record by a non-affiliate of the Company is converted, exercised or exchanged for common shares of the Company at a conversion price or conversion rate less than $0.025 per one (1) common share anytime any part of the outstanding principal amount of this note is outstanding, the conversion rate of this note shall automatically be adjusted to such lower conversion rate.  The Company evaluated this conversion contingency under the guidance at ASC 815-40-15 and determined that this conversion feature should be bifurcated from the host contract and measured at fair value. The Company valued this conversion feature utilizing a Black-Scholes valuation model and a probability analysis with regard to the reset provision of the conversion price. The Company determined the initial value to be $55,241, with $50,000 recorded as a debt discount and the remainder as interest expense-derivative conversion features. The discount was  being amortized over the life of the note. A total of $8,333 in amortization expense was recorded during the nine months ended September 30, 2013. At September 30, 2013, $-0- of this debt plus accrued interest was still outstanding.

The Company accounted for the conversion features underlying these convertible debentures  in accordance with ASC 815-40, Contract in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares. The Company determined the value of the derivate conversion features of these debentures issued to these holders during the nine months ended September 30, 2013 under these terms at the relevant commitment dates to be $1,724,218  utilizing a Black-Scholes valuation model. The change in fair value of the liability for the conversion feature resulted in income of $3,831,776 for the nine months ended September 30,2013, which is included in other income (expense) in the accompanying financial statements. The fair value of these derivative conversion features was determined to be $11,690,121 at September 30, 2013.

In addition, another demand note issued in 2008 and held by Michael Pisani in the amount of $40,000 was restructured to provide for a conversion option. The note was modified to be convertible into stock and five year warrants (exercisable at $0.05) at a conversion rate of $0.025 per share and per warrant. This debt modification resulted in a loss on debt extinguishment of $40,000 and a corresponding recognition of a beneficial conversion feature underlying the new note. In March 2013, the two notes due to Pisani were further restructured to provide for a structured repayment schedule, beginning with a payment of $35,000 in April 2013 and $14,000 per month thereafter until all principal, accrued interest and certain legal costs are fully paid. If the Company defaults on any of the required payments, the terms of the notes would revert back to the terms prior to the agreement. At September 30, 2013 this $40,000 note had been paid in full.

XML

Operating Lease Commitments (Detail) (USD $)	Sep. 30, 2013
New York Operations
Operating Leased Assets [Line Items]
2013	$ 38,033
2014	45,996
2015	47,376
2016	48,792
2017	50,256
Weinstadt Operations
Operating Leased Assets [Line Items]
2013	6,000
2014	31,698
2015	23,672
2016	$ 23,672

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net Sales
Advertising	$ 212,570	$ 267,814	$ 790,657	$ 1,030,455
Other	(39,988)	1,449	8,559	79,459
Total Revenues	172,582	269,263	799,216	1,109,914
Cost of Sales
Website hosting expenses	177,176	180,844	613,241	741,660
Total Cost of Sales	177,176	180,844	613,241	741,660
Gross Profit (Loss)	(4,594)	88,419	185,975	368,254
Selling expenses	142,714	131,449	432,537	631,010
Impairment- goodwill	2,452,812	0	6,138,210	0
General and administrative expenses	215,008	342,603	739,530	1,064,239
Loss from Operations	(2,815,128)	(385,633)	(7,124,302)	(1,326,995)
Other Income (Expense)
Miscellaneous income	(1,767)	6,339	4,808	31,065
Foreign currency transaction gain (loss)	0	(189)	0	50,586
Change in fair value -derivative liability	(244,399)	15,396	3,831,776	663,239
Interest expense-derivative conversion	(602,819)	(583,647)	(1,724,218)	(6,917,459)
(Loss) gain on extinguishment of debt	0	0	(36,480)	0
Amortized debt discount	0	(12,500)	(8,333)	(29,167)
Interest expense	(251,873)	(230,782)	(723,641)	(524,378)
Total Other Income (Expense)	(1,100,858)	(805,383)	1,343,912	(6,726,114)
Loss before Benefit (Provision) for Income Taxes	(3,915,986)	(1,191,016)	(5,780,390)	(8,053,109)
Benefit (Provision) for income taxes	(268)	(17,998)	(918)	(56,461)
Net Income (Loss)	(3,916,254)	(1,209,014)	(5,781,308)	(8,109,570)
Dividends on Preferred Stock	(12,815)	(12,816)	(38,447)	(38,447)
Net Income (Loss) applicable to Common Shareholders, basic and diluted	(3,929,069)	(1,221,830)	(5,819,755)	(8,148,017)
Net Loss per Common Share, basic and diluted.	$ (0.006)	$ (0.002)	$ (0.009)	$ (0.013)
Weighted Average Number of Common Shares Outstanding	681,243,060	678,944,746	680,749,470	641,085,737
Comprehensive Income (Loss):
Net Income (Loss)	(3,916,254)	(1,209,014)	(5,781,308)	(8,109,570)
Foreign currency translation adjustment	87,261	276,470	(13,441)	304,141
Total Comprehensive Income (Loss)	$ (3,828,993)	$ (932,544)	$ (5,794,749)	$ (7,805,429)

XML

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2013

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:	September 30, 2013		December 31, 2012
Furniture	$	14,322	$	14,322
Leasehold Improvements		24,130		24,130
Computer equipment		632,062		630,842
Equipment		73,138		73,138
		743,652		742,432
Less accumulated depreciation		683,369		621,876
Total		60,283	$	120,556

Depreciation expense charged to operations was $61,493 and $125,872 in the first nine months of 2013 and 2012, respectively.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Organization

Nature of Organization

Kiwibox.Com, Inc. (the “Company”) was incorporated as a Delaware corporation on April 19, 1988 under the name Fortunistics, Inc. On November 18, 1998, the Company changed its name to Magnitude Information Systems, Inc. On December 31, 2009, the Company changed its name to Kiwibox.com, Inc.

On August 16, 2007 the Company acquired all outstanding shares of Kiwibox Media, Inc.

The Company, Magnitude, Inc. and Kiwibox Media Inc. were separate legal entities until December 31, 2009, with Kiwibox Media, Inc. being a wholly owned subsidiary. On December 31, 2009, the two subsidiaries, Magnitude, Inc. and Kiwibox Media, Inc. merged into the Company.

On September 30, 2011, Kiwibox.com acquired the German based social network Kwick! Community GmbH & Co. KG (“Kwick”), a wholly-owned subsidiary.

On September 24,2013, Kwick Community GmbH & Co. KG signed an equity purchase agreement to acquire Interscholz Internet Services GmbH and Co. KG, a German limited liability company, and all the equity of its general partner, Interscholz Beteiligungs GmbH (see Note 18).

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company accounts for cash and other highly liquid investments with original maturities of three months or less as cash and cash equivalents.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements as of and for the three months and nine months ended September 30, 2013 and as of December 31, 2012 include the accounts of Kiwibox.com, Inc. and its subsidiary, KWICK! Community GmbH & Co. KG. The activities of the Company’s subsidiary KWICK! Community GmbH & Co. KG. Any significant inter-company balances and transactions have been eliminated.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

In 2012, the Company adopted the provisions of ASU 2011-08, Intangibles—Goodwill or Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. Under the amendments in ASU 2011-08, an entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. The Company has assessed the qualitative factors in all periods since adoption (see Note 16).

In July 2012, the FASB issued ASU 2012-02, Intangibles- Goodwill or Other (Topic 350): Testing Indefinite-Living Tangible Assets for Impairment. ASU 2012-02 simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill by allowing an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is "more likely than not" that the asset is impaired. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of ASU 2012-02 did not have a material impact on our results of operations or our financial position.

Depreciation and Amortization

Depreciation and Amortization

Property and equipment are recorded at cost. Depreciation on equipment, furniture and fixtures and leasehold improvements is computed on the straight-line method over the estimated useful lives of such assets between 3-10 years, or lease term for leasehold improvements, if for a shorter period. Maintenance and repairs are charged to operations as incurred.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Gains and losses resulting from translation of financial statements of our foreign subsidiary operating in a non-hyperinflationary economy are recorded as a component of accumulated other comprehensive loss until either sale or upon complete or substantially complete liquidation by the Company of its investment in the foreign entity. Foreign currency transaction gain (loss) was $87,261 and $(13,441) for the three and nine months ended September 30, 2013. Accumulated gain or (loss) on foreign currency translation adjustment was $(122,788) through September 30, 2013.

Advertising Costs

Advertising Costs

Advertising costs are charged to operations when incurred. Advertising expense was $946 and $54,621 for the three and nine months ended September 30, 2013 and $2,173 and $10,847 for 2012, respectively.

Fair Value Measurements

Fair Value Measurements

The Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, which is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Under ASC 820, a framework was established for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Company accounted for certain convertible debentures issued in the year ended December 31, 2011 and the nine months ended September 30, 2012 as derivative liabilities required to be bifurcated from the host contract in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares (see Note 12).

Evaluation of Long Lived Assets

Evaluation of Long Lived Assets

Long-lived assets are assessed for recoverability on an ongoing basis. In evaluating the fair value and future benefits of long-lived assets, their carrying value would be reduced by the excess, if any, of the long-lived asset over management’s estimate of the anticipated undiscounted future net cash flows of the related long-lived asset.

Securities Issued for Services

Securities Issued for Services

The Company accounts for stock, stock options and stock warrants issued for services and compensation by employees under the fair value method. For non-employees, the fair market value of the Company’s stock on the date of stock issuance or option/grant is used. The Company has determined the fair market value of the warrants/options issued under the Black-Scholes Pricing Model. The Company has adopted the provisions of ASC 718, “Compensation – Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost 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 (generally the vesting period of the equity grant).

Reclassification of certain securities under ASC 815-15

Reclassification of certain securities under ASC 815-15

Pursuant to ASC 815-15, “Contracts in Entity’s own Equity”, if a company has more than one contract subject to this Issue, and partial reclassification is required, there may be different methods that could be used to determine which contracts, or portions of contracts, should be reclassified. The Company's method for reclassification of such contracts is reclassification of contracts with the latest maturity date first.

Capitalization of Software /Website development costs

Capitalization of Software /Website development costs

The Company capitalizes outside-contracted development work in accordance with the guidelines published under ASC 350-50, “Website Development Costs”. Under ASC 350-50, costs incurred during the planning stage are expensed, while costs relating to software used to operate a web site or for developing initial graphics should be accounted for under ASC 350-50, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, unless a plan exists or is being developed to market the software externally. Under ASC 350-50, internal and external costs incurred to develop internal-use computer software during the application development stage should be capitalized. Costs to develop or obtain software that allows for access or conversion of old data by new systems should also be capitalized, excluding training costs.

Fees incurred for web site hosting, which involve the payment of a specified, periodic fee to an Internet service provider in return for hosting the web site on its server(s) connected to the Internet, are expensed over the period of benefit, and included in cost of sales in the accompanying financial statements.

A total of $0 and $58,139 was capitalized for web-site development work during the nine months ended September 30, 2013 and 2012, respectively.

Income Taxes

Income Taxes

The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset.

Revenue Recognition

Revenue Recognition

The Company’s revenue is derived from advertising on the Kiwibox.Com website. Most contracts require the Company to deliver the customer impressions, click-throughs or new customers, or some combination thereof. Accordingly, advertising revenue is estimated and recognized for the period in which customer impressions, click through or new customers are delivered. Licensing or hosting revenue consists of an annual contract with clients to provide web-site hosting and assistance.

Net Loss Per Share

Net Loss Per Share

Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents have not been included in this computation since the effect would be anti-dilutive. Such common stock equivalents totaled 195,560,992 common shares at September 30, 2013, comprised of 39,500,000 shares issuable upon exercise of stock purchase warrants, 5,200,000 shares issuable upon exercise of stock options, 729,537 shares exercisable upon conversion of convertible preferred shares, and 150,131,455 shares potentially issuable upon conversion of convertible debt. Such debt and the related accrued interest, convertible at the option of four debt holders at a price of 50% of the average closing price for the preceding 10 days, totals $11,339,842 which would yield approximately 6.4 billion shares if fully converted at September 30, 2013, however, the respective notes, all of which were issued to these investors, carry a stipulation whereby the number of all shares issued pursuant to a conversion, may in the aggregate not exceed a number that would increase the total share holdings beneficially owned by such investor to a level above 9.99%. At the end of the year, this clause limits any conversion to the aforementioned number of shares. All of the aforementioned conversions or exercises, as the case may be, are at the option of the holders.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

XML

Reconciliation of Financial Instruments that are Recognized at Fair Value in Consolidated Financial Statements (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Conversion Liability at January 1, 2013	$ 13,797,679
Value of beneficial conversion features of new debentures	1,724,218
Change in value of beneficial conversion features during period	(3,831,776)
Reductions in fair value due to principal conversions	0
Conversion Liability at September 30, 2013	$ 11,690,121

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

We maintain offices for our operations at 330 W. 42th Street, New York, New York 10036, for approximately 990 square feet. This lease requires minimum monthly rentals of $3,833 plus tenants’ share of utility/cam/property tax charges which average approximately $291 per month. During the 1^3rd quarter of 2013 the Company successfully negotiated a 5 year lease. Operating lease commitments as of September 2013 are:

2013	$	38,033
2014	$	45,996
2015	$	47,376
2016	$	48,792
2017	$	50,256

In May 2010 the Company negotiated a lease of an apartment in New York City for the CEO in order to reduce travel costs. The lease was for 12 months at $2,775 per month through May 31, 2011. In May 2011 the lease was extended through August 31, 2011 at the rate of $2,837. In August 2011 the lease was extended through December 31, 2011 at the rate of $2,837 per month. In December 2011 the lease was again extended through May 31, 2012 with no change in the base rent. In May 2012 the lease was extended through December 31, 2012 at a monthly rate of $2,943, this lease was then extended through December 31, 2013 at the same terms.

Kwick! has operating leases related to office space in Weinstadt, Germany along with vehicle leases. The office lease is renewable quarterly at a rate of $2,000 per month plus utilities. Kwick also has a vehicle lease which will be terminated January 31, 2014 at a rate of $1,077 per month. All operating lease contracts over 5 years contain clauses for yearly market rental reviews. Kwick has a sublease arrangement with Jaumo GmBh a related party (see note 14). Kwick’s operating leases relate to leases of land and vehicles with lease terms of between 3 and 5 years. All operating lease contracts over 5 years contain clauses for yearly market rental reviews. The Company does not have an option to purchase the leased office at the expiration of the lease period. Operating lease commitments as of September 30, 2013 are:

2013	$	6,000
2014	$	31,698
2015	$	23,672
2016	$	23,672

Our total rent expenses were $92,070 and $99,592 during the nine months ended September 30, 2013 and 2012, respectively.

During the third quarter of 2010 the Chief Technology Officer took over the position of Chief Executive Officer with no changes to the above terms, running through July 30, 2011. On October 6, 2010, the terms of the consulting agreement were modified. The new terms called for a reduced monthly consulting fee of $16,667, and for $100,000 to be prepaid on January 1, 2011 thru June 30,2011. During the fourth quarter of 2011 this agreement was extended through December 31,2012. During the fourth quarter of 2012 this agreement was again extended through December 31,2013 with the same prepayment provision. There were no changes to the stock compensation portion of any earlier agreement.

In the nine months ended September 30,2013 and September 30, 2012 this officer was granted 900,000 shares.

On March 7, 2011 the Company announced its acquisition of the assets of Pixunity.DE a German photo book community. We purchased the internet domain name, the software codes for capturing, uploading and sharing images and the list of its approximate 15,000 members. The principal reason for this purchase was to acquire the source code and technology for image sharing which could have cost us up to $100,000 to develop this technology in house. We are currently integrating the image sharing software into our Kiwibox website and do not intend to market or rely upon the pixunity brand for our business.

XML

Component of Note Payable (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Less: debt discount on above note	$ 0	$ (8,333)
Total	10,393,503	9,220,366
Other | During March 2012
Debt Instrument [Line Items]
Convertible note payable-other	0	50,000
Other | Demand Notes
Debt Instrument [Line Items]
Notes and loans payable	25,000	25,000
Other | Affiliate Loaned Funds
Debt Instrument [Line Items]
Debt instrument, face amount	27,510	0
Related Party Transactions | September 2008 through March 2013
Debt Instrument [Line Items]
Convertible note payable-other	9,597,699	8,773,699
Related Party Transactions | Demand Notes
Debt Instrument [Line Items]
Notes and loans payable	340,000	340,000
Related Party Transactions | Demand Notes | In January 2008
Debt Instrument [Line Items]
Notes and loans payable	0	40,000
Related Party Transactions | Demand Notes | In September 2013
Debt Instrument [Line Items]
Notes and loans payable	$ 403,294	$ 0

XML

Goodwill from the Acquisition Of Kwick! - Additional Information (Detail) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2011
Business Acquisition [Line Items]
Excess of purchase price over net assets acquired	$ 0			$ 0		$ 6,169,426	$ 6,138,210
Fair value of net assets		2,660,000
Goodwill, Fair value disclosure	2,452,812	2,452,812		2,452,812
Impairment-goodwill	$ 2,452,812	$ 3,685,398	$ 0	$ 6,138,210	$ 0

XML

Component of Property and Equipment (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property Plant And Equipment	$ 743,652	$ 742,432
Less accumulated depreciation	683,370	621,876
Total	60,283	120,556
Furniture
Property, Plant and Equipment [Line Items]
Property Plant And Equipment	14,322	14,322
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property Plant And Equipment	24,130	24,130
Computer equipment
Property, Plant and Equipment [Line Items]
Property Plant And Equipment	632,062	630,842
Equipment
Property, Plant and Equipment [Line Items]
Property Plant And Equipment	$ 73,138	$ 73,138

XML

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Consisted of Software for Website Development Costs

	September 30, 2013		December 31, 2012
Website development costs	$	392,659	$	392,659
Less accumulated amortization		343,830		284,120
Total	$	48,829	$	108,539

Estimated Amortization over Next Five Years

Additional amortization over the next 5 years is estimated to be as follows:

	Amortization expense
December 31, 2013	5,282
December 31, 2014	4,285
December 31, 2015	1,953
December 31, 2016	1,173
December 31, 2017	1,111
Thereafter	1,755

XML

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2013

Property and Equipment [Abstract]

Property and Equipment

Property and equipment consist of the following at:	September 30, 2013		December 31, 2012
Furniture	$	14,322	$	14,322
Leasehold Improvements		24,130		24,130
Computer equipment		632,062		630,842
Equipment		73,138		73,138
		743,652		742,432
Less accumulated depreciation		683,369		621,876
Total		60,283	$	120,556

XML

Borrowings under Short Term Loan Agreements (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Short-term Debt [Line Items]
On December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue as of September 30, 2005 and no demand for payment has been made.	$ 75,000
Total	$ 75,000

XML

FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Reconciliation of Financial Instruments that are Recognized at Fair Value in Consolidated Financial Statements

The following table reconciles, for the nine months ended September 30, 2013, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

Conversion Liability at January 1, 2013	$	13,797,679
Value of beneficial conversion features of new debentures		1,724,218
Change in value of beneficial conversion features during period		(3,831,776)
Reductions in fair value due to principal conversions		-
Conversion Liability at September 30, 2013	$	11,690,121

XML

Intangible Assets Consisted of Software for Website Development Costs (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Less accumulated amortization	$ 343,830	$ 284,121
Total	48,829	108,539
Web-Site Development
Finite-Lived Intangible Assets [Line Items]
Website development costs	392,659	392,659
Less accumulated amortization	343,830	284,120
Total	$ 48,829	$ 108,539

XML

Component of Note Payable (Parenthetical) (Detail) (USD $)	Dec. 04, 1996	Sep. 30, 2013 Demand Notes Loans from Shareholders	Dec. 31, 2012 Demand Notes Loans from Shareholders	Sep. 30, 2013 Demand Notes Loans from Shareholders In January 2008	Dec. 31, 2012 Demand Notes Loans from Shareholders In January 2008	Sep. 30, 2013 Demand Notes Loans from Shareholders In January 2011	Dec. 31, 2012 Demand Notes Loans from Shareholders In January 2011	Sep. 30, 2013 Demand Notes Loans from Shareholders In February 2011	Dec. 31, 2012 Demand Notes Loans from Shareholders In February 2011	Sep. 30, 2013 Demand Notes Loans from Shareholders In September 2013	Dec. 31, 2012 Convertible Promissory Notes During March 2012
Debt Instrument [Line Items]
Notes and loans payable		$ 340,000	$ 340,000	$ 0	$ 40,000	$ 50,000	$ 50,000	$ 240,000	$ 240,000	$ 391,908
Debt instrument interest rate	5.00%				5.00%	10.00%	10.00%	10.00%	10.00%	6.00%	5.00%
Interest Payable										$ 11,386

XML

NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2013

Notes Payable [Abstract]

Notes Payable

	September 30,		December 31,
	2013		2012
Balance of non-converted notes outstanding. Attempts to locate the holder of this note, to settle this liability, have been unsuccessful.	$	25,000	$	25,000
In January 2008 a shareholder loaned the Company $40,000 pursuant to which the Company issued a demand note bearing interest at the rate of 5% per year.		-		40,000
From September 2008 through September 2013 five creditors loaned the Company funds under the terms of the convertible notes issued, as modified in March 2009 and July 2010 and April 2011 and August 2012 (see Note 12).		9,597,699		8,773,699
During the three months ended March 2012, an individual loaned the Company funds under the terms of a convertible promissory note at interest of 5% per year (see Note 12)		-		50,000
Less: debt discount on above note		-		(8,333)
In January and again in February 2011, a shareholder loaned the Company $50,000 under a demand note at 10%. In 2011, this shareholder loaned the Company $240,000 under a demand note at 10%.		340,000		340,000
In the nine months ended September 2013,a shareholder loaned the Company $391,908 plus accrued interest of $11,386 under a demand note at 6%.		403,294		-
An affiliate loaned funds under a non-interest bearing note (see Note 14)		27,510		-
Total	$	10,393,503	$	9,220,366

XML

Accrued Expenses (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Accounts Payable and Accrued Liabilities [Line Items]
Accrued interest	$ 1,903,616	$ 1,203,923
Accrued payroll, payroll taxes and commissions	17,623	51,944
Accrued professional fees	132,275	150,598
Accrued rent		12,158
Accrued VAT	38,287	0
Miscellaneous accruals	13,164	23,554
Total	$ 2,104,965	$ 1,442,177

XML

PREPAID EXPENSES (Tables)

9 Months Ended

Sep. 30, 2013

Prepaid Expenses [Abstract]

Prepaid Expenses

Prepaid expenses consist of the following at:	September 30, 2013		December 31, 2012
Consulting Fees	$	50,000	$	100,000
Rent		1,938		11,427
Server costs		75,221		-
Promotional supplies inventory		6,732		6,866
Business insurance		10,136		5,250
Other		5,372		5,467
	$	149,399	$	129,010

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Kiwibox.Com, Inc. (the “Company”) was incorporated as a Delaware corporation on April 19, 1988 under the name Fortunistics, Inc. On November 18, 1998, the Company changed its name to Magnitude Information Systems, Inc. On December 31, 2009, the Company changed its name to Kiwibox.com, Inc.

On August 16, 2007 the Company acquired all outstanding shares of Kiwibox Media, Inc.

The Company, Magnitude, Inc. and Kiwibox Media Inc. were separate legal entities until December 31, 2009, with Kiwibox Media, Inc. being a wholly owned subsidiary. On December 31, 2009, the two subsidiaries, Magnitude, Inc. and Kiwibox Media, Inc. merged into the Company.

On September 30, 2011, Kiwibox.com acquired the German based social network Kwick! Community GmbH & Co. KG (“Kwick”), a wholly-owned subsidiary.

On September 24,2013, Kwick Community GmbH & Co. KG signed an equity purchase agreement to acquire Interscholz Internet Services GmbH and Co. KG, a German limited liability company, and all the equity of its general partner, Interscholz Beteiligungs GmbH (see Note 18).

Cash and Cash Equivalents

The Company accounts for cash and other highly liquid investments with original maturities of three months or less as cash and cash equivalents.

Principles of Consolidation

The consolidated financial statements as of and for the three months and nine months ended September 30, 2013 and as of December 31, 2012 include the accounts of Kiwibox.com, Inc. and its subsidiary, KWICK! Community GmbH & Co. KG. The activities of the Company’s subsidiary KWICK! Community GmbH & Co. KG. Any significant inter-company balances and transactions have been eliminated.

Goodwill and Intangible Assets

In 2012, the Company adopted the provisions of ASU 2011-08, Intangibles—Goodwill or Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. Under the amendments in ASU 2011-08, an entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. The Company has assessed the qualitative factors in all periods since adoption (see Note 16).

In July 2012, the FASB issued ASU 2012-02, Intangibles- Goodwill or Other (Topic 350): Testing Indefinite-Living Tangible Assets for Impairment. ASU 2012-02 simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill by allowing an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is "more likely than not" that the asset is impaired. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of ASU 2012-02 did not have a material impact on our results of operations or our financial position.

Depreciation and Amortization

Property and equipment are recorded at cost. Depreciation on equipment, furniture and fixtures and leasehold improvements is computed on the straight-line method over the estimated useful lives of such assets between 3-10 years, or lease term for leasehold improvements, if for a shorter period. Maintenance and repairs are charged to operations as incurred.

Foreign Currency Translation

Assets and liabilities of foreign operations are translated into U.S. dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Gains and losses resulting from translation of financial statements of our foreign subsidiary operating in a non-hyperinflationary economy are recorded as a component of accumulated other comprehensive loss until either sale or upon complete or substantially complete liquidation by the Company of its investment in the foreign entity. Foreign currency transaction gain (loss) was $87,261 and $(13,441) for the three and nine months ended September 30, 2013. Accumulated gain or (loss) on foreign currency translation adjustment was $(122,788) through September 30, 2013.

Advertising Costs

Advertising costs are charged to operations when incurred. Advertising expense was $946 and $54,621 for the three and nine months ended September 30, 2013 and $2,173 and $10,847 for 2012, respectively.

Fair Value Measurements

The Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, which is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Under ASC 820, a framework was established for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Company accounted for certain convertible debentures issued in the year ended December 31, 2011 and the nine months ended September 30, 2012 as derivative liabilities required to be bifurcated from the host contract in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares (see Note 12).

Evaluation of Long Lived Assets

Long-lived assets are assessed for recoverability on an ongoing basis. In evaluating the fair value and future benefits of long-lived assets, their carrying value would be reduced by the excess, if any, of the long-lived asset over management’s estimate of the anticipated undiscounted future net cash flows of the related long-lived asset.

Securities Issued for Services

The Company accounts for stock, stock options and stock warrants issued for services and compensation by employees under the fair value method. For non-employees, the fair market value of the Company’s stock on the date of stock issuance or option/grant is used. The Company has determined the fair market value of the warrants/options issued under the Black-Scholes Pricing Model. The Company has adopted the provisions of ASC 718, “Compensation – Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost 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 (generally the vesting period of the equity grant).

Reclassification of certain securities under ASC 815-15

Pursuant to ASC 815-15, “Contracts in Entity’s own Equity”, if a company has more than one contract subject to this Issue, and partial reclassification is required, there may be different methods that could be used to determine which contracts, or portions of contracts, should be reclassified. The Company's method for reclassification of such contracts is reclassification of contracts with the latest maturity date first.

Capitalization of Software /Website development costs

The Company capitalizes outside-contracted development work in accordance with the guidelines published under ASC 350-50, “Website Development Costs”. Under ASC 350-50, costs incurred during the planning stage are expensed, while costs relating to software used to operate a web site or for developing initial graphics should be accounted for under ASC 350-50, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, unless a plan exists or is being developed to market the software externally. Under ASC 350-50, internal and external costs incurred to develop internal-use computer software during the application development stage should be capitalized. Costs to develop or obtain software that allows for access or conversion of old data by new systems should also be capitalized, excluding training costs.

Fees incurred for web site hosting, which involve the payment of a specified, periodic fee to an Internet service provider in return for hosting the web site on its server(s) connected to the Internet, are expensed over the period of benefit, and included in cost of sales in the accompanying financial statements.

A total of $0 and $58,139 was capitalized for web-site development work during the nine months ended September 30, 2013 and 2012, respectively.

Income Taxes

The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset.

Revenue Recognition

The Company’s revenue is derived from advertising on the Kiwibox.Com website. Most contracts require the Company to deliver the customer impressions, click-throughs or new customers, or some combination thereof. Accordingly, advertising revenue is estimated and recognized for the period in which customer impressions, click through or new customers are delivered. Licensing or hosting revenue consists of an annual contract with clients to provide web-site hosting and assistance.

Net Loss Per Share

Net loss per share, in accordance with the provisions of ASC 260, “Earnings Per Share” is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents have not been included in this computation since the effect would be anti-dilutive. Such common stock equivalents totaled 195,560,992 common shares at September 30, 2013, comprised of 39,500,000 shares issuable upon exercise of stock purchase warrants, 5,200,000 shares issuable upon exercise of stock options, 729,537 shares exercisable upon conversion of convertible preferred shares, and 150,131,455 shares potentially issuable upon conversion of convertible debt. Such debt and the related accrued interest, convertible at the option of four debt holders at a price of 50% of the average closing price for the preceding 10 days, totals $11,339,842 which would yield approximately 6.4 billion shares if fully converted at September 30, 2013, however, the respective notes, all of which were issued to these investors, carry a stipulation whereby the number of all shares issued pursuant to a conversion, may in the aggregate not exceed a number that would increase the total share holdings beneficially owned by such investor to a level above 9.99%. At the end of the year, this clause limits any conversion to the aforementioned number of shares. All of the aforementioned conversions or exercises, as the case may be, are at the option of the holders.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

XML

CONCENTRATIONS OF BUSINESS AND CREDIT RISK

9 Months Ended

Sep. 30, 2013

Concentrations Of Business and Credit Risk [Abstract]

CONCENTRATIONS OF BUSINESS AND CREDIT RISK

3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

The Company maintains cash balances in a financial institution which is insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s German subsidiary maintains cash balances in a financial institution which is insured by the German Einlagensicherungsfonds up to EUR 100,000. Balances in these accounts may, at times, exceed the respective insured limits. At September 30, 2013 and December 31, 2012, cash balances in bank accounts did not exceed this limit. The Company provides credit in the normal course of business to customers located throughout the U.S. and overseas. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

XML

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

	September 30, 2013		December 31, 2012
Website development costs	$	392,659	$	392,659
Less accumulated amortization		343,830		284,120
Total	$	48,829	$	108,539

Amortization expense of intangible assets for the nine months ended September 30, 2013 and 2012 was $59,710 and $95,775, respectively. Additional amortization over the next 5 years is estimated to be as follows:

	Amortization expense
December 31, 2013	5,282
December 31, 2014	4,285
December 31, 2015	1,953
December 31, 2016	1,173
December 31, 2017	1,111
Thereafter	1,755

XML

PREPAID EXPENSES

9 Months Ended

Sep. 30, 2013

Prepaid Expenses [Abstract]

PREPAID EXPENSES

4. PREPAID EXPENSES

Prepaid expenses consist of the following at:	September 30, 2013		December 31, 2012
Consulting Fees	$	50,000	$	100,000
Rent		1,938		11,427
Server costs		75,221		-
Promotional supplies inventory		6,732		6,866
Business insurance		10,136		5,250
Other		5,372		5,467
	$	149,399	$	129,010

XML

Estimated Amortization over Next Five Years (Detail) (USD $)	Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
December 31, 2013	$ 5,282
December 31, 2014	4,285
December 31, 2015	1,953
December 31, 2016	1,173
December 31, 2017	1,111
Thereafter	$ 1,755

XML

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consisted of the following at:

	September 30, 2013		December 31, 2012
Accrued interest	$	1,903,616	$	1,203,923
Accrued payroll, payroll taxes and commissions		17,623		51,944
Accrued professional fees		132,275		150,598
Accrued rent				12,158
Accrued VAT		38,287		0
Miscellaneous accruals		13,164		23,554
Total	$	2,104,965	$	1,442,177

XML

LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2013

Long-Term Debt [Abstract]

Components Of Long-term debt

Long-term debt as of September 30, 2013 and December 31, 2012 is comprised of the following:

Discounted present value of a non-interest bearing $70,000 settlement with a former investor of Magnitude, Inc. to be paid in 24 equal monthly payments commencing July 1, 1997. The imputed interest rate used to discount the note is 8% per annum. This obligation is in default.		33,529
Total		33,529
Less current maturities		33,529
Long-term debt, net of current maturities	$	-

XML

Prepaid Expenses (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Prepaid expenses consist of the following at:
Consulting Fees	$ 50,000	$ 100,000
Rent	1,938	11,427
Server costs	75,221	0
Promotional supplies inventory	6,732	6,866
Business insurance	10,136	5,250
Other	5,372	5,467
Total Prepaid Expenses	$ 149,399	$ 129,010

XML

Related Party Transactions - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Jun. 30, 2011	Oct. 06, 2010	Dec. 04, 1996
Related Party Transaction [Line Items]
Legal fees			$ 45,000	$ 45,000
Share-based compensation arrangement by share-based payment award, options, grants in period, gross	100,000	100,000	100,000	100,000
Common stock options issued value	2,970	2,790	2,970	2,790
Website development related services	155,256	66,338	311,579	163,751
Prepaid sever cost	75,221		75,221
Accounts payable	285,195		285,195		230,691
Debt instrument interest rate								5.00%
Prepaid Consulting Fee						100,000	16,667
Consulting fee			16,667
Demand Note
Related Party Transaction [Line Items]
Long term debt	391,908		391,908
Interest payable	11,386		11,386
Debt instrument interest rate	6.00%		6.00%
Chief Executive Officer
Related Party Transaction [Line Items]
Share-based compensation arrangement by share-based payment award, options, grants in period, gross			900,000	900,000
Accounts payable	16,837		16,837
Convertible revolving promissory notes	27,510		27,510
Prepaid Consulting Fee	50,000		50,000
Chief Executive Officer | Restricted Stock
Related Party Transaction [Line Items]
Stock issued during period shares new issues			100,000
Chief Executive Officer | Kwick
Related Party Transaction [Line Items]
Convertible revolving promissory notes	11,706		11,706
Advanced Additional
Related Party Transaction [Line Items]
Proceeds from related party debt			745,000
Cambridge Service Inc
Related Party Transaction [Line Items]
Notes payable, related parties	1,980,060		1,980,060
Cambridge Service Inc | Advanced Additional
Related Party Transaction [Line Items]
Proceeds from related party debt	330,000		765,000
Kreuzfeld Ltd
Related Party Transaction [Line Items]
Proceeds from related party debt	0		60,000
Notes payable, related parties	3,624,959		3,624,959
Discovery Advisory Company
Related Party Transaction [Line Items]
Notes payable, related parties	3,221,722		3,221,722
Minority interest ownership percentage by noncontrolling owners	9.90%		9.90%
VGZ
Related Party Transaction [Line Items]
Notes payable, related parties	$ 771,958		$ 771,958
Tell Capital AG | Ulrich Schuerch
Related Party Transaction [Line Items]
Minority interest ownership percentage by noncontrolling owners	11.40%		11.40%

XML

Components of Long-Term Debt (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Discounted present value of a non-interest bearing $70,000 settlement with a former investor of Magnitude, Inc. to be paid in 24 equal monthly payments commencing July 1, 1997. The imputed interest rate used to discount the note is 8% per annum. This obligation is in default.	$ 33,529	$ 33,529
Total	33,529	33,529
Less current maturities	33,529	33,529
Long-term debt, net of current maturities	$ 0	$ 0

XML

Obligations to be Settled in Stock (Parenthetical) (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Employee Stock
Short-term Debt [Line Items]
Common shares issuable, for services rendered	1,050,000	1,050,000
Former Director | Services
Short-term Debt [Line Items]
Common shares issuable, for services rendered	600,000	600,000
Former Director | Employment Agreements
Short-term Debt [Line Items]
Stock options issuable	2,900,000	2,900,000
Chief Executive Officer | Consulting Agreement
Short-term Debt [Line Items]
Common shares issuable, for services rendered	600,000	500,000
Director
Short-term Debt [Line Items]
Stock options issuable	5,100,000	4,200,000
Pixunity.DE | Warrant
Short-term Debt [Line Items]
Warrants granted on Pixunity.de asset Purchase	1,000,000	1,000,000

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Accounts receivable, allowance for doubtful accounts	$ 0	$ 0
Property and equipment, accumulated depreciation	683,370	621,876
Website development costs, accumulated amortization	$ 343,830	$ 284,121
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	3,000,000	3,000,000
Preferred Stock, shares issued	85,890	85,890
Preferred Stock, shares outstanding	85,890	85,890
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	1,400,000,000	1,400,000,000
Common Stock, issued	681,243,060	679,393,060
Common Stock, outstanding	681,243,060	679,393,060

XML

LOANS PAYABLE

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

LOANS PAYABLE

9. LOANS PAYABLE

The Company (Formerly Magnitude, Inc.) had borrowings under short term loan agreements with the following terms and conditions at September 30, 2013 and December 31, 2012:

 

On December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue as of September 30, 2005 and no demand for payment has been made.	$	75,000
Total	$	75,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows from Operating Activities
Net Loss	$ (5,781,308)	$ (8,109,570)
Adjustments to Reconcile Net Loss to Net Cash Used by Operations
Depreciation and amortization	129,536	250,814
Value of stock for services		13,500
Change in fair value - derivative liabilities	(3,831,776)	(663,239)
Intrinsic value of beneficial conversion rights	1,724,218	6,917,460
Impairment of goodwill	6,138,210	0
Loss on extinguishment of debt	36,480	0
Foreign currency transaction gain	0	(50,586)
Deferred tax expense	0	54,864
Decreases (Increases) in Assets
Accounts receivable	(135,909)	167,158
Income taxes Receivable	0	(17,183)
Other receivables	(8,001)	67,370
Prepaid expenses	(20,389)	(50,955)
Increases (decreases) in Liabilities
Bank overdraft	(57,131)	207,457
Liabilities to be settled in stock	14,940	31,860
Accounts payable	54,504	17,554
Accrued expenses	686,759	469,504
Net Cash Used by Operating Activities	(1,049,867)	(693,992)
Cash Flows from Investing Activities
Cash outlay - website development costs	0	(58,139)
Cash proceeds (outlay) - other assets	(4,904)	5,783
Purchases of property and equipment	(1,220)	(1,953)
Net Cash Used by Investing Activities	(6,124)	(54,309)
Cash Flows from Financing Activities
Proceeds from loans and notes	825,000	745,000
Repayment on convertible note	(90,000)	0
Net proceeds (repayments) to related parties	322,165	(157,723)
Net Cash Provided by Financing Activities	1,057,165	587,277
Net Increase (Decrease) in Cash	1,174	(161,024)
Effect of exchange rates on cash	(4,754)	1,011
Cash at Beginning of Period	56,751	195,613
Cash at End of Period	53,171	35,600
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid	23,948	13,808
Income taxes paid	918	19,487
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of obligations with common stock	16,100	16,297
Conversions of debt		1,413,361
Year to date dividend accruals	38,447	38,448
Settlement of bank debt with short term loan	115,344
Reduction of derivatives from conversion of debt		1,516,384
Debt discount created from derivative instrument		50,000
Direct payment of acquisition indebtedness for issuance of convertible debentures		$ 5,170,318

XML

Subsequent Events - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Other loans payable, current	$ 90,000
Interscholtz
Issuance Of Promissory notes	$ 1,352,000

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets
Cash	$ 53,171	$ 56,751
Accounts receivable, net of allowance for doubtful accounts of $0	366,600	230,691
Due from related parties	0	15,468
Other receivables	10,470	2,469
Prepaid expenses and other current assets	149,399	129,010
Total Current Assets	579,640	434,389
Property and equipment, net of accumulated depreciation of $683,370 and $621,876	60,283	120,556
Website development costs, net of accumulated amortization of $343,830 and $284,121	48,829	108,539
Goodwill	0	6,169,426
Other assets	49,117	44,213
Total Assets	737,869	6,877,123
Current Liabilities
Bank overdraft	3,628	176,103
Accounts payable	285,195	230,691
Accrued expenses	2,104,965	1,442,177
Due to related parties	24,389	30,710
Obligations to be settled in stock	265,978	270,658
Dividends payable	671,576	633,129
Current maturities of long-term debt	33,529	33,529
Total Current Liabilities	25,547,884	25,910,042
Commitments and Contingencies
Stockholders' Equity (Impairment)
Preferred Stock, $0.001 par value, non-voting, 3,000,000 shares authorized; 85,890 and 85,890 shares issued and outstanding	86	86
Common Stock, $0.0001 par value, 1,400,000,000 shares authorized; issued and outstanding 681,243,060 and 679,393,060 shares	68,122	67,937
Additional paid-in capital	52,714,100	52,658,185
Accumulated deficit	(77,469,535)	(71,649,780)
Accumulated other comprehensive loss	(122,788)	(109,347)
Total Stockholders’ Equity (Impairment)	(24,810,015)	(19,032,919)
Total Liabilities and Equity (Impairment)	737,869	6,877,123
Other
Current Liabilities
Loans and notes payable	100,000	140,000
Convertible notes payable	0	41,667
Liability for derivative conversion feature	0	51,874
Related Party Transactions
Current Liabilities
Loans and notes payable	770,804	340,000
Convertible notes payable	9,597,699	8,773,699
Liability for derivative conversion feature	$ 11,690,121	$ 13,745,805

XML

Components of Long-Term Debt (Parenthetical) (Detail) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Non-interest bearing obligation	$ 70,000	$ 70,000
Debt instrument, number of periodic payment	24	24
Debt instrument, frequency of periodic payment	monthly	monthly
Debt instrument, date of first required payment	Jul. 01, 1997	Jul. 01, 1997
Imputed interest rate used to discount the note	8.00%	8.00%

XML

OBLIGATIONS TO BE SETTLED IN STOCK (Tables)

9 Months Ended

Sep. 30, 2013

Other Liabilities Disclosure [Abstract]

Obligations to be Settled in Stock

Obligations to be settled in stock consisted of the following at

	September 30,  2013		December 31,  2012
Obligation for warrants granted for compensation	$	100,000	$	100,000
600,000 common shares issuable to a consultant who formerly was a director of the company, for services rendered.		36,000		36,000
600,000 (2013) and 500,000 shares (2012) common Shares, and 2,900,000 (2013) and 2,900,000 (2012) stock options issuable to two officers of the company pursuant to their respective employment agreement		66,518		69,608
5,100,000 (2013) and 4,200,000 (2012) stock options issuable to one director who also serves as the Company’s general counsel		53,460		44,550
1,000,000 warrants granted on the Pixunity.de asset Purchase (see Note 13)		10,000		10,000
1,050,000 shares issuable under stock grants		-		10,500
	$	265,978	$	270,658

XML

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

Following the announcement, reported on Form 8-K on September 24,2013, of the signing, on September 30,2013 Kwick closed the Equity Purchase Agreement and acquired Interscholtz Internet Services GmbH and Co. KG, a German Liability company, and all of the equity of its general partner, interscholz Beteiligungs GmbH (collectively “Interscholtz:)from Andre Scholz, The president and chief executive of Kwick. Kwick issued a promissory note to Interscholtz GmbH for $1,352,000 for the Equity purchase agreement. On October 8, 2013, the German register court recognized the transfer of ownership of Interscholz GmbH and on October 10, 2013 the same court recognized the transfer of ownership of Interscholz GmbH and Co. KG. (“Interscholz”) to Kwick! Interscholz provides website hosting, website development, server farm installations and technical advisory services. All other required disclosures cannot be made at this time due to the fact that there has not yet been a US GAAP conversion done on the books of Interscholz and therefore the accounting for the business combination has not yet been completed.

Since September 30, 2013 we have received $90,000 of working capital from accredited investors, which are covered by convertible promissory notes.

XML

Obligations to be Settled in Stock (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Obligations to be settled in stock	$ 265,978	$ 270,658
Employee Stock
Short-term Debt [Line Items]
Obligations to be settled in stock	0	10,500
Employment Agreement | Former Director
Short-term Debt [Line Items]
Obligations to be settled in stock	66,518	69,608
Services | Former Director
Short-term Debt [Line Items]
Obligations to be settled in stock	36,000	36,000
Consulting Agreement | Chief Executive Officer
Short-term Debt [Line Items]
Obligations to be settled in stock	53,460	44,550
Warrant
Short-term Debt [Line Items]
Obligations to be settled in stock	100,000	100,000
Warrant | Pixunity.DE
Short-term Debt [Line Items]
Obligations to be settled in stock	$ 10,000	$ 10,000

XML

Commitments and Contingencies-Additional Information (Detail) (USD $)	9 Months Ended				0 Months Ended		9 Months Ended				9 Months Ended
	Sep. 30, 2013 acre	Sep. 30, 2012	Jun. 30, 2011	Oct. 06, 2010	Mar. 07, 2011 Pixunity.DE	Sep. 30, 2013 Chief Executive Officer	Sep. 30, 2013 August 2011 Through December 31, 2011	Sep. 30, 2013 December 2011 Through May 31, 2012	Sep. 30, 2013 Maximum	Mar. 07, 2011 Maximum Pixunity.DE	Sep. 30, 2013 Minimum	Sep. 30, 2013 Monthly Payment	Sep. 30, 2013 Monthly Payment Office	Sep. 30, 2013 Monthly Payment May 2010 Through May 31, 2011	Sep. 30, 2013 Monthly Payment May 31, 2012 Through December 31, 2012	Sep. 30, 2013 Monthly Payment Average
Commitments and Contingencies Disclosure [Line Items]
Office area rented	990
Minimum monthly rentals												$ 3,833
Tenants share of utility/cam/property tax charges																291
Lease and rent expenses	92,070	99,592					2,837	2,837					2,000	2,775	2,943
Operating lease term	5 years								5 years		3 years
Prepaid consulting fees			100,000	16,667		50,000				100,000
Number of members					15,000
Shares granted	900,000
Lease rate per month	$ 1,077
Term Of Lease	5 years

XML

Property and Equipment - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 61,493	$ 125,872

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Summary Of Significant Accounting Policies [Line Items]
Entity Incorporation, Date of Incorporation			Apr. 19, 1988
Entity Information, Date To Change Former Legal Or Registered Name			Dec. 31, 2009
Advertising expense	$ 946	$ 2,173	$ 54,621	$ 10,847
Accumulated other comprehensive loss	(122,788)		(122,788)		(109,347)
Common equivalents, dilutive potential common shares			195,560,992
Shares issuable upon exercise of stock purchase warrants			39,500,000
Shares issuable upon exercise of stock options			5,200,000
Shares issuable upon conversion of convertible debt			150,131,455
Debt instrument, convertible, terms of conversion feature			Such debt and the related accrued interest, convertible at the option of four debt holders at a price of 50% of the average closing price for the preceding 10 days, totals $11,339,842 which would yield approximately 6.4 billion shares if fully converted at September 30, 2013, however, the respective notes, all of which were issued to these investors, carry a stipulation whereby the number of all shares issued pursuant to a conversion, may in the aggregate not exceed a number that would increase the total share holdings beneficially owned by such investor to a level above 9.99%. At the end of the year, this clause limits any conversion to the aforementioned number of shares. All of the aforementioned conversions or exercises, as the case may be, are at the option of the holders.
Shares issuable upon conversion of convertible debt conversion price, as percentage of the average closing price preceding 10 days	50.00%		50.00%
Common stock issuable on fully exercise of options by investors	6,400,000,000		6,400,000,000
Shares exercisable upon conversion of convertible preferred shares			729,537
Foreign currency transaction gain (loss)	0	(189)	0	50,586
Foreign currency translation adjustment	87,261	276,470	(13,441)	304,141
Debt conversion converted instrument amount1			11,339,842
Leasehold Improvements
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives, leasehold improvements			computed on the straight-line method over the estimated useful lives of such assets between 3-10 years, or lease term for leasehold improvements, if for a shorter period.
Web-Site Development
Summary Of Significant Accounting Policies [Line Items]
Web-site development capitalized			$ 0	$ 58,139
Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of assets			3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of assets			10 years
Percentage of ownership interest of investors	9.99%		9.99%

XML

Concentrations of Business and Credit Risk - Additional Information (Detail)	Sep. 30, 2013 Maximum USD ($)	Sep. 30, 2013 German Einlagensicherungsfonds EUR (€)
Concentration Risk [Line Items]
Cash, FDIC insurance limit	$ 250,000	€ 100,000

XML

OBLIGATIONS TO BE SETTLED IN STOCK

9 Months Ended

Sep. 30, 2013

Other Liabilities Disclosure [Abstract]

OBLIGATIONS TO BE SETTLED IN STOCK

8. OBLIGATIONS TO BE SETTLED IN STOCK

Obligations to be settled in stock consisted of the following at

	September 30,  2013		December 31,  2012
Obligation for warrants granted for compensation	$	100,000	$	100,000
600,000 common shares issuable to a consultant who formerly was a director of the company, for services rendered.		36,000		36,000
600,000 (2013) and 500,000 shares (2012) common Shares, and 2,900,000 (2013) and 2,900,000 (2012) stock options issuable to two officers of the company pursuant to their respective employment agreement		66,518		69,608
5,100,000 (2013) and 4,200,000 (2012) stock options issuable to one director who also serves as the Company’s general counsel		53,460		44,550
1,000,000 warrants granted on the Pixunity.de asset Purchase (see Note 13)		10,000		10,000
1,050,000 shares issuable under stock grants		-		10,500
	$	265,978	$	270,658

XML

LOANS PAYABLE (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Borrowings under Short Term Loan Agreements

The Company (Formerly Magnitude, Inc.) had borrowings under short term loan agreements with the following terms and conditions at September 30, 2013 and December 31, 2012:

 

On December 4, 1996, The company (Formerly Magnitude, Inc.) repurchased 500,000 shares of its common stock and retired same against issuance of a promissory note maturing twelve months thereafter accruing interest at 5% per annum and due December 4, 1998. This note is overdue as of September 30, 2005 and no demand for payment has been made.	$	75,000
Total	$	75,000

XML

Intangible Assets - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 59,710	$ 95,775

XML

LONG-TERM DEBT

9 Months Ended

Sep. 30, 2013

Long-Term Debt [Abstract]

LONG-TERM DEBT

11. LONG-TERM DEBT

Long-term debt as of September 30, 2013 and December 31, 2012 is comprised of the following:

Discounted present value of a non-interest bearing $70,000 settlement with a former investor of Magnitude, Inc. to be paid in 24 equal monthly payments commencing July 1, 1997. The imputed interest rate used to discount the note is 8% per annum. This obligation is in default.		33,529
Total		33,529
Less current maturities		33,529
Long-term debt, net of current maturities	$	-

XML

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

ACCRUED EXPENSES

7. ACCRUED EXPENSES

Accrued expenses consisted of the following at:

	September 30, 2013		December 31, 2012
Accrued interest	$	1,903,616	$	1,203,923
Accrued payroll, payroll taxes and commissions		17,623		51,944
Accrued professional fees		132,275		150,598
Accrued rent				12,158
Accrued VAT		38,287		0
Miscellaneous accruals		13,164		23,554
Total	$	2,104,965	$	1,442,177

XML

GOING CONCERN

9 Months Ended

Sep. 30, 2013

Going Concern [Abstract]

GOING CONCERN

2. GOING CONCERN

The ability of the Company to continue its operations is dependent on increasing sales and obtaining additional capital and financing. Our revenues during the foreseeable future are insufficient to finance our business and we are entirely dependent on the willingness of existing investors to continue supporting the Company with working capital loans and equity investments, and our ability to find new investors should the financial support from existing investors prove to be insufficient. If we were unable to obtain a steady flow of new debt or equity-based working capital we would be forced to cease operations. In their report for the fiscal year ended December 31, 2012, our auditors had expressed an opinion that, as a result of the losses incurred, there was substantial doubt regarding our ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company were unable to continue as a going concern. Management’s plans are to continue seeking equity and debt capital until cash flow from operations cover funding needs.

XML

Derivative Conversion Features - Additional Information (Detail) (USD $)	1 Months Ended		3 Months Ended		9 Months Ended				9 Months Ended				1 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended											3 Months Ended	9 Months Ended		9 Months Ended
	Apr. 30, 2013	Mar. 31, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 04, 1996	Sep. 30, 2013 Advanced Additional	Jul. 27, 2010 Maximum	Sep. 30, 2013 Minimum	Jul. 27, 2010 Minimum	Feb. 28, 2012 Michael Pisani	Sep. 30, 2013 Michael Pisani	Sep. 30, 2013 Cambridge Service Inc Advanced Additional	Sep. 30, 2013 Cambridge Service Inc Advanced Additional	Sep. 30, 2013 Cambridge Service Inc Senior Class A Notes	Dec. 31, 2012 Cambridge Service Inc Senior Class A Notes	Aug. 01, 2011 Cambridge Service Inc Senior Class A Notes	Jul. 27, 2010 Cambridge Service Inc Senior Class A Notes	Aug. 01, 2011 Cambridge Service Inc Senior Class A Notes Canceled	Aug. 01, 2012 Discovery Advisory Company	Sep. 30, 2013 Discovery Advisory Company Senior Class A Notes	Dec. 31, 2012 Discovery Advisory Company Senior Class A Notes	Jul. 27, 2010 Discovery Advisory Company Senior Class A Notes	Jul. 27, 2010 Discovery Advisory Company Senior Class A Notes Canceled	Sep. 30, 2013 Kreuzfeld Ltd	Sep. 30, 2013 Kreuzfeld Ltd	Sep. 16, 2011 Kreuzfeld Ltd	Sep. 30, 2013 Kreuzfeld Ltd Advanced Additional	Sep. 30, 2013 Kreuzfeld Ltd Senior Class A Notes	Dec. 31, 2012 Kreuzfeld Ltd Senior Class A Notes	Sep. 16, 2011 Kreuzfeld Ltd Senior Class A Notes Canceled	Sep. 30, 2013 Vermoegensverwaltungs Gesellschaft Zurich Ltd Senior Class A Notes	Dec. 31, 2012 Vermoegensverwaltungs Gesellschaft Zurich Ltd Senior Class A Notes	Sep. 30, 2010 Vermoegensverwaltungs Gesellschaft Zurich Ltd Senior Class A Notes	Sep. 30, 2010 Vermoegensverwaltungs Gesellschaft Zurich Ltd Senior Class A Notes Canceled
Derivative [Line Items]
Debt instrument, interest rate, stated percentage								5.00%												10.00%														10.00%
Value of derivative conversion feature					$ 1,724,218								$ 55,241
Fair value of derivative conversion feature														40,000
Convertible note, term													1 year	5 years
Shares issuable upon conversion of convertible debt, price per share													$ 0.025
Debt discount													50,000
Amortization expense recorded			0	12,500	8,333	29,167								8,333
Convertible revolving promissory notes																				683,996	1,303,996				1,160,984	1,080,984							2,000,000				2,000,000
Convertible revolving promissory notes, outstanding													0.025				2,292,860	1,412,142					3,870,803	3,629,836							4,240,361	3,911,338		935,702	877,963
Shares issuable upon conversion of convertible debt conversion price, as percentage of the average closing price preceding 10 days			50.00%		50.00%															50.00%
Shares issuable upon conversion of convertible debt, price per share			$ 0.025		$ 0.025					$ 9.99	$ 0.001	$ 0.001
Conversions of debt and related derivative liabilities						1,413,361																								60,000
Proceeds from related party debt									745,000						330,000	765,000											0	60,000
Fair value measurement with unobservable inputs reconciliation recurring basis liabilities value			11,690,121		11,690,121		13,797,679
Line of credit facility, maximum borrowing capacity																			2,000,000			5,000,000							5,000,000							2,000,000
Change in value of beneficial conversion features during period					(3,831,776)
warrants exercisable					0.05
Accrued interest and certain legal costs	35,000	14,000			40,000
Loss on extinguishment of debt			0	0	(36,480)	0
Debt instrument dividend compensation percentage																				5.00%
Debt and accrued interest outstanding			$ 0		$ 0

XML

Borrowings under Short Term Loan Agreements (Parenthetical) (Detail)	1 Months Ended
	Dec. 04, 1996
Short-term Debt [Line Items]
Common stock repurchased and retired against issuance of promissory note	500,000
Debt maturity date	Dec. 04, 1996
Accruing interest per annum	5.00%

XML

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2013

New York Operations

Commitments and Contingencies Disclosure [Line Items]

Operating Lease Commitments

Operating lease commitments as of September 2013 are:

2013	$	38,033
2014	$	45,996
2015	$	47,376
2016	$	48,792
2017	$	50,256

Weinstadt Operations

Commitments and Contingencies Disclosure [Line Items]

Operating Lease Commitments

Operating lease commitments as of September 30, 2013 are:

2013	$	6,000
2014	$	31,698
2015	$	23,672
2016	$	23,672

XML

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

14. RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2013 and 2012 one outside director of the Company who also serves as The Company’s general and securities counsel, was paid an aggregate $45,000 and $45,000, respectively, for legal services.  The director also received 100,000 common stock options per month during the three and nine month periods ended September 30, 2013 and 2012, valued at $2,970 and $2,790, respectively in each year.

During the three and nine months ended September 30, 2013 we incurred aggregate expenses of $155,256 and $311,579, and $66,338 and $163,751 for 2012 respectively, to companies controlled by the Chief Executive Officer, for  website hosting, website development, server  farm installations and technical advisory services. During the nine months ended September 30,2013 we prepaid, to companies controlled by the Chief Executive Officer, for server costs totaling $75,221,and owed $16,837 in accounts payable at September 30, 2013.The Chief Executive Officer is also party to a consulting agreement with the Company, which calls for a monthly consulting fee of $16,667 in cash plus 100,000 restricted shares. This agreement has been verbally extended through December 2013. In the nine months ended September 30, 2013 and September 30, 2012 this officer was granted 900,000 shares. The consulting fees due for the three months ended December 31, 2013 of $50,000 were prepaid prior to September 30, 2013 and are included in prepaid expenses.

Through September 30, 2013, the beneficial ownership in the Company’s securities held respectively, by Tell Capital AG of Switzerland and its principal, Ulrich Schuerch on a consolidated basis, was approximately 11.4% and approximately 9.9% of the voting stock was beneficially held by Discovery Advisory Company, located in the Bahamas, and Cambridge Services Inc., Kreuzfeld, LTD and Vermoegensverwaltungs-Gesellschaft Zurich LTD. (VGZ) of Switzerland.  Discovery Advisory Company, Cambridge Services Inc., Kreuzfeld, LTD and VGZ are major creditors, having advanced operating capital against issuance by the Company of convertible promissory notes during 2013, 2012 and 2011. During the three and nine months ended September 30, 2013 Cambridge Services, Inc advanced an additional $330,000 and $765,000, respectively. During the  three and nine months ended September 30, 2013 Kreuzfeld, LTD advanced $-0- and $60,000. At September 30, 2013, principal of $3,221,722 and $1,980,060 of such notes were outstanding and owed to Discovery Advisory Company and Cambridge Services Inc, respectively and $3,624,959 and $771,958 principal owed to Kreuzfeld, Ltd. and VGZ, respectively. 

In the nine months ended September 30, 2013, a shareholder loaned Kwick $391,908 plus accrued interest of $11,386. This loan carries an interest rate of 6% and is payable on demand. A portion of this loan was used to pay off a bank line of credit. Also, during the nine months ended September 2013 companies controlled by our Chief Executive officer loaned Kwick $11,706 and loaned Kiwibox $27,510. There are no terms on these loans and the loan to Kwick was paid back in July 2013.

XML

NOTES PAYABLE

9 Months Ended

Sep. 30, 2013

Notes Payable [Abstract]

NOTES PAYABLE

10. NOTES PAYABLE

	September 30,		December 31,
	2013		2012
Balance of non-converted notes outstanding. Attempts to locate the holder of this note, to settle this liability, have been unsuccessful.	$	25,000	$	25,000
In January 2008 a shareholder loaned the Company $40,000 pursuant to which the Company issued a demand note bearing interest at the rate of 5% per year.		-		40,000
From September 2008 through September 2013 five creditors loaned the Company funds under the terms of the convertible notes issued, as modified in March 2009 and July 2010 and April 2011 and August 2012 (see Note 12).		9,597,699		8,773,699
During the three months ended March 2012, an individual loaned the Company funds under the terms of a convertible promissory note at interest of 5% per year (see Note 12)		-		50,000
Less: debt discount on above note		-		(8,333)
In January and again in February 2011, a shareholder loaned the Company $50,000 under a demand note at 10%. In 2011, this shareholder loaned the Company $240,000 under a demand note at 10%.		340,000		340,000
In the nine months ended September 2013,a shareholder loaned the Company $391,908 plus accrued interest of $11,386 under a demand note at 6%.		403,294		-
An affiliate loaned funds under a non-interest bearing note (see Note 14)		27,510		-
Total	$	10,393,503	$	9,220,366

XML

RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes In Accounting Principles [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

17. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2013, the FASB issued ASU 2013-05, Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity , which provides guidance on releasing cumulative translation adjustments out of accumulated comprehensive income into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This guidance is effective prospectively for interim and annual periods beginning on January 1, 2014. Early adoption is permitted. As the Company has not ceased to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, the adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial position, results of operations, or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

XML

FAIR VALUE

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE

15. FAIR VALUE

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables.

Effective July 1 2009, the Company adopted ASC 820, Fair Value Measurements and Disclosures. This topic defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance supersedes all other accounting pronouncements that require or permit fair value measurements. The Company accounted for the conversion features underlying certain convertible debentures in accordance with ASC 815-40, Contracts in Entity’s Own Equity, as the conversion feature embedded in the convertible debentures could result in the note principal and related accrued interest being converted to a variable number of the Company’s common shares.

Effective July 1 2009, the Company adopted ASC 820-10-55-23A, Scope Application to Certain Non-Financial Assets and Certain Non-Financial Liabilities, delaying application for non-financial assets and non-financial liabilities as permitted. ASC 820 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange- traded securities and exchange-based derivatives.

Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges.

Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently- traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

The following table reconciles, for the nine months ended September 30, 2013, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

Conversion Liability at January 1, 2013	$	13,797,679
Value of beneficial conversion features of new debentures		1,724,218
Change in value of beneficial conversion features during period		(3,831,776)
Reductions in fair value due to principal conversions		-
Conversion Liability at September 30, 2013	$	11,690,121

The fair value of the conversion features are calculated at the time of issuance and the Company records a conversion liability for the calculated value. The Company recognizes interest expense for the recognition of the conversion liability.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 18, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	KIWB
Entity Common Stock, Shares Outstanding		681,243,060
Entity Registrant Name	Kiwibox.Com, Inc.
Entity Central Index Key	0000838796
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company

XML

GOODWILL FROM THE ACQUISITION OF KWICK!

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

GOODWILL FROM THE ACQUISITION OF KWICK!

16. GOODWILL FROM THE ACQUISITION OF KWICK!

The excess of purchase price over tangible net assets acquired at September 30, 2011 was initially allocated to goodwill in the amount of $6,138,210. At September 30, 2013 management determined based on qualitative and quantitative factors that there was an impairment to goodwill.

The goodwill has been tested by the management of the Company in qualitative assessments throughout the nine months ended September 30, 2013. These assessments lead management to identify impairment indicators related to goodwill. Management therefore performed the two-step impairment test for goodwill, utilizing a market approach to the valuation. In estimating the fair value of the reporting unit, Kwick, management considered comparable per user values from recent acquisitions in the industry, as well as the effect of the economic recession and continuing deterioration of the use of social networks in Germany. After applying the estimated fair value of the reporting unit of $2,660,000 to the net assets of Kwick at June 30, 2013, an implied fair value of goodwill of $2,452,812 was calculated. Based on the impairment test, during the three months ended June 30, 2013, goodwill of $3,685,398 was determined to be impaired and was written off. Management considered additional qualitative factors during the three months ended September 30, 2013, and after consideration of failures by comparable social networks, continuing operational losses and negative cash flow, the estimated value of the reporting unit created an implied fair value of goodwill of $-0-. Based on the impairment test, during the three months ended September 30, 2013, goodwill of $2,452,812 was determined to be impaired and was written off.