• Filing Date: 2016-03-30
  • Form Type: 10-K
  • Description: Annual report
v3.3.1.900
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2015
Mar. 26, 2016
Jun. 30, 2015
Document And Entity Information      
Entity Registrant Name Mobiquity Technologies, Inc.    
Entity Central Index Key 0001084267    
Document Type 10-K    
Document Period End Date Dec. 31, 2015    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Is Entity a Well-known Seasoned Issuer? No    
Is Entity a Voluntary Filer? No    
Is Entity's Reporting Status Current? Yes    
Entity Filer Category Smaller Reporting Company    
Entity Common Stock, Shares Outstanding   79,125,928  
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2015    
Entity Public Float     $ 16,425
v3.3.1.900
Consolidated Balance Sheets - USD ($)
Dec. 31, 2015
Dec. 31, 2014
Current Assets:    
Cash and cash equivalents $ 2,044,662 $ 1,654,171
Accounts receivable, net 323,313 445,892
Inventory, net 117,893 190,854
Prepaid expenses and other current assets 634,372 152,502
Total Current Assets 3,120,240 2,443,419
Property and equipment, net 103,355 262,480
Intangible assets, net 65,717 94,328
Other Assets 41,858 33,741
Total Assets 3,331,170 2,833,968
Current Liabilities:    
Accounts payable 538,632 609,957
Accrued expenses 474,000 369,383
Derivative liability 576,557 0
Convertible promissory notes 4,276,194 322,000
Total Current Liabilities 5,865,383 1,301,340
Long-term portion of convertible promissory notes 1,571,773 2,573,979
Total Liabilities 7,437,156 3,875,319
Stockholders' Equity:    
Preferred Stock, $.0001 par value; 5,000,000 shares authorized, 200,000 and zero shares issued and outstanding at December 31, 2015 and December 31, 2014 respectively 20 0
Common stock, $.0001 par value; 200,000,000 and 200,000,000 shares authorized; 78,781,757 and 64,818,243 shares issued and outstanding at December 31, 2015, and December 31, 2014, respectively 7,887 6,482
Additional paid-in capital 36,356,626 28,966,269
Accumulated other comprehensive income (loss) 1,072 (2,236)
Accumulated deficit (40,471,590) (30,011,866)
Total Stockholders' Deficit (4,105,985) (1,041,351)
Total Liabilities and Stockholders' Deficit $ 3,331,170 $ 2,833,968
v3.3.1.900
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]    
Preferred Stock par value $ .0001 $ 0.0001
Preferred Stock shares authorized 5,000,000 5,000,000
Preferred Stock shares issued 200,000 0
Preferred stock shares outstanding 200,000 0
Common stock par value $ .0001 $ 0.0001
Common stock shares authorized 200,000,000 200,000,000
Common stock shares issued 78,781,757 64,818,243
Common stock outstanding 78,781,757 64,818,243
v3.3.1.900
Consolidated Statements of Operations - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Revenues    
Product Revenue $ 2,491,875 $ 3,108,450
Service Revenue 0 149,500
Total revenues 2,491,875 3,257,950
Cost of Revenues    
Cost of product revenue 1,627,851 1,860,171
Cost of service revenue 0 244,032
Total cost of revenue 1,627,851 2,104,203
Gross Profit 864,024 1,153,747
Operating Expenses:    
Selling, general and administrative expenses 11,549,375 11,086,616
Total Operating Expenses 11,549,375 11,086,616
Loss from Operations (10,685,351) (9,932,869)
Other Income (Expense):    
Interest expense (996,011) (251,394)
Interest income 41 164
Change in derivatives 1,221,597 0
Loss on extinguishment of debt 0 (322,000)
Total Other Income (Expense) 225,627 (573,230)
Net Loss (10,459,724) (10,506,099)
Other Comprehensive Income (Loss) 3,308 (3,504)
Net Comprehensive Loss $ (10,456,416) $ (10,509,603)
Net Loss Per Common Share:    
Basic and diluted $ (.14) $ (0.17)
Weighted Average Common Shares Outstanding:    
Basic and diluted 72,965,632 61,664,457
v3.3.1.900
Consolidated Statement of Stockholders' Equity - USD ($)
Preferred Stock
Common Stock
Additional Paid-In Capital
Stock Subscription
Accumulated Other Comprehensive Income / Loss
Accumulated Deficit
Treasury Stock
Total
Beginning balance, shares at Dec. 31, 2013 0 52,402,247         23,334  
Beginning balance, value at Dec. 31, 2013 $ 0 $ 5,240 $ 21,948,920 $ (175,000) $ 1,268 $ (19,505,767) $ (31,501) $ 2,243,160
Common stock issued for cash, net of offering costs, shares   10,867,669            
Common stock issued for cash, net of offering costs, value   $ 1,086 3,275,224 175,000       3,451,310
Common stock issued for services, shares   784,000            
Common stock issued for services, value   $ 79 366,462         366,541
Common stock based compensation     3,117,807         3,117,807
Beneficial Conversion Feature     59,379         59,379
Exercise of options and warrants, shares   566,536            
Exercise of options and warrants, value   $ 57 149,943         150,000
Common stock issued in exchange for interest, shares   62,791            
Common stock issued in exchange for interest, value   $ 6 26,994         27,000
Common stock issued for prepaid services, shares   135,000            
Common stock issued for prepaid services, value   $ 14 53,041         53,055
Treasury share cancellation, shares             (23,334)  
Treasury share cancellation, value     (31,501)       $ 31,501  
Net Loss         (3,504) (10,506,099)   (10,509,603)
Ending balance, shares at Dec. 31, 2014 0 64,818,243            
Ending balance, value at Dec. 31, 2014 $ 0 $ 6,482 28,966,269 0 (2,236) (30,011,866)   (1,041,351)
Common stock issued for cash, net of offering costs, shares   9,043,334            
Common stock issued for cash, net of offering costs, value   $ 908 2,719,092         2,720,000
Common stock issued for services, shares   835,000            
Common stock issued for services, value   $ 88 209,000         209,088
Common stock based compensation     1,452,248         1,452,248
Common stock issued in exchange for interest, shares   410,180            
Common stock issued in exchange for interest, value   $ 40 120,680         120,720
Common stock subscriptions, shares   3,675,000            
Common stock subscriptions, value   $ 369 889,357         889,726
Preferred stock issued for cash, shares 200,000              
Preferred stock issued for cash, value $ 20   1,999,980         2,000,000
Net Loss         3,308 (10,459,724)   (10,456,416)
Ending balance, shares at Dec. 31, 2015 200,000 78,781,757            
Ending balance, value at Dec. 31, 2015 $ 20 $ 7,887 $ 36,356,626 $ 0 $ 1,072 $ (40,471,590)   $ (4,105,985)
v3.3.1.900
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash Flows from Operating Activities:    
Net loss $ (10,459,724) $ (10,506,099)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation Expense 164,346 233,588
Amortization - Intangible Assets 28,609 28,599
Amortization - Debt discount 614,867 12,709
Gain on derivative instrument (1,221,597) 0
Stock-based compensation 1,452,248 3,117,807
Common stock issued for services 209,088 366,541
Loss on extinguishment of debt 0 322,000
Payments on accrued interest (146,776) (75,226)
Changes in operating assets and liabilities:    
Accounts receivable 122,579 (12,036)
Inventory 72,961 (81,781)
Prepaid expenses and other assets (489,985) 159,509
Accounts payable (71,325) 186,756
Accrued expenses and other current liabilities 355,078 293,666
Total adjustments 1,090,093 4,552,132
Net Cash Used in Operating Activities (9,369,631) (5,953,967)
Cash Flows from Investing Activities:    
Purchase of property and equipment (5,221) (30,657)
Net Cash Used in Investing Activities (5,221) (30,657)
Cash Flows from Financing Activities:    
Proceeds from the issuance of notes 5,042,035 2,300,000
Proceeds received from exercising warrants 0 150,000
Proceeds received from stock subscription receivable 0 175,000
Proceeds from issuance of common stock 2,720,000 3,276,310
Proceeds from issuance of preferred stock 2,000,000 0
Net Cash Provided by Financing Activities 9,762,035 5,901,310
Net Increase (Decrease) in Cash and Cash Equivalents 387,183 (83,314)
Cash and Cash Equivalents, beginning of period 1,654,171 1,740,989
Change in foreign currency 3,308 (3,504)
Cash and Cash Equivalents, end of period 2,044,662 1,654,171
Supplemental Disclosure Information:    
Cash paid for interest 119,776 77,586
Cash paid for taxes 0 0
Non-cash Disclosures:    
Stock issued for interest 120,720 27,000
Cancellation of treasury stock 0 31,501
Stock issued for non-cash stock subscriptions 889,725 0
Recognition of debt discount $ 1,798,154 $ 0
v3.3.1.900
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS –

 

On September 10, 2013, Mobiquity Technologies, Inc. changed its name from Ace Marketing & Promotions, Inc. “the Company” or “Mobiquity”). We operate through two wholly-owned U.S. subsidiaries, namely, Mobiquity Networks, Inc. and Ace Marketing & Promotions, Inc. Mobiquity Networks owns 100% of Mobiquity Wireless S.L.U, a company incorporated in Spain. This corporation has an office in Spain to support our U.S. operations.

 

We operate a national location-based mobile advertising network that has developed a consumer-focused proximity network which we believe is unlike any other in the United States. Our integrated suite of proprietary location based mobile advertising technologies allows clients to execute more personalized and contextually relevant experiences, driving brand awareness and incremental revenue.

 

Leveraging our agreements with Simon Property Group, Inc. (which we refer to herein as” Simon” or “Simon Property”), and Macerich Partnership, L.P. (which we refer to as “Macerich”), the number one and number three mall operators, respectively, in the U.S. in terms of number of Class A properties, we have installed our location-based mobile advertising solutions in the common areas of approximately 295 retail destinations across the U.S. to create “smart malls” using Bluetooth-enabled iBeacon compatible technology. As part of our plan to expand our mall footprint into the common areas of other malls, we recently have also added 27 malls operated by PREIT Services, LLC, which we will refer to as “PREIT.” We have also added 30 malls operating by Rouse Properties TRS, Inc. which we will refer to as “Rouse.” In December 2015, we entered into an agreement with GGPLP REIT Services, LLC (which we refer to as “GGP”), the second largest mall operator in the United States, to install our Mobi-Beacons in approximately 120 malls by April 2016. We plan to further expand our mall footprint into the common areas of other malls and outside of malls with additional synergistic venues that will allow for cross marketing opportunities, including venues such as stadiums, arenas, additional college campuses, airports and retail chains. For example, we have entered into an agreement with the New York State University at Stony Brook to deploy a mobile advertising network in their new arena. This type of installation will enable fan engagement, cross-marketing opportunities, sponsorship activation and create interactive event experiences. This is our first installation in the university market.

 

Ace Marketing is our legacy marketing and promotions business which provides integrated marketing services to our commercial customers. While Ace Marketing currently represents substantially all of our revenue, we anticipate that activity from Ace Marketing will represent a diminishing portion of corporate revenue as our attention is now principally focused on developing and executing on opportunities in our Mobiquity Networks business.

 

GOING CONCERN -

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company's continued existence is dependent upon the Company's ability to obtain additional debt and/or equity financing to advance its new technology revenue stream. The Company has incurred losses for the years ending December 31, 2015 and December 31, 2014 of $10,459,724 and $10,506,099, respectively. As of December 31, 2015, the Company has an accumulated deficit of $40,471,590. The Company has had negative cash flows from operating activities of $9,369,631 and $5,953,967 for the years ending December 31, 2015 and 2014, respectively. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

 

Management has plans to address the Company’s financial situation as follows:

 

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan related to the Bluetooth-enabled iBeacon compatible technology. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises doubts about the Company’s ability to continue as a going concern.

 

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s efforts to raise equity and debt at acceptable terms or that the planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.

 

PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements include the accounts of Mobiquity Technologies, Inc., formerly known as Ace Marketing & Promotions, Inc., and its wholly owned subsidiaries, Mobiquity Networks, Inc., Ace Marketing, Inc., (which has had its name changed to Ace Marketing & Promotions, Inc. and Mobiquity Wireless S.L.U.). All intercompany accounts and transactions have been eliminated in consolidation.

 

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

 

FAIR VALUE OF FINANCIAL INSTRUMENTS - Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of December 31, 2015 and 2014. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

 

The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of December 31, 2015 and 2014, because of the relatively short-term maturity of these instruments and their market interest rates. No instruments are carried at fair value.

 

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 2.

 

     Level 1   Level 2   Level 3   Total 
 Fair value of derivatives   $   $576,557   $   $576,557 

 

Embedded Conversion Features

 

The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature.

 

Derivative Financial Instruments

 

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting related to 22 convertible notes issued totaling $3,675,000 which included a ratchet provision in the conversion price of $.30 or a price equal to the last equity transaction completed by the Company as part of a subscription agreement. The notes all have a maturity date of December 31, 2016. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of December 31, 2015. The fair values of the derivative instruments are measured each quarter, which resulted in a gain of 1,118,478 and derivative expense of $0 during the three and months ended December 31, 2015. As of December 31, 2015, the fair market value of the derivatives aggregated $576,557, using the following assumptions: estimated 1.00-1.25-year term, estimated volatility of 135.62-120.66%, and a discount rate of 0.65-0.22%.

 

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. As of December 31, 2015 and 2014, the balances are $2,044,662 and $1,654,171, respectively.

 

CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents.

 

Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited.

 

The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. As of December 31, 2015 and 2014, the Company exceeded FDIC limits by $1,644,032 and $1,004,897, respectively.

   

REVENUE RECOGNITION – The Company recognizes revenue, for all revenue streams, when it is realized or realizable and estimable in accordance with ASC 605, “Revenue Recognition”. The Company will recognize revenue only when all of the following criteria have been met:

 

·Persuasive evidence for an agreement exists;

 

·Service has been provided or shipment has occurred;

 

·The fee is fixed or determinable; and,

 

·Collection is reasonably assured.

 

ACE MARKETING – Ace Marketing’s revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the company’s shipment of the merchandise. Revenue is recognized on a gross basis since Ace Marketing has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. Ace Marketing records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided.

 

MOBIQUITY NETWORKS –. Mobiquity income will be derived from the sale of mobile based advertising campaigns utilizing our beacon platform. Revenue is realized with the signing of the advertising contract. The customer signs a contract directly with us for an advertising campaign with mutually agreed upon term and is billed on the start date of the advertising campaign, which are normally in short duration periods. The first option to earn revenue with the beacon platform is for customers to contract for advertising campaigns, on our platform, either directly through their own app or through various third party apps. The second option to earn revenue is through a revenue share with advertising exchanges and networks that deliver advertising campaigns to their customers based on our real-time or delayed location signal data. The third option would be through licensing ofour historical data to data management platform companies.

 

ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the collectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. As of December 31, 2015 and 2014, allowance for doubtful accounts were $104,611 and $40,000, respectively.

 

INVENTORY – Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There have been minimal reserves placed on inventory, based on this arrangement. As of December 31, 2015 and 2014, the Company has reserved against $31,676 and $31,676, respectively.

 

PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is expensed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income.

 

LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

 

PATENTS and TRADEMARKS - Patents and trademarks developed during the prior years were capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985.

 

ADVERTISING COSTS - Advertising costs are expensed as incurred. For the years ended December 31, 2015 and 2014 there were advertising costs of $14,495 and $288, respectively.

 

ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations.  Refer to Note 8 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion.

 

BENEFICIAL CONVERSION FEATURES - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair values of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received.

 

FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows:

 

  (i) Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.
  (ii) Fixed assets and equity transactions at historical rates.
  (iii) Revenue and expense items at the average rate of exchange prevailing during the period.

 

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.

 

No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to December 31, 2015.

 

INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

 

NET LOSS PER SHARE - Basic net loss per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 28,424,266 and 882,576 because they are anti-dilutive, as a result of a net loss for the years ended December 31, 2015 and 2014, respectively. 

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

v3.3.1.900
2. PROPERTY AND EQUIPMENT
12 Months Ended
Dec. 31, 2015
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

Property and equipment, net, consist of the following at December 31:

 

    USEFUL LIVES   2015     2014  
                     
Furniture and Fixtures   3 or 5 years   $ 1,094,601     $ 1,089,380  
Leasehold Improvements   5 years     4,084       4,084  
          1,098,685       1,093,464  
Less Accumulated Depreciation         995,330       830,984  
        $ 103,355     $ 262,480  

 

Depreciation expense for the years ended December 31, 2015 and 2014 was $164,346 and $233,588, respectively.

v3.3.1.900
3. INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

Intangible assets, net, consist of the following at December 31:

 

    USEFUL LIVES   2015     2014  
                     
Acquisition of intellectual property (FuturLink)   5 years   98,000       98,000  
Website technology development (Venn/AcePlace)   5 years   45,000       45,000  
        143,000       143,000  
Less Accumulated Amortization       77,283       48,672  
        $ 65,717     $ 94,328  

 

Future amortization, for the years ending December 31, is as follows:

 

2016     28,600  
2017     27,157  
Thereafter     9,960  
    $ 65,717  

 

Amortization expense for the years ended December 31, 2015 and 2014 was $28,609 and $28,599, respectively.

 

Acquisition of Assets of FuturLink

 

On March 7, 2013, the Company acquired the assets of FuturLink at a cost of approximately $98,000, which cash was paid from the Company’s working capital. These assets include, without limitation, the FuturLink technology (patents and source codes), trademark(s) and access point (proximity marketing) component parts. At the time of acquisition, FuturLink’s assets were minimal; the purchase price was apportioned to the intellectual property received in exchange. The Company changed its name to Mobiquity Networks upon acquisition and is a consolidated component of these financial statements.

v3.3.1.900
4. CONVERTIBLE PROMISSORY NOTE
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
CONVERTIBLE PROMISSORY NOTE

Summary of Convertible Promissory Notes:

 

   2015   2014 
Arnost Note (a)  $322,000   $322,000 
Cavu Notes (b), net of $28,227 for 2015 and $48,021 for 2014 debt discounts   221,773    201,979 
Berg Notes (c)(d)   3,722,000    2,372,000 
Investor Notes (d), net of discounts   1,582,194     
   Total Debt   5,847,967    2,895,979 
Current portion of debt   4,276,194    322,000 
Long-term portion of debt  $1,571,773   $2,573,979 

 

(a) On June 12, 2012, the Company closed on a security agreement (the "Security Agreement") with TCA related to a $350,000 Convertible promissory note issued by the Company in favor of TCA (the "Convertible Note"), which Convertible Note was funded by TCA on June 12, 2012. The maturity date of the Convertible Note was December 2013, and the Convertible Note bears interest at a rate of twelve percent (12%) per annum. The Convertible Note is convertible into shares of the Company's common stock at a price equal to ninety-five percent (95%) of the average of the lowest daily volume weighted average price of the Company's common stock during the five (5) trading days immediately prior to the date of conversion. The Convertible Note may be prepaid in whole or in part at the Company's option without penalty. The Security Agreement granted to TCA a continuing, first priority security interest in all of the Company's assets, wheresoever located and whether now existing or hereafter arising or acquired. The Company's wholly-owned subsidiary, Mobiquity Networks, Inc., also entered into a similar Security Agreement and Guaranty Agreement. On December 12, 2013, TCA sold its entire interest in the Company's $350,000 secured promissory note to Thomas Arnost, a director of the Company, at face value. Mr. Arnost entered into an amendment to the note to extend the maturity date of the note to June 12, 2014, which was later extended to December 12, 2014 and again extended to December 31, 2015, subject to his right to declare the note due and payable at any time in his sole discretion. Also, the interest rate was raised from 12% per annum to 15% and the conversion price of the shares issuable upon conversion of the note was fixed at $.30 per share. In December 2015, Mr. Arnost extended the due date of the Note to December 31, 2016 and the Company agreed in consideration thereof to reduce the conversion price of the Notes to $.20 per share. The aforementioned note is convertible at the sole discretion of the noteholder. The Company recognized a beneficial conversion, in the amount of $116,667, based on the fixed conversion price, compared to the fair market trading value at the date of the agreement. The noteholder immediately converted $28,000 into 93,334 shares of common stock in December 2013. The balance on the note is $322,000 as of December 31, 2015 and December 31, 2014.
   
(b) In July 2014, the Company raised $250,000 in gross proceeds from the sale of convertible promissory notes in the principal amount of $250,000 with a maturity date of July 31, 2017. The noteholders also received Class CC Warrants to purchase 125,000 shares of common Stock, exercisable at $1.20 per share through July 31, 2017. The placement agent received $17,500 in cash, 25,000 shares of restricted Common Stock and five-year warrants to purchase 7,500 shares of Common Stock at an exercise price of $.60 per share. The notes bear interest at the rate of 6% per annum with semi-annual payments to be paid on January 31' and July 31' of each year with the first interest payment due on January 31, 2015. At the option of the noteholder, the principal and accrued interest thereon is convertible at the greater of $.50 per share or 85% of the average daily volume weighted average price of the Company's Common Stock on the OTCQB during the 20 trading days immediately preceding the applicable interest date or conversion date. In the event the Company's Common Stock has a closing sales price of at least $1.00 per share on the OTCQB for a period of at least 10 trading days with an average daily volume weighted average of at least 25,000 shares, then the Company's promissory notes shall automatically convert into shares of the Company's Common Stock at 85% of the average VWAP during the 20 trading days immediately preceding the conversion date.

 

(c)  In November 2014, Carl and Mary Ann Berg 2011 CRT, Carl Berg Trustee, loaned us $1,000,000 pursuant to a two-year unsecured loan. This loan is repayable in November 2016 with interest at the rate of 4% per annum. Carl Berg is the brother of Clyde Berg. In December 2014, the Clyde Berg 2011 CRT with Carl Berg as Trustee, loaned us $1,000,000 pursuant to a two-year unsecured loan. This loan is repayable in December 2016 with interest at the rate of 4% per annum. We had an agreement with the Bergs to loan us an additional $500,000 and $850,000 on the same terms, which monies were received by us in January and February of 2015. On December 29, 2014, Clyde Berg's daughter loaned us $50,000 pursuant to a two-year note. The principal and accrued interest on all of the aforementioned notes are currently convertible at a conversion price of $.30 per share. For every $1.00 of principal and accrued interest thereon converted, the noteholder will also receive a five-year warrant to purchase one share of common stock at an exercise price of $.50 per share. The foregoing loans were all part of a letter agreement dated December 15, 2014 with Carl E. Berg pursuant to which unsecured loans could be advanced to the Company of up to $10 million through June 30, 2015. As no additional monies were received by the Company as of June 30, 2015, Mr. Berg’s right to make additional loans had expired.
   
  The Company evaluated the terms of December 15, 2014 agreement and accounted for the modification of the original notes as an extinguishment of the old notes and fair valued the new note agreement. The Company valued the note with conversion features and warrants and determined that the value of the new agreement resulted in a $322,000 loss on the extinguishment of debt and a corresponding premium to the loan value.
   
(d) Between August and December 2015, the Company borrowed $3,675,000 from accredited investors. These loans are due and payable the earlier of December 31, 2016 or the completion of an equity financing of at least $2,500,000. Upon the sale of the unsecured promissory notes, the Company issued as prepaid interest for each $1 of principal, one share of common stock and a warrant to purchase one share of common stock at an exercise price of $.40 per share through August 31, 2017. Accordingly, an aggregate of 3,675,000 shares of common stock and warrants to purchase a like amount were issued in the last six months of 2015. Each noteholder has the right to convert the principal of their note and accrued interest thereon at a conversion price of $.30 per share or at the noteholder’s option, into equity securities of the Company on the same terms as the last equity transaction completed by the Company prior to each respective conversion date.
   
  The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting related to 17 convertible notes issued totaling $3,675,000 which included a ratchet provision in the conversion price of $.30 or a price equal to the last equity transaction completed by the Company as part of a subscription agreement. The notes all have a maturity date of December 31, 2016. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of December 31, 2015. The fair values of the derivative instruments are measured each quarter, which resulted in a gain of 1,221,597. As of December 31, 2015, the fair market value of the derivatives aggregated $576,557, using the following assumptions: estimated 1.00-1.25-year term, estimated volatility of 135.62-120.66%, and a discount rate of 0.65-0.22%.

 

v3.3.1.900
5. INCOME TAXES
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
INCOME TAXES

The provision for income taxes for the years ended December 31, 2015 and 2014 is summarized as follows:

 

    2015     2014  
Current:                
Federal   $        
State            
             
Deferred:                
Federal            
State            
    $     $  

 

The Company has federal and state net operating loss carry forwards of approximately $27,200,000, which begin to expire 2025 and can be used to reduce future taxable income through 2034. The Company is open for tax years for the years ended 2008 through present.

 

The tax effects of temporary differences which give rise to deferred tax assets (liabilities) are summarized as follows:

 

   YEARS ENDED DECEMBER 31, 
   2015   2014 
Net operating loss carry-forwards  $(15,977,000)  $(11,792,000)
Stock based compensation – options/warrants   3,267,000    2,686,000 
Stock issued for services   971,000    971,000 
Gain on derivative instrument   (489,000)    
Disallowed entertainment expense   52,000    45,000 
Charitable contribution limitation   11,000    10,000 
Preferred Stock   39,000    39,000 
Bad debt expense & reserves   47,000    31,000 
Penalties   1,000    1,000 
Loss on extinguishment of debt   129,000    129,000 
Beneficial conversion features   119,000    119,000 
Mobiquity-Spain – net loss   695,000    440,000 
Amortization of debt discount   246,000     
Deferred Tax Assets   (10,889,000)   (7,321,000)
Less Valuation Allowance   10,889,000    7,321,000 
Net Deferred Tax Asset  $   $ 

 

A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows:

 

   YEARS ENDED DECEMBER 31, 
   2015   2014 
Federal Statutory Tax Rate   34.00%    34.00% 
State Taxes, net of Federal benefit   6.00%    6.00% 
Change in Valuation Allowance   (40.00%)   (40.00%)
Total Tax Expense   0.00%    0.00% 

v3.3.1.900
6. STOCKHOLDERS' EQUITY (DEFICIT)
12 Months Ended
Dec. 31, 2015
Equity [Abstract]  
STOCKHOLDERS' EQUITY (DEFICIT)

During 2014, the Company has raised gross proceeds of $3,276,310, net of offering costs of $283,990, from the sale of its Common Stock, at $0.30 to $0.50 per share, in exchange for 10,867,669 common shares and warrants to purchase 4,433,839 shares at an exercise price of $.50 to $1.00 per share through December 31, 2017 and 2019.

 

During 2014 the Company received $175,000 of the stock subscription receivables from 2013.

 

During 2014, the Company issued to consultants and employees, 784,000 shares of stock for services rendered, at a fair market value of $366,541. Also, the Company issued another 135,000 shares of the common stock to a consultant for prepaid services, at a fair market value of $53,055.

 

During 2014, the Company recorded 3,117,000 for stock based compensation related to warrants and options. The Company also recorded a beneficial conversion feature of $59,379 related to a convertible promissory note for $250,000.

 

December 2014 the Company issued 500,000 common shares for the receipt of $150,000 cash, from the exercise of 500,000 warrants.

 

During the year ending December 2014, cashless exercise of warrants resulted in the issuance of 66,536 shares of common stock.

 

During 2014 the Company issued 62,791 common shares, valued at $27,000, in payment of interest expense.

 

During the quarter ended March 31, 2015, the Company commenced a private placement offering at an offering price of $.30 per share with matching warrants issued to purchase an additional share of common stock at $.45 per share through March 31, 2020. Three investors purchased an aggregate of 1,666,667 shares for proceeds of $500,000 from our private placement offering on March 30, 2015. The Company also issued 77,143 shares for $27,000 of interest and 90,000 shares for $22,000 of services rendered during the quarter.

 

During the quarter ended June 30, 2015, the Company issued 7,400,000 shares for proceeds of $2,220,000 under the private placement offering. We also issued 236,842 shares for $59,000 of interest and 435,000 shares for $119,000 of services during the quarter.

 

During the quarter ended September 30, 2015, the Company issued 96,195 shares for $31,549 of interest and 135,000 shares for services during the quarter.

 

The private placement offering, which commenced in March 2015 and was completed in May 2015, provided for certain anti-dilution protection in the event of sales of common stock below $.30 per share. As a result of the note offering described in note 4, paragraph (d) to the table set forth therein, management of the Company has determined to issue to the investors one share of common stock for every $1 invested for a total of 2,720,000 shares.

 

In December 2015, the Company sold 200,000 shares of its Series AA Preferred Stock at a purchase price of $10 per share and raised $2 million. Each share of Preferred Stock is convertible into 50 shares of Common Stock at an effective conversion price of $.20 per share of Common Stock. The Preferred Stockholder has anti-dilution protection rights through December 31, 2016.

v3.3.1.900
7. OPTIONS AND WARRANTS
12 Months Ended
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
OPTIONS AND WARRANTS

The Company’s results for the years ended December 31, 2015 and 2014 include employee share-based compensation expense totaling $1,452,248 and $3,117,807, respectively. Such amounts have been included in the Statements of Operations within selling, general and administrative expenses. No income tax benefit has been recognized in the statement of operations for share-based compensation arrangements due to a history of operating losses.

 

The following table summarizes stock-based compensation expense for the years ended December 31, 2015 and 2014:

 

   Years Ended December 31, 
   2015   2014 
Employee stock based compensation-option grants  $1,223,332   $2,392,542 
Employee stock based compensation-stock grants        
Non-Employee stock based compensation-option grants   30,155    213,265 
Non-Employee stock based compensation-stock grants        
Non-Employee stock based compensation-stock warrant   198,761    512,000 
   $1,452,248   $3,117,807 

v3.3.1.900
8. STOCK OPTION PLANS
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
STOCK OPTION PLANS

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
       Exercise   Contractual   Intrinsic 
   Share   Price   Term   Value 
Outstanding, January 1, 2015   16,980,000   $.51    8.36    168,150 
Granted   3,370,000   $.43    6.47    500 
Exercised                
Cancelled / Expired   (1,010,000)            
                     
Outstanding, December 31, 2015   19,340,000   $.39    7.97    2,500 
                     
Options exercisable, December 31, 2015   15,940,000   $.39    7.88    2,500 

 

The weighted-average grant-date fair value of options granted during the years ended December 31, 2015 and 2014 was $.30 and $.31, respectively. The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2015 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the shares that had exercise prices, that were lower than the $.15 closing price of the Company’s common stock on December 31, 2015.

 

As of December 31, 2015, the fair value of unamortized compensation cost related to unvested stock option awards was $1,089,145

 

The option information provided above includes options granted outside of the Plans, which total 3,915,000 as of December 31, 2015.

 

 

The weighted average assumptions made in calculating the fair value of warrants granted during the years ended December 31, 2015 and 2014 are as follows:

 

   Years Ended 
   2015   2014 
Expected volatility   158.35%    156.68% 
Expected dividend yield   0     
Risk-free interest rate   .30%    1.69% 
Expected term (in years)   .50    5 

 

            Weighted     
        Weighted   Average     
        Average   Remaining   Aggregate 
        Exercise   Contractual   Intrinsic 
    Share   Price   Term   Value 
Outstanding, January 1, 2015    23,773,914   $.59    2.46    32,500 
Granted    12,741,668   $.44    4.31     
Exercised                 
Cancelled/Expired    (78,800)            
Outstanding, December 31, 2015    36,436,782   $.51    4.58    24,800 
                       
Warrants exercisable, December 31, 2015    36,436,782   $.51    4.58    24,800 

v3.3.1.900
9. COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

COMMITMENTS –

 

In April 2011, we entered into our agreement with Simon Property Group, which agreement was amended first in September 2013 and then in July 2014. This second amendment provides for us to expand our location-based mobile mall network footprint to about 240 Simon malls across the United States. Our agreement with Simon currently expires December 31, 2017. Simon is entitled to receive fees from us equal to the greater of a pre-set per mall fee or a percentage of revenues derived from within the Simon Mall network. The revenue share agreement in which Simon participates will exceed the minimum annual mall fees if the Company has generated revenues within the Simon network of about $15 million or more in a calendar year. Our agreement with Simon requires the company to maintain letters of credit for each calendar year under the agreement represented by the minimum amount of fees due for such calendar year. For 2015, the minimum fees of $2.7 million has been secured through two bank letters of credit, one of which was issued in the amount of $1,350,000 utilizing the funds of a non-affiliated stockholder and the second letter of credit was obtained in the same amount through the funds of Thomas Arnost, our Executive Chairman. In the event Simon draws down upon either letter of credit, we have 30 days after the draw down to obtain replacement letters of credit. Each person who secured our letters of credit has the opportunity to notify us that they wish to turn the cash funds securing the letters of credit over to us and to convert such funds into Common Stock at a conversion price of $1.00 per share, which was lowered first to $.30 per share and then subsequently lowered to $.20 per share in the first quarter of 2016. Also, each person who issued the letter of credit is receiving quarterly, while the letters of credit are outstanding, options to purchase 125,000 shares of Common Stock, exercisable at the prevailing market price per share on the date of grant and interest at the rate of 8% per annum on the monies that they have had to set aside in their bank accounts and are unable to have access to such monies.

 

In April 2015, we entered into a license agreement with Macerich. Pursuant to our agreement with Macerich, we have the right to install Mobi-Beacons to send information across the air space of the common areas of our Macerich mall network, which will, when fully installed we estimate to include approximately 55 malls, across the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls shall be exclusive. Under a Macerich license agreement between us and Macerich currently covering 55 malls, Macerich is entitled to receive fees from us equal to a minimum fee plus the greater of a pre-set per mall fee or a percentage of revenues derived from within the Macerich mall network as well as certain commission fees based on revenues generated through Macerich's sales efforts. The agreement also provides for Macerich to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls. Our agreement with Macerich has a term of three years but is subject to earlier termination (i) with cause following a notice and cure period in the event of material breach of the agreement or (ii) without cause by Macerich after one year on 90 days' prior written notice to us. In the event of termination of the agreement without cause, Macerich will reimburse us for certain out-of-pocket expenses.

 

In April 2015, we entered into a Joint Initiative Agreement with IBM and enrolled as an IBM Business Partner through IBM's PartnerWorld program. We are teaming with IBM to deliver jointly developed solutions for mall-based tenants, including retail clients. These solutions leverage the Mobiquity Networks beacon platform deployed exclusively in the common areas of our mall footprint across the United States, as well as our SDK which can be embedded within mall clients' mobile apps, to deliver relevant content in real time to shoppers' smart phones as they visit these malls. IBM has agreed to work with these clients to provide the analytics solutions needed to deliver personalized, one-on-one content to shoppers through our platform, and to help clients obtain insights from shopper transactions to drive improved customer experience and business performance. IBM services will also provide the integration capabilities needed to combine the Mobiquity Network platform in the mall common areas with the in-store server and network infrastructure, to optimize delivery of context-relevant content for the shopper. Together, our Joint Initiative Agreement with IBM can help their mall clients provide enhanced omni-channel marketing solutions and optimize business results. The agreement has an initial terms of two years and may be extended by agreement of the parties.

 

Pursuant to a master agreement effective August, 2015, we entered into an agreement with PREIT pursuant to which we have the right to install our Mobi-Beacons and to send information across the air space of the common areas of our PREIT mall network, which will include approximately 27 malls in select states in the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive. Under our agreement between us and PREIT, PREIT is entitled to an agreed upon revenue share over the four-year term of the agreement. In the event the net revenue share as defined in the agreement is not attained for any measurement period, also as defined in the agreement, either party may terminate the agreement upon 90 days prior written notice. PREIT may also terminate the agreement if it determines that Mobiquity’s installed equipment is not adequate and/or provides a negative user experience for the visitors to the PREIT malls. The agreement also provides for PREIT to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls.

 

Our Agreements with Mall Property Owners/Management and IBM

 

Simon Properties

 

We entered into an initial agreement with Simon Property in April 2011. This agreement was amended in September 2013 and July 2014 to, among other things, significantly expand the number of Simon mall properties covered by the agreement. Pursuant to our agreement with Simon, we have the right, on an exclusive basis, to install Bluetooth proximity marketing equipment to send information across the air space of the common areas of our Simon mall network, which includes approximately 240 malls across the United States. Under a master agreement and related agreements between us and Simon covering approximately 240 Simon malls, Simon is entitled to receive fees from us equal to a minimum fee plus the greater of a pre-set, per mall fee or a percentage of revenues derived from within the Simon mall network as well as certain commission fees based on revenues generated through Simon’s sales efforts. We believe that the revenue share in which Simon participates will exceed the minimum annual mall fees when revenues exceed approximately $14 million dollars. The agreement provides for Simon to adjust the number of malls subject to the agreement from time to time based upon changes in its beneficial ownership interest in the malls. Our agreement with Simon requires us to maintain letters of credit for each calendar year under the agreement represented by the minimum amount of fees due for such calendar year as well as certain levels of insurance. For 2015, the minimum fees of $2.7 million has been secured through two bank letters of credit, one of which was issued in the amount of $1,350,000 utilizing the funds of a non-affiliated stockholder and the second letter of credit was obtained in the same amount through the funds of Thomas Arnost, our Executive Chairman. In the event Simon draws down upon either letter of credit, we have 30 days after the draw down to obtain replacement letters of credit. Each person who secured our letters of credit has the opportunity to notify us that they wish to turn the cash funds securing the letters of credit over to us and to convert such funds into shares of our common stock. Also, each person who issued the letter of credit is receiving quarterly, while the letters of credit are outstanding, options to purchase $27,000 of common stock, exercisable at the prevailing market price per share on the date of grant and interest at the rate of 8% per annum on the monies that they have had to set aside in their bank accounts and are unable to have access to such monies. Our agreement with Simon expires on December 31, 2017. Our agreement with Simon is subject to earlier termination by either us or Simon only following a notice and cure period in the event of a material breach of the agreement.

 

GGP

 

In January 2016, we entered into a license agreement with GGP, with an effective date of November 20, 2015. Pursuant to our agreement with GGP, we shall install Mobi-Beacons to send information across the air space of the common areas of our GGP mall network, which will include approximately 120 malls across the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive, with defined limitations under the agreement. Under a license agreement between us and GGP currently covering about 120 malls, GGP is entitled to receive fees from us equal to a minimum fee plus the greater of a pre-set per mall fee or a percentage of revenues derived from within the GGP mall network as well as certain commission fees based on revenues generated through GGP’s sales efforts. We believe that the revenue share in which GGP participates will exceed the minimum annual mall fees if we generate revenues within the GGP network of approximately $10 million or more in a calendar year. The agreement also provides for GGP to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls. Our agreement with GGP has a term of two years from April 1, 2016, but is subject to earlier termination with cause following a notice and cure period in the event of material breach of the agreement or operational failure.

   

Macerich

 

In April 2015, we entered into a license agreement with Macerich, which became effective June 2015. Pursuant to our agreement with Macerich, we have the right to install Mobi-Beacons to send information across the air space of the common areas of our Macerich mall network, which will include approximately 55 malls across the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive. Under a license agreement between us and Macerich currently covering 55 malls, Macerich is entitled to receive fees from us equal to a minimum fee plus the greater of a pre-set per mall fee or a percentage of revenues derived from within the Macerich mall network as well as certain commission fees based on revenues generated through Macerich’s sales efforts. We believe that the revenue share in which Macerich participates will exceed the minimum annual mall fees if we generate revenues within the Macerich network of approximately $3 million or more in a calendar year. The agreement also provides for Macerich to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls. Our agreement with Macerich has a term of three years but is subject to earlier termination (i) with cause following a notice and cure period in the event of material breach of the agreement or (ii) without cause by Macerich after one year on 90 days’ prior written notice to us. In the event of termination of the agreement without cause, Macerich will reimburse us for certain out-of-pocket expenses.

 

IBM

 

In April 2015, we entered into a Joint Initiative Agreement with IBM and enrolled as an IBM Business Partner through IBM's PartnerWorld program.  We are teaming with IBM to deliver jointly developed solutions for mall-based tenants, including retail clients. These solutions leverage the Mobiquity Networks beacon platform deployed exclusively in the common areas of our mall footprint across the United States, as well as our SDK which can be embedded within mall clients' mobile apps, to deliver relevant content in real time to shoppers' smart phones as they visit these malls.  IBM has agreed to work with these clients to provide the analytics solutions needed to deliver personalized, one-on-one content to shoppers through our platform, and to help clients obtain insights from shopper transactions to drive improved customer experience and business performance. IBM services will also provide the integration capabilities needed to combine the Mobiquity Network platform in the mall common areas with the in-store server and network infrastructure, to optimize delivery of context-relevant content for the shopper.  Together, our Joint Initiative Agreement with IBM can help their mall clients provide enhanced omni-channel marketing solutions and optimize business results. The agreement has an initial terms of two years and may be extended by agreement of the parties.

  

PREIT

 

Pursuant to a master agreement effective August, 2015, we entered into an agreement with PREIT pursuant to which we have the right to install our Mobi-Beacons to send information across the air space of the common areas of our PREIT mall network, which will include approximately 27 malls in select states in the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive. Under our agreement between us and PREIT, PREIT is entitled to an agreed upon revenue share over the four year term of the agreement. In the event the net revenue share as defined in the agreement is not attained for any measurement period, also as defined in the agreement, either party may terminate the agreement upon 90 days prior written notice. PREIT may also terminate the agreement if it determines that Mobiquity’s installed equipment is not adequate and/or provides a negative user experience for the visitors to the PREIT malls. The agreement also provides for PREIT to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls.

 

Rouse

 

Pursuant to a master agreement entered into in 2015, we entered into an agreement with Rouse pursuant to which we have the right to install our Mobi-Beacons to send information across the air space of the common areas of our Rouse mall network, which will include approximately 30 malls in select states in the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive. Under our agreement between us and Rouse, Rouse is entitled to an agreed upon revenue share over the four-year term of the agreement. In the event the net revenue share as defined in the agreement is not attained for any measurement period, also as defined in the agreement, either party may terminate the agreement upon 90 days prior written notice. Either party may also terminate the agreement due to a material breach which is not cured within 30 days of written notice. Also, Rouse upon at least 60 days written notice to us prior to the end of the second contract year, may terminate the agreement with respect to any participating property for any reason at the end of the second contract year. The agreement also provides for Rouse to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls.

 

In January 2016, we entered into a license agreement with GGP, with an effective date of November 20, 2015. Pursuant to our agreement with GGP, we shall install Mobi-Beacons to send information across the air space of the common areas of our GGP mall network, which will include approximately 120 malls across the United States. Our right to install our Mobi-Beacons to market and sell third party paid advertising in the interior common areas of these malls is exclusive, with defined limitations under the agreement. Under a license agreement between us and GGP currently covering about 120 malls, GGP is entitled to receive fees from us equal to a minimum fee plus the greater of a pre-set per mall fee or a percentage of revenues derived from within the GGP mall network as well as certain commission fees based on revenues generated through GGP’s sales efforts. We believe that the revenue share in which GGP participates will exceed the minimum annual mall fees if we generate revenues within the GGP network of approximately $10 million or more in a calendar year. The agreement also provides for GGP to adjust the number of malls subject to the agreement from time-to-time based upon changes in its beneficial ownership in the malls. Our agreement with GGP has a term of two years from April 1, 2016, but is subject to earlier termination with cause following a notice and cure period in the event of material breach of the agreement or operational failure.

   

In February 2012, the Company entered into a lease agreement for new executive office space of approximately 4,200 square feet located at 600 Old Country Road, Suite 541, Garden City, NY 11530. The lease agreement is for 63 months, commencing April 2012 and expiring June 2017. The annual rent under this office facility for the first year is estimated at $127,000, including electricity, subject to an annual increase of 3%. In the event of a default in which the Company is evicted from the office space, Mobiquity would be responsible to the landlord for an additional payment of rent of $160,000 in the first year of the lease, an additional payment of $106,667 in the second year of the lease and an additional payment of rent of $53,333 in the third year of the lease. Such additional rent would be payable at the discretion of the Company in cash or in Common Stock of the Company.

 

In May of 2015, the company moved to a larger location with the same landlord on a month to month basis for $5,250 each month

 

Minimum future rentals under non-cancelable lease commitments are as follows:

 

YEARS ENDING DECEMBER 31,          
2016       4,518,056  
2017       5,626,360  
2018 and thereafter       5,717,314  
      $ 15,861,730  

 

Rent and real estate tax expense was approximately $3,318,000 and $1,697,000 for the years December 31, 2015 and 2014, respectively.

  

EMPLOYMENT CONTRACTS –

 

Michael D. Trepeta and Dean L. Julia

 

On March 1, 2005, the Company entered into employment contracts with two of its officers, namely, Dean L. Julia and Michael D. Trepeta. The employment agreements provide for minimum annual salaries plus bonuses equal to 5% of pre-tax earnings (as defined) and other perquisites commonly found in such agreements. In addition, pursuant to the employment contracts, the Company granted the officers options to purchase up to an aggregate of 400,000 shares of common stock.

 

On August 22, 2007, the Company approved a three year extension of the employment contracts with two of its officers expiring on February 28, 2011. The employment agreements provided for minimum annual salaries with scheduled increases per annum to occur on every anniversary date of the contract and extension commencing on March 1, 2008. A signing bonus of options to purchase 150,000 shares granted to each executive were fully vested at the date of the grant and exercisable at $1.20 per share through August 22, 2017. Ten year options to purchase 50,000 shares of common stock are to be granted at fair market value on each anniversary date of the contract and extension commencing March 1, 2008. Termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year, plus the amount of bonuses paid (or entitle to be paid) to the executive for the current fiscal year of the preceding fiscal year, whichever is higher.

 

On April 7, 2010, the Board of Directors approved a five-year extension of the employment contract of Dean L. Julia and Michael D. Trepeta to expire on March 1, 2015.  The Board approved the continuation of each officer’s current salary and scheduled salary increases on March 1st of each year. The Board also approved a signing bonus of stock options to purchase 200,000 shares granted to each officer which is fully vested at the date of grant and exercisable at $.50 per share through April 7, 2020; ten-year stock options to purchase 100,000 shares of Common Stock to be granted to each officer at fair market value on each anniversary date of the contract and extension thereof commencing March 1, 2011; and termination pay of one year base salary based upon the scheduled annual salary of each executive officer for the next contract year plus the amount of bonuses paid or entitled to be paid to the executive for the current fiscal year or the preceding fiscal year, whichever is higher.  In the event of termination, the executives will continue to receive all benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof.

 

In July 2012, the Company approved and in January 2013 the Company implemented amending the employment agreements of Messrs. Julia and M. Trepeta to expire on February 28, 2017, subject to an automatic one year renewal on March 1, 2013 and on each March 1st thereafter, unless the Employment Agreement is terminated in accordance with its terms on or before December 30th of the prior calendar year. In the event of termination without cause, the executives will continue to receive all salary and benefits included in the employment agreement through the scheduled expiration date of said employment agreement prior to the acceleration of the termination date thereof, plus one year termination pay.

 

On May 28, 2013, the Company approved amending the employment agreements of Messrs. Julia and Trepeta to provide that each officer may choose an annual bonus equal to 5% of pre-tax earnings for the most recently completed year before deduction of annual bonuses paid to officers or, in the event majority control of the Company is acquired by a person or a group of persons during the prior fiscal year, the officer may choose to receive the aforementioned bonus or 1% of the control consideration paid by acquirer(s) to acquire majority control of the Company.

 

Thomas Arnost

 

In December 2014, we entered into a three-year employment agreement with Thomas Arnost serving as Executive Chairman of the board. Mr. Arnost receives a monthly salary of $10,000 plus an annual grant of options for serving on the board of directors. In the event of his termination, by Mr. Arnost or by the company for cause, Mr. Arnost will receive his pay through the termination date. In the event that Mr. Arnost is terminated without cause, he shall be entitled to receive his salary paid through the end of the term of his agreement. Mr. Arnost may terminate the agreement at any time by giving three months’ prior written notice to our board of directors. Mr. Arnost will also be entitled to indemnification against all claims, judgments, damages, liabilities, costs and expenses (including reasonably legal fees) arising out of, based upon or related to his performance of services to us, to the maximum extent permitted by law.

 

Sean Trepeta

 

In December 2014, Mobiquity Networks entered into an employment agreement with Sean Trepeta, to serve as President of Mobiquity Networks as an employee at will. Mr. Trepeta, as a full-time employee, is to be paid a salary at the rate of $20,000 per month. Upon the execution of the agreement, he received 10-year options to purchase 1,500,000 shares of our common stock vesting quarterly over a period of three years. For calendar 2015, he will be entitled to a bonus of $125,000 upon revenues of Mobiquity Networks achieving a minimum of $6 million in revenues and a further bonus of $125,000 for a total of $250,000 at such time as Mobiquity Network’s revenues achieve a minimum of $12 million, it being understood that any revenues which do not have a 30% margin shall not count toward these totals. All options granted to Mr. Trepeta will become immediately vested in the event of a change in control of our Company or sale of substantially all of our assets. In the event we terminate Mr. Trepeta without cause, after six months of continued employment under the employment agreement, Mr. Trepeta is entitled to receive three months’ severance pay.

 

Paul Bauersfeld

 

In December 2014, we entered into an employment agreement with Paul Bauersfeld, our Chief Technology Officer, who is an employee at will. Mr. Bauersfeld, as a full-time employee, is to be paid a salary at the rate of $25,000 per month. Upon the execution of the agreement, he received 10-year options to purchase 1,000,000 shares of our common stock vesting quarterly over a period of three years. For calendar 2015, he will be entitled to a bonus of $125,000 upon revenues of Mobiquity Networks achieving a minimum of $6 million in revenues and a further bonus of $125,000 for a total of $250,000 at such time as Mobiquity Network’s revenues achieve a minimum of $12 million, it being understood that any revenues which do not have a 30% margin shall not count toward these totals. The foregoing compensatory arrangements with Mr. Bauersfeld is in addition to the non-statutory stock options to purchase 2,600,000 shares of our common stock previously granted to Mr. Bauersfeld. All options granted to Mr. Bauersfeld will become immediately vested in the event of a change of control of our company or sale of substantially all of our assets. In the event we terminate Mr. Bauersfeld without cause. Mr. Bauersfeld is entitled to receive six months’ severance pay.

 

Sean McDonnell

 

Sean McDonnell, our Chief Financial Officer, is an employee at will and is currently receiving a salary of $132,000 per annum.

 

TRANSACTIONS WITH MAJOR CUSTOMERS –

 

The Company sells its products to a geographically diverse group of customers, performs ongoing credit evaluations of its customers and generally does not require collateral. During the year ended December 31, 2015 a customer accounted for approximately 38% of net revenues and for the year ended December 31, 2014 a customer accounted for approximately 35% of net revenues.  The Company holds on hand certain items that are ordered on a regular basis.

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10 . SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
SEGMENT INFORMATION

Reportable operating segment is determined based on Mobiquity Technologies, Inc.’s management approach. The management approach, as defined by accounting standards which have been codified into FASB ASC 280, “Segment Reporting,” is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our chief operating decision-maker is our Chief Executive Officer and Chief Financial Officer.

 

While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in two operating segments: (i) Ace Marketing and Promotions, Inc. captures Branding & Branded Merchandise (ii) Mobiquity Networks represent our Mobil Marketing.

 

Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below:

 

Fiscal 2014

 

   Ace Marketing & Promotions, Inc.   Mobiquity Networks Inc.   Total 
Net sales  $3,108,450   $149,500   $3,257,950 
Operating (loss), excluding depreciation   (5,129,335)   (4,544,851)   (9,674,186)
Interest income   164        164 
Interest (expense)   (251,394)       (251,394)
Other income (expense)   (322,000)       (322,000)
Depreciation and amortization   (113,058)   (149,129)   (262,187)
Comprehensive Loss   (5,815,623)   (4,693,980)   (10,509,603)
Total assets at December 31, 2014   2,436,604    397,364    2,833,968 

 

Fiscal 2015

 

   Ace Marketing & Promotions, Inc.   Mobiquity Networks Inc.   Total 
Net sales  $2,491,875       $2,491,875 
Operating (loss), excluding depreciation   (835,230)   (8,432,261)   (9,267,491)
Interest income   41        41 
Interest (expense)   (996,011)       (996,011))
Depreciation and amortization   (48,014)   (144,941)   (192,955)
Comprehensive Loss   (1,879,214)   (8,577,202)   (10,456,416)
Total assets at December 31, 2015   3,038,728    292,442    3,331,170 

 

All intersegment sales and expenses have been eliminated from the tables above.

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11. COMMON STOCK PURCHASE AGREEMENT
12 Months Ended
Dec. 31, 2015
Common Stock Purchase Agreement  
COMMON STOCK PURCHASE AGREEMENT

On March 31, 2014, the Company entered into a common stock purchase agreement (referred to herein as the “Purchase Agreement”), with Aspire Capital Fund, LLC, an Illinois limited liability company (referred to herein as “Aspire Capital”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $15.0 million of Common Stock over the approximately 24-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, we issued to Aspire Capital 1,000,000 shares of Common Stock as a commitment fee (referred to in herein as the “Commitment Shares”). Upon execution of the Purchase Agreement, we sold to Aspire Capital 1,000,000 shares of Common Stock (referred to herein as the “Initial Purchase Shares”). Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital (referred to herein as the “Registration Rights Agreement”), in which we agreed to file one or more registration statements as permissible and necessary to register under the Securities Act of 1933, as amended, or the Securities Act, the sale of the shares of Common Stock that have been and may be issued to Aspire Capital under the Purchase Agreement.

  

Pursuant to the Purchase Agreement and the Registration Rights Agreement, the Company was obligated to register 15,000,000 shares of Common Stock under the Securities Act, which includes the Commitment Shares and Initial Purchase Shares that have already been issued to Aspire Capital and an additional 13,000,000 shares of Common Stock which the Company may issue to Aspire Capital after the registration statement is declared effective under the Securities Act. Said Registration Statement was declared effective by the SEC on April 28, 2014 and has since become stale.

 

In the event the Company were to file a post-effective amendment to its Registration Statement and said Registration Statement was declared effective by the Securities and Exchange Commission, then in such event, on any trading day on which the closing sale price of our Common Stock exceeds $0.16, we have the right, in our sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 200,000 shares of Common Stock per trading day, provided that the aggregate price of such purchase shall not exceed $250,000 per trading day, up to $15.0 million of Common Stock in the aggregate at a per share price (the “Purchase Price”) calculated by reference to the prevailing market price of the Common Stock (as more specifically described below). In addition, on any date on which we submit a Purchase Notice for 200,000 shares to Aspire Capital and the closing sale price of the Common Stock is equal to or greater than $0.50 per share, we also have the right, in our sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on the OTCQB on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares we may determine (the “VWAP Purchase Share Volume Maximum”) and a minimum trading price (the “VWAP Minimum Price Threshold”) (as more specifically described below). The purchase price per Purchase Share pursuant to such VWAP Purchase Notice (the “VWAP Purchase Price”) is calculated by reference to the prevailing market price of Common Stock (as more specifically described below).

 

The Purchase Agreement provides that the Company and Aspire Capital shall not affect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Common Stock is less than $0.16 per share (the “Floor Price”). This Floor Price and the respective prices and share numbers in the preceding paragraphs shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by us, but is obligated to make purchases from us as the Company directs in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any penalty or cost to the Company. It is the Company’s plan to allow the Purchase Agreement to expire on March 31, 2016 and to not file f post-effective amendment to its Registration Statement.

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12. STOCKHOLDER AUTHORIZATION OF REVERSE STOCK SPLIT
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
STOCKHOLDER AUTHORIZATION OF REVERSE STOCK SPLIT

On November 17, 2014, we held a special meeting of our stockholders to approve authorizing our board of directors to effectuate a reverse stock split in its sole discretion of not less than 1-for-5 and not greater than 1-for-20 for the purpose of attempting to obtain a listing of our common stock on the NYSE MKT. Such approval was obtained. As of the date of this Report, the Board has not taken any action to act upon this authorization.

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13. SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

There are no subsequent events required to be disclosed in the Notes to Financial Statements through the date of the report, except as follows:

 

In the first quarter of 2016, the Company sold 40,000 shares of Series AA Preferred Stock at a purchase price of $10 per share. Each share of Preferred Stock is convertible into 50 shares of Common Stock at an effective conversion price of $.20 per share of Common Stock. Holders of Series AA Preferred Stock have anti-dilution protection against sales of Common Stock below $.20 per share through December 31, 2016.

In the first quarter of 2016, Simon sold 45 of its mall properties covered by our agreement with them to a third party mall manager.

 

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
NATURE OF OPERATIONS

NATURE OF OPERATIONS – On September 10, 2013, Mobiquity Technologies, Inc. changed its name from Ace Marketing & Promotions, Inc. “the Company” or “Mobiquity”). We operate through two wholly-owned U.S. subsidiaries, namely, Mobiquity Networks, Inc. and Ace Marketing & Promotions, Inc. Mobiquity Networks owns 100% of Mobiquity Wireless S.L.U, a company incorporated in Spain. This corporation has an office in Spain to support our U.S. operations.

 

We operate a national location-based mobile advertising network that has developed a consumer-focused proximity network which we believe is unlike any other in the United States. Our integrated suite of proprietary location based mobile advertising technologies allows clients to execute more personalized and contextually relevant experiences, driving brand awareness and incremental revenue.

 

Leveraging our agreements with Simon Property Group, Inc. (which we refer to herein as” Simon” or “Simon Property”), and Macerich Partnership, L.P. (which we refer to as “Macerich”), the number one and number three mall operators, respectively, in the U.S. in terms of number of Class A properties, we have installed our location-based mobile advertising solutions in the common areas of approximately 295 retail destinations across the U.S. to create “smart malls” using Bluetooth-enabled iBeacon compatible technology. As part of our plan to expand our mall footprint into the common areas of other malls, we recently have also added 27 malls operated by PREIT Services, LLC, which we will refer to as “PREIT.” We have also added 30 malls operating by Rouse Properties TRS, Inc. which we will refer to as “Rouse.” In December 2015, we entered into an agreement with GGPLP REIT Services, LLC (which we refer to as “GGP”), the second largest mall operator in the United States, to install our Mobi-Beacons in approximately 120 malls by April 2016. We plan to further expand our mall footprint into the common areas of other malls and outside of malls with additional synergistic venues that will allow for cross marketing opportunities, including venues such as stadiums, arenas, additional college campuses, airports and retail chains. For example, we have entered into an agreement with the New York State University at Stony Brook to deploy a mobile advertising network in their new arena. This type of installation will enable fan engagement, cross-marketing opportunities, sponsorship activation and create interactive event experiences. This is our first installation in the university market.

 

Ace Marketing is our legacy marketing and promotions business which provides integrated marketing services to our commercial customers. While Ace Marketing currently represents substantially all of our revenue, we anticipate that activity from Ace Marketing will represent a diminishing portion of corporate revenue as our attention is now principally focused on developing and executing on opportunities in our Mobiquity Networks business.

GOING CONCERN

GOING CONCERN - The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company's continued existence is dependent upon the Company's ability to obtain additional debt and/or equity financing to advance its new technology revenue stream. The Company has incurred losses for the years ending December 31, 2015 and December 31, 2014 of $10,459,724 and $10,506,099, respectively. As of December 31, 2015, the Company has an accumulated deficit of $40,471,590. The Company has had negative cash flows from operating activities of $9,369,631 and $5,953,967 for the years ending December 31, 2015 and 2014, respectively. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

 

Management has plans to address the Company’s financial situation as follows:

 

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan related to the Bluetooth-enabled iBeacon compatible technology. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises doubts about the Company’s ability to continue as a going concern.

 

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s efforts to raise equity and debt at acceptable terms or that the planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.

PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements include the accounts of Mobiquity Technologies, Inc., formerly known as Ace Marketing & Promotions, Inc., and its wholly owned subsidiaries, Mobiquity Networks, Inc., Ace Marketing, Inc., (which has had its name changed to Ace Marketing & Promotions, Inc. and Mobiquity Wireless S.L.U.). All intercompany accounts and transactions have been eliminated in consolidation.

ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS - Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of December 31, 2015 and 2014. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

 

The carrying amounts of financial instruments, including accounts receivable, accounts payable and accrued liabilities, and promissory note, approximated fair value as of December 31, 2015 and 2014, because of the relatively short-term maturity of these instruments and their market interest rates. No instruments are carried at fair value.

 

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 2.

 

     Level 1   Level 2   Level 3   Total 
 Fair value of derivatives   $   $576,557   $   $576,557 

 

Embedded Conversion Features

 

The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature.

 

Derivative Financial Instruments

 

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting related to 22 convertible notes issued totaling $3,675,000 which included a ratchet provision in the conversion price of $.30 or a price equal to the last equity transaction completed by the Company as part of a subscription agreement. The notes all have a maturity date of December 31, 2016. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of December 31, 2015. The fair values of the derivative instruments are measured each quarter, which resulted in a gain of 1,118,478 and derivative expense of $0 during the three and months ended December 31, 2015. As of December 31, 2015, the fair market value of the derivatives aggregated $576,557, using the following assumptions: estimated 1.00-1.25-year term, estimated volatility of 135.62-120.66%, and a discount rate of 0.65-0.22%.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. As of December 31, 2015 and 2014, the balances are $2,044,662 and $1,654,171, respectively.

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents.

 

Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, as a consequence, believes that its receivable credit risk exposure is limited.

 

The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. As of December 31, 2015 and 2014, the Company exceeded FDIC limits by $1,644,032 and $1,004,897, respectively.

REVENUE RECOGNITION

REVENUE RECOGNITION – The Company recognizes revenue, for all revenue streams, when it is realized or realizable and estimable in accordance with ASC 605, “Revenue Recognition”. The Company will recognize revenue only when all of the following criteria have been met:

 

·Persuasive evidence for an agreement exists;

 

·Service has been provided or shipment has occurred;

 

·The fee is fixed or determinable; and,

 

·Collection is reasonably assured.

 

ACE MARKETING – Ace Marketing’s revenue is recognized when title and risk of loss transfers to the customer and the earnings process is complete. In general, title passes to our customers upon the company’s shipment of the merchandise. Revenue is recognized on a gross basis since Ace Marketing has the risks and rewards of ownership, latitude in selection of vendors and pricing, and bears all credit risk. Advance payments made by customers are included in customer deposits. Ace Marketing records all shipping and handling fees billed to customers as revenues and related costs as cost of goods sold, when incurred. Additional source of revenue, derived from emails/texts directly to consumers are recognized under contractual arrangements. Revenue from this advertising method is recognized at the time of service provided.

 

MOBIQUITY NETWORKS –. Mobiquity income will be derived from the sale of mobile based advertising campaigns utilizing our beacon platform. Revenue is realized with the signing of the advertising contract. The customer signs a contract directly with us for an advertising campaign with mutually agreed upon term and is billed on the start date of the advertising campaign, which are normally in short duration periods. The first option to earn revenue with the beacon platform is for customers to contract for advertising campaigns, on our platform, either directly through their own app or through various third party apps. The second option to earn revenue is through a revenue share with advertising exchanges and networks that deliver advertising campaigns to their customers based on our real-time or delayed location signal data. The third option would be through licensing ofour historical data to data management platform companies.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the collectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. As of December 31, 2015 and 2014, allowance for doubtful accounts were $104,611 and $40,000, respectively.

INVENTORY

INVENTORY – Inventory is recorded at cost (First In, First Out) and is comprised of finished goods. The Company maintains an inventory on hand for its largest customer’s frequent order items. All items held are branded for the customer, therefore are not available for public distribution. The Company has an agreement with this customer, for cost recovery, if vendor relationship is terminated. There have been minimal reserves placed on inventory, based on this arrangement. As of December 31, 2015 and 2014, the Company has reserved against $31,676 and $31,676, respectively.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is expensed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income.

LONG-LIVED ASSETS

LONG LIVED ASSETS - Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

PATENTS AND TRADEMARKS

PATENTS and TRADEMARKS - Patents and trademarks developed during the prior years were capitalized for the period of development and testing. Expenditures during the planning stage and after implementation have been expensed in accordance with ASC985.

ADVERTISING COSTS

ADVERTISING COSTS - Advertising costs are expensed as incurred. For the years ended December 31, 2015 and 2014 there were advertising costs of $14,495 and $288, respectively.

ACCOUNTING FOR STOCK BASED COMPENSATION

ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations.  Refer to Note 8 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion.

BENEFICIAL CONVERSION FEATURES

BENEFICIAL CONVERSION FEATURES - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair values of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received.

FOREIGN CURRENCY TRANSLATIONS

FOREIGN CURRENCY TRANSLATIONS - The Company’s functional and reporting currency is the U.S. dollar. We own a subsidiary in Europe. Our subsidiary’s functional currency is the EURO. All transactions initiated in EUROs are translated into U.S. dollars in accordance with ASC 830-30, “Translation of Financial Statements,” as follows:

 

  (i) Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.
  (ii) Fixed assets and equity transactions at historical rates.
  (iii) Revenue and expense items at the average rate of exchange prevailing during the period.

 

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.

 

No significant realized exchange gains or losses were recorded since March 7, 2013 (date of acquisition of subsidiary) to December 31, 2015.

INCOME TAXES

INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

NET LOSS PER SHARE

NET LOSS PER SHARE - Basic net loss per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 28,424,266 and 882,576 because they are anti-dilutive, as a result of a net loss for the years ended December 31, 2015 and 2014, respectively. 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

v3.3.1.900
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
Fair value of derivatives
     Level 1   Level 2   Level 3   Total 
 Fair value of derivatives   $   $576,557   $   $576,557 
v3.3.1.900
2. PROPERTY AND EQUIPMENT (Tables)
12 Months Ended
Dec. 31, 2015
Property, Plant and Equipment [Abstract]  
Property and equipment
    USEFUL LIVES   2015     2014  
                     
Furniture and Fixtures   3 or 5 years   $ 1,094,601     $ 1,089,380  
Leasehold Improvements   5 years     4,084       4,084  
          1,098,685       1,093,464  
Less Accumulated Depreciation         995,330       830,984  
        $ 103,355     $ 262,480  
v3.3.1.900
3. INTANGIBLE ASSETS (Tables)
12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible asset schedule
    USEFUL LIVES   2015     2014  
                     
Acquisition of intellectual property (FuturLink)   5 years   98,000       98,000  
Website technology development (Venn/AcePlace)   5 years   45,000       45,000  
        143,000       143,000  
Less Accumulated Amortization       77,283       48,672  
        $ 65,717     $ 94,328  
Future accumulated amortization schedule
2016     28,600  
2017     27,157  
Thereafter     9,960  
    $ 65,717  
v3.3.1.900
4. CONVERTIBLE PROMISSORY NOTE (Tables)
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Summary of Convertible Promissory Notes
   2015   2014 
Arnost Note (a)  $322,000   $322,000 
Cavu Notes (b), net of $28,227 for 2015 and $48,021 for 2014 debt discounts   221,773    201,979 
Berg Notes (c)(d)   3,722,000    2,372,000 
Investor Notes (d), net of discounts   1,582,194     
   Total Debt   5,847,967    2,895,979 
Current portion of debt   4,276,194    322,000 
Long-term portion of debt  $1,571,773   $2,573,979 
v3.3.1.900
5. INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Provision for income taxes
    2015     2014  
Current:                
Federal   $        
State            
             
Deferred:                
Federal            
State            
    $     $  
Schedule of deferred income taxes
   YEARS ENDED DECEMBER 31, 
   2015   2014 
Net operating loss carry-forwards  $(15,977,000)  $(11,792,000)
Stock based compensation – options/warrants   3,267,000    2,686,000 
Stock issued for services   971,000    971,000 
Gain on derivative instrument   (489,000)    
Disallowed entertainment expense   52,000    45,000 
Charitable contribution limitation   11,000    10,000 
Preferred Stock   39,000    39,000 
Bad debt expense & reserves   47,000    31,000 
Penalties   1,000    1,000 
Loss on extinguishment of debt   129,000    129,000 
Beneficial conversion features   119,000    119,000 
Mobiquity-Spain – net loss   695,000    440,000 
Amortization of debt discount   246,000     
Deferred Tax Assets   (10,889,000)   (7,321,000)
Less Valuation Allowance   10,889,000    7,321,000 
Net Deferred Tax Asset  $   $ 
Reconciliation of federal statutory rate
   YEARS ENDED DECEMBER 31, 
   2015   2014 
Federal Statutory Tax Rate   34.00%    34.00% 
State Taxes, net of Federal benefit   6.00%    6.00% 
Change in Valuation Allowance   (40.00%)   (40.00%)
Total Tax Expense   0.00%    0.00% 
v3.3.1.900
7. OPTIONS AND WARRANTS (Tables)
12 Months Ended
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of stock based compensation expense
   Years Ended December 31, 
   2015   2014 
Employee stock based compensation-option grants  $1,223,332   $2,392,542 
Employee stock based compensation-stock grants        
Non-Employee stock based compensation-option grants   30,155    213,265 
Non-Employee stock based compensation-stock grants        
Non-Employee stock based compensation-stock warrant   198,761    512,000 
   $1,452,248   $3,117,807 
v3.3.1.900
8. STOCK OPTION PLANS (Tables)
12 Months Ended
Dec. 31, 2015
Options  
Assumptions used
   Years Ended December 31, 
   2015   2014 
Expected volatility   166.38%    54.84% 
Expected dividend yield   0     
Risk-free interest rate   1.76%    2.36% 
Expected term (in years)   6.62    8.93 
Schedule of options outstanding
           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
       Exercise   Contractual   Intrinsic 
   Share   Price   Term   Value 
Outstanding, January 1, 2015   16,980,000   $.51    8.36    168,150 
Granted   3,370,000   $.43    6.47    500 
Exercised                
Cancelled / Expired   (1,010,000)            
                     
Outstanding, December 31, 2015   19,340,000   $.39    7.97    2,500 
                     
Options exercisable, December 31, 2015   15,940,000   $.39    7.88    2,500 
Warrants  
Assumptions used
   Years Ended 
   2015   2014 
Expected volatility   158.35%    156.68% 
Expected dividend yield   0     
Risk-free interest rate   .30%    1.69% 
Expected term (in years)   .50    5 
Schedule of warrants outstanding
            Weighted     
        Weighted   Average     
        Average   Remaining   Aggregate 
        Exercise   Contractual   Intrinsic 
    Share   Price   Term   Value 
Outstanding, January 1, 2015    23,773,914   $.59    2.46    32,500 
Granted    12,741,668   $.44    4.31     
Exercised                 
Cancelled/Expired    (78,800)            
Outstanding, December 31, 2015    36,436,782   $.51    4.58    24,800 
                       
Warrants exercisable, December 31, 2015    36,436,782   $.51    4.58    24,800 
v3.3.1.900
9. COMMITMENTS AND CONTINGENCIES (Tables)
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
Future lease commitments
YEARS ENDING DECEMBER 31,          
2016       4,518,056  
2017       5,626,360  
2018 and thereafter       5,717,314  
      $ 15,861,730  
v3.3.1.900
10. SEGMENT INFORMATION (Tables)
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Schedule of segment information

Fiscal 2014

 

   Ace Marketing & Promotions, Inc.   Mobiquity Networks Inc.   Total 
Net sales  $3,108,450   $149,500   $3,257,950 
Operating (loss), excluding depreciation   (5,129,335)   (4,544,851)   (9,674,186)
Interest income   164        164 
Interest (expense)   (251,394)       (251,394)
Other income (expense)   (322,000)       (322,000)
Depreciation and amortization   (113,058)   (149,129)   (262,187)
Comprehensive Loss   (5,815,623)   (4,693,980)   (10,509,603)
Total assets at December 31, 2014   2,436,604    397,364    2,833,968 

 

Fiscal 2015

 

   Ace Marketing & Promotions, Inc.   Mobiquity Networks Inc.   Total 
Net sales  $2,491,875       $2,491,875 
Operating (loss), excluding depreciation   (835,230)   (8,432,261)   (9,267,491)
Interest income   41        41 
Interest (expense)   (996,011)       (996,011))
Depreciation and amortization   (48,014)   (144,941)   (192,955)
Comprehensive Loss   (1,879,214)   (8,577,202)   (10,456,416)
Total assets at December 31, 2015   3,038,728    292,442    3,331,170 

v3.3.1.900
1. Summary of Significant Accounting Policies (Details)
Dec. 31, 2015
USD ($)
Fair value of derviatives $ 576,557
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]  
Fair value of derviatives 0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]  
Fair value of derviatives 576,557
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]  
Fair value of derviatives $ 0
v3.3.1.900
1. Summary of Significant Policies (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Accounting Policies [Abstract]    
Net loss $ (10,459,724) $ (10,506,099)
Accumulated deficit (40,471,590) (30,011,866)
Cash flows from operations (9,369,631) (5,953,967)
Cash over FDIC insurance limits 2,044,662 1,654,171
Allowance for doubtful accounts 104,611 40,000
Inventory reserve 31,676 31,676
Advertising costs $ 14,495 $ 288
Antidilutive shares excluded from earnings per share calculation 28,424,266 882,576
v3.3.1.900
2. Property and Equipment (Details) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Property and equipment, gross $ 1,098,685 $ 1,093,464
Accumulated depreciation 995,330 830,984
Property and equipment, net 103,355 262,480
Furniture and Fixtures [Member]    
Property and equipment, gross $ 1,094,601 1,089,380
Useful lives 5 years  
Leasehold Improvements [Member]    
Property and equipment, gross $ 4,084 $ 4,084
Useful lives 5 years  
v3.3.1.900
2. Property and Equipment (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 164,346 $ 233,588
v3.3.1.900
3. Intangible Assets (Details-Intangible Assets) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Intangible assets, gross $ 143,000 $ 143,000
Acculumated amortization 77,283 48,672
Intangible assets, net 65,717 94,328
Intellectual Property [Member]    
Intangible assets, gross $ 98,000 98,000
Useful lives 5 years  
Website Technology Development [Member]    
Intangible assets, gross $ 45,000 $ 45,000
Useful lives 5 years  
v3.3.1.900
3. Intangible Assets (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense $ 28,609 $ 28,599
v3.3.1.900
4. Convertible Promissory Note (Details) - USD ($)
Dec. 31, 2015
Dec. 31, 2014
Total debt $ 5,847,967 $ 2,895,979
Current portion of debt 4,276,194 322,000
Long-term portion of debt 1,571,773 2,573,979
Arnost Note    
Total debt 322,000 322,000
Cavu Notes    
Total debt 221,773 201,979
Berg Notes    
Total debt 3,722,000 2,372,000
Investor Notes [Member]    
Total debt $ 1,582,194 $ 0
v3.3.1.900
5. Income Taxes (Details-Provision) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Current:    
Federal $ 0 $ 0
State 0 0
Total Current 0 0
Deferred:    
Federal 0 0
State 0 0
Total Deferred $ 0 $ 0
v3.3.1.900
5. Income Taxes (Details-Deferred Taxes) - USD ($)
Dec. 31, 2015
Dec. 31, 2014
Deferred Tax Assets:    
Net operating loss carry-forwards $ (15,977,000) $ (11,792,000)
Stock based compensation - options/awards 3,267,000 2,686,000
Stock issued for services (stock grants) 971,000 971,000
Gain on derivative instrument (489,000) 0
Disallowed entertainment expense 52,000 45,000
Charitable contribution limitation 11,000 10,000
Preferred stock 39,000 39,000
Bad debt expense and reserves 47,000 31,000
Penalties 1,000 1,000
Loss on extinguishment of debt 129,000 129,000
Beneficial Conversion Feature 119,000 119,000
Mobiquity-Spain - net loss 695,000 440,000
Amortization of debt discount 246,000 0
Deferred Tax Assets (10,889,000) (7,321,000)
Less Valuation Allowance 10,889,000 7,321,000
Net Deferred Tax Asset $ 0 $ 0