Document And Entity Information
Document And Entity Information | 6 Months Ended |
Jun. 30, 2015 | |
Document Information [Line Items] | |
Document Type | S1 |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2015 |
Entity Registrant Name | SOCIAL REALITY, Inc. |
Entity Central Index Key | 1,538,217 |
Entity Filer Category | Smaller Reporting Company |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | |||
Cash and cash equivalents | $ 1,515,726 | $ 1,843,393 | $ 1,715,264 |
Accounts receivable, net | 9,124,275 | 3,874,620 | 441,831 |
Prepaid expenses | 142,259 | 222,532 | 46,109 |
Other current assets | 2,450 | 7,352 | 5,018 |
Total current assets | 10,784,710 | 5,947,897 | 2,208,222 |
Property and equipment, net | 18,155 | 27,602 | $ 27,798 |
Goodwill and other intangibles | 18,318,911 | 18,318,911 | |
Deferred debt issue costs | 2,279,366 | 2,907,736 | |
Prepaid stock based compensation | 690,793 | 1,008,019 | $ 1,662,074 |
Other assets | 9,194 | 4,804 | 9,453 |
Total assets | 32,101,129 | 28,214,969 | 3,907,547 |
Current liabilities: | |||
Accounts payable and accrued expenses | 7,810,331 | 2,882,120 | $ 812,809 |
Note payable - related party | 2,500,000 | 2,500,000 | |
Notes payable, current portion | 1,541,000 | 1,350,000 | |
Unearned revenue | 22,640 | 25,295 | |
Contingent consideration payable to related party - current portion | 3,827,339 | $ 3,586,722 | |
Put liability | 1,344,538 | ||
Total current liabilities | 17,045,848 | $ 10,344,137 | $ 812,809 |
Notes payable | 7,131,728 | 7,713,014 | |
Contingent consideration payable to related party - long term | $ 3,356,412 | 3,145,401 | |
Put liability | 1,260,010 | ||
Total liabilities | $ 27,533,988 | 22,462,562 | $ 812,809 |
Stockholders' equity: | |||
Additional paid in capital | 13,596,629 | 13,143,153 | 6,081,014 |
Accumulated deficit | (9,056,732) | (7,417,862) | (3,006,299) |
Total stockholders' equity | 4,567,141 | 5,752,407 | 3,094,738 |
Total liabilities and stockholders' equity | $ 32,101,129 | $ 28,214,969 | $ 3,907,547 |
Undesignated, 49,800,000 shares, no shares issued and outstanding [Member] | |||
Stockholders' equity: | |||
Preferred stock, authorized 50,000,000 shares, $0.001 par value | |||
Series 1 Preferred stock, authorized 200,000 shares, 86,000 and 121,000 shares issued and outstanding, respectively [Member] | |||
Stockholders' equity: | |||
Preferred stock, authorized 50,000,000 shares, $0.001 par value | $ 86 | $ 86 | $ 121 |
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 29,416,612 shares issued and 27,029,749 shares outstanding, respectively [Member] | |||
Stockholders' equity: | |||
Common stock | $ 27,158 | $ 27,030 | $ 19,902 |
Class B common stock, authorized 9,000,000 shares, $0.001 par value, no shares issued and outstanding [Member] | |||
Stockholders' equity: | |||
Common stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts | $ 103,533 | $ 52,338 | |
Property and equipment, accumulated depreciation | $ 34,460 | $ 25,013 | $ 10,184 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 259,000,000 | 259,000,000 | 259,000,000 |
Undesignated Preferred Stock [Member] | |||
Preferred Stock, shares authorized | 49,800,000 | 49,800,000 | 49,800,000 |
Preferred Stock, par value per share | $ 0.001 | ||
Preferred Stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Series 1 Preferred Stock [Member] | |||
Preferred Stock, shares authorized | 200,000 | 200,000 | 200,000 |
Preferred Stock, par value per share | $ 0.001 | $ 0.001 | |
Preferred Stock, shares issued | 86,000 | 86,000 | 121,000 |
Preferred stock, shares outstanding | 86,000 | 86,000 | 121,000 |
Class A Common Stock [Member] | |||
Common Stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 29,544,943 | 29,416,612 | 19,901,794 |
Common Stock, shares outstanding | 27,158,080 | 27,029,749 | 19,901,794 |
Class B Common Stock [Member] | |||
Common Stock, shares authorized | 9,000,000 | 9,000,000 | 9,000,000 |
Common Stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 0 | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||||||
Revenues | $ 10,761,573 | $ 276,934 | $ 14,782,857 | $ 830,611 | $ 5,120,343 | $ 3,413,353 |
Cost of revenue | 5,158,443 | 204,305 | 7,400,918 | 576,920 | 2,791,948 | 2,326,344 |
Gross profit | 5,603,130 | 72,629 | 7,381,939 | 253,691 | 2,328,395 | 1,087,009 |
Operating expense | 4,252,752 | 953,202 | 7,162,752 | 1,822,607 | 6,066,611 | 2,521,984 |
Income (loss) from operations | 1,350,378 | (880,573) | 219,187 | (1,568,916) | (3,738,216) | (1,434,975) |
Interest (expense) income | (934,787) | 461 | (1,858,057) | 994 | (673,347) | (312,465) |
Income (loss) before provision for income taxes | $ 415,591 | $ (880,112) | $ (1,638,870) | $ (1,567,922) | $ (4,411,563) | $ (1,747,440) |
Provision for income taxes | ||||||
Net income (loss) | $ 415,591 | $ (880,112) | $ (1,638,870) | $ (1,567,922) | $ (4,411,563) | $ (1,747,440) |
Net income (loss) per share, basic | $ 0.02 | $ (0.04) | $ (0.06) | $ (0.08) | ||
Net income (loss) per share, diluted | $ 0.01 | $ (0.04) | $ (0.06) | $ (0.08) | ||
Weighted average shares outstanding, basic | 26,911,285 | 20,515,259 | 26,879,029 | 20,390,170 | ||
Weighted average shares outstanding, diluted | 29,520,556 | 20,515,259 | 26,879,029 | 20,390,170 | ||
Net loss per share, basic and diluted | $ (0.20) | $ (0.12) | ||||
Weighted average shares outstanding | 21,808,515 | 14,691,010 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2012 | $ (21,860) | $ 12,912 | $ 1,224,087 | $ (1,258,859) | |
Balance, shares at Dec. 31, 2012 | 12,912,129 | ||||
Sale of common stock units for cash | 2,388,382 | $ 5,460 | 2,382,922 | ||
Sale of common stock units for cash, shares | 5,460,000 | ||||
Preferred and common stock issued for services to be rendered | 1,735,000 | $ 121 | $ 590 | 1,734,289 | |
Preferred and common stock issued for services to be rendered, shares | 121,000 | 590,000 | |||
Common stock issued for services | $ 318,500 | $ 335 | 318,165 | ||
Common stock issued for services, shares | 335,000 | ||||
Common stock awards vesting | $ 52 | (52) | |||
Common stock awards vesting, shares | 51,665 | ||||
Common stock issued for financing | $ 174 | (174) | |||
Common stock issued for financing, shares | 174,010 | ||||
Common stock warrant issued for services to be rendered | $ 105,827 | 105,827 | |||
Common stock issued as payment of accounts payable | $ 3,000 | $ 3 | 2,997 | ||
Common stock issued as payment of accounts payable, shares | 3,000 | ||||
Repurchase of common stock issued for financing | $ (174) | 174 | |||
Repurchase of common stock issued for financing, shares | (174,010) | ||||
Stock based compensation | $ 313,329 | $ 550 | $ 312,779 | ||
Stock based compensation, shares | 550,000 | ||||
Net loss | (1,747,440) | $ (1,747,440) | |||
Balance at Dec. 31, 2013 | 3,094,738 | $ 121 | $ 19,902 | $ 6,081,014 | $ (3,006,299) |
Balance, shares at Dec. 31, 2013 | 121,000 | 19,901,794 | |||
Sale of common stock units for cash | 5,107,598 | $ 5,199 | 5,102,399 | ||
Sale of common stock units for cash, shares | 5,199,168 | ||||
Common stock warrants subscribed | 2,100 | 2,100 | |||
Stock based compensation, shares | 800,000 | ||||
Stock based compensation | $ 1,203,534 | $ 800 | 1,202,734 | ||
Vested stock awards issued | $ 134 | (134) | |||
Vested stock awards issued, shares | 133,332 | ||||
Unvested stock awards issued | $ 45 | (45) | |||
Unvested stock awards issued, shares | 45,455 | ||||
Common stock issued for acquisition | $ 756,000 | $ 600 | 755,400 | ||
Common stock issued for acquisition, shares | 600,000 | ||||
Common stock issued upon conversion of preferred stock | $ (35) | $ 350 | $ (315) | ||
Common stock issued upon conversion of preferred stock, shares | (35,000) | 350,000 | |||
Net loss | $ (4,411,563) | $ (4,411,563) | |||
Balance at Dec. 31, 2014 | 5,752,407 | $ 86 | $ 27,030 | $ 13,143,153 | $ (7,417,862) |
Balance, shares at Dec. 31, 2014 | 86,000 | 27,029,749 | |||
Net loss | (1,638,870) | ||||
Balance at Jun. 30, 2015 | $ 4,567,141 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,638,870) | $ (1,567,922) | $ (4,411,563) | $ (1,747,440) |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||||
Amortization of stock based prepaid fees | 317,226 | $ 336,834 | 654,055 | 237,587 |
Bad debts expenses | 51,195 | 26,488 | ||
Stock based compensation | 446,683 | $ 147,909 | 1,203,534 | 631,829 |
Amortization of debt issue costs | 628,370 | 256,616 | $ 274,737 | |
PIK interest expense accrued to principal | 176,966 | 63,014 | ||
Accretion of contingent consideration | 451,628 | 148,081 | ||
Accretion of put liability | 84,528 | 27,716 | ||
Depreciation | 9,447 | $ 6,522 | 14,829 | $ 7,184 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (5,300,850) | 167,424 | (1,196,572) | (388,010) |
Prepaid expenses | 80,273 | (8,645) | $ (170,902) | (46,109) |
Tax refunds receivable | 38,000 | |||
Other current assets | 4,902 | (2,000) | $ 17,514 | (18) |
Other assets | (4,390) | (804) | (804) | (445) |
Accounts payable and accrued expenses | 4,928,211 | $ (503,965) | 861,148 | $ 513,752 |
Unearned revenue | (2,655) | 25,295 | ||
Cash provided (used) by operating activities | $ 232,664 | $ (1,424,647) | (2,481,551) | $ (478,933) |
Cash flows from investing activities: | ||||
Cash paid for acquisition | (2,000,000) | |||
Cash acquired in acquisition | 32,038 | |||
Purchase of equipment | (6,856) | (6,856) | $ (19,982) | |
Cash used by investing activities | (6,856) | (1,974,818) | (19,982) | |
Cash flows from financing activities: | ||||
Sale of common stock | 1,273,161 | 3,950,747 | 2,436,493 | |
Cost of common stock sale | $ (16,291) | (16,291) | $ (48,111) | |
Proceeds from warrant offering | $ 6,921 | 2,100 | ||
Proceeds from note payable | $ 1,227,601 | $ 486,425 | ||
Repayments of note payable | (567,252) | (550,000) | ||
Repurchase of common stock | (175,000) | |||
Deferred offering costs | (5,453) | |||
Debt issue costs | $ (579,659) | (36,162) | ||
Cash (used) provided by financing activities | (560,331) | $ 1,256,870 | 4,584,498 | 2,108,192 |
Net increase (decrease) in cash | (327,667) | (174,633) | 128,129 | 1,609,277 |
Cash, beginning of period | 1,843,393 | 1,715,264 | 1,715,264 | 105,987 |
Cash, end of period | 1,515,726 | $ 1,540,631 | 1,843,393 | 1,715,264 |
Supplemental Schedule of Cash Flow Information: | ||||
Cash paid for interest | $ 462,887 | $ 157,792 | 38,007 | |
Cash paid for taxes | (38,000) | |||
Non-cash financial activities: | ||||
Fees and costs deducted from proceeds of debt | $ 1,352,399 | $ 63,575 | ||
Warrants put liability in conjunction with notes payable | $ 1,232,294 | |||
Common and preferred stock issued as prepayment for services | $ 1,735,000 | |||
Common stock warrant issued as prepayment for services | 105,827 | |||
Common stock issued as payment of financing fee | 175,000 | |||
Common stock issued as payment of accounts payable | 3,000 | |||
Common stock Class A issued upon conversion of common stock Class B | $ 9,000 | |||
Net assets and liabilities recognized with the acquisition of Steel Media | $ 17,562,911 | |||
Issuance of stock for the acquisition of Five Delta, Inc. | 756,000 | |||
Common stock issued for preferred stock conversion and vesting grants | 529 | |||
Account payable paid directly through escrow | 98,595 | |||
Steel Media partial purchase consideration paid directly through escrow | $ 7,500,000 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 12,328,767 At Social Reality, we sell digital advertising campaigns to advertising agencies and brands. We have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to a number of digital adverting buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: • sales of digital advertising campaigns to advertising agencies and brands; • sales of media inventory owned by our publishing partners through real-time bidding, or RTB, exchanges; • sale and licensing of our GroupAd platform and related media; and, • creation of custom platforms for buying media on SRAX for large brands. The five core elements of this business are: • Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation • GroupAd • SRAX MD • SRAX DI • Steel Media We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. We also create applications as custom programs and build them on a campaign-by-campaign basis, and offer them on a managed- or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. Social Reality is also an approved Facebook advertising partner, through Facebook's PMD (Preferred Marketing Developer) program. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We are headquartered in Los Angeles, California. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These interim financial statements as of and for the three and six months ended June 30, 2015 and 2014 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any future period. All references to June 30, 2015 and 2014 in these footnotes are unaudited. These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2014, included in the Company's annual report on Form 10-K filed with the SEC on March 31, 2015. The condensed balance sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control and through the date of disposition, if any. Use of Estimates Accounting principles generally accepted in the United States ("GAAP") require management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, goodwill and other intangible assets. The accounting policies for these areas are discussed elsewhere in these consolidated financial statements. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and media and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $ 1,016,000 At June 30, 2015, one SRAX AD Exchange customer, who collects advertising payments from multiple advertisers, and two additional customers each accounted for more than 10% of the accounts receivable balance, for a total of 80 63 75 Fair Value of Financial Instruments The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At June 30, 2015 and December 31, 2014 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value are recognized in earnings until settlement; and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. Goodwill The Company will test for impairment of goodwill annually as of September 30 at the reporting unit level or whenever events or circumstances indicate that goodwill might be impaired. The impairment test is a two-step process, whereby in the first step, the Company compares the estimated fair value of the reporting unit with the reporting unit's carrying amount, including goodwill. The Company determines the estimated fair value of each reporting unit using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment, if any. Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Earnings (loss) Per Share We use ASC 260, "Earnings Per Share" for calculating the basic and diluted earnings (loss) per share. We compute basic earnings (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and warrants and stock awards. For periods with a net loss, basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 13,735,471 5,972,535 2,609,271 Income Taxes We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Stock-Based Compensation We account for our stock based compensation under ASC 718 "Compensation – Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Business Segments The Company uses the "management approach" to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's reportable segments. Using the management approach, the Company determined that it has one Recently Issued Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 12,328,767 At Social Reality, we sell digital advertising campaigns to advertising agencies and brands, we have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to a number of digital adverting buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: • sales of digital advertising campaigns to advertising agencies and brands; • sales of media inventory owned by our publishing partners through real-time bidding, or RTB, exchanges; • sale and licensing of our GroupAd platform and related media; and, • creation of custom platforms for buying media on SRAX for large brands. The five core elements of this business are: • Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation. • GroupAd. • SRAX MD • SRAX DI • Steel Media We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. We also create applications as custom programs and build them on a campaign by campaign basis as well as offer them on a managed or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. Social Reality is also an approved and accredited Facebook advertising network company. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and large websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We are headquartered in Los Angeles, California. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control and through the date of disposition, if any. Use of Estimates Accounting principles generally accepted in the United States ("GAAP") require management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, goodwill and other intangible assets. The accounting policies for these areas are discussed elsewhere in these consolidated financial statements. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and media and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $ 1,343,000 At December 31, 2014, one SRAX AD Exchange customer, who collects advertising payments from multiple advertisers and one additional customer each accounted for more than 10% of the accounts receivable balance, for a total of 34 38 87 Fair Value of Financial Instruments The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At December 31, 2014 and 2013 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight line basis over the estimated useful lives of the assets of three Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value are recognized in earnings until settlement; and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. Goodwill The Company will test for impairment of goodwill annually as of September 30 at the reporting unit level or whenever events or circumstances indicate that goodwill might be impaired. The impairment test is a two-step process, whereby in the first step, the Company compares the estimated fair value of the reporting unit with the reporting unit's carrying amount, including goodwill. The Company determines the estimated fair value of each reporting unit using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment, if any. Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Loss Per Share We use ASC 260, "Earnings Per Share" for calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 13,096,470 5,296,001 Income Taxes We utilize ASC 740 "Income Taxes" which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Stock-Based Compensation We account for our stock based compensation under ASC 718 "Compensation – Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Business Segments The Company uses the "management approach" to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's reportable segments. Using the management approach, the Company determined that it has one Recently Issued Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
ACQUISITIONS [Abstract] | ||
ACQUISITIONS | NOTE 2 – RECENT ACQUISITIONS Acquisition of Steel Media On October 30, 2014, we acquired 100 The acquisition of Steel Media is intended to complement and augment the current operations of Social Reality. Together, the companies intend to offer and deliver improved performance and technology for digital advertising buy-side and sell-side solutions, delivered to agencies, brands and publishers by our combined digital sales team. We expect that the combined expertise of the two companies will enhance the quality of our technology and service. As consideration for the purchase of Steel Media, we agreed to pay the Seller up to $ 20 7.5 2 one 2.5 2,386,863 8 6,584,042 18,584,042 The final accounting for the acquisition of Steel Media has not been completed and will be completed during the third quarter of 2015. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values is as follows: Cash $ 32,038 Accounts receivable and other assets 2,975,728 Equipment 7,777 Goodwill and other intangibles 17,562,911 Total assets acquired 20,578,454 Accounts payable and other liabilities (1,994,412 ) Total $ 18,584,042 At this time we do not expect that goodwill will be tax deductible. Acquisition of Five Delta, Inc. On December 19, 2014 we acquired 100 600,000 756,000 Five Delta is a managed advertising service that uses proprietary technology and methods to optimize digital advertising for its customers. Five Delta primarily utilizes high-quality first-party data from major platforms like Facebook, Yahoo, LinkedIn and Google in optimization decisions. Five Delta's goal is to maximize marketing budget utility while simultaneously reporting clear and actionable information to its clients. The acquisition of Five Delta is intended to complement and augment the current operations of Social Reality and Steel Media through the integration of its proprietary technology and methods into our operations. The final accounting for the acquisition of Five Delta has not been completed and will be completed during the third quarter of 2015. The entire purchase price has been preliminarily allocated to intellectual property. | NOTE 2 – ACQUISITIONS. Acquisition of Steel Media On October 30, 2014, we acquired 100 The acquisition of Steel Media is intended to complement and augment the current operations of Social Reality. Together, the companies intend to offer and deliver improved performance and technology for digital advertising buy-side and sell-side solutions, delivered to agencies, brands and publishers by our combined digital sales team. We expect that the combined expertise of the two companies will enhance the quality of our technology and service. As consideration for the purchase of Steel Media, we agreed to pay Mr. Steel up to $ 20 7.5 2 one 2.5 2,386,863 8 6,584,042 18,584,042 The Earnout Consideration is payable upon the attainment of certain earnings before interest, taxes, depreciation and amortization ("EBITDA") targets of Steel Media during the two 60 100 The Note issued to Mr. Steel at the closing bears interest at the rate of 5 10 five 25 The obligations under the Note are subordinated to the Company's obligations under the Financing Agreement (as hereinafter defined) pursuant to the terms of the Subordination Agreement (as hereinafter described) and are secured by the Escrow Shares. Upon an event of default under the Note, if the Escrow Shares are released to Mr. Steel all amounts due under the Note will be deemed paid and the Note will be satisfied in full provided that (i) all of the Escrow Shares (or at least 90 1.0474 On October, 30, 2014, in connection with the acquisition of Steel Media, the Company entered into a registration rights agreement (the "Registration Rights Agreement") with Mr. Steel pursuant to which the Company agreed to register any Earnout Shares issued to him or Escrow Shares released to him. The Company granted Mr. Steel demand registration rights over the Escrow Shares and the Earnout Shares which he may exercise 90 The final accounting for the acquisition of Steel Media has not been completed and will be completed during the second quarter of 2015. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values is as follows: Cash $ 32,038 Accounts receivable and other assets 2,975,728 Equipment 7,777 Goodwill and other intangibles 17,562,911 Total assets acquired 20,578,454 Accounts payable and other liabilities (1,994,412 ) Total $ 18,584,042 At this time we do not expect that goodwill will be tax deductible. Pro forma Results of Operations. December 31, 2014 2013 Revenue $ 12,558,030 $ 11,349,864 Net loss (4,004,445 ) (1,417,778 ) Net loss per share (0.18 ) (0.10 ) The amounts of revenue and earnings of Steel Media since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2014 are approximately $ 1,896,000 490,000 Acquisition of Five Delta, Inc. On December 19, 2014 we acquired 100 Five Delta 600,000 Five Delta Agreement 756,000 Five Delta is a managed advertising service that uses proprietary technology and methods to optimize digital advertising for its customers. Five Delta primarily utilizes high quality first party data from major platforms like Facebook, Yahoo, LinkedIn and Google in optimization decisions. Five Delta's goal is to maximize marketing budget utility while simultaneously reporting clear and actionable information to its clients. The acquisition of Five Delta is intended to complement and augment the current operations of Social Reality and Steel Media through the integration of its proprietary technology and methods into our operations. Under the terms of the Five Delta Agreement, 300,000 Escrow Shares four The Five Delta stockholders also entered into 24 The final accounting for the acquisition of Five Delta has not been completed and will be completed during the second quarter of 2015. The entire purchase price has been preliminarily allocated to intellectual property. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
NOTES PAYABLE [Abstract] | ||
NOTES PAYABLE | NOTE 3 – NOTES PAYABLE 2014 Transactions: Financing Agreement with Victory Park Management, LLC as agent for the lenders On October 30, 2014 (the "Financing Agreement Closing Date"), the Company entered into a financing agreement (the "Financing Agreement") with Victory Park Management, LLC, as administrative agent and collateral agent for the lenders and holders of notes and warrants issued thereunder (the "Agent"). The Financing Agreement provides for borrowings of up to $ 20 100 9 10 4 4 2 The Financing Agreement provides for subsidiaries of the Company to join the Financing Agreement from time to time as borrowers and cross guarantors thereunder. Immediately after the Company's acquisition of Steel Media on October 30, 2014, Steel Media executed a joinder agreement under which it became a borrower under the Financing Agreement. The Company and its subsidiary, Steel Media, are cross guarantors of each other's obligations under the Financing Agreement, all of which guaranties and obligations are secured pursuant to the terms of the Pledge and Security Agreement. On May 14, 2015 we entered into the First Amendment to Financing Agreement with Victory Park Management, LLC, as administrative agent and collateral agent for the lenders. Under the terms of the amendment, the leverage ratio, senior leverage ratio, fixed charge coverage ratio and interest coverage ratio under the Financing Agreement were all modified, and the minimum current ratio was reduced. The amendment also modified our obligations with respect to the delivery of certain reports, certain representations by us as well as clarifying other additional terms by which the loan is administered. Notes payable consists of the following: Principal amount $ 8,441,735 PIK interest accrued 230,993 8,672,728 Less current portion (1,541,000 ) Notes payable and PIK interest accrued, net of current portion $ 7,131,728 Pursuant to the Financing Agreement, the Company also issued to the lender thereunder, on the Financing Agreement Closing Date, a five 2,900,000 1.00 50 1,500,000 1,232,294 Activity for the put liability during the six months ended June 30, 2015 was: December 31, 2014 Activity During the Period Accretion in Value June 30, 2015 Put liability $ 1,260,010 $ — $ 84,528 $ 1,344,538 Total $ 1,260,010 $ — $ 84,528 $ 1,344,538 We incurred a total of $ 3,164,352 During the three and six months ended June 30, 2015, $ 308,434 628,370 2,279,366 Note payable – Richard Steel As partial consideration for the purchase of Steel Media described in Note 2, we executed a one 2.5 2,386,863 The Note issued to Mr. Steel bears interest at the rate of 5 10 five 25 | NOTE 3 – NOTES PAYABLE. 2014 Transactions: Financing Agreement with Victory Park Management, LLC as agent for the lenders On October 30, 2014 (the "Financing Agreement Closing Date"), the Company entered into a financing agreement (the "Financing Agreement") with Victory Park Management, LLC, as administrative agent and collateral agent for the lenders and holders of notes and warrants issued thereunder (the "Agent"). The Financing Agreement provides for borrowings of up to $ 20 100 9 10 4 4 2 The Financing Agreement provides for subsidiaries of the Company to join the Financing Agreement from time to time as borrowers and cross guarantors thereunder. Immediately after the Company's acquisition of Steel Media on October 30, 2014, Steel Media executed a joinder agreement under which it became a borrower under the Financing Agreement. The Company and its subsidiary, Steel Media, are cross guarantors of each other's obligations under the Financing Agreement, all of which guaranties and obligations are secured pursuant to the terms of the Pledge and Security Agreement. Notes payable consists of the following: December 31, 2014 2013 Principal amount $ 9,000,000 $ — PIK interest accrued 63,014 — 9,063,014 — Less current portion (1,350,000 ) — Notes payable and PIK interest accrued, net of current portion $ 7,713,014 $ — Pursuant to the Financing Agreement, the Company also issued to the lender thereunder, on the Financing Agreement Closing Date, a five 2,900,000 1.00 4.99 50 1,500,000 1,232,294 As contemplated under the Financing Agreement, the Company also entered into a registration rights agreement on the Financing Agreement Closing Date (the "Financing Registration Rights Agreement") with the holder of the Financing Warrant, pursuant to which the Company granted to such holder certain "piggyback" rights to register the shares of the Company's Class A common stock issuable upon exercise of the Financing Warrant. Specifically, the holder of the Financing Warrant has the right, subject to certain allocation provisions set forth in the Financing Registration Rights Agreement, to include the shares underlying the Financing Warrant in registration statements for offerings by the Company of its Class A common stock, as well as offerings of the Company's Class A common stock held by third parties. As part of the arrangements under the Financing Agreement, the Agent, Mr. Steel, and the Company and Steel Media (as borrowers under the Financing Agreement) have also entered into a subordination agreement (the "Subordination Agreement") under which Mr. Steel has agreed, subject to the terms and conditions of the Subordination Agreement, to subordinate to the lenders and holders of Financing Notes and the Financing Warrant issued under the Financing Agreement (i) certain obligations, liabilities, and indebtedness, including, without limitation, payments under the Note and payments of Earnout Consideration, owed to him by the Company and any of its subsidiaries and (ii) Mr. Steel's right to exercise the Put Right. Activity for the put liability during the year ended December 31, 2014 was: December 31, 2013 Activity During the Period Accretion in Value December 31, 2014 Put liability $ — $ 1,232,294 $ 27,716 $ 1,260,010 Total $ — $ 1,232,294 $ 27,716 $ 1,260,010 We incurred a total of $ 3,164,352 During the year ended December 31, 2014, $ 256,616 2,907,736 The approximate maturities of the long term portion of the financing agreement are as follows: Year ended December 31, 2016 2,250,000 2017 5,463,000 Note payable – Richard Steel As partial consideration for the purchase of Steel Media described in Note 2, we executed a one 2.5 2,386,863 The Note issued to Mr. Steel bears interest at the rate of 5 10 five 25 The obligations under the Note are subordinated to the Company's obligations under the Financing Agreement (as hereinafter defined) pursuant to the terms of the Subordination Agreement (as hereinafter described) and are secured by the Escrow Shares. Upon an event of default under the Note, if the Escrow Shares are released to Mr. Steel all amounts due under the Note will be deemed paid and the Note will be satisfied in full provided that (i) all of the Escrow Shares (or at least 90 1.0474 2013 Transactions: Credit Facility and Termination Agreement: During February 2013 we entered into a senior secured revolving credit facility agreement (which was amended on June 11, 2013 (the "Credit Agreement") with TCA Global Credit Master Fund, LP (the "Lender" or "TCA"). Pursuant to the Credit Agreement, the Lender agreed to loan up to $ 5,000,000 550,000 486,425 550,000 174,010 175,000 In total, we incurred costs aggregating $ 274,737 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
STOCKHOLDERS' EQUITY [Abstract] | ||
STOCKHOLDERS' EQUITY | NOTE 4 – STOCKHOLDERS' EQUITY Preferred Stock We are authorized to issue 50,000,000 0.001 200,000 Common Stock We are authorized to issue an aggregate of 259,000,000 250,000,000 0.001 one vote per share 9,000,000 0.001 ten votes per share In January 2015 we sold three 882,001 1.50 8,820 During the six months ended June 30, 2015 we issued 128,331 Stock Awards During the three and six months ended June 30, 2015 we recorded expense of $ 117,822 303,842 Stock Options and Warrants During February 2015 we granted 12,000 one 1.20 five 0.62 Black-Scholes 0.50 0 99 2 1,867 3,111 During the three and six months ended June 30, 2015 we recorded expense of $ 68,828 139,730 | NOTE 4 – STOCKHOLDERS' EQUITY Preferred Stock We are authorized to issue 50,000,000 0.001 200,000 On August 16, 2013 our Board of Directors approved a Certificate of Designations, Rights and Preferences pursuant to which it designated a series consisting of 200,000 • each share has a stated and liquidation value of $ 0.001 • the shares do not pay any dividends, except as may be declared by our Board of Directors, and are not redeemable, • the shares do not have any voting rights, except as may be provided under Delaware law, • each share is convertible into 10 shares of our Class A common stock, subject to customary anti-dilution provisions in the event of stock splits, recapitalizations and similar corporate events, and • the number of shares of Series 1 Preferred Stock, as well as the number of shares of Class A common stock issued upon a conversion of shares of Series 1 Preferred Stock, that a holder may sell, transfer, assign, hypothecate or otherwise dispose of (collectively or severally, a "Disposition") at any one time shall be limited to an amount which is pari passu to any Disposition of Class A common stock by either Christopher Miglino and/or Erin DeRuggerio, executive officers and directors of our company. Notwithstanding anything contained in the designations, the holder of Series 1 Preferred Stock is not obligated to make any Dispositions of Series 1 Preferred Stock or Class A common stock issued upon the conversion of Series 1 Preferred Stock. Common Stock We are authorized to issue an aggregate of 259,000,000 250,000,000 0.001 9,000,000 0.001 2014 Transactions: Preferred Stock During 2014, 35,000 350,000 Common Stock In January 2014 we sold an aggregate of 978,668 1.50 22 1,468,001 190,840 97,866 2.00 25,744 1,251,416 During June 2014 we issued 133,332 On October 30, 2014 and November 5, 2014, we sold 4,220,500 28 1.00 4,220,500 one one 0.5 three 1.50 0.001 20 3.75 20 100,000 In addition to the units sold for cash, we also issued T.R. Winston & Company, LLC ("T.R. Winston") 800,000 800,000 As a result, we issued an aggregate of 5,020,500 2,510,250 351,435 three 301,230 1.50 12,885 2,500,000 678,000 580,000 The Company has agreed to file a registration statement covering the shares underlying the Private Placement Warrants and the placement agent warrants. We anticipate that we will file the registration statements during the second quarter of 2015. We are obligated to pay all costs associated with this registration statement, other than selling expenses of the warrant holders. On December 19, 2014 we issued 600,000 100 During December 2014 we issued 350,000 shares of Class A common stock upon the conversion of 35,000 shares of preferred stock. Stock Awards During May 2014 we granted an aggregate of 200,000 three 36,667 40,000 On August 15, 2014 we granted 250,000 31,250 31,251 On November 5, 2014 we issued 45,455 22,644 On December 19, 2014 we granted 50,000 1,732 During the year ended December 31, 2014 we recorded expense of $ 228,416 The fair value of shares that vested during the year ended December 31, 2014 was $ 447,911 Stock Options and Warrants During February 2014 we granted 12,000 one 2.70 five 0.65 Black-Scholes 0.375 0 43 2 7,180 On March 15, 2014 we granted 200,000 7,678 On June 19, 2014 we granted 300,000 On August 15, 2014 we granted 310,000 three three 1.00 three 0.29 Black-Scholes 0.875 0 41 3 11,121 On October 30, 2014 we granted 600,000 1.50 ten 0.45 Black-Scholes 0.875 0 75 3.5 13,012 On October 30, 2014 we granted an aggregate of 275,000 four 1.50 ten 0.36 Black-Scholes 0.625 0 75 2.5 4,114 On November 5, 2014 we granted an aggregate of 130,000 three 1.50 three 0.35 Black-Scholes 0.375 0 75 2 2,512 On November 5, 2014 we granted 500,000 three 1.10 three 0.45 Black-Scholes 0.375 0 75 2 12,416 On December 19, 2014 we granted 100,000 two 1.26 three 0.53 Black-Scholes 0.375 0 75 2.13 739 During the year ended December 31, 2014 we recorded expense of $ 33,468 2013 Transactions: Preferred Stock During August and October of 2013 we issued an aggregate of 121,000 1,167,000 thirty six 124,000 Common Stock and Common Stock Units During January 2013 we issued 5,000 5,000 During February 2013 we issued 51,665 During February 2013 we issued 99,010 During June 2013 we issued 75,000 During August 2013 we issued 440,000 418,000 52,250 During August 2013 we issued 300,000 285,000 During August 2013 we issued 30,000 28,500 During August 2013 we issued 550,000 On October 4, 2013, 9,000,000 9,000,000 During October 2013 we paid $ 175,000 174,010 During October 2013 we issued 150,000 150,000 thirty two 9,375 Between October 8, 2013 and October 30, 2103 we sold an aggregate of 4,587,940 0.50 2,293,970 106,030 Each unit consisted of one share of our Class A common stock and one three year Class A Common Stock Purchase Warrant to purchase 0.5 shares of our Class A common stock, resulting the issuance of 4,800,000 shares of our Class A common stock and Class A Common Stock Purchase Warrants to purchase an additional 2,400,000 shares of our Class A common stock. 212,060 181,976 480,000 1.00 In November 2013 we sold an additional 660,000 330,000 Stock Awards During 2013 we granted an aggregate of 625,000 2.75 177,604 The fair value of shares that vested during the year ended December 31, 2013 was $ 269,373 During the year ended December 31, 2013 we recorded expense of $ 100,656 Stock Options and Warrants During 2013 we granted an aggregate of 350,500 three 1.00 five 23,275 During 2013 we granted 25,000 three 1.00 five 9,739 On August 22, 2013 we granted an aggregate of 250,000 three 1 105,827 12,738 During the year ended December 31, 2013 we recorded expense of $ 2,059 20,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2014 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consists of the following: December 31, 2014 2013 Assets: Office equipment $ 52,615 $ 37,982 Accumulated depreciation and amortization (25,013 ) (10,184 ) Carrying value $ 27,602 $ 27,798 Depreciation expense was $ 14,829 7,184 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS We are obligated to Richard Steel, our president and a director, pursuant to a promissory note in the amount of $ 2,500,000 We are also obligated to Mr. Steel for contingent Earnout Consideration of up to $ 8,000,000 6,584,042 Activity for the contingent consideration payable during the six months ended June 30, 2015 was: December 31, 2014 Activity During the Period Accretion in Value June 30, 2015 Contingent consideration payable $ 6,732,123 $ — $ 451,628 $ 7,183,751 Total $ 6,732,123 $ — $ 451,628 $ 7,183,751 Maturities of contingent consideration are as follows: Year ended December 31, 2015 $ 3,827,339 2016 $ 3,356,412 | NOTE 6 – RELATED PARTY TRANSACTIONS We are obligated to Richard Steel, our president and a director, pursuant to a promissory note in the amount of $ 2,500,000 We are also obligated to Mr. Steel for contingent Earnout Consideration of up to $ 8,000,000 Media, as described in Note 2. The Company has initially recorded the liability at its present value of $ 6,584,042 Activity for the contingent consideration payable during the year ended December 31, 2014 was: December 31, 2013 Activity During the Period Accretion in Value December 31, 2014 Contingent consideration payable $ — $ 6,584,042 $ 148,081 $ 6,732,123 Total $ — $ 6,584,042 $ 148,081 $ 6,732,123 Maturities as follows: Year ended 2015 3,586,722 2016 3,145,401 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 7 - INCOME TAXES The Company generated operating losses for the years ended December 31, 2014 and December 31, 2013 which are not benefitted for tax accounting purposes. The Company accounts for its state franchise and minimum taxes as a component of its general and administrative expenses. Accordingly, the Company has recorded no current or deferred income tax expense for the years ended December 31, 2014 and December 31, 2013. A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate is as follows: Year Ended December 31, 2014 2013 Federal s tatutory (34.0 )% (34.0 )% State income taxes, net of federal benefit (5.3 ) (5.8 ) Stock based compensation 15.4 0 Acquisition expenses 6.2 0 Permanent differences 1.3 0.0 Other 1.5 1.8 Change in valuation allowance 14.9 38.0 Provision for income taxes 0.0 % 0.0 % Significant components of the Company's deferred income taxes are shown below: Year Ended December 31, 2014 2013 Deferred tax assets: Net operating loss carryforwards $ 1,785,000 $ 652,000 Fixed assets 2,000 — Stock based compensation — 324,000 Total deferred tax assets 1,787,000 976,000 Deferred tax liabilities Stock based compensation (122,000 ) — Other accruals (31,000 ) — Total deferred tax liabilities (153,000 ) — Net deferred tax assets Valuation allowance (1,634,000 ) (976,000 ) Net deferred tax liability $ — $ — The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. The valuation allowance increased $ 658,000 At December 31, 2014, the Company has federal and state net operating losses, or NOL, carryforwards of approximately $ 4.5 4.5 The Company files income tax returns in the United States, and various state jurisdictions. Due to the Company's losses incurred, the Company is essentially subject to income tax examination by tax authorities from inception to date. The Company's policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2014, there are no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2014 | |
STOCK OPTIONS AND WARRANTS [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 8- STOCK OPTIONS AND WARRANTS 2012 and 2014 Equity Compensation Plans In January 2012, our board of directors and stockholders authorized the 2012 Equity Compensation Plan, which we refer to as the 2012 Plan, covering 3,000,000 2014 Plan 3,000,000 • incentive stock options (ISOs), • non-qualified options (NSOs), • awards of our common stock, • stock appreciation rights (SARs), • restricted stock units (RSUs), • performance units, • performance shares, and • other stock-based awards. Any option granted under the 2012 or 2014 Plans must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plans further provide that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The exercise price of any NSO granted under the 2012 or 2014 Plans is determined by the Board at the time of grant, but must be at least equal to fair market value on the date of grant. The term of each plan option and the manner in which it may be exercised is determined by the board of directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant. The terms of grants of any other type of award under the 2012 or 2014 Plans is determined by the Board at the time of grant. Subject to the limitation on the aggregate number of shares issuable under the plans, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person. Transactions involving our stock options are summarized as follows: 2014 2013 Number Weighted Number Weighted Outstanding at beginning of the period 426,000 $ 1.04 70,500 $ 1.35 Granted during the period 2,427,000 1.32 475,500 1.00 Exercised during the period — — — — Terminated during the period (508,000 ) 1.35 (120,000 ) 1.08 Outstanding at end of the period 2,345,000 $ 1.26 426,000 $ 1.04 Exercisable at end of the period 177,171 $ 1.13 35,834 $ 1.09 At December 31, 2014 options outstanding totaled 2,345,000 1.26 261,659 6.6 177,171 39,459 3.2 777,880 283,000 The weighted average remaining life of the options is 6.5 years. Transactions involving our common stock awards are summarized as follows: 2014 2013 Number Number Outstanding at beginning of the period 650,002 180,000 Granted during the period 545,455 675,000 Vested during the period (316,665 ) (151,664 ) Terminated during the period (40,000 ) (53,334 ) Unvested at end of the period 838,792 650,002 Unrecognized compensation cost related to our common stock awards is $ 722,869 476,000 223,000 24,000 Transactions involving our stock warrants are summarized as follows: 2014 2013 Number Weighted Number Weighted Average Outstanding at beginning of the period 3,460,000 $ 1.00 — $ — Granted during the period 5,809,346 1.26 3,460,000 1.00 Exercised during the period — — — — Terminated during the period — — — — Outstanding at end of the period 9,269,346 $ 1.16 3,460,000 $ 1.00 Exercisable at end of the period 9,269,346 $ 1.16 3,460,000 $ 1.00 The weighted average remaining life of the warrants is 3.1 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 6 – COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases executive offices under an operating lease with lease terms which expire through December 31, 2018. Rent expense for office space amounted to $ 37,719 11,303 76,021 25,413 Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances. It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Employment agreements We have entered into employment agreements with a number of our employees. These agreements may include provisions for base salary, guaranteed and discretionary bonuses and option grants. The agreements may contain severance provisions if the employees are terminated without cause, as defined in the agreements. Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patent or other intellectual property rights. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company's business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. | NOTE 9 - COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases executive offices under an operating lease with lease terms which expire through December 31, 2018. The following is a schedule of the future minimum lease payments required under the operating leases that have initial non-cancelable lease terms in excess of one year: Fiscal year ending December 31, Minimum Lease Commitments 2015 $ 45,865 2016 37,925 2017 37,200 2018 37,200 Rent expense for office space amounted to $ 71,231 30,503 Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances. It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Employment agreements We have entered into employment agreements with a number of our employees. These agreements may include provisions for base salary, guaranteed and discretionary bonuses and option grants. The agreements may contain severance provisions if the employees are terminated without cause, as defined in the agreements. Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patent or other intellectual property rights. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company's business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS On July 6, 2015 we borrowed an additional $ 1,500,000 1,500,000 10 4 2 |
ORGANIZATION AND SUMMARY OF S17
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Organization and Basis of Presentation | Organization and Basis of Presentation Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 12,328,767 At Social Reality, we sell digital advertising campaigns to advertising agencies and brands. We have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to a number of digital adverting buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: • sales of digital advertising campaigns to advertising agencies and brands; • sales of media inventory owned by our publishing partners through real-time bidding, or RTB, exchanges; • sale and licensing of our GroupAd platform and related media; and, • creation of custom platforms for buying media on SRAX for large brands. The five core elements of this business are: • Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation • GroupAd • SRAX MD • SRAX DI • Steel Media We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. We also create applications as custom programs and build them on a campaign-by-campaign basis, and offer them on a managed- or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. Social Reality is also an approved Facebook advertising partner, through Facebook's PMD (Preferred Marketing Developer) program. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We are headquartered in Los Angeles, California. | Organization and Basis of Presentation Social Reality, Inc. ("Social Reality", "we", "us" or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 12,328,767 At Social Reality, we sell digital advertising campaigns to advertising agencies and brands, we have developed technology that allows brands to launch and manage digital advertising campaigns, and we provide the platform that allows website publishers to sell their media inventory to a number of digital adverting buyers. Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. We derive our revenues from: • sales of digital advertising campaigns to advertising agencies and brands; • sales of media inventory owned by our publishing partners through real-time bidding, or RTB, exchanges; • sale and licensing of our GroupAd platform and related media; and, • creation of custom platforms for buying media on SRAX for large brands. The five core elements of this business are: • Social Reality Ad Exchange or "SRAX" Real Time Bidding sell side and buy side representation. • GroupAd. • SRAX MD • SRAX DI • Steel Media We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity. We also create applications as custom programs and build them on a campaign by campaign basis as well as offer them on a managed or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels. Social Reality is also an approved and accredited Facebook advertising network company. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and large websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We are headquartered in Los Angeles, California. |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These interim financial statements as of and for the three and six months ended June 30, 2015 and 2014 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any future period. All references to June 30, 2015 and 2014 in these footnotes are unaudited. These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2014, included in the Company's annual report on Form 10-K filed with the SEC on March 31, 2015. The condensed balance sheet as of December 31, 2014 has been derived from the audited financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America. | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control and through the date of disposition, if any. | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control and through the date of disposition, if any. |
Use of Estimates | Use of Estimates Accounting principles generally accepted in the United States ("GAAP") require management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, goodwill and other intangible assets. The accounting policies for these areas are discussed elsewhere in these consolidated financial statements. | Use of Estimates Accounting principles generally accepted in the United States ("GAAP") require management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, stock-based compensation, income taxes, goodwill and other intangible assets. The accounting policies for these areas are discussed elsewhere in these consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and media and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. | Revenue Recognition The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and media and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. | Cost of Revenue Cost of revenue consists of payments to media providers and website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to media providers and website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement. |
Accounts Receivable | Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. | Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company's accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. |
Concentration of Credit Risk, Significant Customers and Supplier Risk | Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $ 1,016,000 At June 30, 2015, one SRAX AD Exchange customer, who collects advertising payments from multiple advertisers, and two additional customers each accounted for more than 10% of the accounts receivable balance, for a total of 80 63 75 | Concentration of Credit Risk, Significant Customers and Supplier Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits. The uninsured cash bank balances were approximately $ 1,343,000 At December 31, 2014, one SRAX AD Exchange customer, who collects advertising payments from multiple advertisers and one additional customer each accounted for more than 10% of the accounts receivable balance, for a total of 34 38 87 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At June 30, 2015 and December 31, 2014 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. | Fair Value of Financial Instruments The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At December 31, 2014 and 2013 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. |
Property and equipment | Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight line basis over the estimated useful lives of the assets of three Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. | |
Business Combinations | Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value are recognized in earnings until settlement; and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. | Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value are recognized in earnings until settlement; and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. |
Goodwill | Goodwill The Company will test for impairment of goodwill annually as of September 30 at the reporting unit level or whenever events or circumstances indicate that goodwill might be impaired. The impairment test is a two-step process, whereby in the first step, the Company compares the estimated fair value of the reporting unit with the reporting unit's carrying amount, including goodwill. The Company determines the estimated fair value of each reporting unit using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment, if any. | Goodwill The Company will test for impairment of goodwill annually as of September 30 at the reporting unit level or whenever events or circumstances indicate that goodwill might be impaired. The impairment test is a two-step process, whereby in the first step, the Company compares the estimated fair value of the reporting unit with the reporting unit's carrying amount, including goodwill. The Company determines the estimated fair value of each reporting unit using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment, if any. |
Long-lived Assets | Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. | Long-lived Assets Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Loss Per Share | Earnings (loss) Per Share We use ASC 260, "Earnings Per Share" for calculating the basic and diluted earnings (loss) per share. We compute basic earnings (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and warrants and stock awards. For periods with a net loss, basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 13,735,471 5,972,535 2,609,271 | Loss Per Share We use ASC 260, "Earnings Per Share" for calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 13,096,470 5,296,001 |
Income Taxes | Income Taxes We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. | Income Taxes We utilize ASC 740 "Income Taxes" which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at year-end based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. |
Stock-Based Compensation | Stock-Based Compensation We account for our stock based compensation under ASC 718 "Compensation – Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. | Stock-Based Compensation We account for our stock based compensation under ASC 718 "Compensation – Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. |
Business Segments | Business Segments The Company uses the "management approach" to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's reportable segments. Using the management approach, the Company determined that it has one | Business Segments The Company uses the "management approach" to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's reportable segments. Using the management approach, the Company determined that it has one |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. | Recently Issued Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
ACQUISITIONS [Abstract] | ||
Schedule of preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values | Cash $ 32,038 Accounts receivable and other assets 2,975,728 Equipment 7,777 Goodwill and other intangibles 17,562,911 Total assets acquired 20,578,454 Accounts payable and other liabilities (1,994,412 ) Total $ 18,584,042 | Cash $ 32,038 Accounts receivable and other assets 2,975,728 Equipment 7,777 Goodwill and other intangibles 17,562,911 Total assets acquired 20,578,454 Accounts payable and other liabilities (1,994,412 ) Total $ 18,584,042 |
Schedule of pro forma resutlts of operations | December 31, 2014 2013 Revenue $ 12,558,030 $ 11,349,864 Net loss (4,004,445 ) (1,417,778 ) Net loss per share (0.18 ) (0.10 ) |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
NOTES PAYABLE [Abstract] | ||
Schedule of notes payable | Principal amount $ 8,441,735 PIK interest accrued 230,993 8,672,728 Less current portion (1,541,000 ) Notes payable and PIK interest accrued, net of current portion $ 7,131,728 | December 31, 2014 2013 Principal amount $ 9,000,000 $ — PIK interest accrued 63,014 — 9,063,014 — Less current portion (1,350,000 ) — Notes payable and PIK interest accrued, net of current portion $ 7,713,014 $ — |
Schedule of put liability | December 31, 2014 Activity During the Period Accretion in Value June 30, 2015 Put liability $ 1,260,010 $ — $ 84,528 $ 1,344,538 Total $ 1,260,010 $ — $ 84,528 $ 1,344,538 | December 31, 2013 Activity During the Period Accretion in Value December 31, 2014 Put liability $ — $ 1,232,294 $ 27,716 $ 1,260,010 Total $ — $ 1,232,294 $ 27,716 $ 1,260,010 |
Schedule of maturities of long term debt | Year ended December 31, 2016 2,250,000 2017 5,463,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Schedule of Property and Equipment | December 31, 2014 2013 Assets: Office equipment $ 52,615 $ 37,982 Accumulated depreciation and amortization (25,013 ) (10,184 ) Carrying value $ 27,602 $ 27,798 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | ||
Schedule of contingent consideration payable | December 31, 2014 Activity During the Period Accretion in Value June 30, 2015 Contingent consideration payable $ 6,732,123 $ — $ 451,628 $ 7,183,751 Total $ 6,732,123 $ — $ 451,628 $ 7,183,751 | December 31, 2013 Activity During the Period Accretion in Value December 31, 2014 Contingent consideration payable $ — $ 6,584,042 $ 148,081 $ 6,732,123 Total $ — $ 6,584,042 $ 148,081 $ 6,732,123 |
Schedule of Maturities of Contingent Consideration | Year ended December 31, 2015 $ 3,827,339 2016 $ 3,356,412 | Year ended 2015 3,586,722 2016 3,145,401 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES [Abstract] | |
Schedule of Effective tax rate | Year Ended December 31, 2014 2013 Federal s tatutory (34.0 )% (34.0 )% State income taxes, net of federal benefit (5.3 ) (5.8 ) Stock based compensation 15.4 0 Acquisition expenses 6.2 0 Permanent differences 1.3 0.0 Other 1.5 1.8 Change in valuation allowance 14.9 38.0 Provision for income taxes 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | Year Ended December 31, 2014 2013 Deferred tax assets: Net operating loss carryforwards $ 1,785,000 $ 652,000 Fixed assets 2,000 — Stock based compensation — 324,000 Total deferred tax assets 1,787,000 976,000 Deferred tax liabilities Stock based compensation (122,000 ) — Other accruals (31,000 ) — Total deferred tax liabilities (153,000 ) — Net deferred tax assets Valuation allowance (1,634,000 ) (976,000 ) Net deferred tax liability $ — $ — |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock options, common stock awards and stock warrants | 2014 2013 Number Weighted Number Weighted Outstanding at beginning of the period 426,000 $ 1.04 70,500 $ 1.35 Granted during the period 2,427,000 1.32 475,500 1.00 Exercised during the period — — — — Terminated during the period (508,000 ) 1.35 (120,000 ) 1.08 Outstanding at end of the period 2,345,000 $ 1.26 426,000 $ 1.04 Exercisable at end of the period 177,171 $ 1.13 35,834 $ 1.09 |
Common stock awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock options, common stock awards and stock warrants | 2014 2013 Number Number Outstanding at beginning of the period 650,002 180,000 Granted during the period 545,455 675,000 Vested during the period (316,665 ) (151,664 ) Terminated during the period (40,000 ) (53,334 ) Unvested at end of the period 838,792 650,002 |
Stock Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock options, common stock awards and stock warrants | 2014 2013 Number Weighted Number Weighted Average Outstanding at beginning of the period 3,460,000 $ 1.00 — $ — Granted during the period 5,809,346 1.26 3,460,000 1.00 Exercised during the period — — — — Terminated during the period — — — — Outstanding at end of the period 9,269,346 $ 1.16 3,460,000 $ 1.00 Exercisable at end of the period 9,269,346 $ 1.16 3,460,000 $ 1.00 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Schedule Of Future Minimum Payments | Fiscal year ending December 31, Minimum Lease Commitments 2015 $ 45,865 2016 37,925 2017 37,200 2018 37,200 |
ORGANIZATION AND SUMMARY OF S25
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 31, 2012shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2015USD ($)itemshares | Jun. 30, 2014shares | Dec. 31, 2014USD ($)itemshares | Dec. 31, 2013shares | |
Debt Instrument [Line Items] | ||||||
Property and equipment estimated useful life | 3 years | |||||
Antidilutive common share equivalents | 13,735,471 | 5,972,535 | 13,096,470 | 5,296,001 | ||
Number of operating segments | item | 1 | 1 | ||||
Uninsured cash bank balance | $ | $ 1,016,000 | $ 1,016,000 | $ 1,343,000 | |||
Weighted Average Number Diluted Shares Outstanding Adjustment | 2,609,271 | |||||
Accounts receivable [Member] | one SRAX AD Exchange customer and one additional customer [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 34.00% | |||||
Accounts receivable [Member] | Credit Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 80.00% | |||||
Revenues [Member] | Three RTB exchange service providers [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 38.00% | |||||
Revenues [Member] | One RTB exchange service providers [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 87.00% | |||||
Revenues [Member] | one SRAX AD Exchange customer and one additional customer [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 63.00% | |||||
Revenues [Member] | Credit Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 75.00% | |||||
Social Reality LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Effective date of business acquisition | Jan. 1, 2012 | |||||
Social Reality LLC [Member] | Class A and Class B common stock [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued in business acquisition | 12,328,767 |
ACQUISITIONS (Acquisition of St
ACQUISITIONS (Acquisition of Steel Media) (Details) - USD ($) | Oct. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 |
Business Acquisition [Line Items] | ||||
Cash payment | $ 2,000,000 | |||
Notes term | 1 year | |||
Notice period for prepayment of debt | 5 days | |||
Steel Media [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership acquired (as a percent) | 100.00% | |||
Cash payment | $ 7,500,000 | |||
Cash payment held in escrow | 2,000,000 | |||
Maximum earnout consideration | 8,000,000 | |||
Value of earnout consideration | 6,584,042 | $ 6,732,123 | $ 7,183,751 | |
Acquisition price | $ 18,584,042 | |||
Period of earnout consideration payment | 2 years | |||
Percentage of earnout consideration | 100.00% | |||
Steel Media [Member] | Common Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of earnout consideration to be paid in shares | 60.00% | |||
Share price (in dollars per share) | $ 1.0474 | |||
Period when registration rights can be exercised | 90 days | |||
Steel Media [Member] | Secured subordinated promissory note [Member] | ||||
Business Acquisition [Line Items] | ||||
Notes term | 1 year | |||
Notes issued | $ 2,500,000 | |||
Interest rate (as a percent) | 5.00% | |||
Increased interest rate (as a percent) | 10.00% | |||
Notice period for prepayment of debt | 5 days | |||
Percentage of quarterly installments | 25.00% | |||
Steel Media [Member] | Secured subordinated promissory note [Member] | Common Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Escrow shares | 2,386,863 | |||
Steel Media [Member] | Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 20,000,000 | |||
Maximum earnout consideration | $ 8,000,000 | |||
Steel Media [Member] | Minimum [Member] | Secured subordinated promissory note [Member] | Common Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of escrow shares subject to effective registration | 90.00% |
ACQUISITIONS (Preliminary alloc
ACQUISITIONS (Preliminary allocation of the purchase price to the assets acquired and liabilities) (Details) - Steel Media [Member] | Oct. 30, 2014USD ($) |
Preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values | |
Cash | $ 32,038 |
Accounts receivable and other assets | 2,975,728 |
Equipment | 7,777 |
Goodwill and other intangibles | 17,562,911 |
Total assets acquired | 20,578,454 |
Accounts payable and other liabilities | (1,994,412) |
Total | $ 18,584,042 |
ACQUISITIONS (Pro forma Results
ACQUISITIONS (Pro forma Results of Operations) (Details) - Steel Media [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Pro forma Results of Operations | ||
Revenue | $ 12,558,030 | $ 11,349,864 |
Net loss | $ (4,004,445) | $ (1,417,778) |
Net loss per share | $ (0.18) | $ (0.10) |
Revenue of acquiree since the acquisition date included in the consolidated statement of operations | $ 1,896,000 | |
Earnings of acquiree since the acquisition date included in the consolidated statement of operations | $ 490,000 |
ACQUISITIONS (Acquisition of Fi
ACQUISITIONS (Acquisition of Five Delta, Inc.) (Details) - Five Delta [Member] | Dec. 19, 2014USD ($)shares |
Business Acquisition [Line Items] | |
Ownership acquired (as a percent) | 100.00% |
Purchase consideration | $ | $ 756,000 |
Common Class A [Member] | |
Business Acquisition [Line Items] | |
Number of common stock issued | 600,000 |
Escrow shares | 300,000 |
Period from the closing date during which entity has a right of refusal over the shares of common stock | 4 years |
Lock Up Agreement term | 24 months |
Percentage of common stock released from the lock up on the one year anniversary | 50.00% |
NOTES PAYABLE (Financing Agreem
NOTES PAYABLE (Financing Agreement with Victory Park Management, LLC as agent for the lenders) (Details) - USD ($) | Oct. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||||||
Present value of put liability | $ 1,344,538 | $ 1,344,538 | $ 1,260,010 | |||
Amortization of debt issue costs | 308,434 | 628,370 | 256,616 | $ 274,737 | ||
Deferred debt issue costs | $ 2,279,366 | $ 2,279,366 | $ 2,907,736 | |||
Financing Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes issued | $ 9,000,000 | |||||
Percentage of equity interest pledged | 100.00% | |||||
Interest rate (as a percent) | 10.00% | |||||
Paid-in-kind interest rate (as a percent) | 4.00% | |||||
Exercise period of warrants | 5 years | |||||
Exercise price of warrants | $ 1 | |||||
Beneficially own shares as a percentage of shares outstanding | 4.99% | |||||
Percentage of revenue used as base to calculate purchase price | 50.00% | |||||
Amount used as base to calculate purchase price | $ 1,500,000 | |||||
Present value of put liability | 1,232,294 | |||||
Costs related to agreement | $ 3,164,352 | |||||
Financing Agreement [Member] | Common Class A [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares to be issued | 2,900,000 | |||||
Maximum [Member] | Financing Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes issued | $ 20,000,000 | |||||
Paid-in-kind interest rate (as a percent) | 4.00% | |||||
Minimum [Member] | Financing Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Paid-in-kind interest rate (as a percent) | 2.00% |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
NOTES PAYABLE [Abstract] | |||
Principal amount | $ 8,441,735 | $ 9,000,000 | |
PIK interest accrued | 230,993 | 63,014 | |
Notes payable | 8,672,728 | 9,063,014 | |
Less current portion | (1,541,000) | (1,350,000) | |
Notes payable and PIK interest accrued, net of current portion | $ 7,131,728 | $ 7,713,014 |
NOTES PAYABLE (Schedule of Put
NOTES PAYABLE (Schedule of Put Liability) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity for the put liability- notes payable [Roll Forward] | ||||
Beginning of period | $ 1,260,010 | |||
Activity During the Period | $ 1,232,294 | |||
Accretion in Value | $ 84,528 | 27,716 | ||
Ending balance | 1,344,538 | $ 1,260,010 | ||
Put Liability Notes Payable [Member] | ||||
Activity for the put liability- notes payable [Roll Forward] | ||||
Beginning of period | $ 1,260,010 | |||
Activity During the Period | $ 1,232,294 | |||
Accretion in Value | $ 84,528 | 27,716 | ||
Ending balance | $ 1,344,538 | $ 1,260,010 |
NOTES PAYABLE (Maturities of lo
NOTES PAYABLE (Maturities of long term debt) (Details) | Dec. 31, 2014USD ($) |
Maturities of long term debt | |
2,016 | $ 2,250,000 |
2,017 | $ 5,463,000 |
NOTES PAYABLE (Note payable - R
NOTES PAYABLE (Note payable - Richard Steel) (Details) $ / shares in Units, $ in Millions | Oct. 30, 2014USD ($)$ / sharesshares |
Debt Instrument [Line Items] | |
Notes term | 1 year |
Notice period for prepayment of debt | 5 days |
Steel Media [Member] | Common Class A [Member] | |
Debt Instrument [Line Items] | |
Share Price | $ / shares | $ 1.0474 |
Secured subordinated promissory note [Member] | Steel Media [Member] | |
Debt Instrument [Line Items] | |
Notes term | 1 year |
Notes issued | $ | $ 2.5 |
Interest rate (as a percent) | 5.00% |
Increased interest rate (as a percent) | 10.00% |
Notice period for prepayment of debt | 5 days |
Percentage of quarterly installments | 25.00% |
Secured subordinated promissory note [Member] | Steel Media [Member] | Common Class A [Member] | |
Debt Instrument [Line Items] | |
Escrow shares | 2,386,863 |
Secured subordinated promissory note [Member] | Steel Media [Member] | Common Class A [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Percentage of escrow shares subject to effective registration | 90.00% |
NOTES PAYABLE (Credit Facility
NOTES PAYABLE (Credit Facility and Termination Agreement) (Details) - USD ($) | Jun. 11, 2013 | Oct. 31, 2013 | Dec. 31, 2013 | Jul. 06, 2015 |
Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 1,500,000 | |||
TCA Global Credit Master Fund, LP [Member] | ||||
Debt Instrument [Line Items] | ||||
Stock redeemed, shares | 174,010 | |||
Stock redeemed, value | $ 175,000 | |||
Tca Global Credit Master Fund Lp First Amendment To Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 5,000,000 | |||
Debt instrument, face amount | 550,000 | |||
Proceeds from Long-term Lines of Credit | $ 486,425 | |||
Repayments of Lines of Credit | $ 550,000 | |||
Stock redeemed, shares | 174,010 | |||
Stock redeemed, value | $ 175,000 | |||
Debt issuance costs | $ 274,737 | |||
Interest expense | $ 274,737 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Dec. 19, 2014$ / sharesshares | Nov. 05, 2014$ / sharesshares | Oct. 30, 2014USD ($)ditem$ / sharesshares | Aug. 15, 2014$ / sharesshares | Jun. 19, 2014shares | Mar. 15, 2014shares | Aug. 22, 2013USD ($)$ / sharesshares | Feb. 28, 2015$ / sharesshares | Jan. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2014shares | May. 31, 2014shares | Feb. 28, 2014$ / sharesshares | Jan. 31, 2014USD ($)item$ / sharesshares | Nov. 30, 2013USD ($)shares | Oct. 31, 2013USD ($)$ / sharesshares | Aug. 31, 2013USD ($)shares | Jun. 30, 2013shares | Feb. 28, 2013shares | Jan. 31, 2013USD ($)shares | Jun. 30, 2015USD ($)$ / sharesshares | Oct. 31, 2013USD ($)shares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Sep. 04, 2015USD ($) | Oct. 04, 2013shares |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||||||||||
Preferred Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Common Stock, shares authorized | 259,000,000 | 259,000,000 | 259,000,000 | 259,000,000 | ||||||||||||||||||||||
Common Stock, voting rights | One vote per share | |||||||||||||||||||||||||
Expense related to restricted stock awards | $ | $ 117,822 | $ 303,842 | $ 228,416 | |||||||||||||||||||||||
Granted during the period | 2,427,000 | 475,500 | ||||||||||||||||||||||||
Share-based compensation expense | $ | $ 2,059 | |||||||||||||||||||||||||
Sale of common stock units for cash | $ | $ 5,107,598 | 2,388,382 | ||||||||||||||||||||||||
Common stock issued for services | $ | $ 318,500 | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.32 | $ 1 | ||||||||||||||||||||||||
Amortization of fair value of stock options | $ | 68,828 | 139,730 | $ 33,468 | $ 100,656 | ||||||||||||||||||||||
Share-based compensation, shares forfeited | 508,000 | 120,000 | ||||||||||||||||||||||||
Number of shares forfeited, stock awards | 20,000 | |||||||||||||||||||||||||
Fees paid to placement agents and selling agent , including commissions and a non-accountable expense allowance | $ | $ 678,000 | |||||||||||||||||||||||||
Common stock issued pursuant to the vesting of stock grants, shares | 133,332 | |||||||||||||||||||||||||
Fair value of shares vested | $ | $ 447,911 | $ 269,373 | ||||||||||||||||||||||||
T R Winston and Company LLC [Member] | Financing Agreement [Member] | ||||||||||||||||||||||||||
Loan origination fee | $ | $ 580,000 | |||||||||||||||||||||||||
TCA Global Credit Master Fund, LP [Member] | ||||||||||||||||||||||||||
Stock redeemed, value | $ | $ 175,000 | |||||||||||||||||||||||||
Stock redeemed, shares | 174,010 | |||||||||||||||||||||||||
Five Delta [Member] | ||||||||||||||||||||||||||
Ownership acquired (as a percent) | 100.00% | |||||||||||||||||||||||||
Steel Media [Member] | ||||||||||||||||||||||||||
Ownership acquired (as a percent) | 100.00% | |||||||||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||||||||
Number of shares that vested in period | 316,665 | 151,664 | ||||||||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 2 | |||||||||||||||||||||||||
Securities sold to accredited investors in a private placement, units | 4,220,500 | 978,668 | 660,000 | 4,587,940 | ||||||||||||||||||||||
Puchase price, per unit | $ / shares | $ 1 | $ 1.50 | $ 0.50 | |||||||||||||||||||||||
Number Of Accredited Investors In Private Placement | item | 28 | 22 | ||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 4,220,500 | $ 1,468,001 | $ 330,000 | $ 2,293,970 | ||||||||||||||||||||||
Description of units | Each unit consisted of one share of our Class A common stock and one three year Class A Common Stock Purchase Warrant to purchase 0.5 shares of our Class A common stock, resulting the issuance of 4,800,000 shares of our Class A common stock and Class A Common Stock Purchase Warrants to purchase an additional 2,400,000 shares of our Class A common stock. | |||||||||||||||||||||||||
Issued to placement agent as payment for fees and expenses, units | 212,060 | |||||||||||||||||||||||||
Issued to placement agent as payment for fees and expenses, value | $ | $ 106,030 | |||||||||||||||||||||||||
Fees paid to placement agents and selling agent , including commissions and a non-accountable expense allowance | $ | $ 190,840 | $ 181,976 | ||||||||||||||||||||||||
Warrants issued to pay placement agents and selling agent | 97,866 | 480,000 | ||||||||||||||||||||||||
Additional Private Placement Transaction Fees Paid | $ | $ 25,744 | |||||||||||||||||||||||||
Private Placement Warrant Exercise Price | $ / shares | $ 1 | |||||||||||||||||||||||||
Private Placement [Member] | T R Winston and Company LLC [Member] | ||||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 1.50 | |||||||||||||||||||||||||
Fees paid to placement agents and selling agent , including commissions and a non-accountable expense allowance | $ | $ 351,435 | |||||||||||||||||||||||||
Warrants issued to pay placement agents and selling agent | 301,230 | |||||||||||||||||||||||||
Net proceeds used for working capital | $ | 1,251,416 | |||||||||||||||||||||||||
Net proceeds from the offering | $ | $ 2,500,000 | |||||||||||||||||||||||||
Exercise period of warrants | 3 years | |||||||||||||||||||||||||
Private Placement [Member] | Steel Media [Member] | T R Winston and Company LLC [Member] | ||||||||||||||||||||||||||
Securities sold to accredited investors in a private placement, units | 800,000 | |||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 800,000 | |||||||||||||||||||||||||
Employee [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||
Share-based compensation, vesting period | 32 months | |||||||||||||||||||||||||
Employee [Member] | Employee Stock Option [Member] | December 19, 2014 [Member] | ||||||||||||||||||||||||||
Granted during the period | 100,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 2 years | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.375% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 75.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 2 years 1 month 17 days | |||||||||||||||||||||||||
Options term | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.26 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.53 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | 739 | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | |||||||||||||||||||||||||
Director [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 12,000 | 12,000 | ||||||||||||||||||||||||
Share-based compensation, vesting period | 1 year | 1 year | ||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.50% | 0.375% | ||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | 0.00% | ||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 99.00% | 43.00% | ||||||||||||||||||||||||
Share-based compensation, expected life in years | 2 years | 2 years | ||||||||||||||||||||||||
Options term | 5 years | 5 years | ||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.20 | $ 2.70 | ||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.62 | $ 0.65 | ||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 1,867 | $ 3,111 | 7,180 | |||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | Black-Scholes | ||||||||||||||||||||||||
Two Employees [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 275,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 4 years | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.625% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 75.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 2 years 6 months | |||||||||||||||||||||||||
Options term | 10 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.50 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.36 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | 4,114 | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | |||||||||||||||||||||||||
President [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 600,000 | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.875% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 75.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 3 years 6 months | |||||||||||||||||||||||||
Options term | 10 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.50 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.45 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | 13,012 | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | |||||||||||||||||||||||||
thirteen employees [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 130,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.375% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 75.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 2 years | |||||||||||||||||||||||||
Options term | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.50 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.35 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | 2,512 | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | |||||||||||||||||||||||||
Chief financial officer [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 500,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.375% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 75.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 2 years | |||||||||||||||||||||||||
Options term | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1.10 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.45 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 12,416 | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes | |||||||||||||||||||||||||
Common Class A [Member] | ||||||||||||||||||||||||||
Common Stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Common stock issued upon conversion of preferred stock, shares | 350,000 | |||||||||||||||||||||||||
Common Stock, voting rights | one vote per share | |||||||||||||||||||||||||
Common Stock, shares issued | 29,544,943 | 29,544,943 | 29,416,612 | 19,901,794 | ||||||||||||||||||||||
Stock issued for services | 150,000 | 5,000 | ||||||||||||||||||||||||
Common stock issued for services | $ | $ 150,000 | $ 5,000 | ||||||||||||||||||||||||
Issuance of common stock for compensation, shares | 51,665 | |||||||||||||||||||||||||
Issued restricted stock, shares | 550,000 | |||||||||||||||||||||||||
Number of new Class A common stock shares from converted Class B common stock shares | 9,000,000 | |||||||||||||||||||||||||
Shares issued for stock awards that have vested | 128,331 | |||||||||||||||||||||||||
Common Class A [Member] | Five Delta [Member] | ||||||||||||||||||||||||||
Number of common stock issued | 600,000 | |||||||||||||||||||||||||
Shares issued in business acquisition | 600,000 | |||||||||||||||||||||||||
Common Class A [Member] | Steel Media [Member] | ||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.0474 | |||||||||||||||||||||||||
Common Class A [Member] | Restricted Stock [Member] | ||||||||||||||||||||||||||
Granted during the period | 625,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 2 years 9 months | |||||||||||||||||||||||||
Share-based compensation expense | $ | $ 177,604 | |||||||||||||||||||||||||
Common Class A [Member] | Private Placement [Member] | ||||||||||||||||||||||||||
Common Stock, shares issued | 5,020,500 | |||||||||||||||||||||||||
Common stock warrants issued | 2,510,250 | |||||||||||||||||||||||||
Additional Private Placement Transaction Fees Paid | $ | $ 12,885 | |||||||||||||||||||||||||
Private Placement Warrant Exercise Price | $ / shares | $ 1.50 | |||||||||||||||||||||||||
Exercise period of warrants | 3 years | |||||||||||||||||||||||||
Number of shares issued for each unit in private placement | 1 | |||||||||||||||||||||||||
Number of warrants issued for each unit in private placement | 1 | |||||||||||||||||||||||||
Notice Period for Redemption of Warrants | 20 days | |||||||||||||||||||||||||
Number of shares called by each warrant | 0.5 | |||||||||||||||||||||||||
Redemption price of warrants (in dollars per share) | $ / shares | $ 0.001 | |||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 3.75 | |||||||||||||||||||||||||
Number of consecutive trading days | d | 20 | |||||||||||||||||||||||||
Daily average minimum volume in 20 consecutive trading days (in shares) | 100,000 | |||||||||||||||||||||||||
Common Class A [Member] | Stock Option Issuance Transaction One [Member] | ||||||||||||||||||||||||||
Share-based compensation expense | $ | 52,250 | |||||||||||||||||||||||||
Stock issued for services | 440,000 | |||||||||||||||||||||||||
Common stock issued for services | $ | $ 418,000 | |||||||||||||||||||||||||
Common Class A [Member] | Stock Option Issuance Transaction Two [Member] | ||||||||||||||||||||||||||
Share-based compensation expense | $ | $ 9,375 | |||||||||||||||||||||||||
Stock issued for services | 30,000 | |||||||||||||||||||||||||
Common stock issued for services | $ | $ 28,500 | |||||||||||||||||||||||||
Common Class A [Member] | Revolving Credit Facility [Member] | ||||||||||||||||||||||||||
Common stock issued during period for revolving credit facility agreement, shares | 75,000 | 99,010 | ||||||||||||||||||||||||
Common Class A [Member] | Employee [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 300,000 | |||||||||||||||||||||||||
Common Class A [Member] | Director [Member] | ||||||||||||||||||||||||||
Common stock issued for services | $ | $ 285,000 | |||||||||||||||||||||||||
Issuance of common stock for compensation, shares | 300,000 | |||||||||||||||||||||||||
Common Class A [Member] | Non Employee [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 200,000 | 25,000 | ||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1 | |||||||||||||||||||||||||
Average remaining contractual life outstanding | 5 years | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 7,678 | $ 9,739 | ||||||||||||||||||||||||
Common Class A [Member] | Employees and Director [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||||||
Granted during the period | 350,500 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1 | |||||||||||||||||||||||||
Average remaining contractual life outstanding | 5 years | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 23,275 | |||||||||||||||||||||||||
Common Class B [Member] | ||||||||||||||||||||||||||
Common Stock, shares authorized | 9,000,000 | 9,000,000 | 9,000,000 | 9,000,000 | ||||||||||||||||||||||
Common Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Common Stock, voting rights | ten votes per share | ten votes per share | ||||||||||||||||||||||||
Common Stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Number of shares of Class B common stock converted into Class A common stock | 9,000,000 | |||||||||||||||||||||||||
Preferred Stock [Member] | ||||||||||||||||||||||||||
Preferred Stock, shares authorized | 49,800,000 | 49,800,000 | 49,800,000 | 49,800,000 | ||||||||||||||||||||||
Preferred Stock, par value per share | $ / shares | $ 0.001 | |||||||||||||||||||||||||
Preferred Stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Number of preferred stock converted to common stock | 35,000 | |||||||||||||||||||||||||
Series 1 Preferred Stock [Member] | ||||||||||||||||||||||||||
Preferred Stock, shares authorized | 200,000 | 200,000 | 200,000 | 200,000 | ||||||||||||||||||||||
Preferred Stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||
Preferred Stock, shares issued | 86,000 | 86,000 | 86,000 | 121,000 | ||||||||||||||||||||||
Preferred stock, shares outstanding | 86,000 | 86,000 | 86,000 | 121,000 | ||||||||||||||||||||||
Share-based compensation expense | $ | $ 124,000 | |||||||||||||||||||||||||
Stock issued for services | 121,000 | |||||||||||||||||||||||||
Term of consulting agreements | 36 months | |||||||||||||||||||||||||
Common stock issued for services | $ | $ 1,167,000 | |||||||||||||||||||||||||
Stock warrants [Member] | ||||||||||||||||||||||||||
Granted during the period | 250,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Grant date fair value of warrants | $ | $ 105,827 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 12,738 | |||||||||||||||||||||||||
Common stock warrants issued | 882,001 | |||||||||||||||||||||||||
Exercise price of warrant | $ / shares | $ 1 | $ 1.50 | ||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 8,820 | |||||||||||||||||||||||||
Exercise period of warrants | 3 years | |||||||||||||||||||||||||
Common Stock [Member] | Employee [Member] | Restricted Stock [Member] | May 2014 [Member] | ||||||||||||||||||||||||||
Awards granted | 200,000 | |||||||||||||||||||||||||
Expense related to restricted stock awards | $ | $ 36,667 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Number of shares forfeited, stock awards | 40,000 | |||||||||||||||||||||||||
Common Stock [Member] | Employee [Member] | Restricted Stock [Member] | August 15, 2014 [Member] | ||||||||||||||||||||||||||
Awards granted | 250,000 | |||||||||||||||||||||||||
Number of shares will vest quarterly with an initial vesting date of January 1, 2015 | 31,250 | |||||||||||||||||||||||||
Expense related to restricted stock awards | $ | $ 31,251 | |||||||||||||||||||||||||
Common Stock [Member] | Employee [Member] | Restricted Stock [Member] | November 5, 2014 [Member] | ||||||||||||||||||||||||||
Awards granted | 45,455 | |||||||||||||||||||||||||
Expense related to restricted stock awards | $ | 22,644 | |||||||||||||||||||||||||
Common Stock [Member] | Employee [Member] | Restricted Stock [Member] | December 19, 2014 [Member] | ||||||||||||||||||||||||||
Awards granted | 50,000 | |||||||||||||||||||||||||
Expense related to restricted stock awards | $ | 1,732 | |||||||||||||||||||||||||
Common Stock [Member] | Employee [Member] | Employee Stock Option [Member] | August 15, 2014 [Member] | ||||||||||||||||||||||||||
Granted during the period | 310,000 | |||||||||||||||||||||||||
Share-based compensation, vesting period | 3 years | |||||||||||||||||||||||||
Share-based compensation, risk free interest rate | 0.875% | |||||||||||||||||||||||||
Share-based compensation, expected dividend yield | 0.00% | |||||||||||||||||||||||||
Share-based compensation, expected volatility rate | 41.00% | |||||||||||||||||||||||||
Share-based compensation, expected life in years | 3 years | |||||||||||||||||||||||||
Options term | 3 years | |||||||||||||||||||||||||
Granted during the period | $ / shares | $ 1 | |||||||||||||||||||||||||
Stock options granted, grant date fair value | $ / shares | $ 0.29 | |||||||||||||||||||||||||
Amortization of fair value of stock options | $ | $ 11,121 | $ 3,707 | ||||||||||||||||||||||||
Share-based compensation, vesting period upon the attainment of a performance condition | 3 years | |||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes |
PROPERTY AND EQUIPMENT (Schedul
PROPERTY AND EQUIPMENT (Schedule of Property and equipment) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||||
Property and Equipment | $ 52,615 | $ 37,982 | ||
Accumulated depreciation and amortization | $ (34,460) | (25,013) | (10,184) | |
Carrying value | 18,155 | 27,602 | 27,798 | |
Depreciation | $ 9,447 | $ 6,522 | $ 14,829 | $ 7,184 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Oct. 30, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ||||
Note payable - related party | $ 2,500,000 | $ 2,500,000 | ||
Steel Media [Member] | ||||
Related Party Transaction [Line Items] | ||||
Contingent Earnout Consideration | 7,183,751 | 6,732,123 | $ 6,584,042 | |
Maximum earnout consideration | 8,000,000 | |||
Steel Media [Member] | Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Maximum earnout consideration | $ 8,000,000 | |||
Richard Steel [Member] | Steel Media [Member] | ||||
Related Party Transaction [Line Items] | ||||
Maximum earnout consideration | 8,000,000 | 8,000,000 | ||
Richard Steel [Member] | Promissory note [Member] | ||||
Related Party Transaction [Line Items] | ||||
Note payable - related party | $ 2,500,000 | $ 2,500,000 |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of contingent consideration payable) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity for the contingent consideration payable [Roll Forward] | ||||
Accretion in Value | $ 451,628 | $ 148,081 | ||
Steel Media [Member] | ||||
Activity for the contingent consideration payable [Roll Forward] | ||||
Beginning of period | $ 6,732,123 | |||
Activity During the Period | $ 6,584,042 | |||
Accretion in Value | $ 451,628 | 148,081 | ||
End of period | 7,183,751 | $ 6,732,123 | ||
Contingent consideration payable [Member] | Steel Media [Member] | ||||
Activity for the contingent consideration payable [Roll Forward] | ||||
Beginning of period | $ 6,732,123 | |||
Activity During the Period | $ 6,584,042 | |||
Accretion in Value | $ 451,628 | 148,081 | ||
End of period | $ 7,183,751 | $ 6,732,123 |
RELATED PARTY TRANSACTIONS (S40
RELATED PARTY TRANSACTIONS (Schedule of maturities of contingent consideration payable) (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Maturities of: | ||
2,015 | $ 3,586,722 | |
2,015 | $ 3,827,339 | |
2,016 | $ 3,356,412 | $ 3,145,401 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014USD ($) | |
INCOME TAXES [Abstract] | |
Increase (decrease) in valuation allowance | $ 658,000 |
Federal net operating losses, or NOL, carryforwards | 4,500,000 |
State net operating losses, or NOL, carryforwards | $ 4,500,000 |
Operating loss carry-forward expiration dates | Dec. 31, 2032 |
Unrecognized tax benefits | $ 0 |
Accruals for interest and penalties related to unrecognized tax benefits | $ 0 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective tax rate) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
INCOME TAXES [Abstract] | ||
Federal statutory income tax rate | (34.00%) | (34.00%) |
State income taxes, net of federal benefit | (5.30%) | (5.80%) |
Stock based compensation | 15.40% | 0.00% |
Acquisition expenses | 6.20% | 0.00% |
Permanent differences | 1.30% | 0.00% |
Other | 1.50% | 1.80% |
Change in valuation allowance | 14.90% | 38.00% |
Provision for income taxes | 0.00% | 0.00% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 1,785,000 | $ 652,000 |
Fixed assets | $ 2,000 | |
Stock based compensation | $ 324,000 | |
Total deferred tax assets | $ 1,787,000 | $ 976,000 |
Deferred tax liabilities | ||
Stock based compensation | (122,000) | |
Other accruals | (31,000) | |
Total deferred tax liabilities | (153,000) | |
Net deferred tax assets | ||
Less: valuation allowance | $ (1,634,000) | $ (976,000) |
Net deferred tax liability |
STOCK OPTIONS AND WARRANTS (Sum
STOCK OPTIONS AND WARRANTS (Summary of Stock Options Activity) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Options | ||
Outstanding at beginning of the period | 426,000 | 70,500 |
Granted during the period | 2,427,000 | 475,500 |
Exercised during the period | ||
Terminated during the period | (508,000) | (120,000) |
Outstanding at end of the period | 2,345,000 | 426,000 |
Exercisable at end of the period | 177,171 | 35,834 |
Weighted Average Exercise Price | ||
Outstanding at beginning of the period | $ 1.04 | $ 1.35 |
Granted during the period | $ 1.32 | $ 1 |
Exercised during the period | ||
Terminated during the period | $ 1.35 | $ 1.08 |
Outstanding at end of the period | 1.26 | 1.04 |
Exercisable at end of the period | $ 1.13 | $ 1.09 |
Employee options [Member] | ||
Options | ||
Outstanding at end of the period | 2,345,000 | |
Exercisable at end of the period | 177,171 | |
Weighted Average Exercise Price | ||
Outstanding at end of the period | $ 1.26 | |
Intrinsic value, outstanding | $ 261,659 | |
Intrinsic value, exercisable | $ 39,459 | |
Average remaining contractual life outstanding | 6 years 7 months 6 days | |
Average remaining contractual life exercisable | 3 years 2 months 12 days | |
Compensation cost related to unvested employee options not yet recognized | $ 777,880 | |
Estimated compensation cost to be recognized in 2015 | $ 283,000 |
STOCK OPTIONS AND WARRANTS (S45
STOCK OPTIONS AND WARRANTS (Summary of Common Stock Award Activity) (Details) - Restricted Stock [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrant activity, number of shares: | ||
Outstanding at beginning of the period | 650,002 | 180,000 |
Granted during the period | 545,455 | 675,000 |
Vested during the period | (316,665) | (151,664) |
Terminated during the period | (40,000) | (53,334) |
Outstanding at the end of period | 838,792 | 650,002 |
Unrecognized compensation cost | $ 722,869 | |
2,015 | 476,000 | |
2,016 | 223,000 | |
2,017 | $ 24,000 |
STOCK OPTIONS AND WARRANTS (S46
STOCK OPTIONS AND WARRANTS (Summary of Stock Warrants Activity) (Details) - Stock warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrant activity, number of shares: | ||
Outstanding at beginning of the period | 3,460,000 | |
Granted during the period | 5,809,346 | 3,460,000 |
Exercised during the period | ||
Terminated during the period | ||
Outstanding at the end of period | 9,269,346 | 3,460,000 |
Exercisable at end of the period | 9,269,346 | 3,460,000 |
Weighted average remaining life | 3 years 1 month 6 days | |
Warrant activity, weighted average exercise price: | ||
Outstanding at beginning of the period | $ 1 | |
Granted during the period | $ 1.26 | $ 1 |
Exercised during the period | ||
Terminated during the period | ||
Outstanding at end of the period | $ 1.16 | $ 1 |
Exercisable at end of the period | $ 1.16 | $ 1 |
STOCK OPTIONS AND WARRANTS (Nar
STOCK OPTIONS AND WARRANTS (Narrative) (Details) - shares | Nov. 05, 2014 | Jan. 31, 2012 |
2012 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 3,000,000 | |
2014 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 3,000,000 |
COMMITMENTS AND CONTINGENCIES48
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of the future minimum lease payments | ||||||
2,015 | $ 45,865 | |||||
2,016 | 37,925 | |||||
2,017 | 37,200 | |||||
2,018 | 37,200 | |||||
Rent expense | $ 37,719 | $ 11,303 | $ 76,021 | $ 25,413 | $ 71,231 | $ 30,503 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Jul. 06, 2015USD ($) |
Subsequent Event [Line Items] | |
Proceeds from agreement | $ 1,500,000 |
Debt instrument, face amount | $ 1,500,000 |
Interest rate (as a percent) | 10.00% |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Paid-in-kind interest rate (as a percent) | 4.00% |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Paid-in-kind interest rate (as a percent) | 2.00% |