Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 10, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-27569 | |
Entity Registrant Name | AppTech Payments Corp. | |
Entity Central Index Key | 0001070050 | |
Entity Tax Identification Number | 65-0847995 | |
Entity Incorporation, State or Country Code | DE | |
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 | |
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 | 16,118,264 | |
Common Stock, $0.001 par value per share | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | APCX | |
Security Exchange Name | NASDAQ | |
Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $5.19 | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $5.19 | |
Trading Symbol | APCXW | |
Security Exchange Name | NASDAQ |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 10,290 | $ 8 |
Accounts receivable | 43 | 40 |
Prepaid expenses | 247 | 95 |
Prepaid License Fees - Current | 599 | 479 |
Total current assets | 11,179 | 622 |
Prepaid offering cost | 92 | |
Prepaid license fees - long term | 3,060 | 3,180 |
Note receivable | 26 | 26 |
Right of use asset | 173 | 189 |
Security deposit | 8 | 8 |
Capitalized software development and license | 3,625 | 3,440 |
TOTAL ASSETS | 18,071 | 7,557 |
Current liabilities | ||
Accounts payable | 474 | 1,255 |
Accrued liabilities | 1,821 | 3,136 |
Right of use liability | 64 | 61 |
Stock repurchase liability | 430 | 430 |
Convertible notes payable, net of $37 and $51 thousand debt discount | 680 | 679 |
Notes payable | 1,086 | 438 |
Notes payable related parties | 685 | |
Derivative liabilities | 463 | 599 |
Total current liabilities | 5,018 | 7,283 |
Long-term liabilities | ||
Right of use liability | 146 | 163 |
Notes Payable, net of current portion | 67 | 67 |
Anti-dilution liability | 2,121 | |
Total long-term liabilities | 2,334 | 230 |
TOTAL LIABILITIES | 7,352 | 7,513 |
Stockholders’ Equity (Deficit) | ||
Series A preferred stock; $0.001 par value; 10,526 shares authorized; 14 shares issued and outstanding at March 31, 2022 and December 31, 2021 | ||
Common stock, $0.001 par value; 105,263,157 shares authorized; 15,745,070 and 11,944,607 and outstanding at March 31, 2022 and December 31, 2021, respectively | 16 | 12 |
Additional paid-in capital | 140,351 | 124,225 |
Accumulated deficit | (129,648) | (124,193) |
Total stockholders’ equity (deficit) | 10,719 | 44 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 18,071 | $ 7,557 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Debt discount | $ 37 | $ 51 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,526 | 10,526 |
Preferred Stock, Shares Issued | 14 | 14 |
Preferred Stock, Shares Outstanding | 14 | 14 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 105,263,157 | 105,263,157 |
Common Stock, Shares, Outstanding | 15,745,070 | 11,944,607 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 104 | $ 101 |
Cost of revenues | 51 | 34 |
Gross profit | 53 | 67 |
Operating expenses: | ||
General and administrative, including stock based compensation of $2.5 million and $1.4 million, respectively | 2,779 | 1,780 |
Research and development | 2,053 | |
Excess fair value of equity issuance over assets received | 832 | 63,943 |
Total operating expenses | 5,664 | 65,723 |
Loss from operations | (5,611) | (65,656) |
Other income (expenses) | ||
Interest expense | (55) | (129) |
Change in fair value of derivative liability | 136 | (508) |
Other income (expenses) | 75 | |
Total other income (expenses) | 156 | (637) |
Loss before provision for income taxes | (5,455) | (66,293) |
Provision for income taxes | ||
Net loss | $ (5,455) | $ (66,293) |
Basic and diluted net loss per common share | $ (0.35) | $ (6.52) |
Weighted-average number of shares used basic and diluted per share amounts | 15,479,613 | 10,165,034 |
STATEMENTS OF OPERATIONS (Una_2
STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Stock based compensation | $ 2,500 | $ 1,400 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Series A Preferred Stocks [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 9 | $ 36,744 | $ (44,948) | $ (8,195) | |
Beginning balance, shares at Dec. 31, 2020 | 14 | 9,317,017 | |||
Net loss | (66,293) | (66,293) | |||
Imputed interest | 3 | 3 | |||
Stock based compensation | 429 | 429 | |||
Stock based compensation, shares | 35,737 | ||||
Issuance of options for capitalized prepaid software development and license | 1,891 | 1,891 | |||
Common stock issued for purchase of judgment | 1,000 | 1,000 | |||
Common Stock issued for purchase of judgement, shares | 21,053 | ||||
Common stock issued for capitalized prepaid software development and license | $ 2 | 67,525 | 67,543 | ||
Common stock issued for capitalized prepaid software development and license, shares | 1,895,949 | ||||
Common stock cancelled | (10) | (10) | |||
Common stock cancelled, shares | (15,789) | ||||
Net Proceeds from sale of Offering Shares | 1,973 | 1,973 | |||
Ending balance, value at Mar. 31, 2021 | $ 11 | 109,555 | (111,241) | (1,659) | |
Ending balance, shares at Mar. 31, 2021 | 14 | 11,253,967 | |||
Beginning balance, value at Dec. 31, 2021 | $ 12 | 124,225 | (124,193) | 44 | |
Beginning balance, shares at Dec. 31, 2021 | 14 | 11,944,600 | |||
Net loss | (5,455) | (5,455) | |||
Common Stock Issued for Forbearance | 3 | 3 | |||
Common stock issued for forbearance, shares | 2,104 | ||||
Imputed interest | |||||
Stock based compensation | 2,732 | 2,732 | |||
Stock based compensation, shares | 310,480 | ||||
Common stock cancelled | |||||
Common stock cancelled, shares | (126,315) | ||||
Net Proceeds from sale of Offering Shares | $ 4 | 13,391 | 13,395 | ||
Net Proceeds from sale of Offering Shares, shares | 3,614,201 | ||||
Ending balance, value at Mar. 31, 2022 | $ 16 | $ 140,351 | $ (129,648) | $ 10,719 | |
Ending balance, shares at Mar. 31, 2022 | 14 | 15,745,070 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,455) | $ (66,293) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Issuance of stock based compensation | 2,508 | 1,829 |
Issuance of stock for prepaid services | 156 | |
Common Stock Issued for Forbearance | 3 | |
Stock issued for purchase of judgment | 1,000 | |
Stock issued for excess fair value of equity over assets received | 832 | 62,543 |
Imputed interest on notes payable | 3 | |
Amortization of debt discount | 14 | 40 |
Change in fair value of derivative liabilities | (136) | 508 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3) | (26) |
Prepaid expenses | 8 | (61) |
Accounts payable | (781) | (24) |
Accrued liabilities | (25) | 93 |
Right of use asset and liability | 1 | 3 |
Net cash used in operating activities | (2,878) | (385) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capitalized prepaid software development and license | (185) | (960) |
Net cash used in investing activities | (185) | (960) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on loans payable - related parties | (33) | |
Payments on notes payable | (50) | |
Net Proceeds from offering | 13,395 | |
Repurchase of common stock | (10) | |
Proceeds from sale of repurchase options | 1,948 | |
Net cash provided by financing activities | 13,345 | 1,905 |
Changes in cash and cash equivalents | 10,282 | 560 |
Cash and cash equivalents, beginning of period | 8 | 58 |
Cash and cash equivalents, end of period | 10,290 | 618 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Non-cash investing and financing transactions related to capitalized software and licensing costs | 5,491 | |
Issuance of stock for prepaid services | $ 156 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS On December 23, 2021, AppTech Payments Corp. (“AppTech” or the “Company”) changed our name to AppTech Payments Corp from AppTech Corp. and re-domiciled to Delaware. We are headquartered in Carlsbad, CA and our stock trades under the symbol “APCX” and our warrants under the symbol “APCXW”. The Company successfully completed its capital raise and uplisting onto NASDAQ (herein referred to its “Offering”) on January 7, 2022. As part of the Offering, the Company executed a 9.5 to 1 3,614,201 4.15 542,168 5 5.19 13.4 AppTech Payments 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 | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company’s management, the accompanying financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2022 and March 31, 2021. Although management believes that the disclosures in these unaudited financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. The accompanying unaudited financial statements should be read in conjunction with the Company’s financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ended December 31, 2022 or for any future interim periods. 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, and realization of tax deferred tax assets. 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 The accounts receivable from merchant services are paid by the financial institutions on a monthly basis. The Company currently uses six financial institut ions to service their merchants for which represented 100 8.2 36 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. Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to measure and disclose the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Level 2 Level 3 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 maturity of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arms-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 March 31, 2022 and December 31, 2021 on recurring basis (in thousands): Schedule of derivative liabilities March 31, 2022 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 463 $ 463 December 31, 2021 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 599 $ 599 See Note 6 for discussion of valuation and roll forward related to derivative liabilities. Research and Development In accordance with ASC 730, Research and Development (“R&D”) costs are expensed when incurred. R&D costs include costs of acquiring patents and other unproven technologies, contractor fees and other costs associated with the development of the SMS short code texting platform, contract and other outside services. Total R&D costs for the three months ended March 31, 2022 and 2021 were $ 2.1 0 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 6,006,350 1,733,159 Schedule of anti dilutive stock March 31, 2022 March 31, 2021 Series A preferred stock 1,149 1,149 Convertible debt 175,632 645,432 Warrants 4,275,464 21,052 Options 999,132 706,000 Restricted stock units 554,973 359,526 Total 6,006,350 1,733,159 Derivative Liability The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable anti-dilution 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 and shares to be issued were recorded as derivative liabilities on the issuance date and at each reporting period. 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. 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. 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. The continuing effects of the potential impact cannot be estimated at this time. |
PATENTS
PATENTS | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PATENTS | NOTE 3 – PATENTS Patents On June 22, 2017, AppTech executed an Amendment to Asset Purchase Agreement with GlobalTel Media, Inc., the details of which were previously disclosed by AppTech. The referenced agreement acquired intellectual property assets including but not limited to USPTO 8,073,895 & 8,572,166 “System and Method for Delivering Web Content to a Mobile Device”, USPTO 8,315,184 “Computer to Mobile Two-Way Chat System and Method”, and USPTO 8,369,828 “Mobile-to-Mobile Payment System and Method”. AppTech intends to See Note 8 for more information on capitalized prepaid software development and license. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED LIABILITIES | NOTE 4 – ACCRUED LIABILITIES Accrued liabilities as of March 31, 2022 and December 31, 2021 consist of the following (in thousands): Schedule of Accrued Liabilities March 31, 2022 December 31, 2021 Accrued interest – third parties $ 1,305 $ 1,420 Accrued payroll 251 294 Accrued residuals 28 98 Anti-dilution provision — 1,290 Other 237 34 Total accrued liabilities $ 1,821 $ 3,136 Accrued Interest Notes payable and convertible notes payable incur interest at rates between 10% and 15%, per annum. 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. Anti-dilution provision The agreement between the Company and Infinios, formerly NEC Payments B.S.C., has an anti-dilution provision. To remain in compliance, the Company accrued 73,848 17.46 1.3 378,109 2.20 832 |
NOTES PAYABLE AND CONVERTIBLE N
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | NOTE 5 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE The Company funded 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 March 31, 2022 and 2021. Related parties noted below are either members of management, board of directors, significant shareholders or individuals in which have significant influence over the Company. Subordinated Notes Payable In 2016, the Company issued $350 thousand in subordinated notes payable to third parties that incurred interest at 10% per annum. On September 30, 2021, the Company converted the notes issued for $530 thousand of principal and interest into 55,767 shares of the Company’s common stock. Since the notes were converted to equity, there will no longer be any accrued interest related to the subordinated notes. 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 thousand convertible note bearing interest at 12% per annum (the “Note”). The Note matures in 365 days from the date of issuance. The Note is convertible at the option of the holder at any time into shares of the Company’s common stock at nine dollars and fifty cents $9.50 for the one hundred and eighty (180) days immediately following the issue date and thereafter shall equal the lower of: 1) the lowest closing price of the common stock during the preceding twenty-five (25) trading day, ending on the last complete trading day prior to the issue date of the Note. 2) seventy-five (75) percent of the lowest trading price for the common stock during the twenty-five (25) consecutive trading days preceding the conversion date with a minimum trading volume of one thousand (1,000) shares. 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 21,052 shares of common stock exercisable at fourteen dollars and twenty-five cents ($14.25) 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 6 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. As of March 31, 2022 and December 31, 2021, the convertible note payable balance was $ 280 280 68 39 Total interest expense on convertible notes payable, inclusive of amortization of debt discount of $ 280 315 0 See Note 6– Derivative Liabilities. In 2015, the Company issued $50 thousand in convertible notes payable. The convertible notes payable are unsecured, were due in nine months, incur interest at 10% per annum and are convertible at $9.50 per share. The Company amended the convertible note on March 2, 2022 and an agreed offer of a $10 thousand discount on the principal and interest resulting in a $72 thousand payment in full. In 2014, the Company issued $400 thousand in convertible notes payable. The convertible notes payable are unsecured, due in periods ranging up to one year, incurring interest between 10% to 12% per annum and are convertible at prices ranging from $3.14 to $9.50 per share. In addition, the Company issued 42,105 shares of common stock in connection with the convertible notes payable. The Company had the obligation to repurchase the 42,105 shares of common stock at $9.50 per share within one year of the note issuance date. On March 30, 2022, the Company entered into three forbearance agreements which granted the holders 2,105 shares of our common stock in exchange for not enforcing the terms of the agreement for a period of twelve months. As of March 31, 2022 and December 31, 2021, the Company held the obligation to repurchase the shares for $ 400 278 268 Notes Payable In 2020, the Company entered into a 30-year unsecured note payable with U.S. Small Business Administration for $68 thousand 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 thirty months from the date of the note. As of March 31, 2022 and December 31, 2021 the balance of the note payable was $ 68 68 4 4 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. 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 thousand. On September 29, 2021, the Company converted notes issued for $51 thousand of principal and accrued interest into 5,329 shares of the Company’s common stock. On September 29, 2021, the Company entered into a forbearance agreement which granted the holder 3,140 shares with a current fair market value of $35 thousand in exchange for not enforcing the terms of the agreement for a period of twelve months. On February 4, 2022, the Company entered into an amended forbearance agreement. The parties agreed to reduce the outstanding accrued interest in the amount of $ 75 50 597 258 383 In Q3 of 2021, the Company converted notes issued for $503 thousand into 52,942 shares of the Company’s common stock. Also, the Company entered into a forbearance agreement which granted the holders 2,760 shares of the Company’s common stock with a current fair market value of $120 thousand in exchange for not enforcing the terms of the agreement for a period of twelve months. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 6– 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 March 31, 2022 and December 31, 2021. Based on the convertible notes described in Note 6, the derivative liability day one loss is $ 390 136 26 Schedule of fair value of derivative liabilities Derivative Liability Convertible Notes Derivative Liability Warrants Total Balance as of December 31, 2021 $ 274 $ 325 $ 599 Change in fair value (76 ) (60 ) (136 ) Balance as of March 31, 2022 $ 198 $ 265 $ 463 As of March 31, 2022, 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 $ 1.35 Expected volatility 104.8 % Expected term (in years) 0.25 Risk-free interest rate 1.37 % As of March 31, 2022, 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 $ 1.35 Expected volatility 108.9 % Expected term (in years) 3.64 Risk-free interest rate 1.67 % |
RIGHT OF USE ASSET
RIGHT OF USE ASSET | 3 Months Ended |
Mar. 31, 2022 | |
Right Of Use Asset | |
RIGHT OF USE ASSET | NOTE 7– 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% within the calculation. The following are the expected lease payments as of March 31, 2022, including the total amount of related imputed interest (in thousands): Years ended December 31: Schedule of Future Minimum Rental Payments for Operating Leases 2022 $ 64 2023 88 2024 90 2025 7 Operating Lease Total 249 Less: Imputed interest (39 ) Total $ 210 The rent expense was $ 15 15 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES Litigation Former Shareholders Lawsuit In November 2017, two shareholders of AppTech, Laura Farris and Eric Ottens, filed a lawsuit against the Company in the State of California, claiming conversion, aiding and abetting conversion, breach of fiduciary duty, breach of contract, breach of implied covenant of good faith and fair dealing and declaratory relief. The lawsuit was removed to the United States District Court for the Southern District of California. On December 19, 2019, the Company entered into a settlement and release agreement with the plaintiffs pursuant to which the Company will pay the plaintiffs an aggregate of $ 240 Other Lawsuit In July of 2020, an owner and corporation having a non-binding Memorandum of Understanding (“MOU”) filed a lawsuit against AppTech Payments Corp. (formally “AppTech Corp.”) in the County of San Diego, State of California. Plaintiffs amended the Complaint on March 11, 2021. The claims include breach of contract, intentional misrepresentation, negligent misrepresentation, and unjust enrichment. Service of process occurred on January 8, 2021. Management believes the non-binding MOU terminated after no Definite Agreement was executed between the parties, and negotiations ceased December 20, 2016. We filed an answer to the Amended Complaint on April 27, 2021 and began discovery. Management does not believe Plaintiffs’ claims for damages have merit or are supported by Plaintiffs’ evidence. We filed a Summary Judgment requesting an Order from the Court to narrow the issues in the Amended Complaint. This matter is scheduled for trial on July 8, 2022. We currently own a judgment dated February 17, 2017, against the owner and corporation in the amount of $517 thousand plus interest. The judgment was assigned to AppTech Payments Corp. and Management plans to use the judgment to assist in the possible settlement and dismissal of this case prior to trial. Convertible Note and Warrant Lawsuit On July 14, 2021, EMA Financial LLC, a Delaware limited liability company (“EMAF”), filed a complaint in the Southern District of New York against the Company. In its complaint, EMAF alleged that the Company breached the terms of a convertible note and a related warrant agreement purchased by EMAF pursuant to a securities purchase agreement between the parties. EMAF sought specific performance, payment of damages to be determined but not in excess of $2.75 million, reimbursement of costs and expenses, including reasonable legal fees, and non-interference. On September 2, 2021, EMAF filed a motion for summary judgment. On September 9, 2021, AppTech filed a motion to dismiss on the grounds the agreements were void as a result of the illegal activity by the plaintiff. On October 15, 2021, the parties filed memorandums in opposition to the respective motion. On October 25, 2021, the parties filed memorandums of law in further support of their respective motions. We believe EMAF’s claims are meritless and intend to vigorously defend against this lawsuit. The parties have engaged in settlement discussions with an expected range of potential liability between $400 thousand and $550 thousand, which includes principal and accrued interest of the convertible notes payable. Significant Contracts Capital Raise 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. On October 27, 2021, Maxim and the Company terminated all relevant agreements and the Company issued Maxim 21,052 On October 18, 2021, the Company entered into an engagement letter with EF Hutton, division of Benchmark Investments, LLC. (“EF Hutton”) to act as lead underwriter, deal manager and investment banker for the Company’s proposed firm commitment follow-on public offering and uplisting. This engaged EF Hutton through the earlier of (i) October 2022 or (ii) the closing of a follow-on offering. The Company completed its offering on January 7, 2022. The Company sold 3,614,201 units of our common stock (a unit consisted of one share of common stock and a warrant to purchase one share of common stock) at $4.15 per unit. The offering provided net proceeds of approximately $13.4 million. See note 1 for information on the capital raise completed in January 2022. 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”). The partnership would expand AppTech’s reach into new markets and provide advanced technological solutions for the telehealth and personal emergency response systems markets. The strategic partnership was cancelled on February 17, 2022. Infinios Financial Services (formerly NEC Payments B.S.C.) On October 1, 2020, the Company entered into a strategic partnership with Infinios Financial Services BSC (formally NEC Payments B.S.C) (“Infinios”) 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”). 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 Infinios (collectively the “Restated Agreements”). The gross total fees due under the Restated Agreements are $2.2 million excluding pass-through costs associated with infrastructure hosting fees. On February 19, 2021, the Company completed and validated its contractual obligations and paid to Infinios the $100 thousand engagement fee. On February 28, 2021, the Company paid the initial fee of $708 thousand to Infinios prior to the Funding Date. On March 25, 2021, the Company issued 1,895,948 shares of common stock to an Infinios affiliate on a fully diluted basis with piggyback rights. The Company valued the common stock issuance at $67.5 million 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 $3.8 million asset and $63.8 million expense in excess fair value of equity issuance over assets received. The capitalized asset was classified as capitalized prepaid software development of $ 2.8 1.0 As of March 31, 2022, the following fees were paid (in thousands): Schedule of fees paid to NECP platform Engagement Fee (prepaid licensing cost) $ 100 License subscription fee (prepaid licensing cost) 750 Annual maintenance subscription fee (prepaid licensing cost) 113 Implementation fee (capitalized software cost) 325 Infrastructure implementation fee (capitalized software cost) 65 Training fee (50% due at Funding Date) 50 Total $ 1,403 The annual maintenance subscription fee of $ 113 72 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 Infinios platform to enter the United States market. Under the agreement, the Company granted options to purchase 42,105 shares at a price of $0.095 and 263,157 shares at $2.375 and exercisable for two years after vesting. These options vest in equal monthly installments over 24 months. These options had a grant date fair value of $1.4 million and $8.7 million using a Black Scholes pricing model. The estimated amortization is a 5-year life based on the term of the licensing agreement. On February 18, 2021, the Company entered into an amended independent contractor services agreement for $760 thousand with IR. The final payment owed to IR of $171 thousand was paid in January 2022. Investor Relations On January 2, 2022, the Company entered into an agreement with an investor relations firm (“IR Firm”) that compensated IR Firm $50 thousand and 100,000 shares upon the successful uplisting onto NASDAQ. In addition, on January 31, 2022, the Company entered into a consulting agreement with IR Firm. The Company agreed to a six-month commitment with IR Firm that pays $5 thousand per month, grants IR Firm a stock purchase agreement to buy 45,000 shares of the Company stock at $0.001 per share and grants a monthly budget of approximately $100 thousand (with monthly automatic renewals unless the agreement were canceled in writing). In return, IR Firm agrees to provide investor relations outreach, public relations, advisory and consulting services, to AppTech. Payment for the two agreements was made in February 2022. |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT Common Stock During the three months ended March 31, 2022 and 2021, the Company issued 233,816 247,000 466 316 During the three months ended March 31, 2022 and 2021, the Company granted 76,664 9,211 103 49 See Note 8 – Significant Contracts for additional common stock issuance. Stock Options During the year ended December 31, 2021: a) options to purchase 353,368 16.25 6.3 b) options to purchase 38,421 8.55 825 13,158 The fair value of the options for the year ended December 31, 2021 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 $ 5.34 33.25 Expected price $ 0.095 19.34 Expected volatility 450 608 Expected term (in years) 0.3 3.0 Risk-free interest rate 0.11 Expected dividend yields — During the three months ended March 31, 2022: a) options to purchase 298,685 3.00 897 b) options to purchase 36,842 12.04 444 The fair value of the options for the three months ended March 31, 2022 is estimated using a Black-Scholes option pricing model with the following range of assumptions: Market value of common stock on issuance date $ 1.24 12.45 Expected price $ 1.24 12.04 Expected volatility 415 442 Expected term (in years) 0.0 - 5.0 Risk-free interest rate 0.11 Expected dividend yields — The following table summarizes option activity: Schedule of option activity Number of shares Weighted Average exercise price Weighted Average remaining years Outstanding December 31, 2021 1,055,184 $ 6.62 Issued 335,527 $ 4.00 Exercised — $ — Cancelled (391,579 ) $ 2.44 Outstanding as of March 31, 2022 999,132 $ 7.38 2.37 Outstanding as of March 31, 2022, vested 667,235 $ 7.75 2.37 The remaining expense outstanding through March 31, 2022 is $ 2.5 23 See Note 8 – Significant Contracts for additional stock options granted. On December 7, 2021, the board authorized the Company’s 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 employees 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 1,052,632 796,547 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 thousand convertible note bearing interest at 12% per annum. The Company also sold warrants to the investors to purchase up to an aggregate of 21,052 shares of common stock, with an exercise term of five (5) years, at a per share price of $14.25 which may be exercised by cashless exercise. The number of warrants adjusted in the period ending March 31, 2022 due to a reset event on January 7, 2022 changed the exercise price from $9.50 to $2.52 and increased the number of warrants from 31,578 to 119,095. The warrants were deemed a derivative liability and recorded as a debt discount at its date of issuance. In total, the Company has 4,275,464 warrants outstanding. 3,614,201 were related to the Offering, 542,168 were granted on January 7 and the reset event added an additional 119,095. See Note 1 for information on warrants issued during the Offering and note 6 for additional information on the derivative liability. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist other than those disclosed below. The Company fully executed a Definitive Agreement to acquire Hothand Inc. (“Hothand”), a patent-holding company which owns the intellectual property rights to a wide array mobile credit/debit transaction and mobile search, location, offer and payment fields in April 2022. The purchase price was a combination of cash and stock, but should be finalized in the second quarter of 2022. The Company is still determining the impact of this transaction on the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company’s management, the accompanying financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2022 and March 31, 2021. Although management believes that the disclosures in these unaudited financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. The accompanying unaudited financial statements should be read in conjunction with the Company’s financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ended December 31, 2022 or for any future interim periods. |
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, and realization of tax deferred tax assets. 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 The accounts receivable from merchant services are paid by the financial institutions on a monthly basis. The Company currently uses six financial institut ions to service their merchants for which represented 100 8.2 36 |
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. |
Fair Value Measurements | Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to measure and disclose the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Level 2 Level 3 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 maturity of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arms-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 March 31, 2022 and December 31, 2021 on recurring basis (in thousands): Schedule of derivative liabilities March 31, 2022 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 463 $ 463 December 31, 2021 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 599 $ 599 See Note 6 for discussion of valuation and roll forward related to derivative liabilities. |
Research and Development | Research and Development In accordance with ASC 730, Research and Development (“R&D”) costs are expensed when incurred. R&D costs include costs of acquiring patents and other unproven technologies, contractor fees and other costs associated with the development of the SMS short code texting platform, contract and other outside services. Total R&D costs for the three months ended March 31, 2022 and 2021 were $ 2.1 0 |
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 6,006,350 1,733,159 Schedule of anti dilutive stock March 31, 2022 March 31, 2021 Series A preferred stock 1,149 1,149 Convertible debt 175,632 645,432 Warrants 4,275,464 21,052 Options 999,132 706,000 Restricted stock units 554,973 359,526 Total 6,006,350 1,733,159 |
Derivative Liability | Derivative Liability The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable anti-dilution 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 and shares to be issued were recorded as derivative liabilities on the issuance date and at each reporting period. |
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. |
Risks and Uncertainties | 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. 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. The continuing effects of the potential impact cannot be estimated at this time. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of derivative liabilities | Schedule of derivative liabilities March 31, 2022 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 463 $ 463 December 31, 2021 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities $ — $ — $ 599 $ 599 |
Schedule of anti dilutive stock | Schedule of anti dilutive stock March 31, 2022 March 31, 2021 Series A preferred stock 1,149 1,149 Convertible debt 175,632 645,432 Warrants 4,275,464 21,052 Options 999,132 706,000 Restricted stock units 554,973 359,526 Total 6,006,350 1,733,159 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilities | Schedule of Accrued Liabilities March 31, 2022 December 31, 2021 Accrued interest – third parties $ 1,305 $ 1,420 Accrued payroll 251 294 Accrued residuals 28 98 Anti-dilution provision — 1,290 Other 237 34 Total accrued liabilities $ 1,821 $ 3,136 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Liabilities | |
Schedule of fair value of derivative liabilities | Schedule of fair value of derivative liabilities Derivative Liability Convertible Notes Derivative Liability Warrants Total Balance as of December 31, 2021 $ 274 $ 325 $ 599 Change in fair value (76 ) (60 ) (136 ) Balance as of March 31, 2022 $ 198 $ 265 $ 463 |
Schedule of pricing mode with assumptions | Schedule of pricing mode with assumptions Market value of common stock $ 1.35 Expected volatility 104.8 % Expected term (in years) 0.25 Risk-free interest rate 1.37 % As of March 31, 2022, 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 $ 1.35 Expected volatility 108.9 % Expected term (in years) 3.64 Risk-free interest rate 1.67 % |
RIGHT OF USE ASSET (Tables)
RIGHT OF USE ASSET (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Right Of Use Asset | |
Schedule of Future Minimum Rental Payments for Operating Leases | Schedule of Future Minimum Rental Payments for Operating Leases 2022 $ 64 2023 88 2024 90 2025 7 Operating Lease Total 249 Less: Imputed interest (39 ) Total $ 210 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of fees paid to NECP platform | Schedule of fees paid to NECP platform Engagement Fee (prepaid licensing cost) $ 100 License subscription fee (prepaid licensing cost) 750 Annual maintenance subscription fee (prepaid licensing cost) 113 Implementation fee (capitalized software cost) 325 Infrastructure implementation fee (capitalized software cost) 65 Training fee (50% due at Funding Date) 50 Total $ 1,403 |
STOCKHOLDERS_ DEFICIT (Tables)
STOCKHOLDERS’ DEFICIT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Black Scholes option pricing | Schedule of Black Scholes option pricing Market value of common stock on issuance date $ 5.34 33.25 Expected price $ 0.095 19.34 Expected volatility 450 608 Expected term (in years) 0.3 3.0 Risk-free interest rate 0.11 Expected dividend yields — The fair value of the options for the three months ended March 31, 2022 is estimated using a Black-Scholes option pricing model with the following range of assumptions: Market value of common stock on issuance date $ 1.24 12.45 Expected price $ 1.24 12.04 Expected volatility 415 442 Expected term (in years) 0.0 - 5.0 Risk-free interest rate 0.11 Expected dividend yields — |
Schedule of option activity | Schedule of option activity Number of shares Weighted Average exercise price Weighted Average remaining years Outstanding December 31, 2021 1,055,184 $ 6.62 Issued 335,527 $ 4.00 Exercised — $ — Cancelled (391,579 ) $ 2.44 Outstanding as of March 31, 2022 999,132 $ 7.38 2.37 Outstanding as of March 31, 2022, vested 667,235 $ 7.75 2.37 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Reverse split | 9.5 to 1 |
Sale of stock | shares | 3,614,201 |
Sale of stock units | $ / shares | $ 4.15 |
Net proceeds | $ | $ 13,400 |
Warrant [Member] | |
Sale of stock | shares | 542,168 |
Warrant expiration | 5 years |
Warrant exercise price | $ / shares | $ 5.19 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Offsetting Assets [Line Items] | ||
Derivative liabilities | $ 463 | $ 599 |
Fair Value, Inputs, Level 1 [Member] | ||
Offsetting Assets [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Offsetting Assets [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Offsetting Assets [Line Items] | ||
Derivative liabilities | $ 463 | $ 599 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Anti dilutive shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 6,006,350 | 1,733,159 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 1,149 | 1,149 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 175,632 | 645,432 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 4,275,464 | 21,052 |
Options Held [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 999,132 | 706,000 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 554,973 | 359,526 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Federal Deposit Insurance Corporation | $ 250 | |
Research and Development Expense | $ 2,100 | $ 0 |
Anti-dilutive shares | 6,006,350 | 1,733,159 |
Accounts Receivable [Member] | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 100.00% | |
Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Concentration of Credit Risk | 8.20% | 36.00% |
ACCRUED LIABILITIES (Detail)
ACCRUED LIABILITIES (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities | ||
Accrued interest – third parties | $ 1,305 | $ 1,420 |
Accrued payroll | 251 | 294 |
Accrued residuals | 28 | 98 |
Anti-dilution provision | 1,290 | |
Other | 237 | 34 |
Total accrued liabilities | $ 1,821 | $ 3,136 |
ACCRUED LIABILITIES (Details Na
ACCRUED LIABILITIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Shares issued for anti dilution provision, shares | 378,109 | 73,848 |
Share price | $ 2.20 | $ 17.46 |
Shares issued for anti dilution provision, value | $ 832 | $ 1,300 |
NOTES PAYABLE AND CONVERTIBLE_2
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Convertible note payable | $ 0 | |
Increase (Decrease) in Accrued Interest Receivable, Net | 75 | |
Payment Of Accrued Interest | 50 | |
Convertible Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Convertible note payable | 280 | $ 280 |
Accrued interest | 68 | 39 |
Amortization of debt discount | 280 | 315 |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 278 | 268 |
Obligation to repurchase shares | 400 | 400 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 4 | 4 |
Notes Payable | 68 | 68 |
Notes Payable 1 [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 258 | 383 |
Notes Payable | $ 597 | $ 597 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Derivative Liabilities | ||
Derivative liability day one loss | $ 390 | |
Change in fair value derivative liabilities | $ 136 | $ 26 |
DERIVATIVE LIABILITIES (Detail)
DERIVATIVE LIABILITIES (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Offsetting Assets [Line Items] | |
Balance as of begining | $ 599 |
Change in fair value | (136) |
Balance as of ending | 463 |
Derivative Liability Convertible Notes [Member] | |
Offsetting Assets [Line Items] | |
Balance as of begining | 274 |
Change in fair value | (76) |
Balance as of ending | 198 |
Derivative Liability Warrants [Member] | |
Offsetting Assets [Line Items] | |
Balance as of begining | 325 |
Change in fair value | (60) |
Balance as of ending | $ 265 |
DERIVATIVE LIABILITIES Disclosu
DERIVATIVE LIABILITIES Disclosure - DERIVATIVE LIABILITIES - Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Offsetting Assets [Line Items] | |
Expected term (in years) | 5 years |
Convertible Notes [Member] | |
Offsetting Assets [Line Items] | |
Market value of common stock | $ 1.35 |
Expected volatility | 104.80% |
Expected term (in years) | 3 months |
Risk-free interest rate | 1.37% |
Warrants | |
Offsetting Assets [Line Items] | |
Market value of common stock | $ 1.35 |
Expected volatility | 108.90% |
Expected term (in years) | 3 years 7 months 20 days |
Risk-free interest rate | 1.67% |
RIGHT OF USE ASSET (Details)
RIGHT OF USE ASSET (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Right Of Use Asset | |
2022 | $ 64 |
2023 | 88 |
2024 | 90 |
2025 | 7 |
Operating Lease Total | 249 |
Less: Imputed interest | 39 |
Total | $ 210 |
RIGHT OF USE ASSET (Details Nar
RIGHT OF USE ASSET (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Right Of Use Asset | ||
Rent expense | $ 15 | $ 15 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Engagement Fee (prepaid licensing cost) | $ 100 |
License subscription fee (prepaid licensing cost) | 750 |
Annual maintenance subscription fee (prepaid licensing cost) | 113 |
Implementation fee (capitalized software cost) | 325 |
Infrastructure implementation fee (capitalized software cost) | 65 |
Training fee (50% due at Funding Date) | 50 |
Total | $ 1,403 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 27, 2021 | Dec. 19, 2019 | Mar. 31, 2022 | Feb. 19, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Payments for fees | $ 240 | |||
Number of shares issue | 21,052 | |||
Capitalized Computer Software, Net | $ 2,800 | |||
Capitalized Licensing | $ 1,000 | |||
Annual maintenance subscription fee | $ 113 | |||
Infrastructure support fee | $ 72 |
Schedule of Black Scholes optio
Schedule of Black Scholes option pricing (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Option Indexed to Issuer's Equity [Line Items] | ||
Expected term (in years) | 5 years | |
Expected dividend yields | 0.00% | 0.00% |
Minimum [Member] | ||
Option Indexed to Issuer's Equity [Line Items] | ||
Market value of common stock on issuance date | $ 1.24 | $ 5.34 |
Expected price | 124.00% | 9.50% |
Expected volatility | 415.00% | 450.00% |
Expected term (in years) | 3 months 18 days | |
Risk-free interest rate | 0.11% | 0.11% |
Maximum [Member] | ||
Option Indexed to Issuer's Equity [Line Items] | ||
Market value of common stock on issuance date | $ 12.45 | $ 33.25 |
Expected price | 1204.00% | 1934.00% |
Expected volatility | 442.00% | 608.00% |
Expected term (in years) | 3 years |
STOCKHOLDERS' DEFICIT - Option
STOCKHOLDERS' DEFICIT - Option activity (Details) - Option Activity [Member] | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Option Indexed to Issuer's Equity [Line Items] | |
Option outstanding Begining Balance | shares | 1,055,184 |
Weighted Average Exercise Price, Option outstanding Begining Balance | $ / shares | $ 6.62 |
Option Issued | shares | 335,527 |
Weighted Average Exercise Price, Option Issued | $ / shares | $ 4 |
Option Exercised | shares | |
Weighted Average Exercise Price, Option Exercised | $ / shares | |
Option Cancelled | shares | (391,579) |
Weighted Average Exercise Price, Option Cancelled | $ / shares | $ 2.44 |
Option outstanding Ending Balance | shares | 999,132 |
Weighted Average Exercise Price, Option outstanding Ending Balance | $ / shares | $ 7.38 |
Options outstanding weighted average remaining years | 2 years 4 months 13 days |
Option outstanding vested | shares | 667,235 |
Weighted Average exercise price, Options, Vested | $ / shares | $ 7.75 |
Weighted Average remaining years Options, Vested | 2 years 4 months 13 days |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock issued for services, value | $ 156 | ||
Expected term (in years) | 5 years | ||
Expected dividend yields | 0.00% | 0.00% | |
Remaining expense outstanding | $ 2,500 | ||
Remaining expense outstanding term | 23 months | ||
Equity Incentive Plan [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Number of Shares Authorized | 1,052,632 | ||
Shares available for grant | 796,547 | ||
Minimum [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Market value of common stock on issuance date | $ 1.24 | $ 5.34 | |
Expected price | 124.00% | 9.50% | |
Expected volatility | 415.00% | 450.00% | |
Expected term (in years) | 3 months 18 days | ||
Risk-free interest rate | 0.11% | 0.11% | |
Maximum [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Market value of common stock on issuance date | $ 12.45 | $ 33.25 | |
Expected price | 1204.00% | 1934.00% | |
Expected volatility | 442.00% | 608.00% | |
Expected term (in years) | 3 years | ||
Consultants [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock issued for services, shares | 233,816 | 247,000 | |
Common stock issued for services, value | $ 466 | $ 316 | |
Option granted | 36,842 | 38,421 | |
Weighted average price of option granted | $ 12.04 | $ 8.55 | |
Fair value of option granted | $ 444 | $ 825 | |
Option exercised | 13,158 | ||
Board Of Directors [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Common stock granted, shares | 76,664 | 9,211 | |
Common stock granted, value | $ 103 | $ 49 | |
Employees [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Option granted | 298,685 | 353,368 | |
Weighted average price of option granted | $ 3 | $ 16.25 | |
Fair value of option granted | $ 897 | $ 6,300 |