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3. Asset Acquisitions | 12 Months Ended
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Dec. 31, 2012
Asset Acquisitions |
NOTE 3. Asset Acquisitions | Trailside Entertainment Corporation On October 5, 2011, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Trailside Entertainment Corporation, a Massachusetts corporation (“Trailside Entertainment” or “Stump! Trivia”), in connection with the Company’s purchase of certain Trailside Entertainment assets used in the conduct of Trailside Entertainment’s business of providing live hosted trivia events at hospitality venues (the “Acquired Assets”). The asset purchase was also consummated on October 5, 2011. In consideration for the Acquired Assets, the Company paid to Trailside Entertainment the sum of $250,000 in cash, $200,000 of which was paid on the closing date of the acquisition. The Company held back $50,000 (the “Holdback Amount”) of the purchase price for a period of six months to secure payment of the Company’s right to indemnification under the Asset Purchase Agreement. In April 2012, the Company delivered to Trailside Entertainment the $50,000 Holdback Amount in full. In addition to the $250,000 cash payment, the Company agreed to pay additional consideration to Trailside Entertainment upon achieving certain gross profit objectives relating to the acquired business (as set forth in the Asset Purchase Agreement) for fiscal years 2012, 2013 and 2014. The Asset Purchase Agreement contains customary representations, warranties and covenants. In connection with this transaction, the Company entered into employment agreements (the “Employment Agreements”) with two principal executives of Trailside Entertainment, Robert D. Carney and George Groccia, each of whom serve as a Vice President of the Company. The Company will use the acquired assets to complement its existing social entertainment offerings. The Company accounted for the acquisition pursuant to ASC No. 805, Business Combinations. Accordingly, it recorded net assets and liabilities acquired at their fair values. As of December 31, 2011, the final purchase price allocation was as follows:
Intangible assets - customer relationships |  | $ | 435,000 |
Total assets |  |  | 435,000 |
Earnout liability |  |  | (185,000 | )
Total liabilities |  |  | (185,000 | )
Purchase price allocated to assets and liabilities acquired |  | $ | 250,000 |
The purchase price may be increased or decreased if certain gross profit objectives relating to the acquired business deviate from the Company’s estimates in fiscal years 2012, 2013 and 2014. In that event, the earnout liability will be adjusted and the change will be reflected in current earnings in the period that the adjustment becomes necessary. The Company incurred approximately $51,000 in acquisition-related expenses, which were recorded in selling, general and administrative expense during the third and fourth quarters of 2011. The following unaudited pro forma information assumes that the October 5, 2011 asset acquisition occurred on January 1, 2011. These unaudited pro forma results have been prepared for comparative purposes only and are not indicative of the results of operations that would have actually resulted had the acquisition been in effect as of the period indicated above, or of future results of operations. The unaudited pro forma results for the year ended December 31, 2011 as compared to the results for the year ended December 31, 2012 are as follows:
|  | Twelve months ended December 31, |
|  | 2012 |  |  | 2011 |
|  |  |  |  |  | (proforma) |
Revenue |  | $ | 24,064,000 |  |  | $ | 24,496,000 |
Net loss |  | $ | (995,000 | ) |  | $ | (3,514,000 | )
Loss per share - basic and diluted |  | $ | (0.01 | ) |  | $ | (0.06 | )
Weighted average shares - basic and diluted |  |  | 69,040,000 |  |  |  | 60,402,000 |
The unaudited pro forma information presented above has been adjusted for material, nonrecurring items directly related to the asset acquisition such as recording amortization expense on the acquired intangible asset and increasing the salary expense for the two principal executives of Trailside Entertainment who became employees of the Company effective upon the acquisition date. As a result of the acquisition, the Company recognized approximately $1,712,000 in additional revenue and $68,000 in net loss for year ended December 31, 2012. Other Asset Acquisitions During the year ended December 31, 2012, the Company entered into an asset acquisition with Interactive Hospitality and an asset acquisition with Panel Media Group. These asset acquisitions have been deemed to be immaterial both individually and in aggregate. The purchase price allocation for these asset acquisitions were final as of December 31, 2012.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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