Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 09, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | SharpSpring, Inc. | ||
Entity Central Index Key | 1,506,439 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 24,191,718 | ||
Entity Common Stock, Shares Outstanding | 8,445,016 | ||
Trading Symbol | SHSP | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 5,399,747 | $ 8,651,374 |
Accounts receivable, net of allowance for doubtful accounts of $526,127 and $508,288 at December 31, 2017 and December 31, 2016, respectively | 639,959 | 1,261,923 |
Income taxes receivable | 2,132,616 | 1,355,180 |
Other current assets | 267,924 | 1,396,642 |
Total current assets | 8,440,246 | 12,665,119 |
Property and equipment, net | 799,145 | 905,345 |
Goodwill | 8,872,898 | 8,845,394 |
Other intangible assets, net | 2,326,000 | 2,850,635 |
Deferred income taxes | 0 | 32,996 |
Deposits and other | 25,000 | 30,464 |
Total assets | 20,463,289 | 25,329,953 |
Liabilities and Shareholders' Equity | ||
Accounts payable | 504,901 | 498,534 |
Accrued expenses and other current liabilities | 625,680 | 953,171 |
Deferred revenue | 279,818 | 280,159 |
Income taxes payable | 171,384 | 484,349 |
Total current liabilities | 1,581,783 | 2,216,213 |
Deferred income taxes | 168,132 | 195,495 |
Total liabilities | 1,749,915 | 2,411,708 |
Commitments and Contingencies (Note 17) | ||
Shareholders' equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value, Authorized shares-50,000,000; issued shares-8,456,061 at December 31, 2017 and 8,380,663 at December 31, 2016; outstanding shares-8,436,061 at December 31, 2017 and 8,360,663 at December 31, 2016 | 8,456 | 8,381 |
Additional paid in capital | 28,362,397 | 27,556,398 |
Accumulated other comprehensive loss | (480,762) | (445,055) |
Accumulated deficit | (9,092,717) | (4,117,479) |
Treasury stock | (84,000) | (84,000) |
Total shareholders' equity | 18,713,374 | 22,918,245 |
Total liabilities and shareholders' equity | $ 20,463,289 | $ 25,329,953 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 526,127 | $ 508,288 |
Preferred Stock, par value per share | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common shares, par value per share | $ 0.001 | $ 0.001 |
Common shares, shares authorized | 50,000,000 | 50,000,000 |
Common shares, shares issued | 8,456,061 | 8,380,663 |
Common shares, shares outstanding | 8,436,061 | 8,360,663 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 13,448,752 | $ 11,541,702 |
Cost of services | 4,996,745 | 4,462,440 |
Gross profit | 8,452,007 | 7,079,262 |
Operating expenses: | ||
Sales and marketing | 6,983,208 | 5,340,351 |
Research and development | 2,883,714 | 2,308,650 |
General and administrative | 5,346,136 | 4,418,500 |
Change in earn out liability | 0 | 219,473 |
Intangible asset amortization | 527,468 | 1,360,105 |
Impairment of intangible assets | 0 | 1,459,541 |
Total operating expenses | 15,740,526 | 15,106,620 |
Operating loss | (7,288,519) | (8,027,358) |
Other income, net | 209,173 | 442,195 |
Loss before income taxes | (7,079,346) | (7,585,163) |
Benefit for income tax | (2,104,108) | (1,869,188) |
Net loss from continuing operations | (4,975,238) | (5,715,975) |
Net income from discontinued operations, net of tax | 0 | 10,666,985 |
Net (loss) income | $ (4,975,238) | $ 4,951,010 |
Net loss per share from continuing operations | ||
Basic net loss per share | $ (0.59) | $ (0.72) |
Diluted net loss per share | (0.59) | (0.72) |
Net income per share from discontinued operations | ||
Basic net income per share | 0 | 1.35 |
Diluted net income per share | 0 | 1.35 |
Net (loss) income per share | ||
Basic net (loss) income per share | (0.59) | 0.63 |
Diluted net (loss) income per share | $ (0.59) | $ 0.63 |
Shares used in computing basic net (loss) income per share | 8,395,319 | 7,895,197 |
Shares used in computing diluted net (loss) income per share | 8,395,319 | 7,895,197 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | $ (35,707) | $ (302,442) |
Comprehensive (loss) income | $ (5,010,945) | $ 4,648,568 |
Consolidated Statment of Change
Consolidated Statment of Changes in Shareholdres' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss[Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 7,233 | $ 22,607,290 | $ (142,613) | $ 0 | $ (9,068,488) | $ 13,403,422 |
Balance, shares at Dec. 31, 2015 | 7,233,035 | 0 | ||||
Stock based compensation - stock options | 510,002 | 510,002 | ||||
Issuance of common stock for cash | $ 3 | 12,214 | 12,217 | |||
Issuance of common stock for cash, shares | 3,088 | |||||
Issuance of common stock for services | $ 51 | 220,479 | 220,530 | |||
Issuance of common stock for services, shares | 50,976 | |||||
Issuance of common stock for earn out payment | $ 1,094 | 4,206,835 | 4,207,929 | |||
Issuance of common stock for earn out payment, shares | 1,093,564 | |||||
Receipt of treasury shares of shares | $ (84,000) | (84,000) | ||||
Receipt of treasury shares of shares, shares | 20,000 | |||||
Tax benefit from stock-based award activity, net | (422) | (422) | ||||
Foreign currency translation adjustment | (302,442) | (302,442) | ||||
Net loss | 4,951,010 | 4,951,010 | ||||
Balance at Dec. 31, 2016 | $ 8,381 | 27,556,398 | (445,055) | $ (84,000) | (4,117,479) | 22,918,245 |
Balance, shares at Dec. 31, 2016 | 8,380,663 | 20,000 | ||||
Stock based compensation - stock options | 510,978 | 510,978 | ||||
Issuance of common stock for cash | $ 15 | 22,105 | 22,120 | |||
Issuance of common stock for cash, shares | 15,387 | |||||
Issuance of common stock for services | $ 60 | 272,916 | 272,976 | |||
Issuance of common stock for services, shares | 60,011 | |||||
Foreign currency translation adjustment | (35,707) | (35,707) | ||||
Net loss | (4,975,238) | (4,975,238) | ||||
Balance at Dec. 31, 2017 | $ 8,456 | $ 28,362,397 | $ (480,762) | $ (84,000) | $ (9,092,717) | $ 18,713,374 |
Balance, shares at Dec. 31, 2017 | 8,456,061 | 20,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (4,975,238) | $ 4,951,010 |
Deduct: Income from discontinued operations, net of income taxes | 0 | 10,666,985 |
Net loss from continuing operations | (4,975,238) | (5,715,975) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 807,574 | 2,978,798 |
Non-cash stock compensation | 783,942 | 705,649 |
Deferred income taxes | 5,618 | 167,757 |
Loss on disposal of property and equipment | 3,481 | 128,978 |
Non-cash change in value of earn out liability | 0 | 219,473 |
Non-cash gain from escrow claim | 0 | (84,000) |
Unearned foreign currency gain/loss | (70,769) | (185,414) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 665,296 | (499,516) |
Other assets | 136,771 | (210,715) |
Income taxes, net | (1,105,771) | (5,706,659) |
Accounts payable | (22,860) | (156,081) |
Accrued expenses and other current liabilities | (272,133) | 271,058 |
Deferred revenue | (8,795) | (246,721) |
Net cash used in operating activities - Continuing operations | (4,052,884) | (8,333,368) |
Net cash provided by operating activities - Discontinued operations | 0 | 1,265,364 |
Net cash used in operating activities | (4,052,884) | (7,068,004) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (177,110) | (455,506) |
Acquisitions of customer assets from resellers | (64,268) | (724,678) |
Net cash used in investing activities - Continuing operations | (241,378) | (1,180,184) |
Net cash provided by investing activities - Discontinued operations | 1,000,000 | 13,945,548 |
Net cash provided by investing activities | 758,622 | 12,765,364 |
Cash flows from financing activities: | ||
Payment to reduce earn out | 0 | (1,207,929) |
Proceeds from exercise of stock options | 22,133 | 12,217 |
Excess tax benefits from share-based payments | 0 | (422) |
Net cash provided by (used in) financing activities - Continuing operations | 22,133 | (1,196,134) |
Net cash provided by financing activities - Discontinued operations | 0 | 0 |
Net cash provided by (used in) financing activities | 22,133 | (1,196,134) |
Effect of exchange rate on cash | 20,502 | (8,498) |
Change in cash and cash equivalents | (3,251,627) | 4,492,728 |
Cash and cash equivalents, beginning of period | 8,651,374 | 4,158,646 |
Cash and cash equivalents, end of period | 5,399,747 | 8,651,374 |
Supplemental information on consolidated statements of cash flows: | ||
Cash paid for income taxes | (556,291) | 3,643,858 |
Supplemental information on non-cash investing and financing activities: | ||
Receipt of common stock for escrow claim | 0 | 84,000 |
Settlement of earn out liabilities with common stock | 0 | (4,207,929) |
Other receivable created for sale of SMTP email relay business | $ 0 | $ (1,000,000) |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | We were incorporated in Massachusetts in October 1998 as EMUmail, Inc. During 2010, we changed our name to SMTP.com, then later reincorporated in the State of Delaware and changed our name to SMTP, Inc. In December 2015, we changed our name to SharpSpring, Inc. and changed the name of our SharpSpring product U.S. operating subsidiary from SharpSpring, Inc. to SharpSpring Technologies, Inc. In June 2016, we sold the assets related to our SMTP email relay product to the Electric Mail Company, a Nova Scotia company. See Note 5 for details of this disposition. Our Company focuses on providing the SharpSpring cloud-based marketing automation solution. SharpSpring is designed to increase the rates at which businesses generate leads and convert leads to sales opportunities by improving the way businesses communicate with customers and prospects. Our products are marketed directly by us and through a small group of reseller partners to customers around the world. Prior to June 27, 2016, our Company also provided cloud-based email relay delivery services to its customers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation and Consolidation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Our Consolidated Financial Statements include the accounts of SharpSpring, Inc. and our subsidiaries (“the Company”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. The Company does not present geographical information about revenues because it is impractical to do so. Foreign Currencies The Company’s subsidiaries utilize the U.S. Dollar, Swiss Franc, South African Rand and British Pound as their functional currencies. The assets and liabilities of these subsidiaries are translated at ending exchange rates for the respective periods, while revenues and expenses are translated at the average rates in effect for the period. The related translation gains and losses are included in other comprehensive income or loss within the Consolidated Statements of Comprehensive Loss. Cash and Cash Equivalents Cash equivalents are short-term, liquid investments with remaining maturities of three months or less when acquired. Cash and cash equivalents are deposited or managed by major financial institutions and at most times are in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits. Fair Value of Financial Instruments U.S. GAAP establishes a fair value hierarchy which has three levels based on the reliability of the inputs to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, deposits and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the short-term nature of these items. Accounts Receivable Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. Management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. The Company reserves for receivables that are determined to be uncollectible, if any, in its allowance for doubtful accounts. The Company had an allowance for doubtful accounts of $526,127 and $508,288 as of December 31, 2017 and 2016, respectively. After the Company has exhausted all collection efforts, the outstanding receivable is written off against the allowance. Intangibles Finite-lived intangible assets include trade names, developed technologies and customer relationships and are amortized based on the estimated economic benefit over their estimated useful lives, with original periods ranging from 5 to 11 years. We continually evaluate the reasonableness of the useful lives of these assets. Finite-lived intangibles are tested for recoverability whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Impairment losses are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. Judgment is used when applying these impairment rules to determine the timing of the impairment test, the undiscounted cash flows used to assess impairments and the fair value of an asset group. The dynamic economic environment in which the Company operates and the resulting assumptions used to estimate future cash flows impact the outcome of these impairment tests. Goodwill and Impairment As of December 31, 2017 and 2016, we had recorded goodwill of $8,872,898 and $8,845,394, respectively. Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in the SharpSpring and GraphicMail acquisitions (See Note 3). Under FASB ASC 350, “Intangibles - Goodwill and Other” Income Taxes Provision for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740, Accounting for Income The Company applies the authoritative guidance in accounting for uncertainty in income taxes recognized in the consolidated financial statements. This guidance prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. There are no material uncertain tax positions taken by the Company on its tax returns. Tax years subsequent to 2013 remain open to examination by U.S. federal and state tax jurisdictions. In determining the provision for income taxes, the Company uses statutory tax rates and tax planning opportunities available to the Company in the jurisdictions in which it operates. This includes recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns to the extent pervasive evidence exists that they will be realized in future periods. The deferred tax balances are adjusted to reflect tax rates by tax jurisdiction, based on currently enacted tax laws, which are expected to be in effect in the years in which the temporary differences are expected to reverse. In accordance with the Company’s income tax policy, significant or unusual items are separately recognized in the period in which they occur. The Company is subject to routine examination by domestic and foreign tax authorities and frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature and amount of deductions and the allocation of income among various tax jurisdictions. As of December 31, 2017, the Company is not being examined by domestic or foreign tax authorities. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the assets. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Depreciation expense from continuing operations related to property and equipment was $280,106 and $159,152 for the years ended December 31, 2017 and 2016, respectively. Property and equipment as of December 31 is as follows: December 31, December 31, 2017 2016 Property and equipment, net: Leasehold improvements $ 128,122 $ 128,122 Furniture and fixtures 355,033 316,819 Computer equipment and software 776,201 641,722 Total 1,259,356 1,086,663 Less: Accumulated depreciation and amortization (460,211 ) (181,318 ) $ 799,145 $ 905,345 Useful lives are as follows: Leasehold improvements 3-5 years Furniture and fixtures 3-5 years Computing equipment 3 years Software 3-5 years Revenue Recognition The Company recognizes revenue from its services when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. This is normally demonstrated when: (i) persuasive evidence of an arrangement exists; (ii) the fee is fixed or determinable; (iii) performance of service has been delivered; and (iv) collection is reasonably assured. For the Company’s internet-based SharpSpring marketing automation solution, the services are typically offered on a month-to-month basis with a fixed fee charged each month depending on the size of the engagement with the customer. Monthly fees are recorded as revenue during the month they are earned. Some customers are charged annually, for which revenues are deferred and recorded ratably over the subscription period. The Company also charges transactional-based fees if monthly volume limitations are reached or other chargeable activity occurs. Additionally, customers are typically charged an upfront implementation and training fee. The upfront implementation and training fees represent short-term “use it or lose it” services offered for a flat fee. Such flat fees are recognized over the service period, which is 60 days. For the Company’s SMTP email delivery product (prior to its sale in June 2016), the Company’s GraphicMail email product (which was discontinued in 2016) and the SharpSpring Mail+ product, services are provided over various contractual periods for a fixed fee that varies based on a maximum volume of transactions. Revenue is recognized on a straight-line basis over the contractual period. If the customer’s transactions exceed contractual volume limitations, overages are charged and recorded as revenue in the periods in which the transaction overages occur. Prior to June 2016, certain of the Company’s GraphicMail customers were sold through third party resellers. In some cases, we allowed the third party resellers to collect the funds directly from the customer, withhold their own reseller fee, and remit the net amount owed back to the Company. In those situations, because the Company was the primary obligor in the arrangement, the Company recorded the gross revenue and expenses such that 100% of the end customer revenue was reported by the Company and a corresponding expense was recorded for the reseller fee. The Company discontinued selling through third party resellers for the GraphicMail and SharpSpring Mail+ products during 2016. From time to time, the Company offers refunds to customers and experiences credit card chargebacks relating to cardholder disputes that are commonly experienced by businesses that accept credit cards. The Company makes estimates for refunds and credit card chargebacks based on historical experience. Deferred Revenue Some of the Company’s customers pay for services in advance on a periodic basis (such as monthly, quarterly, annually or bi-annually). Also, the Company charges an upfront implementation and training fee for its SharpSpring marketing automation solution that is paid in advance, for which services are performed over a 60-day period. Deferred revenue consists of payments received in advance of the Company’s providing the services. Deferred revenues are amortized on a straight-line basis in connection with the contractual period or recorded as revenue when the services are used. Accrued Revenue In cases where our customers pay for services in arrears, we accrue for revenue in advance of billings as long as the criteria for revenue recognition is met. A portion of our accounts receivable balance is therefore unbilled at each balance sheet date. As of December 31, 2017, and 2016, the Company had accrued revenue balances of $639,959 and $1,261,923 respectively. Concentration of Credit Risk and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents. At December 31, 2017 and 2016, the Company had cash balances at financial institutions that exceed federally insured limits. The Company maintains its cash balances with accredited financial institutions. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. For the years ended December 31, 2017, and 2016, there were no customers that accounted for more than 10% of total revenue or 10% of total accounts receivable. Cost of Services Cost of services consists primarily of direct labor costs associated with support and customer onboarding and technology hosting costs and license costs associated with the cloud-based platform. Credit Card Processing Fees Credit card processing fees are included as a component of general and administrative expenses and are expensed as incurred. Advertising Costs The Company expenses advertising costs as incurred. Advertising and marketing expenses from continuing operations was $3.2 million and $1.6 million for the years ended December 31, 2017 and 2016, respectively. Research and Development Costs and Capitalized Software Costs We capitalize certain costs associated with internal use software during the application development stage, mostly related to software that we use in providing our hosted solutions. We expense costs associated with preliminary project phase activities, training, maintenance and any post-implementation period costs as incurred. For the years ended December 31, 2017 and December 31, 2016, we capitalized $68,217 and $5,239, respectively, in software development costs. We amortize capitalized software costs over the estimated useful life of the software, which is typically estimated to be 3 years, once the related project has been completed and deployed for customer use. At December 31, 2017 and December 31, 2016, the net carrying value of capitalized software was $90,437 and $78,005, respectively. All other software development costs are charged to expenses when incurred, and generally consist of salaries, software development tools and personnel-related costs for those engaged in research and development activities. Stock Compensation We account for stock based compensation in accordance with FASB ASC 718 “Compensation - Stock Compensation”, which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Comprehensive Income or Loss Comprehensive income or loss includes all changes in equity during a period from non-owner sources, such as net income or loss and foreign currency translation adjustments. Recently Issued Accounting Standards Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations. In February 2016, the FASB issued guidance that requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective in 2019 with early adoption permitted. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard now is effective for annual reporting periods beginning January 1, 2018. The FASB will permit companies to adopt the new standard early, but not before the original effective date of January 1, 2017. The Company has evaluated the impact of this standard and does not expect any material changes in revenue or cost recognized as a result of this pronouncement due to the month-to-month nature of its revenue arrangements. In January 2017, the FASB issued guidance simplifying the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standard is effective beginning in January 2020, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | During 2014, the Company pursued strategic acquisitions to further extend its product offerings. Such acquisitions have been accounted for as business combinations pursuant to ASC 805 “ Business Combinations. SharpSpring On August 15, 2014, the Company acquired substantially all the assets and assumed the liabilities of SharpSpring LLC, a Delaware limited liability company for a cash payment of $5,000,000 plus potential earn out consideration of $10,000,000 that was contingent on the SharpSpring product achieving certain levels of revenue in 2015. SharpSpring is a cloud-based marketing automation platform that enables users to improve the effectiveness of their marketing communications and drive increased revenues through the use of automation. The SharpSpring earn out was initially $10,000,000, payable 60% in cash and 40% in stock, depending on SharpSpring achieving certain revenue levels in 2015. At the time of the acquisition, the Company utilized the income approach to estimate the fair value of the earn out. The Company analyzed scenarios and determined a probability weighting for each scenario. The Company calculated the earn out payments based on the respective revenues for each scenario and then weighted the resulting payment by the probabilities of achieving each scenario. In order to calculate an appropriate risk-adjusted discount rate for the earn out, the Company calculated the weighted average cash-flows of the business based on the three scenarios and their respective weightings. The Company then calculated an implied internal rate of return (“IRR”) of 18.9%, which is the discount rate necessary in order to reconcile the weighed cash-flows of the three scenarios to the total purchase price including the earn out payment. The earn out payment was then discounted by the 18.9% IRR. Based on these methods and the Company’s original assessment of meeting those revenue levels in 2015, an earn out liability of $6,963,000 was originally recorded as a liability during purchase accounting. This was re-measured in each subsequent quarter since the transaction, resulting in additional charges of $222,000 during the year ended December 31, 2016 having been recorded on the Consolidated Statement of Comprehensive Income (Loss). The final payments against the earn out of $1.0 million in cash and $4.0 million in common stock occurred in the quarter ended June 30, 2016. GraphicMail On October 17, 2014, we acquired 100% of the equity interest owned, directly or indirectly, in GraphicMail group companies (“GraphicMail”) consisting of InterInbox SA, a Swiss corporation, InterCloud Limited, a Gibraltar limited company, ERNEPH 2012A (Pty) Ltd. dba ISMS, a South African limited company, ERNEPH 2012B (Pty) Ltd. dba GraphicMail South Africa, a South African limited company, and Quattro Hosting LLC, a Delaware limited liability company. The acquisition consideration consisted of $5.3 million, $2.6 million of which was paid in cash and $2.7 million of which was paid in stock, plus potential earn out consideration of up to $0.8 million based on achieving certain revenue levels in 2015 (paid 50% in cash and 50% in stock). GraphicMail operated as a campaign management solution, enabling customers to create content and manage emails being sent to customers and distribution lists. Pursuant to the equity interest purchase agreement, the Company was liable for an earn out of up to $0.8 million, related to GraphicMail achieving certain revenue levels in 2015. The Company utilized the income approach to estimate the fair value of the earn out. The Company analyzed scenarios and determined a probability weighting for each scenario. The Company calculated the earn out payments based on the respective revenues for each scenario and then weighted the resulting payment by the probabilities of achieving each scenario. In order to calculate an appropriate risk-adjusted discount rate for the earn out, the Company calculated the weighted average cash-flows of the business based on the three scenarios and their respective weightings. The Company then calculated an implied internal rate of return (“IRR”) of 29.8%, which is the discount rate necessary in order to reconcile the weighed cash-flows of the three scenarios to the total purchase price including the earn out payment. The earn out payment was then discounted by the 29.8% IRR. Based on these methods and the Company’s initial assessment of meeting those revenue levels in 2015, an earn out liability of $36,000 was recorded as a liability during purchase accounting. This was re-measured in the subsequent quarters, resulting in a benefit of $2,527 during the year ended December 31, 2016. During March 2016, the Company paid $415,858 in the form of $207,929 in cash and 53,924 shares of common stock in full settlement of the earn out liability to the former GraphicMail shareholders. Additionally, in March 2016, the Company received $175,970 in cash and 20,000 shares of Company stock (valued at $84,000) from the GraphicMail escrow fund related to an indemnified claim for unrecorded liabilities at the time of the acquisition. The total value of the claim of $259,970 was recorded as a gain in other income (expense), net during the year ended December 31, 2016. The Company accounted for the receipt of 20,000 shares as treasury stock with a carrying value of $84,000. |
Asset Purchase Agreement
Asset Purchase Agreement | 12 Months Ended |
Dec. 31, 2017 | |
Asset Purchase Agreement [Abstract] | |
Asset Purchase Agreement | During 2015 and 2016, the Company entered into separation agreements with several third-party GraphicMail resellers to terminate the reseller arrangements and for the Company to purchase the customer relationships that each had accumulated as a GraphicMail reseller. Pursuant to the terms of the separation agreements, the Company made payments to the resellers in exchange for the rights to the customer relationships. The Company accounted for these purchases as intangible asset acquisitions. The aggregate estimated purchase price for the intangible assets acquired was approximately $731,000. Due to heavy customer attrition from the GraphicMail customer base during the second half of 2016, the majority of the acquired intangible assets value was impaired during the fourth quarter of 2016. |
Dispositions
Dispositions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Dispositions | On June 27, 2016, the Company completed the sale of the assets and deferred revenue liabilities of its SMTP email relay business (“SMTP”) to the Electric Mail Company for approximately $15.0 million. Of the total proceeds from the sale of SMTP, approximately $1.0 million in cash was held in escrow until the one-year anniversary and recorded in Other current assets at December 31, 2016. The Company received the $1.0 million escrow payment in June 2017. In conjunction with the sale, the Company also entered into a transition services agreement (the “TSA”) with the buyer to assist in the transition of operations over a six-month period, which was subsequently extended for an additional three months. Pursuant to the terms of the transition services agreement, in exchange for assisting in the transfer of operations, the Company may continue utilizing the SMTP email relay platform for its email sending needs at no cost. Although no cash was exchanged for the services performed by the parties to the TSA, the Company recorded the estimated cost to utilize the SMTP sending platform as a cost of sale and recorded a benefit to Other income (expense), net for the value of services provided to the Electric Mail Company. Also, in conjunction with the sale, the Company abandoned a software asset that was not acquired, but will not be utilized by the Company in the future. The Company recorded a gain on the sale of SMTP of approximately $9.8 million, net of tax of $5.2 million in 2016. Pursuant to the reporting requirements of ASC 205-20, Presentation of Financial Statements – Discontinued Operations Financial information for the SMTP email relay business for the year ended December 31, 2017 and 2016, are presented in the following table: Year Ended December 31, 2017 2016 Revenue $ — $ 2,746,378 Cost of services — 642,013 Gross profit — 2,104,365 Operating expenses: Sales and marketing — 177,265 Research and development — 152,898 General and administrative — 474,048 Total operating expenses — 804,211 Operating income — 1,300,154 Other income (expense), net, before gain on sale — — Income before income taxes, before gain on sale — 1,300,154 Income tax expense — 447,675 Net income, before gain on sale $ — $ 852,479 Gain on sale of discontinued operations — 9,814,506 Income from discontinued operations, net of income taxes $ — $ 10,666,985 The financial information above includes the financial results for the SMTP email relay business through June 27, 2016, plus any residual costs incurred after June 27, 2016 related to the transition of the business to the buyer. The results are comprised of revenue and costs directly attributable to the SMTP email relay business as well as allocated costs for resources that have historically had shared roles in our consolidated operations. For resources performing shared roles, cost allocations have been created based on estimated work performed and job activities. Although our SharpSpring and GraphicMail products had utilized the SMTP email relay sending platform prior to the disposition, no intercompany revenues have been reflected in the SMTP email relay business operating results related to the use of the email sending platform by our other product lines. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and acquired intangible assets are initially recorded at fair value and measured periodically for impairment. In performing the Company’s annual impairment analysis during the fourth quarters of 2017 and 2016, the Company determined that the carrying amount of the Company’s goodwill was recoverable and no additional tests were required. Since some of the goodwill is denominated in foreign currencies, relatively minor changes to the goodwill balance occur over time due to changes in foreign exchange rates. During the year ended December 31, 2017 and 2016, changes in foreign exchange rates caused an increase to goodwill of $27,504 and a reduction to goodwill of $36,539, respectively. In addition to our annual goodwill impairment review, the Company also performs periodic reviews of the carrying value and amortization periods of other acquired intangible assets. If indicators of impairment are present, an estimate of the undiscounted cash flows that the specific asset is expected to generate must be made to ensure that the carrying value of the asset can be recovered. These estimates involve significant subjectivity. During the year ended December 31, 2017, the Company determined that no indicators of impairment are present. However, during the year ended December 31, 2016, the Company recorded an impairment loss of $1,459,541 related to the impaired recovery of its GraphicMail customer relationship assets due to significant erosion of that customer base following the migration onto the SharpSpring Mail+ product. The impairment has been included in the Accumulated Amortization referenced below. The following tables set forth the information for intangible assets subject to amortization and for intangible assets not subject to amortization. As of December 31, 2017 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 346,644 $ (309,640 ) $ 37,004 Technology 3,834,023 (2,404,023 ) 1,430,000 Customer relationships 4,165,665 (3,306,669 ) 858,996 Unamortized intangible assets: 8,346,332 (6,020,332 ) 2,326,000 Goodwill 8,872,898 Total intangible assets $ 11,198,898 As of December 31, 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 326,992 $ (256,988 ) $ 70,004 Technology 3,686,270 (2,001,270 ) 1,685,000 Customer relationships 4,024,005 (2,928,374 ) 1,095,631 Unamortized intangible assets: 8,037,267 (5,186,632 ) 2,850,635 Goodwill 8,845,394 Total intangible assets $ 11,696,029 Estimated amortization expense for 2018 and subsequent years is as follows: 2018 $ 459,996 2019 381,000 2020 332,004 2021 279,996 2022 228,000 Thereafter 645,004 Total $ 2,326,000 Amortization expense, excluding impairments, for the years ended December 31, 2017 and 2016 was $527,468 and $1,360,105, respectively. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | During the year ended December 31, 2016, in an effort to consolidate operations into one primary office, the Company executed a plan to close its South African offices in Cape Town and Johannesburg and terminate approximately 50 resources based in those offices. All employees were notified of the restructuring during the month of September 2016. The Company recorded pre-tax restructuring expenses associated with severance, asset write offs and contract termination expenses of $294,249 in 2016 as follows: Cost of services $ 83,544 Sales and marketing 102,904 Research and development 30,693 General and administrative 77,108 $ 294,249 There was no remaining liability as of December 31, 2017. At December 31, 2016, our remaining liability for restructuring expenses was $10,705 related to facility closure costs. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facility | In March 2016, the Company entered into a $2.5 million revolving loan agreement (the “Loan Agreement”) with Western Alliance Bank. The facility matures on March 21, 2018 and has no mandatory amortization provisions and is payable in full at maturity. Loan proceeds accrue interest at the higher of Western Alliance Bank’s Prime interest rate (4.50% as of December 31, 2017) or 3.5%, plus 1.75%. The Loan Agreement is collateralized by a lien on substantially all of the existing and future assets of the Company and secured by a pledge of 100% of the capital stock of SharpSpring Technologies, Inc. and Quattro Hosting, LLC and a 65% pledge of the Company’s foreign subsidiaries’ stock. The Loan Agreement subjects the Company to a number of restrictive covenants, including financial and non-financial covenants customarily found in loan agreements for similar transactions. The Loan Agreement also restricts our ability to pay cash dividends on our common stock. During June 2016, the Company amended the Loan Agreement to modify its financial covenants and allow for the sale of the SMTP business assets. During October 2017, the Loan Agreement was amended to waive the minimum adjusted EBITDA financial covenant for the third quarter of 2017 and modify the minimum adjusted EBITDA financial covenant for the fourth quarter of 2017. There are no amounts outstanding under the Loan Agreement as of December 31, 2017 and no events of default have occurred to date. As of December 31, 2017, based on the borrowing base calculations approximately $2.0 million was available for withdrawal under the Loan Agreement. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | In March 2016, the Company issued 53,924 shares of common stock to the former owners of GraphicMail in satisfaction of the GraphicMail stock-based earn out (see Note 3). Additionally, in March 2016, the Company received 20,000 shares of stock from the GraphicMail escrow fund related to an indemnified claim. In June 2016, the Company issued 1,039,636 shares of common stock to the RCTW, LLC shareholders to satisfy the remaining stock-based portion of the SharpSpring earn out (see Note 3). |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) | Foreign Currency Translation Adjustment Balance as of December 31, 2016 $ (445,055 ) Other comprehensive income (loss) prior to reclassifications — Amounts reclassified from accumulated other comprehensive income — Tax effect — Net current period other comprehensive loss (35,707 ) Balance as of December 31, 2017 $ (480,762 ) |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Net (loss) income per share | |
Net Loss Per Share | Computation of net income per share is as follows: Year Ended December 31, 2017 2016 Net loss from continuing operations $ (4,975,238 ) $ (5,715,975 ) Basic weighted average common shares outstanding 8,395,319 7,895,197 Add incremental shares for: Warrants — — Stock options — — Diluted weighted average common shares outstanding 8,395,319 7,895,197 Net loss per share: Basic $ (0.59 ) $ (0.72 ) Diluted $ (0.59 ) $ (0.72 ) For the year ended December 31, 2017, 1,069,330 stock options and 80,000 warrants were excluded from diluted net loss per share, because the effect of including these potential shares was anti-dilutive. For the year ended December 31, 2016, 1,128,368 stock options and 170,973 warrants were excluded from diluted net loss per share, because the effect of including these potential shares was anti-dilutive. Pursuant to ASC 260, Earnings Per Share |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted into the law. The Tax Act contains broad and complex provisions including, but not limited to: (i) the reduction of corporate income tax rate from 35% to 21%, (ii) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, (iii) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, (iv) modifying limitation on excessive employee remuneration, (v) requiring current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations, (vi) repeal of corporate alternative minimum tax (“AMT”) and changing how AMT credits can be realized, (vii) creating a new minimum tax, (viii) creating a new limitation on deductible interest expense, (ix) changing rules related to uses and limitations of net operating loss carryforwards and foreign tax credits created in tax years beginning after December 31, 2017, and (x) eliminating the deduction for income attributable to domestic production activities. As required under U.S. GAAP, the effects of tax law changes are recognized in the period of enactment. Accordingly, the Company has recorded incremental income tax benefit in the amount of $0.1 million, after the impact of valuation allowance, associated with the Tax Act during the year ended December 31, 2017 and is reflected in its deferred provision. In response to the enactment of the Tax Act in late 2017, the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address situations where the accounting is incomplete for certain income tax effects of the Tax Act upon issuance of an entity’s financial statements for the reporting period in which the Tax Act was enacted. Under SAB 118, a company may record provisional amounts during a measurement period for specific income tax effects of the Tax Act for which the accounting is incomplete, but a reasonable estimate can be determined, and when unable to determine a reasonable estimate for any income tax effects, report provisional amounts in the first reporting period in which a reasonable estimate can be determined. The Company has recorded the impact of the tax effects of the Tax Act, relying on estimates where the accounting is incomplete as of December 31, 2017. As guidance and technical corrections are issued in the upcoming quarters, the Company will record updates to its original provisional estimates. The Act reduces the corporate tax rate to 21 percent, effective January 1, 2018. Accordingly, the Company recorded a provisional decrease of $0.1 million, after the impact of valuation allowance, to deferred tax liabilities for the year ended December 31, 2017. While the Company is able to make a reasonable estimate of the impact of the reduction in corporate rate, it may be affected by other analyses related to the Tax Act, including, but not limited to, our calculation of subsequent payments and economic performance analyses. The analyses will continue throughout 2018 and will be completed when the Company files its income tax returns in late 2018. The Tax Act creates a new requirement that certain income earned by controlled foreign corporations must be included currently in the gross income of the U.S. shareholder under the Global Intangible Low-Taxed Income ("GILTI") provision. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the Tax Act and the application within the Company’s financial statements. Under U.S. GAAP, the Company may make an accounting policy choice to: (i) record taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (ii) factor such amounts into its measurement of deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether it expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only its current structure and estimated future results of global operations but also its intent and ability to modify its structure and/or business, it is not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding how to record the tax effects of GILTI as of December 31, 2017. The Company will continue to analyze the impact of GILTI as more guidance is issued and a decision will be made during 2018 on whether to treat the GILTI as a period cost or a deferred tax item. The Tax Act includes a transition tax on the deemed distribution of previously untaxed accumulated and current earnings and profits of certain of foreign subsidiaries. To determine the amount of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 earnings and profits of relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company estimates that it will not have a transition tax in light of accumulated negative earnings and profits, accumulated deficit, as of December 31, 2017 for its applicable foreign subsidiaries. The Company is continuing to gather additional information to more precisely determine the amount of the transition tax, if applicable. Income taxes for years ended December 31, is summarized as follows: Year Ended December 31, 2017 2016 Current provision $ (2,107,804 ) $ 3,451,571 Payable true-up (1,922 ) 101,783 Deferred provision 5,618 179,159 Net income tax provision (2,104,108 ) 3,732,513 Less: net income tax provision from discontinued operations — (5,601,701 ) Net income tax benefit from continuing operations $ (2,104,108 ) $ (1,869,188 ) Year Ended December 31, 2017 2016 From continuing operations: Federal $ (1,944,618 ) $ (2,366,022 ) State 50,934 32,928 Foreign (210,424 ) 463,906 Net income tax provision $ (2,104,108 ) $ (1,869,188 ) From discontinued operations: Federal $ — $ 5,531,353 State — 70,348 Foreign — — Net income tax provision $ — $ 5,601,701 A reconciliation of income tax for continuing operations computed at the U.S. statutory rate to the effective income tax rate is as follows: 2017 2016 Amount Percent Amount Percent Federal statutory rates $ (2,369,986 ) 34 % $ (2,578,955 ) 34 % State income taxes, net of federal benefit (563,944 ) 8 % 32,928 0 % Permanent differences 148,246 -2 % 621,683 -8 % Rate Change 672,562 -10 % — 0 % Other 141,284 -2 % 375,738 -5 % Credits (141,256 ) 2 % (164,297 ) 2 % Foreign 381,364 -5 % 29,040 0 % Valuation Allowance (372,378 ) 5 % (185,325 ) 2 % Effective rate from continuing operations $ (2,104,108 ) 30 % $ (1,869,188 ) 25 % The following is a summary of the components of the Company’s deferred tax assets: December 31, 2017 2016 Deferred tax assets (liabilities) Accrual to cash $ 118,366 $ 184,958 Stock-based compensation 193,620 595,576 Asset Dispositions — (309,479 ) Depreciation (103,863 ) (152,542 ) Intangibles 701,956 1,140,222 Net operating loss carryforwards 1,110,387 939,725 Other — 16 Net deferred tax asset valuation allowance (2,188,598 ) (2,560,975 ) Total net deferred tax liabilities $ (168,132 ) $ (162,499 ) The company has foreign net operating loss carryforwards of $2,530,855 and $3,813,146 as of December 31, 2017 and 2016, respectively. The company has state net operating loss carryforwards of $9,242,148 and $5,427,424 as of December 31, 2017 and 2016, respectively. Depending on the jurisdiction, some of these net operating loss carryovers will begin to expire within 3 years, while other net operating losses can be carried forward indefinitely as long as the company is operating. In addition to these figures, the Company has a U.S. federal net operating loss of approximately $5.2 million generated in 2017 that is being utilized as a carry-back to the 2016 year. These net operating losses have been tax effected and shown as income taxes receivable in the balance sheet as of December 31, 2017. Valuation Allowance We record a deferred tax asset if we believe that it is more likely than not that we will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on our ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset recoverability considers many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. We establish a valuation allowance against any deferred tax asset for which we are unable to conclude that recoverability is more likely than not. This is inherently judgmental, since we are required to assess many different factors and evaluate as much objective evidence as we can in reaching an overall conclusion. The particularly sensitive component of our evaluation is our projection of future operating results since this relies heavily on our estimates of future revenue and expense levels by tax jurisdiction. We have established valuation allowances of $2.2 million and $2.6 million as of December 31, 2017 and December 31, 2016, respectively, against certain deferred tax assets given the uncertainty of recoverability of these amounts. In making our assessment of deferred tax asset recoverability, we considered our historical financial results, our projected future financial results, the planned reversal of existing deferred tax liabilities and the impact of any tax planning actions. Based on our analysis we noted both positive and negative factors relative to our ability to support realization of certain deferred tax assets. However, based on the weighting of all the evidence, including the near-term effect on our income projections of investments we are making in our team, product and systems infrastructure, we concluded that it was more likely than not that the majority of our deferred tax assets related to temporary differences and net operating losses may not be recovered. The establishment of a valuation allowance has no effect on our ability to use the underlying deferred tax assets prior to expiration to reduce cash tax payments in the future to the extent that we generate taxable income. |
Defined Contribution Retirement
Defined Contribution Retirement Plan | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Retirement Plan | |
Defined Contribution Retirement Plan | Starting in 2016, we offered our U.S. employees the ability to participate in a 401(k) plan. Eligible U.S. employees may contribute up to 60% of their eligible compensation, subject to limitations established by the Internal Revenue Code. The Company contributes a matching contribution equal to 100% of each such participant’s contribution up to the first 3% of their annual eligible compensation. We charged $198,783 and $108,228 to expense in the years ended December 31, 2017 and 2016, respectively, associated with our matching contribution for those years. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Intercompany transactions have been eliminated in our consolidated financial statements. There were no material related party transactions for the years ended December 31, 2017 or 2016. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | From time to time, the Company grants stock option awards to officers and employees and grants stock awards to directors as compensation for their service to the Company. In November 2010, the Company adopted the 2010 Stock Incentive Plan (“the Plan”) which was amended in April 2011, August 2013, April 2014, February 2016 and March 2017. As amended, up to 1,950,000 shares of common stock are available for issuance under the Plan. The Plan provides for the issuance of stock options and other stock-based awards. Stock Options Stock option awards under the Plan have a 10-year maximum contractual term and must be issued at an exercise price of not less than 100% of the fair market value of the common stock at the date of grant. The Plan is administered by the Board of Directors, which has the authority to determine to whom options may be granted, the period of exercise and what other restrictions, if any, should apply. Vesting for option awards granted to date under the Plan have been principally over four years from the date of the grant, with 25% of the award vesting after one year with monthly vesting thereafter. Option awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions: Year Ended December 31, 2017 2016 Volatility 48% - 49% 38% - 50% Risk-free interest rate 1.85% - 2.26% 1.12% - 1.93% Expected term 6.25 years 6.25 years The weighted average grant date fair value of stock options granted during the year ended December 31, 2017 was $2.36. For grants prior to January 1, 2015, the volatility assumption was based on historical volatility of similar sized companies due to lack of historical data of the Company’s stock price. For all grants subsequent to January 1, 2015, the volatility assumption reflects the Company’s historic stock volatility for the period of February 1, 2014 forward, which is the date the Company’s stock started actively trading. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110. Stock option awards are expensed on a straight-line basis over the requisite service period. During the year ended December 31, 2017 and 2016, the Company recognized expense of $510,978 and $510,002, respectively, associated with stock option awards. At December 31, 2017, future stock compensation expense associated with stock options (net of estimated forfeitures) not yet recognized was $1,216,391 and will be recognized over a weighted average remaining vesting period of 2.54 years. The following summarizes stock option activity for the year ended December 31, 2017: Weighted Weighted Aggregate Number of Average Average Remaining Intrinsic Options Exercise Price Contractual Life Value Outstanding at December 31, 2016 1,128,368 $ 5.12 7.0 $ 514,439 Granted 357,500 4.78 Exercised (15,387 ) 1.44 Forfeited (401,151 ) 4.99 Outstanding at December 31, 2017 1,069,330 $ 5.11 7.8 $ 90,007 Exercisable at December 31, 2017 475,640 $ 5.46 7.0 $ 36,693 The total intrinsic value of stock options exercised during the year ended December 31, 2017 was $34,373. Stock Awards During the year ended December 31, 2017 and 2016, the Company issued 60,011 and 50,976 shares, respectively, to non-employee directors as compensation for their service on the board. Such stock awards are immediately vested. Stock awards are valued based on the closing price of our common stock on the date of grant, and compensation cost is recorded immediately if there is no vesting period or on a straight-line basis over the vesting period. The total fair value of stock awards granted, vested and expensed during the year ended December 31, 2017 and 2016 was $272,976 and $220,530, respectively. As of December 31, 2017, there was no unrecognized compensation cost related to stock awards. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | On January 30, 2014, in connection with an $11.5 million financing transaction, the Company issued 80,000 warrants to purchase common stock at an exercise price of $7.81 per share with a term of 5 years. The fair value of the warrants was determined using the Black-Scholes option valuation model. The warrants expire on January 30, 2020 and have a remaining contractual life of 2.1 years as of December 31, 2017. These warrants became exercisable on January 30, 2015. The following table summarizes information about the Company’s warrants at December 31, 2017: Weighted Weighted Number of Average Average Remaining Intrinsic Units Exercise Price Contractual Term Value Outstanding at December 31, 2016 170,973 $ 6.26 4.6 $ 33,660 Granted — — Cancelled (90,973 ) 4.90 Outstanding at December 31, 2017 80,000 $ 7.81 2.1 $ — Exercisable at December 31, 2017 80,000 $ 7.81 2.1 $ — No warrants were issued in 2017 or 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Litigation The Company may from time to time be involved in legal proceedings arising from the normal course of business. The Company is not a party to any litigation of a material nature. Operating Leases and Service Contracts The Company typically rents office facilities with leases involving multi-year commitments. The Company incurred rent expense associated with its leased facilities of $430,930 and $500,183 during the years ended December 31, 2017 and December 31, 2016, respectively. Although some of our service contracts are on a month-to-month basis, we sometimes enter into non-cancelable service contracts for longer periods of time, some of which may last several years. Future minimum lease payments and payments due under non-cancelable service contracts are as follows as of December 31, 2017: 2018 $ 483,204 2019 373,015 2020 382,884 2021 292,843 2022 — Thereafter — $ 1,531,946 Employment Agreements The Company has employment agreements with several members of its leadership team and executive officers. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Our Consolidated Financial Statements include the accounts of SharpSpring, Inc. and our subsidiaries (“the Company”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Operating Segments | The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. The Company does not present geographical information about revenues because it is impractical to do so. |
Foreign Currencies | The Company’s subsidiaries utilize the U.S. Dollar, Swiss Franc, South African Rand and British Pound as their functional currencies. The assets and liabilities of these subsidiaries are translated at ending exchange rates for the respective periods, while revenues and expenses are translated at the average rates in effect for the period. The related translation gains and losses are included in other comprehensive income or loss within the Consolidated Statements of Comprehensive Loss. |
Cash and Cash Equivalents | Cash equivalents are short-term, liquid investments with remaining maturities of three months or less when acquired. Cash and cash equivalents are deposited or managed by major financial institutions and at most times are in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits. |
Fair Value of Financial Instruments | U.S. GAAP establishes a fair value hierarchy which has three levels based on the reliability of the inputs to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, deposits and accounts payable. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the short-term nature of these items. |
Accounts Receivable | Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. Management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. The Company reserves for receivables that are determined to be uncollectible, if any, in its allowance for doubtful accounts. The Company had an allowance for doubtful accounts of $526,127 and $508,288 as of December 31, 2017 and 2016, respectively. After the Company has exhausted all collection efforts, the outstanding receivable is written off against the allowance. |
Intangibles | Finite-lived intangible assets include trade names, developed technologies and customer relationships and are amortized based on the estimated economic benefit over their estimated useful lives, with original periods ranging from 5 to 11 years. We continually evaluate the reasonableness of the useful lives of these assets. Finite-lived intangibles are tested for recoverability whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Impairment losses are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. Judgment is used when applying these impairment rules to determine the timing of the impairment test, the undiscounted cash flows used to assess impairments and the fair value of an asset group. The dynamic economic environment in which the Company operates and the resulting assumptions used to estimate future cash flows impact the outcome of these impairment tests. |
Goodwill and Impairment | As of December 31, 2017 and 2016, we had recorded goodwill of $8,872,898 and $8,845,394, respectively. Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in the SharpSpring and GraphicMail acquisitions (See Note 3). Under FASB ASC 350, “Intangibles - Goodwill and Other” |
Income Taxes | Provision for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB ASC 740, Accounting for Income The Company applies the authoritative guidance in accounting for uncertainty in income taxes recognized in the consolidated financial statements. This guidance prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. There are no material uncertain tax positions taken by the Company on its tax returns. Tax years subsequent to 2013 remain open to examination by U.S. federal and state tax jurisdictions. In determining the provision for income taxes, the Company uses statutory tax rates and tax planning opportunities available to the Company in the jurisdictions in which it operates. This includes recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns to the extent pervasive evidence exists that they will be realized in future periods. The deferred tax balances are adjusted to reflect tax rates by tax jurisdiction, based on currently enacted tax laws, which are expected to be in effect in the years in which the temporary differences are expected to reverse. In accordance with the Company’s income tax policy, significant or unusual items are separately recognized in the period in which they occur. The Company is subject to routine examination by domestic and foreign tax authorities and frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature and amount of deductions and the allocation of income among various tax jurisdictions. As of December 31, 2017, the Company is not being examined by domestic or foreign tax authorities. |
Property and Equipment | Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the assets. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Depreciation expense from continuing operations related to property and equipment was $280,106 and $159,152 for the years ended December 31, 2017 and 2016, respectively. Property and equipment as of December 31 is as follows: December 31, December 31, 2017 2016 Property and equipment, net: Leasehold improvements $ 128,122 $ 128,122 Furniture and fixtures 355,033 316,819 Computer equipment and software 776,201 641,722 Total 1,259,356 1,086,663 Less: Accumulated depreciation and amortization (460,211 ) (181,318 ) $ 799,145 $ 905,345 Useful lives are as follows: Leasehold improvements 3-5 years Furniture and fixtures 3-5 years Computing equipment 3 years Software 3-5 years |
Revenue Recognition | The Company recognizes revenue from its services when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. This is normally demonstrated when: (i) persuasive evidence of an arrangement exists; (ii) the fee is fixed or determinable; (iii) performance of service has been delivered; and (iv) collection is reasonably assured. For the Company’s internet-based SharpSpring marketing automation solution, the services are typically offered on a month-to-month basis with a fixed fee charged each month depending on the size of the engagement with the customer. Monthly fees are recorded as revenue during the month they are earned. Some customers are charged annually, for which revenues are deferred and recorded ratably over the subscription period. The Company also charges transactional-based fees if monthly volume limitations are reached or other chargeable activity occurs. Additionally, customers are typically charged an upfront implementation and training fee. The upfront implementation and training fees represent short-term “use it or lose it” services offered for a flat fee. Such flat fees are recognized over the service period, which is 60 days. For the Company’s SMTP email delivery product (prior to its sale in June 2016), the Company’s GraphicMail email product (which was discontinued in 2016) and the SharpSpring Mail+ product, services are provided over various contractual periods for a fixed fee that varies based on a maximum volume of transactions. Revenue is recognized on a straight-line basis over the contractual period. If the customer’s transactions exceed contractual volume limitations, overages are charged and recorded as revenue in the periods in which the transaction overages occur. Prior to June 2016, certain of the Company’s GraphicMail customers were sold through third party resellers. In some cases, we allowed the third party resellers to collect the funds directly from the customer, withhold their own reseller fee, and remit the net amount owed back to the Company. In those situations, because the Company was the primary obligor in the arrangement, the Company recorded the gross revenue and expenses such that 100% of the end customer revenue was reported by the Company and a corresponding expense was recorded for the reseller fee. The Company discontinued selling through third party resellers for the GraphicMail and SharpSpring Mail+ products during 2016. From time to time, the Company offers refunds to customers and experiences credit card chargebacks relating to cardholder disputes that are commonly experienced by businesses that accept credit cards. The Company makes estimates for refunds and credit card chargebacks based on historical experience. |
Deferred Revenue | Some of the Company’s customers pay for services in advance on a periodic basis (such as monthly, quarterly, annually or bi-annually). Also, the Company charges an upfront implementation and training fee for its SharpSpring marketing automation solution that is paid in advance, for which services are performed over a 60-day period. Deferred revenue consists of payments received in advance of the Company’s providing the services. Deferred revenues are amortized on a straight-line basis in connection with the contractual period or recorded as revenue when the services are used. |
Accrued Revenue | In cases where our customers pay for services in arrears, we accrue for revenue in advance of billings as long as the criteria for revenue recognition is met. A portion of our accounts receivable balance is therefore unbilled at each balance sheet date. As of December 31, 2017, and 2016, the Company had accrued revenue balances of $639,959 and $1,261,923 respectively. |
Concentration of Credit Risks and Significant Customers | Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents. At December 31, 2017 and 2016, the Company had cash balances at financial institutions that exceed federally insured limits. The Company maintains its cash balances with accredited financial institutions. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. For the years ended December 31, 2017, and 2016, there were no customers that accounted for more than 10% of total revenue or 10% of total accounts receivable. |
Cost of Services | Cost of services consists primarily of direct labor costs associated with support and customer onboarding and technology hosting costs and license costs associated with the cloud-based platform. |
Credit Card Processing Fees | Credit card processing fees are included as a component of general and administrative expenses and are expensed as incurred. |
Advertising Costs | The Company expenses advertising costs as incurred. Advertising and marketing expenses from continuing operations was $3.2 million and $1.6 million for the years ended December 31, 2017 and 2016, respectively. |
Research and Development Costs and Capitalized Software Costs | We capitalize certain costs associated with internal use software during the application development stage, mostly related to software that we use in providing our hosted solutions. We expense costs associated with preliminary project phase activities, training, maintenance and any post-implementation period costs as incurred. For the years ended December 31, 2017 and December 31, 2016, we capitalized $68,217 and $5,239, respectively, in software development costs. We amortize capitalized software costs over the estimated useful life of the software, which is typically estimated to be 3 years, once the related project has been completed and deployed for customer use. At December 31, 2017 and December 31, 2016, the net carrying value of capitalized software was $90,437 and $78,005, respectively. All other software development costs are charged to expenses when incurred, and generally consist of salaries, software development tools and personnel-related costs for those engaged in research and development activities. |
Stock Compensation | We account for stock based compensation in accordance with FASB ASC 718 “Compensation - Stock Compensation”, which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. |
Net Income (Loss) Per Share | Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. |
Comprehensive Income or Loss | Comprehensive income or loss includes all changes in equity during a period from non-owner sources, such as net income or loss and foreign currency translation adjustments. |
Recently Issued Accounting Standards | Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations. In February 2016, the FASB issued guidance that requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective in 2019 with early adoption permitted. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard now is effective for annual reporting periods beginning January 1, 2018. The FASB will permit companies to adopt the new standard early, but not before the original effective date of January 1, 2017. The Company has evaluated the impact of this standard and does not expect any material changes in revenue or cost recognized as a result of this pronouncement due to the month-to-month nature of its revenue arrangements. In January 2017, the FASB issued guidance simplifying the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standard is effective beginning in January 2020, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment | December 31, December 31, 2017 2016 Property and equipment, net: Leasehold improvements $ 128,122 $ 128,122 Furniture and fixtures 355,033 316,819 Computer equipment and software 776,201 641,722 Total 1,259,356 1,086,663 Less: Accumulated depreciation and amortization (460,211 ) (181,318 ) $ 799,145 $ 905,345 |
Schedule of Property and Equipment Useful Lives | Leasehold improvements 3-5 years Furniture and fixtures 3-5 years Computing equipment 3 years Software 3-5 years |
Dispositions (Tables)
Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Disposal Groups Including Discontinued Operations | Year Ended December 31, 2017 2016 Revenue $ — $ 2,746,378 Cost of services — 642,013 Gross profit — 2,104,365 Operating expenses: Sales and marketing — 177,265 Research and development — 152,898 General and administrative — 474,048 Total operating expenses — 804,211 Operating income — 1,300,154 Other income (expense), net, before gain on sale — — Income before income taxes, before gain on sale — 1,300,154 Income tax expense — 447,675 Net income, before gain on sale $ — $ 852,479 Gain on sale of discontinued operations — 9,814,506 Income from discontinued operations, net of income taxes $ — $ 10,666,985 |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | As of December 31, 2017 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 346,644 $ (309,640 ) $ 37,004 Technology 3,834,023 (2,404,023 ) 1,430,000 Customer relationships 4,165,665 (3,306,669 ) 858,996 Unamortized intangible assets: 8,346,332 (6,020,332 ) 2,326,000 Goodwill 8,872,898 Total intangible assets $ 11,198,898 As of December 31, 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 326,992 $ (256,988 ) $ 70,004 Technology 3,686,270 (2,001,270 ) 1,685,000 Customer relationships 4,024,005 (2,928,374 ) 1,095,631 Unamortized intangible assets: 8,037,267 (5,186,632 ) 2,850,635 Goodwill 8,845,394 Total intangible assets $ 11,696,029 |
Schedule of Estimated Amortization Expense | 2018 $ 459,996 2019 381,000 2020 332,004 2021 279,996 2022 228,000 Thereafter 645,004 Total $ 2,326,000 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Pre-tax Restructuring Expenses | Cost of services $ 83,544 Sales and marketing 102,904 Research and development 30,693 General and administrative 77,108 $ 294,249 |
Changes in Accumulated Other 29
Changes in Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Foreign Currency Translation Adjustment Balance as of December 31, 2016 $ (445,055 ) Other comprehensive income (loss) prior to reclassifications — Amounts reclassified from accumulated other comprehensive income — Tax effect — Net current period other comprehensive loss (35,707 ) Balance as of December 31, 2017 $ (480,762 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net (loss) income per share | |
Schedule of Computation of Net Income Per Share | Year Ended December 31, 2017 2016 Net loss from continuing operations $ (4,975,238 ) $ (5,715,975 ) Basic weighted average common shares outstanding 8,395,319 7,895,197 Add incremental shares for: Warrants — — Stock options — — Diluted weighted average common shares outstanding 8,395,319 7,895,197 Net loss per share: Basic $ (0.59 ) $ (0.72 ) Diluted $ (0.59 ) $ (0.72 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | Year Ended December 31, 2017 2016 Current provision $ (2,107,804 ) $ 3,451,571 Payable true-up (1,922 ) 101,783 Deferred provision 5,618 179,159 Net income tax provision (2,104,108 ) 3,732,513 Less: net income tax provision from discontinued operations — (5,601,701 ) Net income tax benefit from continuing operations $ (2,104,108 ) $ (1,869,188 ) |
Schedule of Income Tax Domestic and Foregn | Year Ended December 31, 2017 2016 From continuing operations: Federal $ (1,944,618 ) $ (2,366,022 ) State 50,934 32,928 Foreign (210,424 ) 463,906 Net income tax provision $ (2,104,108 ) $ (1,869,188 ) From discontinued operations: Federal $ — $ 5,531,353 State — 70,348 Foreign — — Net income tax provision $ — $ 5,601,701 |
Schedule of Income Tax Rate Reconciliation | 2017 2016 Amount Percent Amount Percent Federal statutory rates $ (2,369,986 ) 34 % $ (2,578,955 ) 34 % State income taxes, net of federal benefit (563,944 ) 8 % 32,928 0 % Permanent differences 148,246 -2 % 621,683 -8 % Rate Change 672,562 -10 % — 0 % Other 141,284 -2 % 375,738 -5 % Credits (141,256 ) 2 % (164,297 ) 2 % Foreign 381,364 -5 % 29,040 0 % Valuation Allowance (372,378 ) 5 % (185,325 ) 2 % Effective rate from continuing operations $ (2,104,108 ) 30 % $ (1,869,188 ) 25 % |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2017 2016 Deferred tax assets (liabilities) Accrual to cash $ 118,366 $ 184,958 Stock-based compensation 193,620 595,576 Asset Dispositions — (309,479 ) Depreciation (103,863 ) (152,542 ) Intangibles 701,956 1,140,222 Net operating loss carryforwards 1,110,387 939,725 Other — 16 Net deferred tax asset valuation allowance (2,188,598 ) (2,560,975 ) Total net deferred tax liabilities $ (168,132 ) $ (162,499 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value Assumptions Used in Valuing Stock Options | Year Ended December 31, 2017 2016 Volatility 48% - 49% 38% - 50% Risk-free interest rate 1.85% - 2.26% 1.12% - 1.93% Expected term 6.25 years 6.25 years |
Schedule of Stock Option Activity | Weighted Weighted Aggregate Number of Average Average Remaining Intrinsic Options Exercise Price Contractual Life Value Outstanding at December 31, 2016 1,128,368 $ 5.12 7.0 $ 514,439 Granted 357,500 4.78 Exercised (15,387 ) 1.44 Forfeited (401,151 ) 4.99 Outstanding at December 31, 2017 1,069,330 $ 5.11 7.8 $ 90,007 Exercisable at December 31, 2017 475,640 $ 5.46 7.0 $ 36,693 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Warrants Activity | Weighted Weighted Number of Average Average Remaining Intrinsic Units Exercise Price Contractual Term Value Outstanding at December 31, 2016 170,973 $ 6.26 4.6 $ 33,660 Granted — — Cancelled (90,973 ) 4.90 Outstanding at December 31, 2017 80,000 $ 7.81 2.1 $ — Exercisable at December 31, 2017 80,000 $ 7.81 2.1 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments and Payments Due Under Non-cancelable Service Contracts | 2018 $ 483,204 2019 373,015 2020 382,884 2021 292,843 2022 — Thereafter — $ 1,531,946 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment, gross | $ 1,259,356 | $ 1,086,663 |
Less: Accumulated depreciation and amortization | (460,211) | (181,318) |
Property and equipment, net | 799,145 | 905,345 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 128,122 | 128,122 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 355,033 | 316,816 |
Computer Equipment And Software [Member] | ||
Property and equipment, gross | $ 776,201 | $ 641,722 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Leasehold Improvements [Member] | Minimum [Member] | |
Useful lives | 3 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Useful lives | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Useful lives | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Useful lives | 5 years |
Computer Equipment [Member] | |
Useful lives | 3 years |
SoftwareMember | Minimum [Member] | |
Useful lives | 3 years |
SoftwareMember | Maximum [Member] | |
Useful lives | 5 years |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2017USD ($)Integer | Dec. 31, 2016USD ($) | |
Number of operating segment | Integer | 1 | |
Allowance for doubtful accounts receivable | $ 526,127 | $ 508,288 |
Goodwill | 8,872,898 | 8,845,394 |
Depreciation expense | 280,106 | 159,152 |
Accrued revenue | 639,959 | 1,261,923 |
Advertising and marketing expenses | 3,200,000 | 1,600,000 |
Software development costs capitalized | $ 68,217 | 5,239 |
Estimated useful lives for software | 3 years | |
Net carrying value of capitalized software | $ 90,437 | $ 78,005 |
Minimum [Member] | ||
Finite-lived intangible assets useful lives | 5 years | |
Maximum [Member] | ||
Finite-lived intangible assets useful lives | 11 years |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Sharp Spring LLC [Member] | |||
Acquisition date | Aug. 15, 2014 | ||
Business acquisition including potential earn out consideration | $ 10,000,000 | ||
Earn out liability | $ 6,963,000 | ||
Business combination additional charges | $ 222,000 | ||
Internal rate of return, percentage | 18.90% | ||
Sharp Spring LLC [Member] | Cash [Member] | |||
Business acquisition cash payments | $ 5,000,000 | ||
Percentage of acquire of equity interest owned | 60.00% | ||
Sharp Spring LLC [Member] | Stock [Member] | |||
Percentage of acquire of equity interest owned | 40.00% | ||
GraphicMail [Member] | |||
Acquisition date | Oct. 17, 2014 | ||
Business acquisition including potential earn out consideration | $ 5,300,000 | ||
Earn out liability | $ 36,000 | $ 800,000 | |
Business combination additional charges | 2,527 | ||
Gain in other income (expense) | 259,970 | ||
Internal rate of return, percentage | 29.80% | ||
Earnout consideration paid in cash | $ 175,970 | ||
Shares issued in lieu of cash to settle additional earn out, shares | 20,000 | ||
Shares issued in lieu of cash to settle additional earn out | $ 84,000 | ||
GraphicMail [Member] | Cash [Member] | |||
Business acquisition cash payments | $ 2,600,000 | ||
Earnout consideration paid in cash | $ 207,929 | ||
GraphicMail [Member] | Stock [Member] | |||
Business acquisition cash payments | $ 2,700,000 | ||
Shares issued in lieu of cash to settle additional earn out, shares | 53,924 |
Dispositions (Details)
Dispositions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Dispositions - Schedule Of Disposal Groups Including Discontinued Operations Details | ||
Revenue | $ 0 | $ 2,746,378 |
Cost of services | 0 | 642,013 |
Gross profit | 0 | 2,104,365 |
Sales and marketing | 0 | 177,265 |
Research and development | 0 | 152,898 |
General and administrative | 0 | 474,048 |
Total operating expenses | 0 | 804,211 |
Operating income | 0 | 1,300,154 |
Other income (expense), net, before gain on sale | 0 | 0 |
Income before income taxes, before gain on sale | 0 | 1,300,154 |
Income tax expense | 0 | 447,675 |
Net income, before gain on sale | 0 | 852,479 |
Gain on sale of discontinued operations, net of tax expense of $5,154,026 | 0 | 9,814,506 |
Income from discontinued operations, net of income taxes | $ 0 | $ 10,666,985 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Gross Carrying Amount | $ 8,346,332 | $ 8,037,267 |
Accumulated amortization | (6,020,332) | (5,186,632) |
Net Carrying Value | 2,326,000 | 2,850,635 |
Goodwill | 8,872,898 | 8,845,394 |
Total intangible assets | 11,198,898 | 11,696,029 |
Trade Names [Member] | ||
Gross Carrying Amount | 346,644 | 326,992 |
Accumulated amortization | (309,640) | (256,988) |
Net Carrying Value | 37,004 | 70,004 |
Technology [Member] | ||
Gross Carrying Amount | 3,834,023 | 3,686,270 |
Accumulated amortization | (2,404,023) | (2,001,270) |
Net Carrying Value | 1,430,000 | 1,685,000 |
Customer Relationships [Member] | ||
Gross Carrying Amount | 4,165,665 | 4,024,005 |
Accumulated amortization | (3,306,669) | (2,928,374) |
Net Carrying Value | $ 858,996 | $ 1,095,631 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 459,996 | |
2,019 | 381,000 | |
2,020 | 332,004 | |
2,021 | 279,996 | |
2,022 | 228,000 | |
Thereafter | 645,004 | |
Total | $ 2,326,000 | $ 2,850,635 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in foreign exchange rate increase/reduction to goodwill | $ 27,504 | $ (36,539) |
Amortization expense | 527,468 | 1,360,105 |
GraphicMail [Member] | Trade Names [Member] | ||
Impairment loss | $ 0 | $ 1,459,541 |
Restructuring Costs (Details)
Restructuring Costs (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restructuring expenses | $ 294,249 |
Cost Of Services [Member] | |
Restructuring expenses | 83,544 |
Sales And Marketing [Member] | |
Restructuring expenses | 102,904 |
Research and Development [Member] | |
Restructuring expenses | 30,693 |
General and Administrative [Member] | |
Restructuring expenses | $ 77,108 |
Restructuring Costs (Details Na
Restructuring Costs (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring expenses | $ 294,249 | |
Facility closure costs | $ 10,705 |
Credit Facility (Details Narrat
Credit Facility (Details Narrative) - Revolving Loan Agreement [Member] | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Line of credit | $ 2,500,000 |
Line of credit facility, expiration date | Mar. 21, 2018 |
Loan interest rate | 4.50% |
Percentage of secured pledge of capital stock | 100.00% |
Percentage of pledge of foreign subsidiaries stock | 65.00% |
Line of credit borrowing capacity | $ 2,000,000 |
Changes in Accumulated Other 46
Changes in Accumulated Other Comprehensive Income (Loss) (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Equity [Abstract] | |
Balance beginning | $ (445,055) |
Other comprehensive income (loss) prior to reclassifications | 0 |
Amounts reclassified from accumulated other comprehensive income | 0 |
Tax effect | 0 |
Net current period other comprehensive loss | (35,707) |
Balance end | $ (480,762) |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net (loss) income per share | ||
Net loss from continuing operations | $ (4,975,238) | $ (5,715,975) |
Basic weighted average common shares outstanding | 8,395,319 | 7,895,197 |
Add incremental shares for Warrants | 0 | 0 |
Add incremental shares for Stock options | 0 | 0 |
Diluted weighted average common shares outstanding | 8,395,319 | 7,895,197 |
Net loss per share Basic | $ (0.59) | $ (0.72) |
Net loss per share Diluted | $ (0.59) | $ (0.72) |
Net Loss Per Share (Details Nar
Net Loss Per Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
WarrantsMember | ||
Diluted net loss per share | 80,000 | 170,973 |
Stock Option [Member] | ||
Diluted net loss per share | 1,128,368 | |
Stock Option [Member] | ||
Diluted net loss per share | 1,069,330 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Current provision | $ (2,107,804) | $ 3,451,571 |
Payable true-up | (1,922) | 101,783 |
Deferred provision | 5,618 | 179,159 |
Net income tax provision | (2,104,108) | 3,732,513 |
Less: net income tax provision from discontinued operations | 0 | (5,601,701) |
Net income tax provision from continuing operations | $ (2,104,108) | $ (1,869,188) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
From continuing operations: Federal | $ (1,944,618) | $ (2,366,022) |
From continuing operations: State | 50,934 | 32,928 |
From continuing operations: Foreign | (210,424) | 463,906 |
From continuing operations: Net income tax provision | (2,104,108) | (1,869,188) |
From discontinued operations: Federal | 0 | 5,531,353 |
From discontinued operations: State | 0 | 70,348 |
From discontinued operations: Foreign | 0 | 0 |
From discontinued operations: Net income tax provision | $ 0 | $ 5,601,701 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rates | $ (2,369,986) | $ (2,578,955) |
State income taxes, net of federal benefit | (563,944) | 32,928 |
Permanent differences | 148,246 | 621,683 |
Rate change | 672,562 | 0 |
Other | 141,284 | 375,738 |
Credits | (141,256) | (164,297) |
Foreign | 381,364 | 29,040 |
Valuation Allowance | (372,378) | (185,325) |
Effective rate from continuing operations | $ (2,104,108) | $ (1,869,188) |
Federal statutory rates on continuing operations | 34.00% | 34.00% |
State income taxes, net of federal benefit | 8.00% | 0.00% |
Permanent differences | (2.00%) | (8.00%) |
Rate change | (10.00%) | 0.00% |
Other | (2.00%) | (5.00%) |
Credits | 2.00% | 2.00% |
Foreign | (5.00%) | 0.00% |
Valuation Allowance | 5.00% | 2.00% |
Effective rate from continuing operations | 30.00% | 25.00% |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Accrual to cash | $ 118,366 | $ 184,958 |
Asset dispositions | 193,620 | 595,576 |
Stock-based compensation | 0 | (309,479) |
Depreciation | (103,863) | (152,542) |
Intangibles | 701,956 | 1,140,222 |
Net operating loss carryforwards | 1,110,387 | 939,725 |
Other | 0 | 16 |
Net deferred tax asset valuation allowance | (2,188,598) | (2,560,975) |
Total net deferred tax liabilities | $ (168,132) | $ (162,499) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Net operating loss carryforwards | $ 5,200,000 | |
Deferred tax valuation allowance | 2,200,000 | $ 2,600,000 |
Foreign | ||
Net operating loss carryforwards | 2,530,855 | 3,813,146 |
State | ||
Net operating loss carryforwards | $ 9,242,148 | $ 5,427,424 |
Defined Contribution Retireme54
Defined Contribution Retirement Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Retirement Plan | ||
Defined contribution plan, maximum annual contributions employee, percent | 60.00% | |
Defined contribution plan, employer matching contribution, percent of match | 100.00% | |
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 3.00% | |
Defined contribution retirement plan, expenses | $ 198,783 | $ 108,228 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Volatility, minimum | 48.00% | 38.00% |
Volatility, maximum | 49.00% | 50.00% |
Risk-free interest rate, minimum | 1.85% | 1.12% |
Risk-free interest rate, maximum | 2.26% | 1.93% |
Expected term | 6 years 3 months | 6 years 3 months |
Stock-Based Compensation (Det56
Stock-Based Compensation (Details 1) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of shares outstanding, beginning | shares | 1,128,368 |
Number of shares granted | shares | 357,500 |
Number of shares exercised | shares | (15,387) |
Number of shares forfeited | shares | (401,151) |
Number of shares outstanding, ending | shares | 1,069,330 |
Number of shares exercisable | shares | 475,640 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 5.12 |
Weighted average exercise price granted | $ / shares | 4.78 |
Weighted average exercise price exercised | $ / shares | 1.44 |
Weighted average exercise price forfeited | $ / shares | 4.99 |
Weighted average exercise price outstanding, ending | $ / shares | 5.11 |
Weighted average exercise price exercisable | $ / shares | $ 5.46 |
Weighted average remaining contractual life outstanding, beginning | 7 years |
Weighted average remaining contractual life outstanding, ending | 7 years 9 months 18 days |
Weighted average remaining contractual life exercisable | 7 years |
Aggregate intrinsic value, beginning | $ | $ 514,439 |
Aggregate intrinsic value, ending | $ | 90,007 |
Aggregate intrinsic value, exercisable | $ | $ 36,693 |
Stock-Based Compensation (Det57
Stock-Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average grant date fair value of stock options granted | $ 2.36 | |
Stock option expense | $ 783,942 | $ 705,649 |
Aggregate intrinsic value | 90,007 | $ 514,439 |
Stock Awards [Member] | ||
Unrecognized compensation cost | $ 0 | |
Number of shares issued to non-employee directors | 60,011 | 50,976 |
Fair value of stock awards granted, vested and expensed | $ 272,976 | $ 220,530 |
Stock Option [Member] | ||
Stock option expense | 510,978 | $ 510,002 |
Unrecognized compensation cost | $ 1,216,391 | |
Weighted average remaining vesting period | 2 years 6 months 14 days | |
Aggregate intrinsic value | $ 34,373 |
Warrants (Details)
Warrants (Details) - Warrants [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Units Outstanding ,Beginning of period | shares | 170,973 |
Number of Units ,Granted | shares | 0 |
Number of Units ,Cancelled | shares | (90,973) |
Number of Units Outstanding ,End of period | shares | 80,000 |
Number of Units ,Exercisable | shares | 80,000 |
Weighted Average Exercise Price Outstanding, Beginning of period | $ / shares | $ 6.26 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Cancelled | $ / shares | 4.90 |
Weighted Average Exercise Price Outstanding, End of period | $ / shares | 7.81 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 7.81 |
Weighted Average Remaining Contractual Term Outstanding, Beginning | 4 years 7 months 6 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | 2 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Exercisable | 2 years 1 month 6 days |
Intrinsic Value, Outstanding, Beginning | $ | $ 33,660 |
Intrinsic Value, Outstanding, Ending | $ | 0 |
Intrinsic Value, Exercisable | $ | $ 0 |
Warrants (Details Narrative)
Warrants (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Connection with financing transaction value | $ | $ 11,500,000 |
Number of warrants issued to purchase of common stock | shares | 80,000 |
Exercise price of warrants | $ / shares | $ 7.81 |
Warrant term | 5 years |
Warrant expiration date | Jan. 30, 2020 |
Remaining contractual life of warrants | 2 years 1 month 6 days |
Commitments and Contingencies60
Commitments and Contingencies (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 483,204 |
2,019 | 373,015 |
2,020 | 382,884 |
2,021 | 292,843 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 1,531,946 |
Commitments and Contingencies61
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Details Narrative | ||
Rent expense | $ 430,930 | $ 500,183 |