Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-27569 | |
Entity Registrant Name | AppTech Corp. | |
Entity Central Index Key | 0001070050 | |
Entity Tax Identification Number | 65-0847995 | |
Entity Incorporation, State or Country Code | WY | |
Entity Address, Address Line One | 5876 Owens Ave | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Carlsbad | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92008 | |
City Area Code | 760 | |
Local Phone Number | 707-5959 | |
Title of 12(b) Security | Common Stock, | |
Trading Symbol | APCX | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 111,915,122 |
BALANCE SHEETS (UNAUDITED)
BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 354,180 | $ 57,497 |
Accounts receivable | 72,830 | 40,635 |
Prepaid expenses | 36,667 | 6,696 |
Total current assets | 463,677 | 104,828 |
Capitalized prepaid software development and license | 6,830,922 | 0 |
Prepaid offering cost | 25,000 | 0 |
Note receivable | 17,500 | 17,500 |
Right of use asset | 219,234 | 249,825 |
Security deposit | 7,536 | 7,536 |
TOTAL ASSETS | 7,563,869 | 379,689 |
Current liabilities | ||
Accounts payable | 1,269,543 | 1,635,384 |
Accrued liabilities | 1,951,096 | 2,632,334 |
Right of use liability | 56,636 | 52,161 |
Stock repurchase liability | 430,000 | 430,000 |
Loans payable related parties | 0 | 34,400 |
Convertible notes payable, net of $83,017 and $280,174 debt discount | 626,483 | 639,826 |
Convertible notes payable related parties | 0 | 372,000 |
Notes payable | 1,108,078 | 1,104,981 |
Notes payable related parties | 708,493 | 708,493 |
Derivative liabilities | 628,299 | 597,948 |
Total current liabilities | 6,778,628 | 8,207,527 |
Long-term liabilities | ||
Accounts payable | 35,000 | 75,000 |
Right of use liability | 194,817 | 224,492 |
Notes Payable, net of current portion | 64,304 | 67,400 |
Total long-term liabilities | 294,121 | 366,892 |
TOTAL LIABILITIES | 7,072,749 | 8,574,419 |
Stockholders’ Equity (Deficit) | ||
Series A preferred stock; $0.001 par value; 100,000 shares authorized; 14 shares issued and outstanding at June 30, 2021 and December 31, 2020 | ||
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 111,889,370 and 88,511,657 and outstanding at June 30, 2021 and December 31, 2020, respectively | 111,890 | 88,512 |
Additional paid-in capital | 117,960,935 | 36,664,488 |
Accumulated deficit | (117,581,705) | (44,947,730) |
Total stockholders’ equity (deficit) | 491,120 | (8,194,730) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 7,563,869 | $ 379,689 |
BALANCE SHEETS (UNAUDITED) (Par
BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Convertible notes, net of discount | $ 83,017 | $ 280,174 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 100,000 | 100,000 |
Preferred stock, issued | 14 | 14 |
Preferred stock, outstanding | 14 | 14 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 111,889,370 | 88,511,657 |
Common stock, outstanding | 111,889,370 | 88,511,657 |
STATEMENTS OF OPERATIONS (UNAU
STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 151,021 | $ 77,853 | $ 251,538 | $ 136,010 |
Cost of revenues | 35,860 | 31,737 | 70,258 | 54,962 |
Gross profit | 115,161 | 46,116 | 181,280 | 81,048 |
Operating expenses: | ||||
General and administrative, including stock based compensation of $224,186, $81,554, $1,589,350 and $1,290,739, respectively | 3,560,692 | 276,207 | 5,340,907 | 1,692,104 |
Excess fair value of equity issuance over assets received | 1,090,716 | 0 | 65,033,890 | 0 |
Research and development | 0 | 34,250 | 0 | 46,251 |
Total operating expenses | 4,651,408 | 310,457 | 70,374,797 | 1,738,355 |
Loss from operations | (4,536,247) | (264,341) | (70,193,517) | (1,657,307) |
Other income (expenses) | ||||
Interest expense | (2,431,736) | (71,083) | (2,560,558) | (142,167) |
Change in fair value of derivative liability | 452,443 | 0 | (55,099) | 0 |
Forgiveness of debt | 0 | 9,000 | 0 | 9,000 |
Other income (expenses) | 175,063 | 0 | 175,200 | 0 |
Total other expenses | (1,804,230) | (62,083) | (2,440,457) | (133,167) |
Loss before provision for income taxes | (6,340,477) | (326,424) | (72,633,974) | (1,790,474) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | $ (6,340,477) | $ (326,424) | $ (72,633,974) | $ (1,790,474) |
Basic and diluted net loss per common share | $ (0.06) | $ 0 | $ (0.71) | $ (0.02) |
Weighted-average number of shares used basic and diluted per share amounts | 102,911,078 | 86,536,841 | 102,911,078 | 85,413,932 |
STATEMENTS OF OPERATIONS (UN_2
STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||
Stock based compensation | $ 224,186 | $ 1,290,739 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 84,154 | $ 33,230,869 | $ (40,760,413) | $ (7,445,390) | |
Beginning balance (in shares) at Dec. 31, 2019 | 14 | 84,153,825 | |||
Net loss | (1,464,050) | (1,464,050) | |||
Imputed interest | 3,450 | 3,450 | |||
Common stock issued for services | $ 2,350 | 1,206,835 | 1,209,185 | ||
Common stock issued for services (in shares) | 2,349,500 | ||||
Proceeds from sale of repurchase option | 186,531 | 186,531 | |||
Ending balance, value at Mar. 31, 2020 | $ 86,504 | 34,627,685 | (42,224,463) | (7,510,274) | |
Ending balance (in shares) at Mar. 31, 2020 | 14 | 86,503,325 | |||
Beginning balance, value at Dec. 31, 2019 | $ 84,154 | 33,230,869 | (40,760,413) | (7,445,390) | |
Beginning balance (in shares) at Dec. 31, 2019 | 14 | 84,153,825 | |||
Issuance of stock options for board of directors | 0 | ||||
Ending balance, value at Jun. 30, 2020 | $ 86,678 | 34,731,765 | (42,550,887) | (7,732,444) | |
Ending balance (in shares) at Jun. 30, 2020 | 14 | 86,677,825 | |||
Beginning balance, value at Mar. 31, 2020 | $ 86,504 | 34,627,685 | (42,224,463) | (7,510,274) | |
Beginning balance (in shares) at Mar. 31, 2020 | 14 | 86,503,325 | |||
Net loss | (326,424) | (326,424) | |||
Imputed interest | 3,450 | 3,450 | |||
Common stock issued for services | $ 174 | 81,380 | 81,554 | ||
Common stock issued for services (in shares) | 174,500 | ||||
Proceeds from sale of repurchase option | 19,250 | 19,250 | |||
Ending balance, value at Jun. 30, 2020 | $ 86,678 | 34,731,765 | (42,550,887) | (7,732,444) | |
Ending balance (in shares) at Jun. 30, 2020 | 14 | 86,677,825 | |||
Beginning balance, value at Dec. 31, 2020 | $ 88,512 | 36,664,488 | (44,947,730) | (8,194,730) | |
Beginning balance (in shares) at Dec. 31, 2020 | 14 | 88,511,657 | |||
Net loss | (66,293,498) | (66,293,498) | |||
Imputed interest | 3,450 | 3,450 | |||
Issuance of stock options for board of directors | 17,559 | 17,559 | |||
Issuance of stock options for services | 29,999 | 29,999 | |||
Issuance of options for capitalized prepaid software development and license | 1,891,414 | 1,891,414 | |||
Common stock issued for board of directors | $ 87 | 49,087 | 49,174 | ||
Common stock issued for board of directors (in shares) | 87,500 | ||||
Common stock issued for merchant equity | $ 5 | 16,245 | 16,250 | ||
Common stock issued for merchant equity, Shares | 5,000 | ||||
Common stock issued for judgment | $ 200 | 999,800 | 1,000,000 | ||
Common stock issued for judgment (in shares) | 200,000 | ||||
Common stock issued for services | $ 247 | 315,743 | 315,990 | ||
Common stock issued for capitalized prepaid software development and license | $ 18,012 | 67,525,170 | 67,543,182 | ||
Common stock issued for services (in shares) | 247,000 | ||||
Common stock issued for capitalized prepaid software development and license (in shares) | 18,011,515 | ||||
Proceeds from sale of repurchase option | 1,972,750 | 1,972,750 | |||
Ending balance, value at Mar. 31, 2021 | $ 106,913 | 109,475,855 | (111,241,228) | (1,658,460) | |
Ending balance (in shares) at Mar. 31, 2021 | 14 | 106,912,672 | |||
Common stock cancelled | $ (150) | (9,850) | (10,000) | ||
Common stock cancelled (in shares) | (150,000) | ||||
Beginning balance, value at Dec. 31, 2020 | $ 88,512 | 36,664,488 | (44,947,730) | (8,194,730) | |
Beginning balance (in shares) at Dec. 31, 2020 | 14 | 88,511,657 | |||
Issuance of stock options for board of directors | (32,776) | ||||
Ending balance, value at Jun. 30, 2021 | $ 111,890 | 117,960,935 | (117,581,705) | 491,120 | |
Ending balance (in shares) at Jun. 30, 2021 | 14 | 111,889,370 | |||
Beginning balance, value at Mar. 31, 2021 | $ 106,913 | 109,475,855 | (111,241,228) | (1,658,460) | |
Beginning balance (in shares) at Mar. 31, 2021 | 14 | 106,912,672 | |||
Net loss | (6,340,477) | (6,340,477) | |||
Imputed interest | 3,450 | 3,450 | |||
Issuance of stock options for board of directors | 15,217 | 15,217 | |||
Issuance of stock options for services | 2,746,385 | 2,746,385 | |||
Issuance of options for capitalized prepaid software development and license | 1,090,716 | 1,090,716 | |||
Common stock issued for board of directors | $ 88 | 49,087 | 49,175 | ||
Common stock issued for board of directors (in shares) | 87,500 | ||||
Common stock issued for services | $ 106 | 174,905 | 175,011 | ||
Common stock issued for services (in shares) | 106,053 | ||||
Proceeds from sale of repurchase option | 458,000 | 458,000 | |||
Ending balance, value at Jun. 30, 2021 | $ 111,890 | 117,960,935 | (117,581,705) | 491,120 | |
Ending balance (in shares) at Jun. 30, 2021 | 14 | 111,889,370 | |||
Common stock issued for merchant equity program | $ 26 | 2,095 | 2,121 | ||
Common stock issued for merchant equity program (in shares) | 26,250 | ||||
Common stock issued for convertible notes payable, accrued interest, derivative liabilities, and accounts payable | $ 4,757 | $ 3,945,225 | $ 3,949,982 | ||
Common stock issued for convertible notes payable, accrued interest, derivative liabilities, and accounts payable, Shares | 4,756,895 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (72,633,974) | $ (1,790,474) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Issuance of stock options for board of directors | 32,776 | 0 |
Issuance of stock options for service | 4,176,376 | 0 |
Stock issued for board of directors | 98,349 | 0 |
Stock issued for services | 491,001 | 1,290,739 |
Stock issued for merchant equity | 16,250 | 0 |
Stock issued for purchase of judgment | 1,000,000 | 0 |
Stock issued for excess fair value of equity over assets received | 63,633,898 | 0 |
Stock issued for excess fair value of equity issuance | 2,490,884 | 0 |
Imputed interest on notes payable | 6,900 | 6,900 |
Amortization of debt discount | 177,157 | 0 |
Gain on extinguishment of accounts payable | (174,925) | 0 |
Change in fair value of derivative liabilities | 55,099 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (32,195) | (11,635) |
Prepaid expenses | (29,971) | 0 |
Accounts payable | (22,665) | 134,464 |
Accrued liabilities | (15,517) | 139,754 |
Right of use asset and liability | 5,391 | 17,241 |
Net cash used in operating activities | (725,166) | (213,011) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Deposit escrow | 0 | 25,000 |
Capitalized prepaid software development and license | (1,339,501) | 0 |
Security deposit | 0 | (1,589) |
Net cash provided (used) by investing activities | (1,339,501) | 23,411 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments for offering costs | (25,000) | 0 |
Proceeds on loans payable – related parties | 0 | 750 |
Payments on loans payable - related parties | (34,400) | (31,550) |
Repurchase of common stock - related party | (10,000) | 0 |
Proceeds from sale of repurchase options | 2,430,750 | 205,781 |
Net cash provided by financing activities | 2,361,350 | 174,981 |
Changes in cash and cash equivalents | 296,683 | (14,619) |
Cash and cash equivalents, beginning of period | 57,497 | 24,159 |
Cash and cash equivalents, end of period | 354,180 | 9,540 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non cash investing and financing activities: | ||
Common stock issued for conversion of accounts payable | 206,250 | 0 |
Forgiveness of debt through conversion of accounts payable | 174,925 | 0 |
Common stock issued convertible notes, accrued interest and derivative liabilities | 1,252,848 | 0 |
Common stock and options issued for capitalized software and licensing costs | $ 5,491,421 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS AppTech Corp. (“AppTech” or the “Company”) is a Wyoming Corporation incorporated on July 2, 1998. AppTech Corp. is a FinTech company providing electronic payment processing technologies and merchant services. These technologies allow businesses to accept cashless and/or contactless payments, such as credit cards, ACH, wireless payments, and more. Their patented, exclusively licensed and/or proprietary merchant services software offers or will offer integrated solutions for frictionless digital and mobile payment acceptance; AppTech is supplementing these capabilities with software that solves for multi-use case, multi-channel, API-driven, account-based issuer processing for card, digital tokens, and payment transfer transactions. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Also see Note 3. Use of Estimates The preparation of the 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. Significant estimates include the estimated liabilities related to various vendors in which communications have ceased, contingent liabilities, realization of tax deferred tax assets and capitalization of software development. Actual results could differ from those estimates. Concentration of Credit Risk Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $ 250,000 The accounts receivable from merchant services are paid by the financial institutions on a monthly basis. The Company currently uses six financial institutions to service their merchants for which represented 100% of accounts receivable as of June 30, 2021 and 2020. The loss of one of these financial institutions would not have a significant impact on the Company’s operations as there are additional financial institutions available to the Company. For the six months ended June 30, 2021 and 2020, the one merchant (customer) represented approximately 46% and 41% of the total revenues, respectively. The loss of this customer would have significant impact on the Company’s operations. Software Development Costs The Company capitalizes software development costs in developing internal use software when capitalizing requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. Revenue Recognition The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, codified as Accounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1, 2019 using modified retrospective basis and the cumulative effect was immaterial to the financial statements. The Company provides merchant processing solutions for credit cards and electronic payments. In all cases, the Company acts as an agent between the merchant which generates the credit card and electronic payments, and the bank which processes such payments. The Company’s revenue is generated on services priced as a percentage of transaction value or a specified fee transaction, depending on the card or transaction type. Revenue is recorded as services are performed which is typically when the bank processes the merchant’s credit card and electronic payments. Consideration paid to customers such as amounts earned under our customer equity incentive program, are recorded as a reduction to revenues. There were no amounts paid or incurred during the six months ended June 30, 2021 and 2020. Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Company’s financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term mature of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-marketing dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. The following table presents liabilities that are measured and recognized at fair value as of June 30, 2021 and December 31, 2020 on recurring basis: Schedule of derivative liabilities June 30, 2021 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 628,299 628,299 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 597,948 597,948 See Note 7 for discussion of valuation and roll forward related to derivative liabilities. Per Share Information Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year, increased by the potentially dilutive common shares that were outstanding during the year. Dilutive securities include stock options, warrants granted, convertible debt and convertible preferred stock. The number of common stock equivalents not included in diluted income per share was 10,315,337 and 5,540,288 for the six months ended June 30, 2021 and 2020, respectively. The weighted average number of common stock equivalents is not included in diluted income (loss) per share, because the effects are anti-dilutive. Schedule of anti dilutive stock June 30, 2021 June 30, 2020 Series A preferred stock 10,920 10,920 Convertible debt 1,770,083 5,529,368 Warrants 200,000 — Options 6,707,500 — Common stock 3,395,500 — Total 12,084,003 5,540,288 New Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN As reflected in the accompanying financial statements, during the six months ended June 30, 2021 and 2020, the Company incurred a net loss of $ 72,633,974 1,790,474 725,166 213,011 6,589,951 117,581,705 While the Company is continuing operations and generating revenues, the Company’s cash position is not significant enough to support the Company’s daily operations. To fund operations and reduce the working capital deficit, the Company intends to raise additional funds through public or private debt and/or equity offerings. During 2021, the Company received $ 2,430,750 Risks and Uncertainties On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. Since the Company derives its revenues from processing of purchases from our merchant services clients, a downturn in economic activity, such as associated with the current coronavirus pandemic, could reduce the volume of purchases it processes, and thus its revenues. In addition, such a downturn could cause its merchant customers to cease operations permanently decreasing our payment processing unless new customers are found. We may also face additional difficulty in raising capital during an economic downturn. The effects of the pandemic had significant impact on revenue at the beginning of the pandemic and the processors gave significant concessions of reduced fees to minimize the impact of the pandemic. The revenue began to increase after several months as the economy began to open up using different methods of purchasing especially online purchasing, as well as, the Company has been able to add new customers. The continuing effects of the potential impact cannot be estimated at this time. Additionally, it is reasonably possible that the estimates made in the financial statements have been, or will be materially and adversely impacted in the near term as a result of these conditions. Also, if the development of the Company’s payment platform is not successful, the software development costs will need to be expensed instead of capitalized. |
PATENTS
PATENTS | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PATENTS | NOTE 4 – PATENTS Patents On June 22, 2017, AppTech executed an Amendment to Asset Purchase Agreement with GlobalTel Media, Inc. In connection with the asset purchase agreement, 5,000,000 1,000,000 1,600,000 26,600,000 280,000 280,000 See Note 9 for more information on capitalized prepaid software development and license. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED LIABILITIES | NOTE 5 – ACCRUED LIABILITIES Accrued liabilities as of June 30, 2021 and December 31, 2020 consist of the following: Schedule of Accrued Liabilitie June 30, 2021 December 31, 2020 Accrued interest – related parties $ 378,650 $ 1,039,977 Accrued interest – third parties 1,260,495 1,395,133 Accrued payroll 52,946 — Accrued PTO 42,331 — Accrued residuals 89,096 62,174 Accrued merchant equity 88,903 91,023 Other 38,675 44,027 Total accrued liabilities $ 1,951,096 $ 2,632,334 Accrued Interest Notes payable and convertible notes payable incur interest at rates between 10 15 Accrued Residuals The Company pays commissions to independent agents which refer merchant accounts. The amounts payable to these independent agents is based upon a percentage of the amounts processed on a monthly basis by these merchant accounts. Accrued Merchant Equity Liability The Company provided all merchants the opportunity to earn shares of the Company’s common stock through their Merchant Equity Program (the “Program”). Under the Program, the merchant earned 1% of their total Visa/MasterCard volume processed during the first year of their contract. For example, if a merchant processes $1.0 million in credit card charges, the merchant will receive 10,000 shares of the Company’s common stock. The merchant must process with the Company for a period of three years for the shares to vest. All merchants became fully vested when the Company ended the program effective December 31, 2015. The Company accounts for the value of the shares under the program as a sales incentive and thus the amounts in connection with the Program are recorded as a reduction to revenues. As of June 30, 2021, the Company has an obligation to issue approximately 750,000 |
NOTES PAYABLE AND CONVERTIBLE N
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | NOTE 6 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE The Company funds operations through cash flows generated from operations and the issuance of loans and notes payable. The following is a summary of loans and notes payable outstanding as of June 30, 2021 and 2020. Related parties noted below are either members of management, board of directors, significant shareholders or individuals in which have significant influence over the Company. Loans Payable – Related Parties During the six months ended June 30, 2021 and 2020, the Company obtained (paid) $( 34,400 30,800 0 34,400 Subordinated Notes Payable In 2016, the Company issued $ 350,000 10 171,045 153,545 Convertible Notes Payable In 2020, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company agreed to sell to the investor a $ 300,000 12 In the event of a default of the Note, the Holder in its sole discretion may elect to use a conversion price equal to the lower of: 1) the lowest trading price of the common stock on the trading day immediately preceding the issue date or 2) seventy-five (75) percent of either the lowest trading price or the closing bid price, whichever is lower during any trading day in which the event of default has not been cured. The embedded conversion feature of this Note was deemed to require bifurcation and liability classification, at fair value. Pursuant to the Securities Purchase Agreement, the Company also sold warrants to the investors to purchase up to an aggregate of 200,000 shares of common stock exercisable at one dollar and fifty cents ($1.50) and expire in five (5) years. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 7 for valuation) resulting in full discount of the Note. The conversion feature and warrants have various reset provisions for which lower the exercise price and share and warrants issuable. Total interest expense on convertible notes payable, inclusive of amortization of debt discount of $ 177,157 83,017 280,174 Schedule of notes and convertible notes payable June 30, 2021 December 31, 2021 Convertible note payable $ 332,200 $ 378,134 Warrants 296,099 219,814 Total notes and convertible notes payable $ 628,299 $ 597,948 See Note 9 – Convertible note and warrant lawsuit. In 2017, the Company received $ 222,000 10 0.10 76,187 222,000 200,000 3,055,875 Schedule of Convertible note and warrant lawsuit Convertible note payable $ 222,000 Accrued interest 83,588 Excess fair value of equity issuance 1,379,193 Total $ 1,684,781 In 2015, the Company issued $ 50,000 10 1.00 28,334 25,833 In 2014, the Company issued $ 400,000 10 12 1.00 400,000 400,000 400,000 247,583 227,083 In 2008 and 2009, the Company issued $320,000 in convertible notes payable, of which $150,000 was from related parties. The convertible notes payable are currently due on demand, incur interest at 15% per annum, and convertible at $0.60 per share. As of December 31, 2020, accrued interest related to the convertible notes was $ 564,013 Schedule of convertible notes payables Convertible notes payable $ 170,000 Convertible notes payable – related parties 150,000 Accrued interest 306,637 Accrued interest – related parties 273,375 Excess fair value of equity issuance 587,723 Excess fair value of equity issuance – related parties 523,968 Total $ 2,011,703 Notes Payable In 2020, the Company entered into a 30-year unsecured note payable with U.S. Small Business Administration for $68,200 in proceeds. The notes payable incurred a $100 fee upon issuance and incurs interest at 3.75% per annum. All payments of principal and interest are deferred for twelve months with the first $333 payment due July 1, 2021. As of June 30, 2021 and December 31, 2020 the balance of the note payable was $ 68,300 2,561 1,281 In 2016, the Company issued $143,000 in notes payable to third parties. The notes payable were due in ninety days or less. During 2019, the Company paid $36,000 in notes payable. The Company is currently in default of the note agreements. Two significant shareholders funded the Company’s operations through notes payable in primarily 2009 and 2010. The notes payable incur interest at 10% per annum and were due on December 31, 2016. The Company is currently in default of the note agreements. As of June 30, 2021 and December 31, 2020, the aggregate balance of the notes payable was $620,355 and accrued interest was $367,873 and $638,016, respectively. On May 2, 2021, the Company entered into a debt reduction and confirmation agreement with a significant shareholder. The parties agreed to reduce the outstanding accrued interest in the amount of $275,000. In 2008, the Company entered into a note payable with a third party for $10,000 in total proceeds. The note payable is currently in default and has a flat interest amount due of $21,000. As of June 30, 2021 and 2020, the Company was in default of the note agreement and the entire amount of $21,000 has been included within accrued interest. Since the notes payable do not incur interest, the Company imputed interest at $500 and $500, respectively, which represented an interest rate of 10% per annum during the six months ended June 30, 2021 and 2020. In 2008, the Company entered into notes payable with a third party for $26,000 in total proceeds. The notes payable have a flat interest amount due of $80,000. During 2015, the Company received another $50,000 from the third party. During 2017, the Company entered into an agreement whereby they would repay the principal and accrued interest in the amount of $145,000 by April 4, 2018 and issue the holders 800,000 shares of common stock. The Company recorded the fair market value of the common stock issued at $336,000 based on the date of issuance as interest expense. Other than the issuance of shares of common stock, the Company did not perform under the agreement. The Company is currently in default of the note agreement. In 2007 and 2008, the Company entered into notes payable with a related party for $46,000 in proceeds. The notes payable were due on demand and incurred interest at 12% per annum. These were combined into a single note agreement in 2014. As of June 30, 2021 and December 31, 2020, the balance on the note payable was $88,136 and accrued interest related to the note payable was $65,228 and $59,900, respectively. The Company is currently in default of the note payable agreement. In 2007, the Company entered into note payable with a third party for $128,000 in proceeds. Under the terms of the agreement the holder received a flat interest amount of $37,496. The Company is currently in default of the note payable agreement and the entire amount of $37,496 has been included within accrued interest. Since the note payable did not incur interest, the Company imputed interest at $6,400 and $6,400, respectively, which represented an interest rate of 10% per annum during the six months ended June 30, 2021 and 2020. In 2007, the Company entered into note payable with a third party for $221,800 in proceeds. The note payable is currently in default and incurs interest at 10% per annum. On December 31, 2013, the holder received an arbitration settlement for the principal and accrued interest. As of June 30, 2021 and December 31, 2020, the Company was in default of the arbitration settlement. As of June 30, 2021 and December 31, 2020, accrued interest related to the note payable was $490,284 and $470,143, respectively. In 2007, the Company entered into note payable with a significant shareholder for $58,600 in proceeds. The note payable is currently due on demand and incurs interest at 10% per annum. As of June 30, 2021 and December 31, 2020, accrued interest related to the note payable was $79,303 and $76,372, respectively. The Company is currently in default of the note agreement. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 7– DERIVATIVE LIABILITIES The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable conversion provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants were recorded as derivative liabilities on the issuance date and revalued at June 30, 2021 and December 31, 2020. Based on the convertible notes described in Note 6, the derivative liability day one loss is $389,712 and the change in fair value at June 30, 2021 and December 31, 2020 is $30,351 and $71,464. The fair value of applicable derivative liabilities on note, warrants and change in fair value of derivative liability are as follows for the six months ended June 30, 2021. Schedule of fair value of derivative liabilities Derivative Liability Convertible Notes Derivative Total Balance as of December 31, 2020 378,134 219,814 597,948 Change in fair value (21,186 ) 76,285 55,099 Change in fair value due to conversion (24,748 ) — (24,748 ) Balance as of June 30, 2021 $ 332,200 $ 296,099 $ 628,299 At June 30, 2021, the fair value of the derivative liability convertible notes is estimated using a Monte Carlo pricing model with the following assumptions: Schedule of pricing mode with assumptions Market value of common stock $ 1.67 Expected volatility 66.2 % Expected term (in years) 0.11 Risk-free interest rate 0.13 % At June 30, 2021, the fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $ 1.67 Expected volatility 97.7 % Expected term (in years) 4.39 Risk-free interest rate 0.59 % |
RIGHT OF USE ASSET
RIGHT OF USE ASSET | 6 Months Ended |
Jun. 30, 2021 | |
Right Of Use Asset | |
RIGHT OF USE ASSET | NOTE 8– RIGHT OF USE ASSET Lease Agreement In January 2020, the Company entered into a lease agreement commencing February 8, 2020 for its current facility which expires in 2025. The term of the lease is for five years. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 12 Years ended December 31: Schedule of Future Minimum Rental Payments for Operating Leases 2021 $ 41,380 2022 85,039 2023 87,590 2024 90,217 2025 7,536 Operating Lease Total $ 311,762 Less: Imputed interest (57,309 ) Total $ 254,453 The rent expense was $ 30,591 21,914 |
COMMITMENTS AND CONTIGENCIES
COMMITMENTS AND CONTIGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | NOTE 9 - COMMITMENTS AND CONTIGENCIES Litigation Former Shareholders Lawsuit In November 2017, two shareholders of AppTech, one who previously filed the 2014 lawsuit in the State of Washington, filed another lawsuit against the Company in the State of California, claiming the same accusations as the previously filed lawsuit which was dismissed. The lawsuit has been transferred to the United States District Court for the Southern District of California. The Company filed the defendants answer, affirmative defenses and counter claims. Management believes that the Plaintiff misrepresented and misled AppTech during the merger. The court has encouraged the parties to settle. Even though the Company believes the lawsuit is without merit and will vigorously defend, the Company has made several offers to settle. On December 19, 2019, the Company entered into a settlement and release agreement. The Company has recorded the liability as of December 31, 2019 for the total obligation of $240,000 to be paid out over three years beginning February 15, 2020. The 2019 impact is recorded in general and administrative expenses. On January 24, 2021, the parties entered a stipulation modifying the repayment schedule of the settlement. The Company is current on the following modified repayment schedule. Years ended December 31: Schedule of payment of lawsuit 2021 $ 40,000 2022 75,000 Total $ 115,000 Patent Acquisition Lawsuit In September 2018, a complaint was filed in San Diego superior court for a breach of contract arising from a written agreement for the purchase of a judgment to which AppTech was not a party. The purchase of the judgment was part of the transaction to acquire the patents. AppTech substantially performed under the agreement but the second agreement to extend the final payment was executed under alleged duress. On October 26, 2018, the Company filed an answer that denied each and every purported allegation and cause of action and further denied that they caused any damage or loss. On December 3, 2019, the Company entered into a conditional settlement providing the terms of the conditional settlement have been completed by October 1, 2020. The conditional settlement amount of $150,000 was paid in monthly installments of $15,000. The settlement installments paid for the year ended December 31, 2020 was $ 135,000 Other Lawsuit In July of 2020, an owner and corporation having a business opportunity filed a lawsuit in the State of California alleging a breach of contract, intentional misrepresentation, fraudulent inducement of contract, negligent misrepresentation and unjust enrichment relating to a non-binding memorandum of understanding (“MOU”) between the parties and its associated circumstances in 2016 and other alleged representations associated with the proposed partnership between the parties. Process was served on January 8, 2021. The Plaintiffs filed an amended complaint on March 15, 2021. The Company filed an answer with affirmative defenses on April 26, 2021. The lawsuit is in the beginning stages of discovery. Management believes the agreement was non-binding, the statute of limitation has expired and the allegations have no merit. We currently own a judgment against the owner and corporation in the amount of $516,932 plus statutory interest. Convertible Note and Warrant Lawsuit In July 2021, an entity possessing a convertible note and warrant filed a lawsuit in the Southern District of New York for specific performance, breach of contract, permanent injunction, and attorney’s fees. The Company believes that the plaintiff is acting as an unlicensed dealer and utilized unlicensed brokers to induce the Company into the contracts thereby voiding the agreements. Prior to the plaintiff filing suit, the Company provided demand letters to the plaintiff and their coconspirators, and filed complaints with the SEC, FINRA and California Division of Corporations. The Company has not yet filed its answer but anticipates filing counter and cross suits in the near future. Significant Contracts Capital Raise In January 2019, the Company entered into an agreement with a broker dealer to provide capital raising activities. Under the terms of the agreement the broker dealer is to make a minimum of $90,000 in advisory fees. In addition, there are various other provisions within the agreement which include a 10% placement fee, warrants to purchase common stock, a 4% transaction fee, etc. In February 2021, the Company entered into an engagement letter with Maxim Group LLC (“Maxim”) as the lead management underwriter for a follow-on offering which is non-binding. This engages Maxim through September 30, 2021 as exclusive financial advisor, lead managing underwriter and sole book running manager and investment banker in connection with the offering. The offering shall consist of approximately fifteen million worth of securities subject to the due diligence examination of the Company. The actual size of the offering, the precise number of securities to be offered by the Company and Maxim will depend upon the capitalization of the Company among other various factors. Maxim shall be granted an option to acquire an additional 15% of the total number of securities as an over-allotment, an underwriting discount of 7% and an expense allowance equal to 1%. Silver Alert Services, LLC In August 2020, the Company entered into a strategic partnership with Silver Alert Services, LLC. doing business as Lifelight Systems (“Lifelight”), expanding into the telehealth sphere. The partnership will expand AppTech’s reach into new markets and provide advanced technological solutions for the telehealth and personal emergency response systems markets. The strategic partnership provides a promissory note to Lifelight for up to $1.0 million dollars with an interest rate of three percent per annum upon successful completion of Lifelight’s Personal Emergency Response System (“PERS”) pilot program. Also, Lifelight is granted an option for the right to purchase 4,500,000 shares of AppTech Corp. for which 1 million are exercisable at $0.01 and 3,500,000 are exercisable at $0.25 for which vest upon the successful completion of the PERS pilot program and are exercisable for 24 months. These options had a grant date fair value of at $1,549,999 and $5,424,987, respectively using a Black-Scholes options pricing model. No stock-based compensation was recorded during the six months ended June 30, 2021 as vesting was determined to be highly improbable. On December 30, 2020, the Company amended its strategic partnership agreement and purchase option agreement with Silver Alert dated August 21, 2020. The amendment altered and/or added certain definitions and the loan disbursements in the strategic partnership agreement. Further, the purchase option agreement was amended to incorporate a vesting schedule related to the gross revenue generated from the partnership. The options will vest based on reaching various gross revenue benchmarks for which expire two years after each tranche vests. On March 29, 2021, the Company amended its strategic partnership agreement and purchase option agreement dated December 30, 2020. The amendment altered the agreement reducing the options to purchase to one million shares at a price of $0.01 and two million five thousand shares of stock at $0.25. These options had a grant date fair value of $2,329,999 and $5,824,980, respectively using a Black-Scholes options pricing model. No stock-based compensation was recorded during the six months ended June 30, 2021 as vesting was determined to be highly improbable. The Company’s ability to deliver on the $1,000,000 loan and fulfill its 50% obligation in 2020 was greatly impacted by the ongoing Covid 19 pandemic. Nursing homes and other senior living facilities were in lock down which did not allow the Silver Alert team into facilities for set-up and equipment training. As of August 9, 2021, the team still does not have access to these facilities and thus revenue could not be generated. Both parties agreed the delay was in the best interest of the long-term growth of the partnership. The Company will assess the probability of vesting at the end of each reporting period. On April 27, 2021, the Company entered an amended and restated strategic partnership agreement and purchase option agreement with Silver Alert Services, LLC which amends and restates earlier agreements dated August 21, 2020, as amended on December 30, 2020 and March 29, 2021. The amended and restated agreements provide for an equity transaction whereby the Company receives a 70% (seventy percent) ownership in Silver Alert, LLC upon certain revenue goals being achieved. Further, upon the occurrence of the revenue goals, the revenue sharing between the companies shall be altered resulting in the Company retaining 70% (seventy percent). NEC Payments On October 1, 2020, the Company entered into a strategic partnership with NEC Payments B.S.C (“NECP”) through a series of agreements, which included the following: (a) Subscription License and Services Agreement; (b) Digital Banking Platform Operating Agreement; (c) Subscription License Order Form; and (d) Registration Rights Agreement (collectively the “Agreements”). The intent of the Agreements was for the Company to deploy NECP’s technologies, allowing the Company to extend its product offering to include flexible, scalable and secure payment acceptance and issuer payment processing that supports the digitization of business and consumer financial services and the migration of cash and other legally payment types to distanced and contactless card and real time payment transactions. NECP will assist the Company to complete the development of its text payment solution and provide “best in class” software that complements the Company’s intellectual property. The Agreements, among other things: (a) provide the Company a license to access and use NECP’s digital banking and payment technology solutions, as identified in the Subscription License Order Form; (b) grant the Company conditional exclusivity in the United States for all of NECP’s payment acceptance processing technologies contingent upon the Company reaching transaction volume target goals; (c) grant NECP a license to develop software without the possibility of infringing upon the Company’s intellectual property; (d) creates the parameters in which NECP shall assist the Company in completing the development of its text payment system related to the Company’s patents; (e) award NECP a fifteen percent (15%) equity stake in the Company, on a fully diluted basis; (f) set revenue sharing splits between AppTech and NECP for all revenues generated from digital banking technologies licensed to AppTech. Under the Agreements, either party had the right to terminate the agreement should the Company fail to secure a funding in the amount of $3,000,000 within 45 days from the effective date of the Agreements. On November 19, 2020, the Company entered into Amendment No. 1 to the Subscription License and Services Agreement whereby the funding date was amended to amended to no later than December 18, 2020. All other terms of the original Agreements remained in full force and effect. On February 11, 2021, the Company entered into an amended and restated Subscription License and Services Agreement, Digital Banking Platform Operating Agreement and Subscription License Order Form with NECP (collectively the “Restated Agreements”). The Restated Agreement created an engagement fee of $100,000 due within three business days from the effective date, reduced the funding amount triggering the enforceability of the Restated Agreements to $707,500 (“Funding”), altered the date in which initial fees are payable to no later than March 5, 2021 (the “Funding Date”) and provided terms to prevent dilution for NECP’s equity compensation for future funding secured by the Company. The fees in the Restated Agreements are payable within three business days from the effective date, at or before the Funding Date, at the Subscription Service Ready Date annually and monthly. The gross total fees due under the Restated Agreements are $2,212,500, excluding pass-through costs associated with infrastructure hosting fees. On February 19, 2021, the Company completed and validated its contractual obligations and paid to NECP the $100,000 engagement fee. On February 29, 2021, the Company paid the initial fee of $707,500 to NECP prior to the Funding Date. On March 25, 2021, the Company issued 18,011,515 shares of common stock to NEC on a fully diluted basis with piggyback rights. The Company valued the common stock issuance at $67,543,182 based upon the closing market price on the effective date of the transaction based on the closing market price of the Company’s common stock. The issuance was recorded as a $5,000,000 asset, as capitalized prepaid software development and licensing and $62,543,182 as an expense, as excess fair value of equity issuance over assets received, as of June 30, 2021 based on the estimated fair market value of services had the Company developed improvements and additional functionality of the NECP platform. The estimated amortization is a 5 years life based on the term of the licensing agreement. The Company may revise the value of the asset and estimated life as more information is made available. The initial fees paid within three business days from the effective date and at or before the Funding Date included the following costs: Schedule of fees paid to NECP platform Engagement Fee $ 100,000 License subscription fee (50% due at Funding Date) 375,000 Annual maintenance subscription fee (first year) 112,500 Implementation fee (50% due at Funding Date) 162,500 Infrastructure implementation fee (50% due at Funding Date) 32,500 Training fee (50% due at Funding Date) 25,000 Total $ 807,500 As of June 30, 2021, the following payments are due in the intervals noted over the five-year life of the Restated Agreements: License subscription fee (second 50% due at Subscription Ready Date) $ 375,000 Annual maintenance subscription fees ($112,500 annually) 450,000 Implementation fees (50% due at Subscription Ready Date) 162,500 Infrastructure implementation fees (50% due at Subscription Ready Date) 32,500 Training fees (50% due at Subscription Ready Date) 25,000 Infrastructure support fees ($6,000 monthly after Subscription Ready Date) 360,000 Total $ 1,405,000 * * Infrastructure Hosting Fees, which are pass through hosting fees from a hosting partner are excluded from this calculation. Innovations Realized LLC On October 2, 2020, the Company entered into an independent contractor services agreement with Innovations Realized, LLC (“IR”) to develop a strategic operating plan focused on the design, execution and go to market implementation of the NECP platform to enter the United States market. On February 18, 2021, the Company entered into an amended independent contractor services agreement with IR. On February 19, 2021, the initial payment of $76,000 was made and on February 24, 2021 the second payment of $76,000 was made, on April 5, 2021 the third payment of $152,000 and on May 5, 2021, the fourth and fifth payment of $114,000 was made. The following payments are due over the life of the contract: Schedule of service agreement with IR July 5, 2021 114,000 August 5, 2021 114,000 Total $ 228,000 Under the October 2020 agreement, the Company granted options to purchase 400,000 shares at a price of $0.01 and 2,500,000 shares at $0.25 and exercisable for two years after vesting. These options vest in equal monthly installments over 24 months. In addition, the options early vesting based on the completion date of the statement of work or the IR principle becoming an employee of AppTech Corp. These options had a grant date fair value of $1,399,992 and $8,749,701 using a Black Scholes pricing model. The options to purchase 400,000 shares valued at $1,399,992 were recorded as an expense, as excess fair value of equity issuance, and to purchase 141,411 shares valued at $491,421 were recorded as an asset, as capitalized prepaid software development and licensing, as of June 30, 2021 based on the estimated fair market value of services had the Company developed the platform. The estimated amortization is a 5 years life based on the term of the licensing agreement. The Company may revise the estimated life upon completion of the platform. On December 21, 2020, the Company sold the domain “bubblepay.com” for $72,500 to a third party. Employee versus Contractor Classification The Company compensated various individuals as consultants. Annually, the Company issues Form 1099s for amounts paid to them. In addition, a portion of these consultants did not have arrangements which specified compensation payable to them. The Company risks potential tax and legal actions should these consultants be deemed to be employees by governmental agencies. The Company added all relevant independent contractors as paid full-time employees on April 22 nd th Executive Compensation On April 28, 2021, the Company entered into new employment and stock options agreements with its named executive officers. The agreements, among other things, each employment agreement, apart from the Chief Executive Officer which implements a guaranteed bonus structure, shall provide for a starting base salary and potential business development revenue sharing at rates ranging from 20-50% of net processing revenue. Each Employment Agreement also provides a potential annual bonus, which is subject to adjustment by the Board from time to time. Further, stock option awards for certain named executives were provided, subject to the applicable vesting schedule. Each Employment Agreement provides that the applicable named executive officer’s employment with us is “at will”. The named executive officers are entitled to receive all other benefits generally available to our executive officers. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 10 – STOCKHOLDERS’ DEFICIT Series A Preferred Stock The Company is authorized to issue 100,000 0.001 14 Common Stock The Company is authorized to issue 1,000,000,000 0.001 111,889,370 88,511,657 During the six months ended June 30, 2021 and 2020, the Company issued 353,053 2,524,000 491,001 1,290,739 381,175 152,500 During the year ended December 31, 2020, the Company granted 350,000 196,700 0.562 During the six months ended June 30, 2021, the Company issued 5,000 shares of common stock to a merchant in connection with a new contract extension. The Company valued the common stock issuance at $16,250 based upon the closing market price of the Company’s common stock on the date of the agreement. The amount was reflected as a reduction of revenue on the accompanying statement of operations. During the six months ended June 30, 2021, the Company issued 200,000 shares of common stock in connection with a judgment purchase agreement from a third party. The judgment is for damages in the amount of $516,932 plus statutory interest against FlowPay Corporation and R. Wayne Steiger. The Company valued the common stock issuance at $1,000,000 based on the closing market price of the Company’s common stock on the date of the judgment purchase. During the six months ended June 30, 2021, the Company issued 26,250 shares of common stock to two merchants in connection with the merchant equity program. The Company recorded the common stock issuance at the historical price of $2,121 based upon the closing market price of the Company’s common stock on the date of the qualification. The amount was reflected as a reduction of the merchant equity liability. During the six months ended June 30, 2021, the Company issued 4,555,896 shares of common stock to several convertible notes payable holders of which 3,761,500 shares of common stock were issued to related parties in connection with debt conversions. The closing market price of the Company’s common stock on the date of the agreement was used to value the excess fair value of equity issuance. The amounts were reflected as a reduction of convertible notes payable and accrued interest, as well as, excess fair value of equity issuance as follows:. Schedule of convertible related party Convertible notes payable $ 170,000 Convertible notes payable – related parties 372,000 Accrued interest 306,637 Accrued interest – related parties 356,963 Excess fair value of equity issuance 587,722 Excess fair value of equity issuance – related parties 1,903,162 Total $ 3,696,484 See Note 9 – Significant Contracts for additional common stock issuance. Stock Options On July 28, 2020, the Company entered into an agreement for board of director services. As compensation the Company granted options to purchase 125,000 0.562 70,235 On August 25, 2020, the Company entered into an agreement for accounting services in general and administrative expenses. As compensation the Company granted options to purchase 100,000 0.25 140,945 On September 21, 2020, the Company entered into an agreement for sales and marketing services in general and administrative expenses. As compensation the Company granted options to purchase 10,000 0.01 13,498 On September 22, 2020, the Company entered into an agreement for IT services in general and administrative expenses. As compensation the Company granted options to purchase 52,000 0.25 77,995 On October 29, 2020, the Company entered into an agreement for sales and marketing in general and administrative expenses. As compensation the Company granted options to purchase 100,000 0.30 156,999 On April 22, 2021, the Company entered into four agreements for administrative services, sales and marketing services in general and administrative expenses. As compensation the Company granted non-statutory stock options to purchase 282,000 2.15 606,278 On April 22, 2021, the Company entered into three agreements for executive officers compensation in general and administrative expenses. As compensation the Company granted non-statutory stock options to purchase 1,600,000 2.29 3,663,820 See Note 9 – Significant Contracts for additional stock options granted. The fair value of the options is estimated using a Black-Scholes option pricing model with the following range of assumptions: Schedule of Black Scholes option pricing Market value of common stock on issuance date $ 0.562 2.29 Expected price $ 0.01 2.036 Expected volatility 467 608 Expected term (in years) 0.3 2.8 Risk-free interest rate 0.11% Expected dividend yields — The following table summarizes option activity: Schedule of option activity Weighted Weighted Number of Average Average shares exercise price remaining years Outstanding December 31, 2020 7,707,000 $ 0.21 Issued 1,882,000 $ 2.02 Cancelled (1,006,249 ) $ 0.25 Outstanding as of June 30, 2021 8,582,751 $ 0.31 2.75 Outstanding as of June 30, 2021, vested 2,235,141 $ 1.17 2.80 The remaining expense outstanding through June 30, 2021 is $8,869,318 for which $1,701,755 is expected to be expensed over the next 33 months in general and administrative expense and $7,167,563 is expected to be recorded over the next 19 ½ months as an asset, as capitalized prepaid software development and licensing or as an expense excess fair value of equity issuance over assets received. On July 28, 2020, the board authorized the Company’s AppTech Equity Incentive Plan in order to facilitate the grant of equity incentives to employees (including our named executive officers), directors, independent contractors, merchants, referral partners, channel partners and consultants of our company to enable our company to attract, retain and motivate employees, directors, merchants, referral partners and channel partners, which is essential to our long-term success. A total of 5,000,000 shares of common stock were authorized under the AppTech Equity Incentive Plan, for which as of June 30, 2021 a total of 3,224,500 are available for issuance. Warrants In 2020, the Company entered into a security purchase agreement with an investor pursuant to which the Company agreed to sell the investor a $300,000 convertible note bearing interest at 12% per annum. The Company also sold warrants to the investors to purchase up to an aggregate of 200,000 shares of common stock, with an exercise term of five (5) years, at a per share price of one dollar and fifty cents ($1.50) which may be exercised by cashless exercise. The warrants were deemed a derivative liability and were recorded as a debt discount at date of issuance. See Note 7. Common Stock Repurchase Option On February 3, 2021, the Company entered into a common stock repurchase option agreement with a former officer and significant shareholder to purchase or assign 2,000,000 0.20 50,000 33,750 On February 3, 2021, the Company entered into a common stock repurchase option agreement with a former officer and significant shareholder to purchase or assign 2,000,000 shares of common stock from a third party at $0.20 per share. The Company assigned a portion of the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase option for 350,000 shares was exercised on February 17, 2021 for which the Company received $222,250 in proceeds which was recorded as additional paid-in capital. On February 3, 2021, the Company entered into a common stock repurchase option agreement with a former officer and significant shareholder to purchase or assign 2,000,000 shares of common stock from a third party at $0.20 per share. The Company assigned a portion of the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase option for 850,000 shares was exercised on February 19, 2021 for which the Company received $539,750 in proceeds which was recorded as additional paid-in capital. On February 3, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 1,000,000 shares of common stock from a third party at $0.20 per share. The Company assigned a portion of the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase option for 750,000 shares was exercised on February 22, 2021 for which the Company received $881,250 in proceeds which was recorded as additional paid-in capital. On February 23, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 500,000 0.225 250,000 193,750 On February 23, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 500,000 shares of common stock from a third party at $0.225 per share. The Company assigned a portion of the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase option for 150,000 shares was exercised on March 5, 2021 for which the Company received $102,000 in proceeds which was recorded as additional paid-in capital. On March 4, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 2,000,000 0.20 50,000 On March 15, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 100,000 0.20 117,500 On March 17, 2021, the Company entered into a common stock repurchase option agreement with a former officer and significant shareholder to purchase or assign 750,000 0.20 35,000 28,000 On June 17, 2021, the Company entered into a common stock repurchase option agreement with a former officer and significant shareholder to purchase or assign 706,667 0.20 500,000 87,500 On June 18, 2021, the Company entered into a common stock repurchase option agreement to purchase or assign 1,000,000 0.15 1,000,000 225,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Also see Note 3. |
Use of Estimates | Use of Estimates The preparation of the 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. Significant estimates include the estimated liabilities related to various vendors in which communications have ceased, contingent liabilities, realization of tax deferred tax assets and capitalization of software development. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $ 250,000 The accounts receivable from merchant services are paid by the financial institutions on a monthly basis. The Company currently uses six financial institutions to service their merchants for which represented 100% of accounts receivable as of June 30, 2021 and 2020. The loss of one of these financial institutions would not have a significant impact on the Company’s operations as there are additional financial institutions available to the Company. For the six months ended June 30, 2021 and 2020, the one merchant (customer) represented approximately 46% and 41% of the total revenues, respectively. The loss of this customer would have significant impact on the Company’s operations. |
Software Development Costs | Software Development Costs The Company capitalizes software development costs in developing internal use software when capitalizing requirements have been met. Costs prior to meeting the capitalization requirements are expensed as incurred. |
Revenue Recognition | Revenue Recognition The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, codified as Accounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1, 2019 using modified retrospective basis and the cumulative effect was immaterial to the financial statements. The Company provides merchant processing solutions for credit cards and electronic payments. In all cases, the Company acts as an agent between the merchant which generates the credit card and electronic payments, and the bank which processes such payments. The Company’s revenue is generated on services priced as a percentage of transaction value or a specified fee transaction, depending on the card or transaction type. Revenue is recorded as services are performed which is typically when the bank processes the merchant’s credit card and electronic payments. Consideration paid to customers such as amounts earned under our customer equity incentive program, are recorded as a reduction to revenues. There were no amounts paid or incurred during the six months ended June 30, 2021 and 2020. |
Fair Value Measurements | Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Company’s financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term mature of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-marketing dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. The following table presents liabilities that are measured and recognized at fair value as of June 30, 2021 and December 31, 2020 on recurring basis: Schedule of derivative liabilities June 30, 2021 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 628,299 628,299 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 597,948 597,948 See Note 7 for discussion of valuation and roll forward related to derivative liabilities. |
Per Share Information | Per Share Information Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year, increased by the potentially dilutive common shares that were outstanding during the year. Dilutive securities include stock options, warrants granted, convertible debt and convertible preferred stock. The number of common stock equivalents not included in diluted income per share was 10,315,337 and 5,540,288 for the six months ended June 30, 2021 and 2020, respectively. The weighted average number of common stock equivalents is not included in diluted income (loss) per share, because the effects are anti-dilutive. Schedule of anti dilutive stock June 30, 2021 June 30, 2020 Series A preferred stock 10,920 10,920 Convertible debt 1,770,083 5,529,368 Warrants 200,000 — Options 6,707,500 — Common stock 3,395,500 — Total 12,084,003 5,540,288 |
New Accounting Pronouncements | New Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of derivative liabilities | Schedule of derivative liabilities June 30, 2021 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 628,299 628,299 December 31, 2020 Total Carrying Level 1 Level 2 Level 3 Value Derivative liabilities — — 597,948 597,948 |
Schedule of anti dilutive stock | Schedule of anti dilutive stock June 30, 2021 June 30, 2020 Series A preferred stock 10,920 10,920 Convertible debt 1,770,083 5,529,368 Warrants 200,000 — Options 6,707,500 — Common stock 3,395,500 — Total 12,084,003 5,540,288 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilitie | Schedule of Accrued Liabilitie June 30, 2021 December 31, 2020 Accrued interest – related parties $ 378,650 $ 1,039,977 Accrued interest – third parties 1,260,495 1,395,133 Accrued payroll 52,946 — Accrued PTO 42,331 — Accrued residuals 89,096 62,174 Accrued merchant equity 88,903 91,023 Other 38,675 44,027 Total accrued liabilities $ 1,951,096 $ 2,632,334 |
NOTES PAYABLE AND CONVERTIBLE_2
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of notes and convertible notes payable | Schedule of notes and convertible notes payable June 30, 2021 December 31, 2021 Convertible note payable $ 332,200 $ 378,134 Warrants 296,099 219,814 Total notes and convertible notes payable $ 628,299 $ 597,948 |
Schedule of Convertible note and warrant lawsuit | Schedule of Convertible note and warrant lawsuit Convertible note payable $ 222,000 Accrued interest 83,588 Excess fair value of equity issuance 1,379,193 Total $ 1,684,781 |
Schedule of convertible notes payables | Schedule of convertible notes payables Convertible notes payable $ 170,000 Convertible notes payable – related parties 150,000 Accrued interest 306,637 Accrued interest – related parties 273,375 Excess fair value of equity issuance 587,723 Excess fair value of equity issuance – related parties 523,968 Total $ 2,011,703 Notes Payable In 2020, the Company entered into a 30-year unsecured note payable with U.S. Small Business Administration for $68,200 in proceeds. The notes payable incurred a $100 fee upon issuance and incurs interest at 3.75% per annum. All payments of principal and interest are deferred for twelve months with the first $333 payment due July 1, 2021. As of June 30, 2021 and December 31, 2020 the balance of the note payable was $ 68,300 2,561 1,281 In 2016, the Company issued $143,000 in notes payable to third parties. The notes payable were due in ninety days or less. During 2019, the Company paid $36,000 in notes payable. The Company is currently in default of the note agreements. Two significant shareholders funded the Company’s operations through notes payable in primarily 2009 and 2010. The notes payable incur interest at 10% per annum and were due on December 31, 2016. The Company is currently in default of the note agreements. As of June 30, 2021 and December 31, 2020, the aggregate balance of the notes payable was $620,355 and accrued interest was $367,873 and $638,016, respectively. On May 2, 2021, the Company entered into a debt reduction and confirmation agreement with a significant shareholder. The parties agreed to reduce the outstanding accrued interest in the amount of $275,000. In 2008, the Company entered into a note payable with a third party for $10,000 in total proceeds. The note payable is currently in default and has a flat interest amount due of $21,000. As of June 30, 2021 and 2020, the Company was in default of the note agreement and the entire amount of $21,000 has been included within accrued interest. Since the notes payable do not incur interest, the Company imputed interest at $500 and $500, respectively, which represented an interest rate of 10% per annum during the six months ended June 30, 2021 and 2020. In 2008, the Company entered into notes payable with a third party for $26,000 in total proceeds. The notes payable have a flat interest amount due of $80,000. During 2015, the Company received another $50,000 from the third party. During 2017, the Company entered into an agreement whereby they would repay the principal and accrued interest in the amount of $145,000 by April 4, 2018 and issue the holders 800,000 shares of common stock. The Company recorded the fair market value of the common stock issued at $336,000 based on the date of issuance as interest expense. Other than the issuance of shares of common stock, the Company did not perform under the agreement. The Company is currently in default of the note agreement. In 2007 and 2008, the Company entered into notes payable with a related party for $46,000 in proceeds. The notes payable were due on demand and incurred interest at 12% per annum. These were combined into a single note agreement in 2014. As of June 30, 2021 and December 31, 2020, the balance on the note payable was $88,136 and accrued interest related to the note payable was $65,228 and $59,900, respectively. The Company is currently in default of the note payable agreement. In 2007, the Company entered into note payable with a third party for $128,000 in proceeds. Under the terms of the agreement the holder received a flat interest amount of $37,496. The Company is currently in default of the note payable agreement and the entire amount of $37,496 has been included within accrued interest. Since the note payable did not incur interest, the Company imputed interest at $6,400 and $6,400, respectively, which represented an interest rate of 10% per annum during the six months ended June 30, 2021 and 2020. In 2007, the Company entered into note payable with a third party for $221,800 in proceeds. The note payable is currently in default and incurs interest at 10% per annum. On December 31, 2013, the holder received an arbitration settlement for the principal and accrued interest. As of June 30, 2021 and December 31, 2020, the Company was in default of the arbitration settlement. As of June 30, 2021 and December 31, 2020, accrued interest related to the note payable was $490,284 and $470,143, respectively. In 2007, the Company entered into note payable with a significant shareholder for $58,600 in proceeds. The note payable is currently due on demand and incurs interest at 10% per annum. As of June 30, 2021 and December 31, 2020, accrued interest related to the note payable was $79,303 and $76,372, respectively. The Company is currently in default of the note agreement. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Liabilities | |
Schedule of fair value of derivative liabilities | Schedule of fair value of derivative liabilities Derivative Liability Convertible Notes Derivative Total Balance as of December 31, 2020 378,134 219,814 597,948 Change in fair value (21,186 ) 76,285 55,099 Change in fair value due to conversion (24,748 ) — (24,748 ) Balance as of June 30, 2021 $ 332,200 $ 296,099 $ 628,299 |
Schedule of pricing mode with assumptions | Schedule of pricing mode with assumptions Market value of common stock $ 1.67 Expected volatility 66.2 % Expected term (in years) 0.11 Risk-free interest rate 0.13 % At June 30, 2021, the fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $ 1.67 Expected volatility 97.7 % Expected term (in years) 4.39 Risk-free interest rate 0.59 % |
RIGHT OF USE ASSET (Tables)
RIGHT OF USE ASSET (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Right Of Use Asset | |
Schedule of Future Minimum Rental Payments for Operating Leases | Schedule of Future Minimum Rental Payments for Operating Leases 2021 $ 41,380 2022 85,039 2023 87,590 2024 90,217 2025 7,536 Operating Lease Total $ 311,762 Less: Imputed interest (57,309 ) Total $ 254,453 |
COMMITMENTS AND CONTIGENCIES (T
COMMITMENTS AND CONTIGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of payment of lawsuit | Schedule of payment of lawsuit 2021 $ 40,000 2022 75,000 Total $ 115,000 |
Schedule of fees paid to NECP platform | Schedule of fees paid to NECP platform Engagement Fee $ 100,000 License subscription fee (50% due at Funding Date) 375,000 Annual maintenance subscription fee (first year) 112,500 Implementation fee (50% due at Funding Date) 162,500 Infrastructure implementation fee (50% due at Funding Date) 32,500 Training fee (50% due at Funding Date) 25,000 Total $ 807,500 As of June 30, 2021, the following payments are due in the intervals noted over the five-year life of the Restated Agreements: License subscription fee (second 50% due at Subscription Ready Date) $ 375,000 Annual maintenance subscription fees ($112,500 annually) 450,000 Implementation fees (50% due at Subscription Ready Date) 162,500 Infrastructure implementation fees (50% due at Subscription Ready Date) 32,500 Training fees (50% due at Subscription Ready Date) 25,000 Infrastructure support fees ($6,000 monthly after Subscription Ready Date) 360,000 Total $ 1,405,000 * |
Schedule of service agreement with IR | Schedule of service agreement with IR July 5, 2021 114,000 August 5, 2021 114,000 Total $ 228,000 |
STOCKHOLDERS_ DEFICIT (Tables)
STOCKHOLDERS’ DEFICIT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of convertible related party | Schedule of convertible related party Convertible notes payable $ 170,000 Convertible notes payable – related parties 372,000 Accrued interest 306,637 Accrued interest – related parties 356,963 Excess fair value of equity issuance 587,722 Excess fair value of equity issuance – related parties 1,903,162 Total $ 3,696,484 |
Schedule of Black Scholes option pricing | Schedule of Black Scholes option pricing Market value of common stock on issuance date $ 0.562 2.29 Expected price $ 0.01 2.036 Expected volatility 467 608 Expected term (in years) 0.3 2.8 Risk-free interest rate 0.11% Expected dividend yields — |
Schedule of option activity | Schedule of option activity Weighted Weighted Number of Average Average shares exercise price remaining years Outstanding December 31, 2020 7,707,000 $ 0.21 Issued 1,882,000 $ 2.02 Cancelled (1,006,249 ) $ 0.25 Outstanding as of June 30, 2021 8,582,751 $ 0.31 2.75 Outstanding as of June 30, 2021, vested 2,235,141 $ 1.17 2.80 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Derivative liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Summary of Investment Holdings [Line Items] | ||
Derivative liabilities | $ 628,299 | $ 597,948 |
Fair Value, Inputs, Level 1 [Member] | ||
Summary of Investment Holdings [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Summary of Investment Holdings [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Summary of Investment Holdings [Line Items] | ||
Derivative liabilities | $ 628,299 | $ 597,948 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Accounting Policies [Abstract] | ||
Series A preferred stock | $ 10,920 | $ 10,920 |
Convertible debt | 1,770,083 | 5,529,368 |
Warrants | 200,000 | |
Options | 6,707,500 | |
Common stock | 3,395,500 | |
Total | $ 12,084,003 | $ 5,540,288 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Jun. 30, 2021USD ($) |
Accounting Policies [Abstract] | |
Federal Deposit Insurance Corporation | $ 250,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss | $ 6,340,477 | $ 326,424 | $ 72,633,974 | $ 1,790,474 | |
Net cash used in operating activities | 725,166 | $ 213,011 | |||
Negative working capital | 6,589,951 | 6,589,951 | |||
Accumulated deficit | $ 117,581,705 | 117,581,705 | $ 44,947,730 | ||
Proceeds from sale of repurchase option | $ 2,430,750 |
PATENTS (Details Narrative)
PATENTS (Details Narrative) - USD ($) | 1 Months Ended | ||
Jun. 22, 2017 | Jun. 30, 2021 | Dec. 31, 2020 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Accounts payable related to assumption of liabilities | $ 280,000 | $ 280,000 | |
Global Tel Media [Member] | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Stock Issued During Period, Shares, Purchase of Assets | 5,000,000 | ||
Stock Issued During Period, Value, Purchase of Assets | $ 1,000,000 | ||
Business aqusition cost | 1,600,000 | ||
Revenue from related party | $ 26,600,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Accrued interest – related parties | $ 378,650 | $ 1,039,977 |
Accrued interest – third parties | 1,260,495 | 1,395,133 |
Accrued payroll | 52,946 | |
Accrued PTO | 42,331 | |
Accrued residuals | 89,096 | 62,174 |
Accrued merchant equity | 88,903 | 91,023 |
Other | 38,675 | 44,027 |
Total accrued liabilities | $ 1,951,096 | $ 2,632,334 |
ACCRUED LIABILITIES (Details Na
ACCRUED LIABILITIES (Details Narrative) | 6 Months Ended |
Jun. 30, 2021shares | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Line Items] | |
Common stock issuable | 750,000 |
Minimum [Member] | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Line Items] | |
Accrued Interest rate | 10.00% |
Maximum [Member] | |
SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Line Items] | |
Accrued Interest rate | 15.00% |
NOTES PAYABLE AND CONVERTIBLE_3
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Convertible note payable | $ 332,200 | $ 378,134 |
Warrants | 296,099 | 219,814 |
Total notes and convertible notes payable | $ 628,299 | $ 597,948 |
NOTES PAYABLE AND CONVERTIBLE_4
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details 1) | Jun. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
Convertible note payable | $ 222,000 |
Accrued interest | 83,588 |
Excess fair value of equity issuance | 1,379,193 |
Total | $ 1,684,781 |
NOTES PAYABLE AND CONVERTIBLE_5
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details 2) | Jun. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
Convertible notes payable | $ 170,000 |
Convertible notes payable – related parties | 150,000 |
Accrued interest | 306,637 |
Accrued interest – related parties | 273,375 |
Excess fair value of equity issuance | 587,723 |
Excess fair value of equity issuance – related parties | 523,968 |
Total | $ 2,011,703 |
NOTES PAYABLE AND CONVERTIBLE_6
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Apr. 29, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 24, 2021 | |
Debt Instrument [Line Items] | |||||||||
Proceeds from loans payable - related parties | $ 34,400 | $ 30,800 | |||||||
Loans payable related parties | 0 | $ 34,400 | |||||||
Accrued interest | 83,588 | ||||||||
Amortization of Debt Discount (Premium) | 177,157 | $ 0 | |||||||
Convertible note payable discount | 83,017 | 280,174 | |||||||
Note Payable | 68,300 | 68,300 | |||||||
Accrued interest | 2,561 | 1,281 | |||||||
Executive Officer [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Loans payable related parties | $ 200,000 | ||||||||
Subordinated Notes Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument Carrying Amount | $ 350,000 | ||||||||
Interest rate | 10.00% | ||||||||
Accrued interest | 171,045 | 153,545 | |||||||
Convertible Note Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of share converted | 3,055,875 | ||||||||
Convertible Note Payable [Member] | Securities Purchase Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument Carrying Amount | $ 300,000 | ||||||||
Interest rate | 12.00% | ||||||||
Convertible Notes Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument Carrying Amount | $ 222,000 | ||||||||
Interest rate | 10.00% | ||||||||
Accrued interest | $ 76,187 | ||||||||
Conversion Price | $ 0.10 | ||||||||
Discount | 222,000 | ||||||||
Convertible Notes Payable 1 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument Carrying Amount | $ 50,000 | ||||||||
Interest rate | 10.00% | ||||||||
Accrued interest | 28,334 | 25,833 | |||||||
Conversion Price | $ 1 | ||||||||
Convertible Notes Payable 2 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument Carrying Amount | $ 400,000 | ||||||||
Accrued interest | $ 247,583 | $ 227,083 | |||||||
Common stock repurchased (In shares) | 400,000 | 400,000 | |||||||
Common stock repurchased | $ 400,000 | $ 400,000 | |||||||
Convertible Notes Payable 2 [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 10.00% | ||||||||
Convertible Notes Payable 2 [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 12.00% | ||||||||
Conversion Price | $ 1 | ||||||||
Convertible Notes Payable 3 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Accrued interest | $ 564,013 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Summary of Investment Holdings [Line Items] | |
Balance as of March 31, 2020 | $ 597,948 |
Change in fair value | 55,099 |
Change in fair value due to conversion | (24,748) |
Balance as of March 31, 2021 | 628,299 |
Derivative Liability Convertible Notes | |
Summary of Investment Holdings [Line Items] | |
Balance as of March 31, 2020 | 378,134 |
Change in fair value | (21,186) |
Change in fair value due to conversion | (24,748) |
Balance as of March 31, 2021 | 332,200 |
Derivative Liability Warrants | |
Summary of Investment Holdings [Line Items] | |
Balance as of March 31, 2020 | 219,814 |
Change in fair value | 76,285 |
Change in fair value due to conversion | |
Balance as of March 31, 2021 | $ 296,099 |
DERIVATIVE LIABILITIES - Valuat
DERIVATIVE LIABILITIES - Valuation Assumptions (Details) | 6 Months Ended |
Jun. 30, 2021$ / shares | |
Summary of Investment Holdings [Line Items] | |
Market value of common stock | $ 1.67 |
Risk-free interest rate | 0.11% |
Convertible Notes | |
Summary of Investment Holdings [Line Items] | |
Market value of common stock | $ 1.67 |
Expected volatility | 66.20% |
Expected term (in years) | 1 month 9 days |
Risk-free interest rate | 0.13% |
Warrants | |
Summary of Investment Holdings [Line Items] | |
Expected volatility | 97.70% |
Expected term (in years) | 4 years 4 months 20 days |
Risk-free interest rate | 0.59% |
RIGHT OF USE ASSET (Details)
RIGHT OF USE ASSET (Details) | Jun. 30, 2021USD ($) |
Right Of Use Asset | |
2021 | $ 41,380 |
2022 | 85,039 |
2023 | 87,590 |
2024 | 90,217 |
2025 | 7,536 |
Operating Lease Total | 311,762 |
Less: Imputed interest | (57,309) |
Total | $ 254,453 |
RIGHT OF USE ASSET (Details Nar
RIGHT OF USE ASSET (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Right Of Use Asset | ||
Borrowing rate | 12.00% | |
Rent expense | $ 30,591 | $ 21,914 |
COMMITMENTS AND CONTIGENCIES (D
COMMITMENTS AND CONTIGENCIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 40,000 | |
2022 | 75,000 | |
Total | $ 135,000 | $ 115,000 |
COMMITMENTS AND CONTIGENCIES _2
COMMITMENTS AND CONTIGENCIES (Details 1) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Engagement Fee | $ 100,000 |
License subscription fee (50% due at Funding Date) | 375,000 |
Annual maintenance subscription fee (first year) | 112,500 |
Implementation fee (50% due at Funding Date) | 162,500 |
Infrastructure implementation fee (50% due at Funding Date) | 32,500 |
Training fee (50% due at Funding Date) | 25,000 |
Total | 807,500 |
License subscription fee (second 50% due at Subscription Ready Date) | 375,000 |
Annual maintenance subscription fees ($112,500 annually) | 450,000 |
Infrastructure implementation fees (50% due at Subscription Ready Date) | 32,500 |
Training fees (50% due at Subscription Ready Date) | 25,000 |
Infrastructure support fees ($6,000 monthly after Subscription Ready Date) | 360,000 |
Total | $ 1,405,000 |
COMMITMENTS AND CONTIGENCIES _3
COMMITMENTS AND CONTIGENCIES (Details 2) - USD ($) | Aug. 05, 2021 | Jul. 05, 2021 | Jun. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Contractor services agreement | $ 114,000 | $ 114,000 | $ 228,000 |
COMMITMENTS AND CONTIGENCIES _4
COMMITMENTS AND CONTIGENCIES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lawsuit payment | $ 135,000 | $ 115,000 |
Schedule of convertible related
Schedule of convertible related party (Details) | Jun. 30, 2021USD ($) |
Equity [Abstract] | |
Convertible notes payable | $ 170,000 |
Convertible notes payable – related parties | 372,000 |
Accrued interest | 306,637 |
Accrued interest – related parties | 356,963 |
Excess fair value of equity issuance | 587,722 |
Excess fair value of equity issuance – related parties | 1,903,162 |
Total | $ 3,696,484 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) | 6 Months Ended |
Jun. 30, 2021$ / shares | |
Option Indexed to Issuer's Equity [Line Items] | |
Market value of common stock on issuance date | $ 1.67 |
Risk-free interest rate | 0.11% |
Expected dividend yields | 0.00% |
Maximum [Member] | |
Option Indexed to Issuer's Equity [Line Items] | |
Market value of common stock on issuance date | $ 0.562 |
Expected price | 0.01% |
Expected volatility | 467.00% |
Expected term (in years) | 3 months 18 days |
Minimum [Member] | |
Option Indexed to Issuer's Equity [Line Items] | |
Market value of common stock on issuance date | $ 2.29 |
Expected price | 2.036% |
Expected volatility | 608.00% |
Risk-free interest rate | 280.00% |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 2) - Option Activity | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Option Indexed to Issuer's Equity [Line Items] | |
Begining Balance | shares | 7,707,000 |
Options Outstanding, Begining Balance, Weighted Average Exercise Price | $ / shares | $ 0.21 |
Granted | shares | 1,882,000 |
Granted | $ / shares | $ 2.02 |
Cancelled | shares | (1,006,249) |
Cancelled | $ / shares | $ 0.25 |
Ending Balance | shares | 8,582,751 |
Options Outstanding, Ending Balance, Weighted Average Exercise Price | $ / shares | $ 0.31 |
Options outstanding weighted average remaining years | 2 years 9 months |
Option outstanding vested | shares | 2,235,141 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ / shares | $ 1.17 |
Options outstanding weighted average remaining years, vested | 2 years 9 months 18 days |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | Mar. 15, 2021 | Mar. 04, 2021 | Feb. 11, 2021 | Feb. 03, 2021 | Jun. 18, 2021 | Jun. 17, 2021 | Mar. 17, 2021 | Mar. 15, 2021 | Feb. 23, 2021 | Feb. 03, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Apr. 25, 2021 | Apr. 22, 2021 | Oct. 29, 2020 | Sep. 22, 2020 | Sep. 21, 2020 | Aug. 25, 2020 | Jul. 28, 2020 | Apr. 24, 2020 |
Class of Stock [Line Items] | |||||||||||||||||||||
Preferred stock, shares authorized | 100,000 | 100,000 | |||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||
Preferred stock, outstanding | 14 | 14 | |||||||||||||||||||
Common stock, authorized | 1,000,000,000 | 1,000,000,000 | |||||||||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||
Common stock, outstanding | 111,889,370 | 88,511,657 | |||||||||||||||||||
Common stock issued for services | $ 353,053 | $ 2,524,000 | |||||||||||||||||||
Common stock issued for services (in shares) | 491,001 | 1,290,739 | |||||||||||||||||||
Accounts payable conversion | $ 381,175 | $ 152,500 | |||||||||||||||||||
Stock options issued | 1,600,000 | 282,000 | 100,000 | 52,000 | 10,000 | 100,000 | 125,000 | ||||||||||||||
Exercise price | $ 2.29 | $ 2.15 | $ 0.30 | $ 0.25 | $ 0.01 | $ 0.25 | $ 0.562 | ||||||||||||||
Fair value of options | $ 3,663,820 | $ 606,278 | $ 156,999 | $ 77,995 | $ 13,498 | $ 140,945 | $ 70,235 | ||||||||||||||
Board And Directors [Member] | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Number of share issued | 350,000 | ||||||||||||||||||||
Stock Issued During Period, Value, Other | $ 196,700 | ||||||||||||||||||||
Share Price | $ 0.562 | ||||||||||||||||||||
Third Party [Member] | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Share Price | $ 0.20 | $ 0.20 | $ 0.15 | $ 0.20 | $ 0.20 | $ 0.225 | $ 0.20 | $ 0.20 | |||||||||||||
Common Stock Repurchase Option (in shares) | 100,000 | 2,000,000 | 1,000,000 | 706,667 | 750,000 | 500,000 | 2,000,000 | ||||||||||||||
Stock option exercised | 50,000 | 50,000 | 1,000,000 | 500,000 | 35,000 | 250,000 | |||||||||||||||
Additional paid-in capital | $ 33,750 | $ 225,000 | $ 87,500 | $ 28,000 | $ 117,500 | $ 193,750 | |||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||
Preferred stock, shares authorized | 100,000 | ||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||||||||
Preferred stock, outstanding | 14 | 14 |