Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 25, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | Mobiquity Technologies, Inc. | ||
Entity Central Index Key | 0001084267 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 947,492,640 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Public Float | $ 50,569,000 | ||
Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NY | ||
Entity File Number | 000-51160 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 1,240,064 | $ 624,338 |
Accounts receivable | 3,611,378 | 2,479,363 |
Prepaid expenses and other current assets | 20,200 | 11,700 |
Total Current Assets | 4,871,642 | 3,115,401 |
Property and equipment (net of accumulated depreciation of $6,364 and $1,967, respectively) | 21,100 | 6,662 |
Goodwill | 1,352,865 | 7,425,433 |
Intangibles assets (net of accumulated amortization of $1,555,618 and $30,939, respectively) | 11,448,490 | 1,825,419 |
Other Assets | ||
Security deposits | 9,000 | 9,000 |
Member's loan | 0 | 131,649 |
Investment in corporate stock | 3,100 | 4,284,444 |
Total Assets | 17,706,197 | 16,798,008 |
Current Liabilities: | ||
Accounts payable | 2,958,108 | 1,255,437 |
Accrued expenses | 960,734 | 975,359 |
Notes payable | 566,250 | 150,000 |
Total Current Liabilities | 4,485,092 | 2,380,796 |
Long term portion of notes payable, net | 2,300,000 | 0 |
Total Liabilities | 6,785,092 | 2,380,796 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock: 2,000,000,000 authorized; $0.0001 par value 945,072,040 and 629,066,933 shares issued and outstanding at December 31, 2019 and December 31, 2018 | 93,453 | 62,922 |
Treasury stock $.09 par value; 15,000,000 and zero outstanding at December 31, 2019 and December 31, 2018 | (1,350,000) | 0 |
Additional paid-in capital | 177,334,305 | 129,223,402 |
Accumulated deficit | (171,136,522) | (127,108,803) |
Non-controlling interest | 0 | 664,178 |
Total Stockholder's Equity | 10,921,105 | 14,417,212 |
Total Liabilities and Stockholders' Equity | 17,706,197 | 16,798,008 |
AAA Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred Stock | 714,869 | 11,552,513 |
AAAA Preferred Stock | ||
Stockholders' Equity: | ||
Preferred Stock | 0 | 8,000 |
Preferred stock Series C [Member] | ||
Stockholders' Equity: | ||
Preferred Stock | 15,000 | 15,000 |
Series E Preferred Stock | ||
Stockholders' Equity: | ||
Preferred Stock | $ 5,250,000 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated depreciation, property and equipment | $ 6,364 | $ 1,967 |
Accumulated amortization, intangible assets | $ 1,555,186 | $ 30,939 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock shares issued | 945,072,040 | 629,066,933 |
Common stock outstanding | 945,072,040 | 629,066,933 |
Treasury Stock par value | $ 0.09 | $ 0.09 |
Treasury Stock shares outstanding | 15,000,000 | 0 |
AAA Preferred Stock [Member] | ||
Preferred Stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock shares authorized | 4,930,000 | 5,000,000 |
Preferred Stock shares issued | 56,413 | 1,090,588 |
Preferred stock shares outstanding | 56,413 | 1,090,588 |
AAAA Preferred Stock | ||
Preferred Stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock shares authorized | 1,250 | 1,250 |
Preferred Stock shares issued | 0 | 800 |
Preferred stock shares outstanding | 0 | 800 |
Preferred stock Series C [Member] | ||
Preferred Stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock shares authorized | 1,500 | 1,500 |
Preferred Stock shares issued | 1,500 | 1,500 |
Preferred stock shares outstanding | 1,500 | 1,500 |
Series E Preferred Stock | ||
Preferred Stock par value | $ 80 | $ 80 |
Preferred Stock shares authorized | 70,000 | 70,000 |
Preferred Stock shares issued | 65,625 | 0 |
Preferred stock shares outstanding | 65,625 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 9,717,796 | $ 1,474,392 |
Cost of Revenue | 7,297,550 | 1,043,616 |
Gross Profit | 2,420,246 | 430,776 |
Operating Expenses: | ||
Selling, general and administrative | 5,867,884 | 3,201,808 |
Salaries | 3,415,591 | 1,684,210 |
Stock based compensation | 6,599,000 | 327,405 |
Total Operating Expenses | 15,882,475 | 5,213,423 |
Loss from Operations | (13,462,229) | (4,782,647) |
Other Income (Expenses) | ||
Interest expense | (346,204) | (2,304,401) |
Change in derivative liability | 0 | (8,905,784) |
Acquisition expense | (2,970,364) | (12,044,444) |
Loss on sale of warrants | 0 | (2,222,500) |
Warrant cost from conversion/issuance of debt | (23,213,197) | (2,354,458) |
Loss on sale of investments | (3,755,381) | (14,732,825) |
Initial derivative expense | 0 | (559,728) |
Gain / Loss on settlement of debt | 0 | (10,603,942) |
Total Other Income (Expense) | (30,285,146) | (53,728,082) |
Net loss | (43,747,375) | (58,510,729) |
Other Comprehensive Income | ||
Unrealized holding (loss) arising during period | (280,344) | (7,194,479) |
Less net gain attributable to non-controlling interest | 0 | (113,880) |
Net Comprehensive Loss | $ (44,027,719) | $ (65,819,088) |
Net Comprehensive Loss Per Common Share: | ||
For continued operations, basic and diluted | $ (0.06) | $ (0.18) |
Weighted Average Common Shares Outstanding, basic and diluted | 781,015,355 | 375,477,797 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | AAAA Preferred Stock | Mezzanine Preferred Stock | Series E Preferred Stock | Series C Preferred Stock | Preferred Stock | Common Stock | Additional Paid-In Capital | Noncontrolling Interest | Treasury Stock | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 0 | 850,588 | 0 | 0 | 240,000 | 198,375,600 | 0 | ||||
Beginning balance, value at Dec. 31, 2017 | $ 0 | $ 11,552,538 | $ 0 | $ 0 | $ 25 | $ 19,850 | $ 44,776,029 | $ 0 | $ 0 | $ (61,298,474) | $ (4,950,032) |
Common stock issued in exchange for interest, shares | 11,500,000 | ||||||||||
Common stock issued in exchange for interest, value | $ 1,150 | 405,225 | 406,375 | ||||||||
Common stock issued for services, shares | 24,725,000 | ||||||||||
Common stock issued for services, value | $ 2,472 | 2,267,268 | 2,269,740 | ||||||||
Stock issued new, shares | 235,583,334 | ||||||||||
Stock issued new, value | $ 23,561 | 24,093,106 | 24,116,667 | ||||||||
Conversion of stock, shares converted | (200) | ||||||||||
Conversion of stock, amount converted | $ (2,000) | ||||||||||
Conversion of stock, shares issued | 20,000,000 | ||||||||||
Conversion of stock, amount issued | $ 2,000 | 2,200,000 | 2,200,000 | ||||||||
Stock based compensation | 327,405 | 327,405 | |||||||||
Note conversion, shares | 108,632,999 | ||||||||||
Note conversion, value | $ 10,864 | 10,194,677 | 10,205,541 | ||||||||
Preferred stock series, shares | 1,500 | ||||||||||
Preferred stock series, value | $ 15,000 | 15,000 | |||||||||
Warrant cost from conversion/issuance of debt, shares | 30,250,000 | ||||||||||
Warrant cost from conversion/issuance of debt, value | $ 3,025 | 3,631,975 | 3,635,000 | ||||||||
Warrants issued | 20,578,626 | 20,578,626 | |||||||||
Derivative conversions | 10,779,066 | 10,779,066 | |||||||||
Default shares, shares | 240,000 | (240,000) | |||||||||
Default shares, value | $ (25) | 25 | |||||||||
Exchange shares, shares | 1,000 | ||||||||||
Exchange shares, value | $ 10,000 | 9,970,000 | 9,980,000 | ||||||||
Net Loss | 664,178 | (65,810,329) | (65,146,151) | ||||||||
Ending balance, shares at Dec. 31, 2018 | 800 | 1,090,588 | 1,500 | 629,066,933 | |||||||
Ending balance, value at Dec. 31, 2018 | $ 8,000 | $ 11,552,513 | $ 15,000 | $ 62,922 | 129,223,402 | 664,178 | (127,108,803) | 14,417,212 | |||
Common stock issued for services, shares | 6,385,090 | ||||||||||
Common stock issued for services, value | $ 639 | 716,938 | 717,577 | ||||||||
Treasury shares, shares | 15,000,000 | ||||||||||
Treasury shares, value | $ (1,350,000) | (1,350,000) | |||||||||
Stock issued new, shares | 49,215,137 | ||||||||||
Stock issued new, value | $ 4,924 | 3,624,576 | 3,629,500 | ||||||||
Preferred stock series E, shares | 65,625 | ||||||||||
Preferred stock series E, value | $ 5,250,000 | 5,250,000 | |||||||||
Stock based compensation | 6,599,000 | 6,599,000 | |||||||||
Warrant cost from conversion/issuance of debt, shares | 45,232,180 | ||||||||||
Warrant cost from conversion/issuance of debt, value | $ 4,524 | 3,149,467 | 3,153,991 | ||||||||
Warrants issued | 23,213,197 | 23,213,197 | |||||||||
Exchange shares, shares | (800) | (1,044,175) | 204,417,500 | ||||||||
Exchange shares, value | $ (8,000) | $ (10,837,644) | $ 20,444 | 10,807,725 | (17,475) | ||||||
Net Loss | (664,178) | (44,027,719) | (44,691,897) | ||||||||
Ending balance, shares at Dec. 31, 2019 | 46,413 | 65,625 | 1,500 | 934,316,840 | 15,000,000 | ||||||
Ending balance, value at Dec. 31, 2019 | $ 714,869 | $ 5,250,000 | $ 15,000 | $ 93,453 | $ 177,334,305 | $ (1,350,000) | $ (171,136,522) | $ 10,921,105 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (44,027,719) | $ (58,510,729) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation Expense | 4,397 | 1,967 |
Allowance for uncollectible receivables | 0 | 80,600 |
Amortization - Intangible Assets | 1,524,247 | 40,899 |
Amortization - Debt discount | 0 | 234,502 |
Change in derivative instrument | 0 | 10,672,672 |
Stock-based compensation | 6,599,000 | 327,405 |
Common stock issued for services | 717,577 | 2,269,740 |
Warrant expense | 3,153,991 | 24,176,958 |
Warrant cost from the conversion/issuance of debt | 23,213,197 | 0 |
Initial derivative expense | 0 | (559,728) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,132,015) | (2,541,387) |
Prepaid expenses and other assets | (8,500) | 8,213 |
Investment in corporate stock | 0 | (27,818,436) |
Accounts payable | 1,702,671 | 797,157 |
Accrued expenses and other current liabilities | (7,816) | 320,834 |
Accrued interest | (81,536) | (80,906) |
Total adjustments | 35,685,213 | 7,930,490 |
Net Cash in Operating Activities | (8,342,506) | (50,580,239) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (18,835) | (8,629) |
Proceeds from the sale of investments | 167,400 | 0 |
Issuance of preferred stock | 5,250,000 | 0 |
Addition to Goodwill and Intangibles | (5,074,750) | (9,281,791) |
Net Cash Used in Investing Activities | 323,815 | (9,290,420) |
Cash Flows from Financing Activities: | ||
Proceeds from the issuance of convertible notes | 2,550,000 | 1,243,351 |
Proceeds from issuance of common stock | 3,629,500 | 9,120,000 |
Loss on sale of company stock | 2,483,600 | 9,051,192 |
Loss on sale of investments | 0 | 23,533,992 |
Notes converted to preferred stock | 0 | (2,997,500) |
Common stock issued in exchange for interest | 0 | 406,375 |
Accrued interest converted to note | 74,727 | 0 |
Notes converted to common stock | 0 | 14,576,184 |
Preferred stock converted to common stock | (17,475) | 2,224,999 |
Non-controlling interest | 0 | 559,057 |
Issuance of preferred stock for investment | 0 | 9,970,000 |
Cash received from bank notes | 750,000 | 209,454 |
Cash paid on bank notes | (452,101) | (264,098) |
Net Cash Provided by Financing Activities | 9,018,251 | 67,633,006 |
Net Change in Cash and Cash Equivalents | 999,560 | 7,762,347 |
Cash and Cash Equivalents, beginning of period | 624,338 | 56,470 |
Non-controlling interest | (664,178) | 0 |
Unrealized holding change on securities | 280,344 | (7,194,479) |
Cash and Cash Equivalents, end of period | 1,240,064 | 624,338 |
Supplemental Disclosure Information: | ||
Cash paid for interest | 2,524 | 5,681 |
Cash paid for taxes | 0 | 0 |
Non-cash Disclosures: | ||
Common stock issued for interest | 0 | 406,375 |
Conversion of notes and interest into AAA & AAAA Preferred and Common Stock | $ 0 | $ 5,609,000 |
1. ORGANIZATION AND GOING CONCE
1. ORGANIZATION AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND GOING CONCERN | NOTE 1 : We have a history of losses and may continue to incur losses in the future, which could negatively impact the trading value of our common stock. We incurred losses from operations of $12,462,229 for the year ended December 31, 2019, $4,782,647 for the year ended December 31, 2018. We may continue to incur operating and net losses in future periods. These losses may increase, and we may never achieve profitability for a variety of reasons, including increased competition, decreased growth in the unified advertising industry and other factors described elsewhere in this “Risk Factors” section. If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company. These consolidated financial statements have been prepared on a going concern basis. Which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The recently acquired Advangelists LLC has also incurred losses and experienced negative cash flows from operations during the most recent fiscal year. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional capital through private and public offerings of its common stock, and the attainment of profitable operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS – Mobiquity Technologies, Inc., a New York corporation (the “Company”), is the parent company of its operating subsidiaries; Mobiquity Networks, Inc. (“Mobiquity Networks”) and Advangelists, LLC (Advangelists). Mobiquity Networks has evolved and grown from a mobile advertising technology company focused on driving Foot-traffic throughout its indoor network, into a next generation location data intelligence company. Mobiquity Networks provides precise unique, at-scale location data and insights on consumer’s real-world behavior and trends for use in marketing and research. Mobiquity Networks provides one of the most accurate and scaled solution for mobile data collection and analysis, utilizing multiple geo-location technologies. Mobiquity Networks is seeking to implement several new revenue streams from its data collection and analysis, including, but not limited to; Advertising, Data Licensing, The ATOS platform: · creates an automated marketplace of advertisers and publishers on digital media outlets to host online auctions to facilitate the sale of ad time slots (known as digital real estate) targeted at users while engaged on their connected TV, computer or mobile device, and · gives advertisers the capability to understand and interact with their audiences and engage them in a meaningful way by the using ads in both image and video formats (known as rich media) to increase their customer base and foot traffic to their physical locations. Advangelists’ marketplace engages with approximately 20 billion advertisement opportunities per day. Our sales and marketing strategy is focused on creating a de-fragmented operating system that makes it considerably more efficient and effective for advertisers and publishers to transact with each other. Our goal is to create a standardized and transparent medium. Advangelists' technology is proprietary and has all been developed internally. We own all of our technology. Recent Developments and Employment Agreement with Deepanker Katyal Deepanker Katyal’s employment agreement which commenced December 7, 2018 has a term of three years. Mr. Katyal is required to devote at least 40 hours per week pursuant to his responsibility as CEO of Advangelists. The agreement provides for full indemnification and participation in all benefit plans, programs and perquisites as are generally provided by the Company to its employees, including medical, dental, life insurance, disability and 401(k) participation. The agreement provides for termination for cause after giving employee 30 days’ prior written notice. The agreement provides for termination by the Company without cause after 60 days’ prior written notice with severance pay as described in his agreement. His employment agreement also provides for termination by disability for a period of more than six consecutive months in any 12-month period, termination by employee for good reason as defined in the agreement and restrictive covenants for a period of one year following the termination date. Effective as of September 13, 2019, Mobiquity Technologies, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “GTECH SPA”) with GBT Technologies, Inc. (“GTECH”), pursuant to which the Company acquired from GTECH 15,000,000 shares of the Company’s common stock that was owned by GTECH (the “MOBQ Shares”). In consideration for the purchase of the MOBQ Shares from GTECH, the Company transferred to GTECH 110,000 shares of GTECH’s common stock that was owned by the Company. On September 13, 2019, Advangelists, LLC (“AVNG”), a wholly-owned subsidiary of the Company, entered into Amendment No. 1 to Employment Agreement (the “Katyal Amendment”) with Deepankar Katyal, the CEO of AVNG, which amends Mr. Katyal’s original employment agreement (the “Original Katyal Agreement”), dated as of December 7, 2018. Pursuant to the Katyal Amendment, among other things, (i) the Company agreed to indemnify Mr. Katyal to the extent provided in the Company’s Certificate of Incorporation (the “Certificate”) and By-laws and to include Mr. Katyal as an insured under the Company’s applicable directors’ and officers’ liability insurance policies; (ii) AVNG agreed to provide Mr. Katyal with an automobile allowance of $550.00 per month, and (iii) the non-compete restrictive covenants contained in the Original Katyal Agreement ceased. In addition, the Katyal Amendment provides for the Company to redeem the shares of the Company’s Class B Preferred Stock (the “Class B Stock”) owned by Mr. Katyal, and entitles Mr. Katyal to the following additional compensation: · A bonus, payable in cash or common stock of the Company, equal to 1% of the Company’s gross revenue (the “Gross Revenue”) for each completed fiscal month during the 2019 fiscal year, subject to certain revenue thresholds as set forth in the Katyal Amendment; · Commissions equal to 10% of the Net Revenues (as defined in the Katyal Amendment) of all New Katyal Managed Accounts (as defined in the Katyal Amendment); · Options to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.09 per share, of which 10,000,000 vest on the date of the Katyal Amendment, and of which 5,000,000 vest on the one year anniversary of the Katyal Amendment. In connection with the Katyal Amendment, on September 13, 2019, the Company entered into a Class B Preferred stock Redemption Agreement (the “Katyal Redemption Agreement”), pursuant to which the Company redeemed the Company’s Class B Stock owned by Katyal. On September 13, 2019, AVNG entered into Amendment No. 1 to Employment Agreement (the “Katyal Amendment”) with Lokesh Mehta, which amends Mr. Mehta’s original employment agreement (the “Original Mehta Agreement”), dated as of December 7, 2018. Pursuant to the Mehta Amendment, among other things, (i) the Company agreed to indemnify Mr. Mehta to the extent provided in the Company’s Certificate and By-laws and to include Mr. Mehta as an insured under the Company’s applicable directors’ and officers’ liability insurance policies; (ii) AVNG agreed to provide Mr. Mehta with an automobile allowance of $550.00 per month, and (iii) the non-compete restrictive covenants contained in the Original Mehta Agreement ceased. In addition, the Mehta Amendment provides for the Company to redeem the shares of the Company’s Class B Preferred Stock (the “Class B Stock”) owned by Mr. Mehta, and entitles Mr. Mehta to the following additional compensation: · A bonus, payable in cash or common stock of the Company, equal to 1% of the Company’s Gross Revenue for each completed fiscal month during the 2019 fiscal year, subject to certain revenue thresholds as set forth in the Mehta Amendment; · Commissions equal to 5% of the Net Revenues (as defined in the Mehta Amendment) of all New Katyal Managed Accounts (as defined in the Katyal Amendment); · Options to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.09 per share, of which 10,000,000 vest on the date of the Mehta Amendment, and of which 5,000,000 vest on the one year anniversary of the Mehta Amendment. In connection with the Mehta Amendment, on September 13, 2019, the Company entered into a Class B Preferred Stock Redemption Agreement (the “Mehta Redemption Agreement”), pursuant to which the Company redeemed the Company’s Class B Stock owned by Mehta in exchange for an employment agreement and other good and valuable consideration including an automobile allowance. Risks Related to Our Financial Results and Financing Plans Management has plans to address the Company’s financial situation as follows: In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan related to technology. Management will continue to seek out equity and/or debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable. In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s efforts to raise equity and debt at acceptable terms or that the planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. We disclose related party transactions that are outside of normal compensatory agreements, such as salaries or board of director fees. We consider the following individuals / companies to be related parties: Dean Julia - Principal Executive Officer President and Director Sean McDonnell - Chief Financial Officer Sean Trepeta – Board of Directors Deepankar Katyal – Board of Directors Dr. Eugene Salkind – Board of Directors PRINCIPLES OF CONSOLIDATION - The accompanying condensed consolidated financial statements include the accounts of Mobiquity Technologies, Inc. and its wholly owned subsidiaries, Mobiquity Networks, Inc. and Advangelists, LLC. All intercompany accounts and transactions have been eliminated in consolidation. ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: · Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. · Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, convertible debt, approximate their fair values because of the short maturity of these instruments for years ended December 31, 2019 and 2018. Level 1 Level 2 Level 3 Total Fair value of derivatives $ – $ – $ – $ – EMBEDDED CONVERSION FEATURES The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature. DERIVATIVE FINANCIAL INSTRUMENTS The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting . The notes have maturity dates ranging from February 11, 2018 –July 31, 2018. The Company also has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. All notes were extinguished on November 30, 2018 ending the derivative functions due to sequencing under ASC 815-40. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of December 31, 2018. The fair values of the derivative instruments are measured each quarter, which resulted in a loss of $8,299,622 and derivative expense of $509,729 during the year ended December 31, 2018. As of December 31, 2018, the fair market value of the derivatives aggregated $ using the following assumptions: estimated 0.08 to 4.8-year term, estimated volatility of 163.71% to 394.26%, and a discount rate of 0.00% to 2.83%. All derivative instruments were liquidated during the fourth quarter of 2018. CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. As of December 31, 2019, and December 31, 2018, the balances are $1,240,064 and $624,338, respectively. CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, consequently, believes that its receivable credit risk exposure is limited. Our current receivables at December 31, 2019 consist of 47% held by four of our largest customers. Our December 31, 2018 receivables consist of 57% held by five of our largest customers. The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. As of December 31, 2019, and December 31, 2018, the Company exceeded FDIC limits by $749,037 and $170,762, respectively. REVENUE RECOGNITION – On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance became effective for the Company beginning on January 1, 2018, and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The Company adopted this standard using the modified retrospective approach on January 1, 2018. In preparation for adoption of the standard, the Company evaluated each of the five steps in Topic 606, which are as follows: 1) Identify the contract with the customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue when (or as) performance obligations are satisfied. Reported revenue was not affected materially in any period due to the adoption of ASC Topic 606 because: (1) the Company expects to identify similar performance obligations under Topic 606 as compared with deliverables and separate units of account previously identified; (2) the Company has determined the transaction price to be consistent; and (3) the Company records revenue at the same point in time, upon delivery of services, under both ASC Topic 605 and Topic 606, as applicable under the terms of the contract with the customer. Additionally, the Company does not expect the accounting for fulfillment costs or costs incurred to obtain a contract to be affected materially in any period due to the adoption of Topic 606. ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the collectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. As of December 31, 2019, and December 31, 2018, allowance for doubtful accounts were $80,600 and $80,600, respectively. PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is expensed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. LONG LIVED ASSETS – In accordance with ASC 360, “ Property, Plant and Equipment ”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. The Company recognized no impairment losses for the period ended September 30, 2019. Transactions with major customers During the year ended December 31, 2019, four customers accounted for approximately 47% of revenues and for the year ended December 31, 2018, three customers accounted for 78% our revenues. ADVERTISING COSTS - Advertising costs are expensed as incurred. For the year ended December 31, 2019 and December 31, 2018, there were advertising costs of $70,042 and $1,453, respectively. ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. Refer to Note 7 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion. BENEFICIAL CONVERSION FEATURES - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair values of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received. INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS We adopted the lease standard ACS 842 effective January 1, 2019 and have elected to use January 1, 2019 as our date of initial application. Consequently, financial information will not be updated, and disclosures required under the new standard will not be provided for periods presented before January 1, 2019 as these prior periods conform to the Accounting Standards Codification 840. We elected the package of practical expedients permitted under the transition guidance within the new standard. By adopting these practical expedients, we were not required to reassess (1) whether an existing contract meets the definition of a lease; (2) the lease classification for existing leases; or (3) costs previously capitalized as initial direct costs. As of December 10, 2019, we are not a lessor or lessee under any lease arrangements. We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or result of operations. NET LOSS PER SHARE Basic net loss per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 347,772,333 because they are anti-dilutive, as a result of a net loss for the year ended December 31, 2019. |
3. ACQUISITION OF ADVANGELISTS,
3. ACQUISITION OF ADVANGELISTS, LLC | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITION OF ADVANGELISTS, LLC | NOTE 3: ACQUISITION OF ADVANGELISTS, LLC In December 2018, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) with Glen Eagles Acquisition LP (“GEAL”) and Mobiquity Technologies, Inc. purchased of all the issued and outstanding capital stock and membership interest of Advangelists LLC. The Company closed and completed the acquisition on December 6, 2018. The purchase price paid includes the assumption of certain assets, liabilities and contracts associated with Advangelists, LLC, at closing the sellers received $500,000 cash, warrants and stock and the issuance of a nineteen- month promissory note in aggregate principal amount of $9,500,000. The following table summarizes the allocation of the purchase price as of the acquisition date: Purchase Price $9,500,000 Promissory note $ 9,500,000 Cash 500,000 Mobiquity Technologies, Inc. warrants 3,844,444 Gopher Protocol Inc. common stock 6,155,556 $ 20,000,000 On April 30, 2019, the Company entered into a Membership Interest Purchase Agreement with GEAL, which the Company acquired from GEAL 3% of the membership interest of Advangelists, LLC for $600,000 in cash. Giving the Company a 51% interest. On May 8, 2019, the Company entered into a Membership Purchase Agreement with Gopher Protocol, Inc. to acquire the 49% interest of Advangelists, LLC which it contemporaneously purchased from GEAL. The purchase price was paid by the issuance of a $7,512,500 promissory note. As a result of the transaction, the Company owns 100% of Advangelists LLC. On September 13, 2019, the Company repurchased fifteen million shares of common stock for the aggregate by exchanging 110,000 shares of GTCH common stock held for investment purposes. On September 13, 2019, Dr. Gene Salkind, is a related party who is a director of the Company, and an affiliate of Dr. Salkind (collectively, the “Lenders”) subscribed for convertible promissory notes (the “Note”) and loaned to the Company an aggregate of $2,300,000 (the “Loans”) on a secured basis. The Notes bear interest at a fixed rate of 15% per annum, computed based on a 360-day year of twelve 30-day months and will be payable monthly in arrears. Interest on the Notes is payable in cash, or, at the Lenders’ option, in shares of the Company’s common stock. The principal amount due under the Notes will be payable on September 30, 2029, unless earlier converted pursuant to the terms of the Notes. Subject to the Company obtaining prior approval from the Company’s shareholders for the issuance of shares of common stock upon conversion of the Notes, if and to the extent required by the New York Business Corporation Law, the Notes will be convertible into equity of the Company upon the following events on the following terms: · At any time at the option of the Lenders, the outstanding principal under the Notes will be converted into shares of common stock of the Company at a conversion price of $0.08 per share (the “Conversion Price”). · at any time that the trailing thirty (30) day volume weighted average price per share (as more particularly described in the Notes) of the Company’s common stock is above $1.00 per share, until the Notes are no longer outstanding, the Company may convert the entire unpaid un-converted principal amount of the Notes, plus all accrued and unpaid interest thereon, into shares of the Company’s common stock at the Conversion Price. The Notes contain customary events of default, which, if uncured, entitle the Lenders thereof to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, their Notes. In connection with the subscription of the Notes, the Company issued to each Lender a warrant to purchase one share of the Company’s common stock for every two shares of common stock issuable upon conversion of the Notes, at an exercise price of $0.12 per share (the “Lender Warrants”). On September 13, 2019, Advangelists, LLC, a wholly-owned subsidiary of the Company (“AVNG”), entered into Amendment No. 1 to Employment Agreement (the “Katyal Amendment”) with Deepankar Katyal, who is a related party and the CEO of AVNG, which amends Mr. Katyal’s original employment agreement (the “Original Katyal Agreement”), dated as of December 7, 2018. Pursuant to the Katyal Amendment, among other things, (i) the Company agreed to indemnify Mr. Katyal to the extent provided in the Company’s Certificate of Incorporation (the “Certificate”) and By-laws and to include Mr. Katyal as an insured under the Company’s applicable directors’ and officers’ liability insurance policies; (ii) AVNG agreed to provide Mr. Katyal with an automobile allowance of $550.00 per month, and (iii) the non-compete restrictive covenants contained in the Original Katyal Agreement ceased. In addition, the Katyal Amendment provides for the Company to redeem the shares of the Company’s Class B Preferred Stock (the “Class B Stock”) owned by Mr. Katyal, and entitles Mr. Katyal to the following additional compensation: · A bonus, payable in cash or common stock of the Company, equal to 1% of the Company’s gross revenue (the “Gross Revenue”) for each completed fiscal month during the 2019 fiscal year, subject to certain revenue thresholds as set forth in the Katyal Amendment; · Commissions equal to 10% of the Net Revenues (as defined in the Katyal Amendment) of all New Katyal Managed Accounts (as defined in the Katyal Amendment); · Options to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.09 per share, of which 10,000,000 vest on the date of the Katyal Amendment, and of which 5,000,000 vest on the one year anniversary of the Katyal Amendment. In connection with the Katyal Amendment, on September 13, 2019, the Company entered into a Class B Preferred stock Redemption Agreement (the “Katyal Redemption Agreement”), pursuant to which the Company redeemed the Company’s Class B Stock owned by Katyal. In May 2019, the Company assumed a promissory note (the “AVNG Note”) payable to Deepankar Katyal (the “Payee”), as representative of the former owners of AVNG, which at the time of assumption had a remaining principal balance of $7,512,500. Simultaneously with the assumption of the AVNG Note, the AVNG Note was amended and restated as disclosed in the May 8-K (the “First Amended AVNG Note”). Effective as of September 13, 2019, the Company and Payee entered into a Second Amended and Restated Promissory Note (the “Second Amended AVNG Note”), in the principal amount of $6,750,000, pursuant to which the repayment terms under the First Amended AVNG Note were amended and restated as follows: · $5,250,000 of the principal balance remaining due under the Second Amended AVNG Note is payable by the delivery of (i) 65,625 shares of the Company’s newly designated Class E Preferred Stock, which is convertible into 65,625,000 shares the Company’s common stock, and (ii) common stock purchase warrants to purchase 32,812,500 shares of the Company’s common stock, at an exercise price of $0.12 per share (the “AVNG Warrant”). · $1,530,000 of the principal balance, inclusive of all accrued and unpaid interest, remaining due under the Second Amended AVNG Note in three equal consecutive monthly installments of $510,000, commencing on September 15, 2019 and on the 15 th The Second Amended AVNG Note provides that upon an Event of Default (as defined in the Second Amended AVNG Note), and upon the election of the Payee, (i) the shares of Class E Preferred Stock issuable pursuant to the terms of the Second Amended AVNG Note, and any shares of the Company’s common stock issued upon the conversion of the Class E Preferred Stock, shall be cancelled and cease to issued and outstanding, (ii) the AVNG Warrants (as defined below), to the extent unexercised, shall be cancelled, and (iii) the Second Amended AVNG Note shall be cancelled and the repayment of the principal amount remaining due to Payee shall be paid in accordance with the terms of the First Amended AVNG Note. Merger Mobiquity entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Glen Eagles Acquisition LP (“GEAL”) (which at the time owned 165,000,000 shares of common stock of Mobiquity, equivalent to approximately 29.6% of the outstanding shares), AVNG Acquisition Sub, LLC (“Merger Sub”) and Advangelists, LLC (“Advangelists”) on November 20, 2018 which provided for Merger Sub to merge into Advangelists, with Advangelists as the surviving company following the merger. On December 6, 2018, Mobiquity and the other parties to the Merger Agreement entered into the First Amendment to Agreement and Plan of Merger (the “Amendment”) which amended the Merger Agreement as follows: · The number of warrants to purchase shares of Mobiquity’s common stock issuable as part of the merger consideration was changed from 90,000,000 shares to 107,753,750 shares, and the exercise price of the warrants was changed from $0.09 per share to $0.14 per share; and · The number of shares of Gopher Protocol Inc.’s common stock to be transferred by Mobiquity as part of the merger consideration changed from 11,111,111 to 9,209,722 shares. Under the Merger Agreement and the Amendment, in consideration for the Merger: · Mobiquity issued warrants for 107,753,750 shares of Mobiquity common stock at an exercise price of $0.14 per share and, subject to the vesting threshold described below, Mobiquity transferred 9,209,722 shares of Gopher Protocol, Inc. common stock, to the pre-merger Advangelists members. The Gopher common stock was unvested at the time of transfer subject to vesting in February 2019 only if Advangelists’ combined revenues for the months of December 2018 and January 2019 were at least $250,000. The vesting threshold was met. · GEAL paid the pre-merger Advangelists members $10 million in cash. $500,000 was paid at closing and $9,500,000 will be paid under a promissory note that was issued at closing, in 19 monthly installments of $500,000 each, commencing on January 6, 2019. The transactions contemplated by the Merger Agreement were consummated on December 7, 2018 upon the filing of a Certificate of Merger by Advangelists. As a result of the merger, Mobiquity owned 48% and GEAL owned 52% of Advangelists; and Mobiquity is the sole manager of, and controls, Advangelists at that time. As a result of Mobiquity having 100% control over Advangelists as of December 31, 2018, ASC 810-10-05-3 states “that for LLCs with managing and non-managing members, a managing member is the functional equivalent of a general partner and a non-managing member is the functional equivalent of a limited partner. In this case, a reporting entity with an interest in an LLC (which is not a VIE) would likely apply the consolidation model for limited partnerships if the managing member has the right to make the significant operating and financial decisions of the LLC.” In this case Mobiquity has the right to make the significant operating and financial decisions of Advangelists resulting in consolidation of Advangelists. On April 30, 2019, the Company entered into a Membership Interest Purchase Agreement with GEAL, pursuant to which the Company acquired from GEAL 3% of the membership interests of Advangelists, for cash in the amount of $600,000 (the “Purchase Price”). The Purchase Price was paid by the Company to GEAL on May 3, 2019. As a result of the Transaction, the Company then owned 51% of the membership interests of Advangelists, with GEAL owning 49% of the membership interests of Advangelists. On May 10, 2019, the Company entered into a Membership Purchase Agreement effective as of May 8, 2019 with Gopher Protocol, Inc. to acquire the 49% interest of Advangelists, which it contemporaneously purchased from GEAL. As a result of this transaction, the Company owns 100% of Advangelists’s Membership Interests. The acquisition of the 49% of Advangelists membership interests was accomplished in a transaction involving Mobiquity, Glen Eagles Acquisition LP, and Gopher Protocol, Inc. Recognized amount of identifiable assets acquired, liabilities assumed and consideration expensed: Financial assets: Cash and cash equivalents $ 216,799 Accounts receivable, net 2,679,698 Property and equipment, net 20,335 Intangible assets (a) 10,000,000 Accounts payable and accrued liabilities (2,871,673 ) Purchase price expensed 9,954,841 $ 20,000,000 The ATOS platform: · creates an automated marketplace of advertisers and publishers on digital media outlets to host online auctions to facilitate the sale of ad time slots (known as digital real estate) targeted at users while engaged on their connected TV, computer or mobile device, and · gives advertisers the capability to understand and interact with their audiences and engage them in a meaningful way by the using ads in both image and video formats (known as rich media) to increase their customer base and foot traffic to their physical locations. The Company tests goodwill for impairment at least annually on December 31 st Our goodwill balance is not amortized to expense, instead it is tested for impairment at least annually. We perform our annual goodwill impairment analysis at the end of the fourth quarter. If events or indicators of impairment occur between annual impairment analyses, we perform an impairment analysis of goodwill at that date. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant asset. In testing for a potential impairment of goodwill, we: (1) verify there are no changes to our reporting units with goodwill balances; (2) allocate goodwill to our various reporting units to which the acquired goodwill relates; (3) determine the carrying value, or book value, of our reporting units, as some of the assets and liabilities related to each reporting unit are held by a corporate function; (4) estimate the fair value of each reporting unit using a discounted cash flow model; (5) reconcile the fair value of our reporting units in total to our market capitalization adjusted for a subjectively estimated control premium and other identifiable factors; (6) compare the fair value of each reporting unit to its carrying value; and (7) if the estimated fair value of a reporting unit is less than the carrying value, we must estimate the fair value of all identifiable assets and liabilities of that reporting unit, in a manner similar to a purchase price allocation for an acquired business to calculate the implied fair value of the reporting unit’s goodwill and recognize an impairment charge if the implied fair value of the reporting unit’s goodwill is less than the carrying value. There were no impairment charges during the year ended December 31, 2019 . Intangible Assets At December 31, 2019 and December 31, 2018, definite-lived intangible assets primarily consist of customer relationships which are being amortized over their estimated useful lives of five years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they will be removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. Useful Lives 2019 2018 Customer relationships 5 years $ 3,003,676 $ 1,856,358 ATOS Platform 5 years 10,000,000 – 13,003,676 1,856,358 Less accumulated amortization (1,555,186 ) (30,939 ) Net carrying value $ 11,448,490 $ 1,825,419 Future amortization, for the years ending December 31, is as follows: 2020 $ 2,600,736 2021 $ 2,600,736 2022 $ 2,600,736 2023 $ 2,600,736 2024 $ 1,045,546 Thereafter $ – |
4. NOTES PAYABLE AND DERIVATIVE
4. NOTES PAYABLE AND DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND DERIVATIVE LIABILITIES | NOTE 4: NOTES PAYABLE AND DERIVATIVE LIABILITIES Summary of Notes payable: December 31, 2019 December 31, 2018 CAVU Notes, net $ – $ 100,000 Berg Notes (a) 50,000 50,000 Dr. Salkind, et al 2,550,000 – Business Capital Providers 266,250 – Total Debt 2,866,250 150,000 Current portion of debt 566,250 150,000 Long-term portion of debt $ 2,300,000 $ – (a) Between August and December 2015, the Company borrowed $3,675,000 from accredited investors. These loans are due and payable the earlier of December 31, 2016 or the completion of an equity financing of at least $2,500,000. Upon the sale of the unsecured promissory notes, the Company issued $1 of principal, one share of common stock and a warrant to purchase one share of common stock at an exercise price of $0.40 per share through August 31, 2017. Accordingly, an aggregate of 3,675,000 shares of common stock and warrants to purchase a like amount were issued in the last six months of 2015. Each noteholder has the right to convert the principal of their note and accrued interest thereon at a conversion price of $0.30 per share or at the noteholder’s option, into equity securities of the Company on the same terms as the last equity transaction completed by the Company prior to each respective conversion date. All other notes have been converted to equity. In the first quarter of 2018, the Company entered into agreements to receive $1,000,000 of short term secured debt financing in four monthly tranches. Dr. Gene Salkind made these investments and he would become a director of the Company on January 1, 2019. The Company issued in connection with each tranche, a six-month secured convertible promissory note. In connection with this transaction, the Company agreed to issue an origination fee of 1,000,000 shares of restricted common stock. Alexander Capital L.P. acted as Placement Agent and Advisor for this transaction. Each of these new notes are on the terms of the Company's 10% Senior Secured debt. In the second quarter of 2018, the Company borrowed $375,000, including $125,000 from Thomas Arnost, Chairman, and $250,000 from two non-affiliated persons. The investors received 3,500,000 shares of common stock each as an origination fee and in lieu of interest. During the fourth quarter 2018 the notes were converted to equity. On May 10, 2019, the Company entered into a $7,512,500 Promissory note with Deepankar Katyal, et al, for the acquisition of the balance of Advangelists, LLC, requiring six monthly payments of $250,000 starting May 15, 2019 through October 6, 2019, a payment of $1,500,000 on December 6, 2019, and beginning in January of 2020, ten monthly payments of $500,000 each until October of 2020, with a stated interest rate of 1.5%. On June 26, 2019, the Company entered into a merchant agreement with Business Capital Providers, Inc. in the amount of $250,000 payable daily at $2,556.82, per payment for the term of 132 business days. On August 1, 2019, the Company entered into a second merchant agreement with Business Capital Providers, Inc. in the amount of $250,000 payable daily at $2,556.82, per payment for the term of 132 business days. On September 13, 2019, Dr. Gene Salkind, who is a director of the Company, and an affiliate of Dr. Salkind (collectively, the “Lenders”) subscribed for convertible promissory notes (the “Notes”) and loaned to the Company an aggregate of $2,300,000 (the “Loans”) on a secured basis payable in three installments in September 13 received net $720.000, balance received October and November 2019. The Notes bear interest at a fixed rate of 15% per annum, computed based on a 360-day year of twelve 30-day months and will be payable monthly in arrears. Interest on the Notes is payable in cash or, at the Lenders’ option, in shares of the Company’s common stock. The principal amount due under the Notes will be payable on September 30, 2029, unless earlier converted pursuant to the terms of the Notes. Subject to the Company obtaining prior approval from the Company’s shareholders for the issuance of shares of common stock upon conversion of the Notes, if and to the extent required by the New York Business Corporation Law, the Notes will be convertible into equity of the Company upon the following events on the following terms: · At any time at the option of the Lenders, the outstanding principal under the Notes will be converted into shares of common stock of the Company at a conversion price of $0.08 per share (the “Conversion Price”). · at any time that the trailing thirty (30) day volume weighted average price per share (as more particularly described in the Notes) of the Company’s common stock is above $1.00 per share, until the Notes are no longer outstanding, the Company may convert the entire unpaid un-converted principal amount of the Notes, plus all accrued and unpaid interest thereon, into shares of the Company’s common stock at the Conversion Price. The Notes contain customary events of default, which, if uncured, entitle the Lenders thereof to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, their Notes. In connection with the subscription of the Notes, the Company issued to each Lender a warrant to purchase one share of the Company’s common stock for every two shares of common stock issuable upon conversion of the Notes, at an exercise price of $0.12 per share (the “Lender Warrants”). On May 16, 2019, the Company assumed a promissory note (the “AVNG Note”) payable to Deepankar Katyal (the “Payee”), as representative of the former owners of AVNG, which at the time of assumption had a remaining principal balance of $7,512,500. Simultaneously with the assumption of the AVNG Note, the AVNG Note was amended and restated (the “First Amended AVNG Note”). Effective as of September 13, 2019, the Company and Payee entered into a Second Amended and Restated Promissory Note (the “Second Amended AVNG Note”), in the principal amount of $6,750,000, pursuant to which the repayment terms under the First Amended AVNG Note were amended and restated as follows: · $5,250,000 of the principal balance remaining due under the Second Amended AVNG Note is payable by the delivery of (i) 65,625 shares of the Company’s newly designated Class E Preferred Stock, which is convertible into 65,625,000 shares the Company’s common stock, and (ii) common stock purchase warrants to purchase 32,812,500 shares of the Company’s common stock, at an exercise price of $0.12 per share (the “AVNG Warrant”). · $1,530,000 of the principal balance, inclusive of all accrued and unpaid interest, remaining due under the Second Amended AVNG Note in three equal consecutive monthly installments of $510,000, commencing on September 15, 2019 and on the 15 th The Second Amended AVNG Note provides that upon an Event of Default (as defined in the Second Amended AVNG Note), and upon the election of the Payee, (i) the shares of Class E Preferred Stock issuable pursuant to the terms of the Second Amended AVNG Note, and any shares of the Company’s common stock issued upon the conversion of the Class E Preferred Stock, shall be cancelled and cease to issued and outstanding, (ii) the AVNG Warrants (as defined below), to the extent unexercised, shall be cancelled, and (iii) the Second Amended AVNG Note shall be cancelled and the repayment of the principal amount remaining due to Payee shall be paid in accordance with the terms of the First Amended AVNG Note. FAIR VALUE OF FINANCIAL INSTRUMENTS- The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: · Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. · Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. A recap of the derivative instruments is as follows: Derivative Liability 2018 Beginning balance $ (666,123 ) New Issuances – Discount on new derivative in excess of note face value – Effect on debt extinguishment 666,123 Ending balance $ – |
5. INCOME TAXES
5. INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5: INCOME TAXES The provision for income taxes for the years ended December 31, 2019 and 2018 is summarized as follows: 2019 2018 Current: Federal $ – $ – State – – – – Deferred: Federal – – State – – $ – $ – The Company has federal net operating loss carryforwards (“NOL’s) of $162,134,640 and $119,387,265, respectively, which will be available to reduce future taxable income. The tax effects of temporary differences which give rise to deferred tax assets (liabilities) are summarized as follows: YEAR ENDED DECEMBER 31, 2019 2018 Net operating loss carryforwards $ (42,155,000 ) $ (31,073,000 ) Stock based compensation – options/warrants 4,257,000 2,541,000 Stock issued for services 971,000 971,000 Gain loss on derivative instrument 781,000 781,000 Disallowed entertainment expense 50,000 43,000 Charitable contribution limitation 7,000 7,000 Preferred Stock 25,000 25,000 Bad debt expense & reserves 33,000 33,000 Penalties 3,000 1,000 Loss on extinguishment of debt 1,133,000 1,133,000 Beneficial conversion features 77,000 77,000 Mobiquity-Spain – net loss 540,000 540,000 Impairment of long-lived assets 58,000 58,000 Stock issued for interest 245,000 245,000 Nondeductible insurance 13,000 10,000 Stock incentives 15,000 15,000 Derivative expense 480,000 480,000 Professional Fees 774,000 2,835,000 Gain / Loss on stock for investment 4,456,000 3,831,000 Gain / Loss on company stock 2,757,000 2,757,000 Gain / Loss on sale of warrants 6,931,000 1,190,000 Unrealized loss on securities 1,943,000 1,871,000 Acquisition expense 3,904,000 3,132,000 Amortization of debt discount 2,058,000 2,058,000 Deferred Tax Assets (10,644,000 ) (6,439,000 ) Less Valuation Allowance 10,644,000 6,439,000 Net Deferred Tax Asset $ – $ – A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows: YEARS ENDED DECEMBER 31, 2019 2018 Federal Statutory Tax Rate 21.00% 21.00% State Taxes, net of Federal benefit 5.00% 5.00% Change in Valuation Allowance (26.00% ) (26.00% ) Total Tax Expense 0.00% 0.00% |
6. STOCKHOLDERS' EQUITY (DEFICI
6. STOCKHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 6: STOCKHOLDERS’ EQUITY (DEFICIT) During the year ended December 31, 2018, the Company issued 11,500,000 common stock at a price per share between $0.03 and $0.05 for original issue discount on receipt of $406,375 in unsecured convertible promissory notes. In September 2018, Gopher Protocol Inc. (the “Gopher”) and the Company entered an Agreement (the “MOBQ Agreement”) pursuant to which the parties exchanged equity interest in each of the companies. In accordance with the Agreement, Gopher will receive 1,000 shares of the Company’s restricted Series AAAA Preferred Stock (the “the Company Preferred Stock”) in consideration of Gopher’s concurrent sale and issuance to the Company of 10,000,000 shares of Gopher’s restricted Common Stock (the “Gopher Common Stock”). The shares of Company Preferred Stock are convertible into an aggregate of up to 100,000,000 shares of the Company common stock (the “Company Common Stock”) and 150,000,000 common stock purchase warrants (the “Company Warrants”). The Company Warrants shall have a term of 5-years from the date of grant and shall be exercisable at a price of $0.12 per share and the shares of the Company Preferred Stock shall not be convertible into shares of the Company Common Stock and the Company Warrants shall not be contemporaneously granted until after the Company’s Board of Directors and stockholders shall have increased the authorized number of shares of the Company’s common stock to a number sufficient to accommodate a reserve in Gopher’s favor of 250,000,000 shares of the Company’s common stock. The Company Preferred Stock shall have immediate voting rights equal to the number of shares of the Company Common Stock into which they may be converted, not including the shares of the Company’s common stock underlying the Company Warrants (the “Company Warrant Shares”). A fee of 10,000,000 shares of the Company’s common stock and warrants to purchase 15,000,000 shares was issued in connection with the transaction. The closing occurred on September 4, 2018. The Company agreed that for a period beginning immediately upon the six (6)-month anniversary of the date hereof and ending on the twenty-four (24)-month anniversary of the date hereof (the “Leak-Out Period”), The Company shall have the right to sell or otherwise transfer into the public markets on any given day up to 20,000 shares of Gopher Common Stock. The Company may transfer all or a portion of the shares of Gopher Common Stock otherwise at any time, so long as the receiving party adheres to the above Leak-Out Period. In the fourth quarter of 2018, Gopher converted 200 shares of its Series AAAA Preferred Stock into 20,000,000 shares of common stock and warrants to purchase 30,000,000 shares at an exercise price of $.12 per share. The 30,000,000 warrants were converted in a cashless exercise transaction in which Gopher submitted to the Company 10,000,000 shares of its common stock valued at $3,600,000 in full payment of the warrants. In the fourth quarter of 2018, the Company received equity subscription agreements totaling $960,000, which include 50% warrant coverage, at an exercise price of $0.12 with an expiration date of September 30, 2023. The Company issued 16,000,001 shares of common stock and 8,000,000 warrants in connection with these transactions. Of the $960,000, $200,000 was invested by Thomas Arnost, Chairman of the Board. In 2019, the Company sold 49,215,137 shares of common stock with 24,369,834 warrants to purchase common stock, exercisable between $0.12 to $0.18 expiring on September 30, 2023 in exchange for cash consideration of $3,434,500, net. In 2019, the Company issued 6,835,090 shares of common stock in exchange for services rendered. In 2019, the Company issued 65,625 shares of preferred stock series E for the exchange of a $5,250,000 senior secured note. The Company received cash consideration of $1,132,210 in exchange for the conversion of warrants issued previously. The company issued 80 million common stock with 150% matching warrants for the conversion of series AAAA preferred stock. In 2019, holders of Series AAA preferred stock converted their preferred stock into 104,417,500 shares of common stock and warrants to purchase 104,417,500 shares, with each warrant exercisable at $.05 per share through December 31, 2019. As approved by the Company’s Board of Directors on September 10, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of New York to designate the rights, preferences and limitations of 70,000 shares of the Company’s authorized 5,000,000 shares of Preferred Stock, $.0001 par value, as Class E Preferred Stock, $0.0001 per share (“Class E Preferred Stock”). Of the 70,000 shares of Class E Preferred Stock, 65,625 shares were issued to nine persons, including 25,675 were issued to Mr. Katyal and 25,020 shares were issued to Mr. Mehta. In 2019, holders of warrants expiring December 31, 2019 exercised 11,755,200 warrants and the Company received cash consideration of $146,940 in January 2020 and notes receivable totaling $440,820, which have maturity dates in 2020. Consulting Agreements Upon consummation of the Merger, Mobiquity entered into consulting agreements (the “Consulting Agreements”) with certain employees and contractors of Advangelists (the “Consultants”), pursuant to which Mobiquity (i) issued to the Consultants warrants to purchase an aggregate of 22,246,250 shares of its common stock and (ii) agreed to transfer to the Consultants an aggregate of 1,901,389 shares of common stock of Gopher Protocol Inc. The terms of the Consultant’s warrants are substantially similar to the terms of the warrants issued in the merger. |
7. OPTIONS AND WARRANTS
7. OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
OPTIONS AND WARRANTS | NOTE 7: OPTIONS AND WARRANTS The Company’s results for the years ended December 31, 2019 and 2018 include employee share-based compensation expense totaling $29,812,197 and $327,405, respectively. Such amounts have been included in the Statements of Operations within selling, general and administrative expenses and other expenses. No income tax benefit has been recognized in the statement of operations for share-based compensation arrangements due to a history of operating losses. The following table summarizes stock-based compensation expense for the years ended December 31, 2019 and 2018: Years Ended December 31, 2019 2018 Employee stock-based compensation – option grants $ 6,599,000 $ 273,945 Employee stock-based compensation-stock grants – – Non-Employee stock-based compensation – option grants – 53,460 Non-Employee stock-based compensation-stock grants – – Non-Employee stock-based compensation-warrants for retirement of debt 23,213,197 2,354,458 $ 29,812,197 $ 2,681,863 |
8. STOCK OPTION PLANS
8. STOCK OPTION PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
STOCK OPTION PLANS | NOTE 8: STOCK OPTION PLANS During Fiscal 2005, the Company established, and the stockholders approved, an Employee Benefit and Consulting Services Compensation Plan (the “2005 Plan”) for the granting of up to 2,000,000 non-statutory and incentive stock options and stock awards to directors, officers, consultants and key employees of the Company. On June 9, 2005, the Board of Directors amended the Plan to increase the number of stock options and awards to be granted under the Plan to 4,000,000. During Fiscal 2009, the Company established a plan of long-term stock-based compensation incentives for selected Eligible Participants of the Company covering 4,000,000 shares. This plan was adopted by the Board of Directors and approved by stockholders in October 2009 and shall be known as the 2009 Employee Benefit and Consulting Services Compensation Plan (the “2009 Plan”). In September 2013, the Company’s stockholders approved an increase in the number of shares covered by the 2009 Plan to 10,000,000. In February 2015, the Board approved, subject to stockholder approval within one year, an increase in the number of shares under the 2009 Plan to 20,000,000 shares; however, stockholder approval was not obtained within the requisite one year and the anticipated increase in the 2009 Plan was canceled. In the first quarter of 2016, the Board approved, and stockholders ratified a 2016 Employee Benefit and Consulting Services Compensation Plan covering 10,000,000 shares (the “2016 Plan”) and approving moving all options which exceeded the 2009 Plan limits to the 2016 Plan. In December 2018, the Board of Directors adopted and in February 2019. The stockholders ratified the 2018 Employee Benefit and Consulting Services Compensation Plan covering 30,000,000 shares (the “2018 Plan”). On April 2, 2019, the Company approved the 2019 Plan identical to the 2018 Plan, except that the 2019 Plan covers 60 million shares. The 2019 Plan requires stockholder approval by April 2, 2020 in order to grant incentive stock options. The 2005, 2009, 2016, 2018 and 2019 plans are collectively referred to as the “Plans.” All stock options under the Plans are granted at or above the fair market value of the common stock at the grant date. Employee and non-employee stock options vest over varying periods and generally expire either 5 or 10 years from the grant date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For option grants, the Company will take into consideration payments subject to Years Ended December 31, 2019 2018 Expected volatility 242.39% 181.8% Expected dividend yield – – Risk-free interest rate 2.32% 2.83% Expected term (in years) 6.00 5.00 Share Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, January 1, 2018 17,515,001 $ 0.39 4.43 $ – Granted 36,250,000 $ 0.06 4.39 $ 2,887,500 Exercised – – – – Cancelled / Expired (11,765,001 ) – – – Outstanding, December 31, 2018 42,000,000 $ 0.10 4.38 $ 2.981.875 Options exercisable, December 31, 2018 42,000,000 $ 0.10 4.38 $ 2.981.875 Outstanding, January 1, 2019 42,000,000 $ 0.10 4.38 $ 2,981,875 Granted 70,700,000 $ 0.13 7.88 – Exercised – – – – Cancelled / Expired (300,000 ) – – – Outstanding, December 31, 2019 112,400,000 $ 0.12 6.15 $ 769,500 Options exercisable, December 31, 2019 95,375,000 $ 0.12 5.95 $ – The weighted-average grant-date fair value of options granted during the years ended December 31, 2019 and 2018 was $0.13 and $0.11, respectively. The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2019 and 2018 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the shares that had exercise prices, that were lower than the $0.08 closing price of the Company’s common stock on December 31, 2019. As of December 31, 2019, the fair value of unamortized compensation cost related to unvested stock option awards was $2,272,000. The option information provided above includes options granted outside of the Plans, which total 1,825,000 and 2,075,000 as of December 31, 2019 and 2018. The weighted average assumptions made in calculating the fair value of warrants granted during the years ended December 31, 2019 and 2018 are as follows: Years Ended 2019 2018 Expected volatility 164.85% 173.58% Expected dividend yield – – Risk-free interest rate 7.48% 2.88% Expected term (in years) 3.20 5.42 Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Share Price Term Value Outstanding, January 1, 2018 11,814,167 $ 0.20 2.58 $ – Granted 164,752,034 $ 0.13 8.80 $ 904,784 Exercised – – – – Cancelled / Expired (1,040,000 ) – – – Outstanding, December 31, 2018 175,526,201 $ 0.14 8.37 $ 1,504,784 Warrants exercisable, December 31, 2018 175,526,201 $ 0.14 8.37 $ 1,504,784 Outstanding, January 1, 2019 175,526,201 $ 0.14 8.37 $ 1,504,784 Granted 246,244,634 $ 0.02 0.38 $ 2,318,002 Exercised (178,857,666 ) – – – Cancelled/Expired (7,540,836 ) – – – Outstanding, December 31, 2019 235,372,333 $ 0.11 5.81 $ 2,500,502 Warrants exercisable, December 31, 2019 235,372,333 $ 0.11 5.81 $ 2,500,502 |
9. LITIGATION
9. LITIGATION | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | NOTE 9: LITIGATION We are not a party to any pending material legal proceedings, except as follow: Washington Prime Group, Inc., a successor in interest to Simon Property Group, L.P., commenced an action in the Marion Superior Court, County of Marion, State of Indiana against the Company alleging default on 36 commercial leases which the Company had entered into in 36 separate shopping mall locations across the United States. Plaintiff alleges damages from unpaid rent of $892,332. Plaintiff is seeking a judgment from the Court to collect said unpaid rent plus attorneys’ fees and other costs of collection. The Company does not believe that it owes any money on these leases and the Company intends to vigorously defend itself in connection with this lawsuit. In the Supreme Court of New York, county of Nassau, Carter, Deluca & Farrell LP,a law firm filed a summons and Complaint against the Company seeking $113,654 in past due legal fees allegedly owed. The Company disputes the amount owed to said firm. |
10. COMMITMENTS
10. COMMITMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 10: COMMITMENTS: · $5,250,000 of the principal balance remaining due under the Second Amended AVNG Note is payable by the delivery of (i) 65,625 shares of the Company’s newly designated Class E Preferred Stock, which is convertible into 65,625,000 shares the Company’s common stock, and (ii) common stock purchase warrants to purchase 32,812,500 shares of the Company’s common stock, at an exercise price of $0.12 per share (the “AVNG Warrant”). · $1,530,000 of the principal balance, inclusive of all accrued and unpaid interest, remaining due under the Second Amended AVNG Note in three equal consecutive monthly installments of $510,000, commencing on September 15, 2019 and on the 15 th The Second Amended AVNG Note provides that upon an Event of Default (as defined in the Second Amended AVNG Note), and upon the election of the Payee, (i) the shares of Class E Preferred Stock issuable pursuant to the terms of the Second Amended AVNG Note, and any shares of the Company’s common stock issued upon the conversion of the Class E Preferred Stock, shall be cancelled and cease to issued and outstanding, (ii) the AVNG Warrants (as defined below), to the extent unexercised, shall be cancelled, and (iii) the Second Amended AVNG Note shall be cancelled and the repayment of the principal amount remaining due to Payee shall be paid in accordance with the terms of the First Amended AVNG Note. |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11: SUBSEQUENT EVENTS In January 2020, the Company amended its notes with its secured lender (Gene Salkind) to provide for a balloon interest payment of $250,000, representing unpaid interest for 2019, payable December 31, 2020. |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS – Mobiquity Technologies, Inc., a New York corporation (the “Company”), is the parent company of its operating subsidiaries; Mobiquity Networks, Inc. (“Mobiquity Networks”) and Advangelists, LLC (Advangelists). Mobiquity Networks has evolved and grown from a mobile advertising technology company focused on driving Foot-traffic throughout its indoor network, into a next generation location data intelligence company. Mobiquity Networks provides precise unique, at-scale location data and insights on consumer’s real-world behavior and trends for use in marketing and research. Mobiquity Networks provides one of the most accurate and scaled solution for mobile data collection and analysis, utilizing multiple geo-location technologies. Mobiquity Networks is seeking to implement several new revenue streams from its data collection and analysis, including, but not limited to; Advertising, Data Licensing, The ATOS platform: · creates an automated marketplace of advertisers and publishers on digital media outlets to host online auctions to facilitate the sale of ad time slots (known as digital real estate) targeted at users while engaged on their connected TV, computer or mobile device, and · gives advertisers the capability to understand and interact with their audiences and engage them in a meaningful way by the using ads in both image and video formats (known as rich media) to increase their customer base and foot traffic to their physical locations. Advangelists’ marketplace engages with approximately 20 billion advertisement opportunities per day. Our sales and marketing strategy is focused on creating a de-fragmented operating system that makes it considerably more efficient and effective for advertisers and publishers to transact with each other. Our goal is to create a standardized and transparent medium. Advangelists' technology is proprietary and has all been developed internally. We own all of our technology. Recent Developments and Employment Agreement with Deepanker Katyal Deepanker Katyal’s employment agreement which commenced December 7, 2018 has a term of three years. Mr. Katyal is required to devote at least 40 hours per week pursuant to his responsibility as CEO of Advangelists. The agreement provides for full indemnification and participation in all benefit plans, programs and perquisites as are generally provided by the Company to its employees, including medical, dental, life insurance, disability and 401(k) participation. The agreement provides for termination for cause after giving employee 30 days’ prior written notice. The agreement provides for termination by the Company without cause after 60 days’ prior written notice with severance pay as described in his agreement. His employment agreement also provides for termination by disability for a period of more than six consecutive months in any 12-month period, termination by employee for good reason as defined in the agreement and restrictive covenants for a period of one year following the termination date. Effective as of September 13, 2019, Mobiquity Technologies, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “GTECH SPA”) with GBT Technologies, Inc. (“GTECH”), pursuant to which the Company acquired from GTECH 15,000,000 shares of the Company’s common stock that was owned by GTECH (the “MOBQ Shares”). In consideration for the purchase of the MOBQ Shares from GTECH, the Company transferred to GTECH 110,000 shares of GTECH’s common stock that was owned by the Company. On September 13, 2019, Advangelists, LLC (“AVNG”), a wholly-owned subsidiary of the Company, entered into Amendment No. 1 to Employment Agreement (the “Katyal Amendment”) with Deepankar Katyal, the CEO of AVNG, which amends Mr. Katyal’s original employment agreement (the “Original Katyal Agreement”), dated as of December 7, 2018. Pursuant to the Katyal Amendment, among other things, (i) the Company agreed to indemnify Mr. Katyal to the extent provided in the Company’s Certificate of Incorporation (the “Certificate”) and By-laws and to include Mr. Katyal as an insured under the Company’s applicable directors’ and officers’ liability insurance policies; (ii) AVNG agreed to provide Mr. Katyal with an automobile allowance of $550.00 per month, and (iii) the non-compete restrictive covenants contained in the Original Katyal Agreement ceased. In addition, the Katyal Amendment provides for the Company to redeem the shares of the Company’s Class B Preferred Stock (the “Class B Stock”) owned by Mr. Katyal, and entitles Mr. Katyal to the following additional compensation: · A bonus, payable in cash or common stock of the Company, equal to 1% of the Company’s gross revenue (the “Gross Revenue”) for each completed fiscal month during the 2019 fiscal year, subject to certain revenue thresholds as set forth in the Katyal Amendment; · Commissions equal to 10% of the Net Revenues (as defined in the Katyal Amendment) of all New Katyal Managed Accounts (as defined in the Katyal Amendment); · Options to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.09 per share, of which 10,000,000 vest on the date of the Katyal Amendment, and of which 5,000,000 vest on the one year anniversary of the Katyal Amendment. In connection with the Katyal Amendment, on September 13, 2019, the Company entered into a Class B Preferred stock Redemption Agreement (the “Katyal Redemption Agreement”), pursuant to which the Company redeemed the Company’s Class B Stock owned by Katyal. On September 13, 2019, AVNG entered into Amendment No. 1 to Employment Agreement (the “Katyal Amendment”) with Lokesh Mehta, which amends Mr. Mehta’s original employment agreement (the “Original Mehta Agreement”), dated as of December 7, 2018. Pursuant to the Mehta Amendment, among other things, (i) the Company agreed to indemnify Mr. Mehta to the extent provided in the Company’s Certificate and By-laws and to include Mr. Mehta as an insured under the Company’s applicable directors’ and officers’ liability insurance policies; (ii) AVNG agreed to provide Mr. Mehta with an automobile allowance of $550.00 per month, and (iii) the non-compete restrictive covenants contained in the Original Mehta Agreement ceased. In addition, the Mehta Amendment provides for the Company to redeem the shares of the Company’s Class B Preferred Stock (the “Class B Stock”) owned by Mr. Mehta, and entitles Mr. Mehta to the following additional compensation: · A bonus, payable in cash or common stock of the Company, equal to 1% of the Company’s Gross Revenue for each completed fiscal month during the 2019 fiscal year, subject to certain revenue thresholds as set forth in the Mehta Amendment; · Commissions equal to 5% of the Net Revenues (as defined in the Mehta Amendment) of all New Katyal Managed Accounts (as defined in the Katyal Amendment); · Options to purchase 15,000,000 shares of the Company’s common stock at an exercise price of $0.09 per share, of which 10,000,000 vest on the date of the Mehta Amendment, and of which 5,000,000 vest on the one year anniversary of the Mehta Amendment. In connection with the Mehta Amendment, on September 13, 2019, the Company entered into a Class B Preferred Stock Redemption Agreement (the “Mehta Redemption Agreement”), pursuant to which the Company redeemed the Company’s Class B Stock owned by Mehta in exchange for an employment agreement and other good and valuable consideration including an automobile allowance. Risks Related to Our Financial Results and Financing Plans Management has plans to address the Company’s financial situation as follows: In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan related to technology. Management will continue to seek out equity and/or debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable. In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s efforts to raise equity and debt at acceptable terms or that the planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. We disclose related party transactions that are outside of normal compensatory agreements, such as salaries or board of director fees. We consider the following individuals / companies to be related parties: Dean Julia - Principal Executive Officer President and Director Sean McDonnell - Chief Financial Officer Sean Trepeta – Board of Directors Deepankar Katyal – Board of Directors Dr. Eugene Salkind – Board of Directors |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION - The accompanying condensed consolidated financial statements include the accounts of Mobiquity Technologies, Inc. and its wholly owned subsidiaries, Mobiquity Networks, Inc. and Advangelists, LLC. All intercompany accounts and transactions have been eliminated in consolidation. |
ESTIMATES | ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: • Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. • Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, convertible debt, approximate their fair values because of the short maturity of these instruments for years ended December 31, 2019 and 2018. Level 1 Level 2 Level 3 Total Fair value of derivatives $ – $ – $ – $ – |
EMBEDDED CONVERSION FEATURES | EMBEDDED CONVERSION FEATURES The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature. |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting . The notes have maturity dates ranging from February 11, 2018 –July 31, 2018. The Company also has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. All notes were extinguished on November 30, 2018 ending the derivative functions due to sequencing under ASC 815-40. The Company has estimated the fair value of these embedded derivatives for convertible debentures and associated warrants using a multinomial lattice model as of December 31, 2018. The fair values of the derivative instruments are measured each quarter, which resulted in a loss of $8,299,622 and derivative expense of $509,729 during the year ended December 31, 2018. As of December 31, 2018, the fair market value of the derivatives aggregated $ using the following assumptions: estimated 0.08 to 4.8-year term, estimated volatility of 163.71% to 394.26%, and a discount rate of 0.00% to 2.83%. All derivative instruments were liquidated during the fourth quarter of 2018. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt instruments with a maturity of three months or less, as well as bank money market accounts, to be cash equivalents. As of December 31, 2019, and December 31, 2018, the balances are $1,240,064 and $624,338, respectively. |
CONCENTRATION OF CREDIT RISK | CONCENTRATION OF CREDIT RISK - Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables and cash and cash equivalents. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across geographic areas principally within the United States. The Company routinely addresses the financial strength of its customers and, consequently, believes that its receivable credit risk exposure is limited. Our current receivables at December 31, 2019 consist of 47% held by four of our largest customers. Our December 31, 2018 receivables consist of 57% held by five of our largest customers. The Company places its temporary cash investments with high credit quality financial institutions. At times, the Company maintains bank account balances, which exceed FDIC limits. As of December 31, 2019, and December 31, 2018, the Company exceeded FDIC limits by $749,037 and $170,762, respectively. |
REVENUE RECOGNITION | REVENUE RECOGNITION – On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance became effective for the Company beginning on January 1, 2018, and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The Company adopted this standard using the modified retrospective approach on January 1, 2018. In preparation for adoption of the standard, the Company evaluated each of the five steps in Topic 606, which are as follows: 1) Identify the contract with the customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue when (or as) performance obligations are satisfied. Reported revenue was not affected materially in any period due to the adoption of ASC Topic 606 because: (1) the Company expects to identify similar performance obligations under Topic 606 as compared with deliverables and separate units of account previously identified; (2) the Company has determined the transaction price to be consistent; and (3) the Company records revenue at the same point in time, upon delivery of services, under both ASC Topic 605 and Topic 606, as applicable under the terms of the contract with the customer. Additionally, the Company does not expect the accounting for fulfillment costs or costs incurred to obtain a contract to be affected materially in any period due to the adoption of Topic 606. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS - Management must make estimates of the collectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. As of December 31, 2019, and December 31, 2018, allowance for doubtful accounts were $80,600 and $80,600, respectively. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT - Property and equipment are stated at cost. Depreciation is expensed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are being amortized using the straight-line method over the estimated useful lives of the related assets or the remaining term of the lease. The costs of additions and improvements, which substantially extend the useful life of a particular asset, are capitalized. Repair and maintenance costs are charged to expense. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the account and the gain or loss on disposition is reflected in operating income. |
LONG-LIVED ASSETS | LONG LIVED ASSETS – In accordance with ASC 360, “ Property, Plant and Equipment ”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. The Company recognized no impairment losses for the period ended September 30, 2019. Transactions with major customers During the year ended December 31, 2019, four customers accounted for approximately 47% of revenues and for the year ended December 31, 2018, three customers accounted for 78% our revenues. |
ADVERTISING COSTS | ADVERTISING COSTS - Advertising costs are expensed as incurred. For the year ended December 31, 2019 and December 31, 2018, there were advertising costs of $70,042 and $1,453, respectively. |
ACCOUNTING FOR STOCK BASED COMPENSATION | ACCOUNTING FOR STOCK BASED COMPENSATION. Stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period. The Company uses the Black-Sholes option-pricing model to determine fair value of the awards, which involves certain subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s common stock price over the expected term (“volatility”) and the number of options for which vesting requirements will not be completed (“forfeitures”). Changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation, and the related amount recognized on the consolidated statements of operations. Refer to Note 7 “Stock Option Plans” in the Notes to Consolidated Financial Statements in this report for a more detailed discussion. |
BENEFICIAL CONVERSION FEATURES | BENEFICIAL CONVERSION FEATURES - Debt instruments that contain a beneficial conversion feature are recorded as deemed interest to the holders of the convertible debt instruments. The beneficial conversion is calculated as the difference between the fair values of the underlying common stock less the proceeds that have been received for the debt instrument limited to the value received. |
INCOME TAXES | INCOME TAXES - Deferred income taxes are recognized for temporary differences between financial statement and income tax basis of assets and liabilities for which income tax or tax benefits are expected to be realized in future years. A valuation allowance is established to reduce deferred tax assets, if it is more likely than not, that all or some portion of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. |
NET LOSS PER SHARE | NET LOSS PER SHARE Basic net loss per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants. The number of common shares potentially issuable upon the exercise of certain options and warrants that were excluded from the diluted loss per common share calculation was approximately 347,772,333 because they are anti-dilutive, as a result of a net loss for the year ended December 31, 2019. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS We adopted the lease standard ACS 842 effective January 1, 2019 and have elected to use January 1, 2019 as our date of initial application. Consequently, financial information will not be updated, and disclosures required under the new standard will not be provided for periods presented before January 1, 2019 as these prior periods conform to the Accounting Standards Codification 840. We elected the package of practical expedients permitted under the transition guidance within the new standard. By adopting these practical expedients, we were not required to reassess (1) whether an existing contract meets the definition of a lease; (2) the lease classification for existing leases; or (3) costs previously capitalized as initial direct costs. As of December 10, 2019, we are not a lessor or lessee under any lease arrangements. We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or result of operations. |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Fair value of derivatives | Level 1 Level 2 Level 3 Total Fair value of derivatives $ – $ – $ – $ – |
3. ACQUISITION OF ADVANGELIST_2
3. ACQUISITION OF ADVANGELISTS, LLC (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Allocation of purchase price | $9,500,000 Promissory note $ 9,500,000 Cash 500,000 Mobiquity Technologies, Inc. warrants 3,844,444 Gopher Protocol Inc. common stock 6,155,556 $ 20,000,000 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Recognized amount of identifiable assets acquired, liabilities assumed and consideration expensed: Financial assets: Cash and cash equivalents $ 216,799 Accounts receivable, net 2,679,698 Property and equipment, net 20,335 Intangible assets (a) 10,000,000 Accounts payable and accrued liabilities (2,871,673 ) Purchase price expensed 9,954,841 $ 20,000,000 |
Schedule of intangible assets | Useful Lives 2019 2018 Customer relationships 5 years $ 3,003,676 $ 1,856,358 ATOS Platform 5 years 10,000,000 – 13,003,676 1,856,358 Less accumulated amortization (1,555,186 ) (30,939 ) Net carrying value $ 11,448,490 $ 1,825,419 |
Future accumulated amortization schedule | 2020 $ 2,600,736 2021 $ 2,600,736 2022 $ 2,600,736 2023 $ 2,600,736 2024 $ 1,045,546 Thereafter $ – |
4. NOTES PAYABLE AND DERIVATI_2
4. NOTES PAYABLE AND DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Convertible Promissory Notes | Summary of Convertible Promissory Notes: December 31, 2019 December 31, 2018 CAVU Notes, net $ – $ 100,000 Berg Notes (a) 50,000 50,000 Dr. Salkind, et al 2,550,000 – Business Capital Providers 266,250 – Total Debt 2,866,250 150,000 Current portion of debt 566,250 150,000 Long-term portion of debt $ 2,300,000 $ – (a) Between August and December 2015, the Company borrowed $3,675,000 from accredited investors. These loans are due and payable the earlier of December 31, 2016 or the completion of an equity financing of at least $2,500,000. Upon the sale of the unsecured promissory notes, the Company issued $1 of principal, one share of common stock and a warrant to purchase one share of common stock at an exercise price of $0.40 per share through August 31, 2017. Accordingly, an aggregate of 3,675,000 shares of common stock and warrants to purchase a like amount were issued in the last six months of 2015. Each noteholder has the right to convert the principal of their note and accrued interest thereon at a conversion price of $0.30 per share or at the noteholder’s option, into equity securities of the Company on the same terms as the last equity transaction completed by the Company prior to each respective conversion date. All other notes have been converted to equity. |
Schedule of Derivative Instruments | A recap of the derivative instruments is as follows: Derivative Liability 2018 Beginning balance $ (666,123 ) New Issuances – Discount on new derivative in excess of note face value – Effect on debt extinguishment 666,123 Ending balance $ – |
5. INCOME TAXES (Tables)
5. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | 2019 2018 Current: Federal $ – $ – State – – – – Deferred: Federal – – State – – $ – $ – |
Schedule of deferred income taxes | The tax effects of temporary differences which give rise to deferred tax assets (liabilities) are summarized as follows: YEAR ENDED DECEMBER 31, 2019 2018 Net operating loss carryforwards $ (42,155,000 ) $ (31,073,000 ) Stock based compensation – options/warrants 4,257,000 2,541,000 Stock issued for services 971,000 971,000 Gain loss on derivative instrument 781,000 781,000 Disallowed entertainment expense 50,000 43,000 Charitable contribution limitation 7,000 7,000 Preferred Stock 25,000 25,000 Bad debt expense & reserves 33,000 33,000 Penalties 3,000 1,000 Loss on extinguishment of debt 1,133,000 1,133,000 Beneficial conversion features 77,000 77,000 Mobiquity-Spain – net loss 540,000 540,000 Impairment of long-lived assets 58,000 58,000 Stock issued for interest 245,000 245,000 Nondeductible insurance 13,000 10,000 Stock incentives 15,000 15,000 Derivative expense 480,000 480,000 Professional Fees 774,000 2,835,000 Gain / Loss on stock for investment 4,456,000 3,831,000 Gain / Loss on company stock 2,757,000 2,757,000 Gain / Loss on sale of warrants 6,931,000 1,190,000 Unrealized loss on securities 1,943,000 1,871,000 Acquisition expense 3,904,000 3,132,000 Amortization of debt discount 2,058,000 2,058,000 Deferred Tax Assets (10,644,000 ) (6,439,000 ) Less Valuation Allowance 10,644,000 6,439,000 Net Deferred Tax Asset $ – $ – |
Reconciliation of federal statutory rate | A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows: YEARS ENDED DECEMBER 31, 2019 2018 Federal Statutory Tax Rate 21.00% 21.00% State Taxes, net of Federal benefit 5.00% 5.00% Change in Valuation Allowance (26.00% ) (26.00% ) Total Tax Expense 0.00% 0.00% |
7. OPTIONS AND WARRANTS (Tables
7. OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock based compensation expense | Years Ended December 31, 2019 2018 Employee stock-based compensation – option grants $ 6,599,000 $ 273,945 Employee stock-based compensation-stock grants – – Non-Employee stock-based compensation – option grants – 53,460 Non-Employee stock-based compensation-stock grants – – Non-Employee stock-based compensation-warrants for retirement of debt 23,213,197 2,354,458 $ 29,812,197 $ 2,681,863 |
8. STOCK OPTION PLANS (Tables)
8. STOCK OPTION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Options [Member] | |
Assumptions used | Years Ended December 31, 2019 2018 Expected volatility 242.39% 181.8% Expected dividend yield – – Risk-free interest rate 2.32% 2.83% Expected term (in years) 6.00 5.00 |
Schedule of options outstanding | Share Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, January 1, 2018 17,515,001 $ 0.39 4.43 $ – Granted 36,250,000 $ 0.06 4.39 $ 2,887,500 Exercised – – – – Cancelled / Expired (11,765,001 ) – – – Outstanding, December 31, 2018 42,000,000 $ 0.10 4.38 $ 2.981.875 Options exercisable, December 31, 2018 42,000,000 $ 0.10 4.38 $ 2.981.875 Outstanding, January 1, 2019 42,000,000 $ 0.10 4.38 $ 2,981,875 Granted 70,700,000 $ 0.13 7.88 – Exercised – – – – Cancelled / Expired (300,000 ) – – – Outstanding, December 31, 2019 112,400,000 $ 0.12 6.15 $ 769,500 Options exercisable, December 31, 2019 95,375,000 $ 0.12 5.95 $ – |
Warrants [Member] | |
Assumptions used | Years Ended 2019 2018 Expected volatility 164.85% 173.58% Expected dividend yield – – Risk-free interest rate 7.48% 2.88% Expected term (in years) 3.20 5.42 |
Schedule of warrants outstanding | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Share Price Term Value Outstanding, January 1, 2018 11,814,167 $ 0.20 2.58 $ – Granted 164,752,034 $ 0.13 8.80 $ 904,784 Exercised – – – – Cancelled / Expired (1,040,000 ) – – – Outstanding, December 31, 2018 175,526,201 $ 0.14 8.37 $ 1,504,784 Warrants exercisable, December 31, 2018 175,526,201 $ 0.14 8.37 $ 1,504,784 Outstanding, January 1, 2019 175,526,201 $ 0.14 8.37 $ 1,504,784 Granted 246,244,634 $ 0.02 0.38 $ 2,318,002 Exercised (178,857,666 ) – – – Cancelled/Expired (7,540,836 ) – – – Outstanding, December 31, 2019 235,372,333 $ 0.11 5.81 $ 2,500,502 Warrants exercisable, December 31, 2019 235,372,333 $ 0.11 5.81 $ 2,500,502 |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details) | Dec. 31, 2019USD ($) |
Fair value of derviatives | $ 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair value of derviatives | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |
Fair value of derviatives | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair value of derviatives | $ 0 |
2. Summary of Significant Polic
2. Summary of Significant Policies (Details Narrative) - USD ($) | 4 Months Ended | 5 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Apr. 30, 2019 | May 31, 2019 | Sep. 13, 2019 | Dec. 07, 2018 | Dec. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | May 10, 2019 | Dec. 31, 2017 | |
Fair market value of derviatives | $ 0 | ||||||||
Cash and cash equivalents | $ 1,240,064 | 624,338 | $ 56,470 | ||||||
Cash over FDIC insurance limits | 749,037 | 170,762 | |||||||
Allowance for doubtful accounts | 80,600 | 80,600 | |||||||
Impairment losses on long lived assets | 0 | 0 | |||||||
Advertising costs | $ 70,042 | 1,453 | |||||||
Antidilutive shares excluded from earnings per share calculation | 347,772,333 | ||||||||
Loss from Operations | $ (13,462,229) | (4,782,647) | |||||||
Proceeds from convertible note | $ 2,550,000 | $ 1,243,351 | |||||||
Deepankar Katyal [Member] | |||||||||
Debt converted, shares issued | 65,625 | ||||||||
AVNG Note [Member] | Deepankar Katyal [Member] | |||||||||
Promissory note assumed | $ (7,512,500) | ||||||||
Note payable | 1,530,000 | ||||||||
Debt converted, debt amount | $ 5,250,000 | ||||||||
AVNG Note [Member] | Deepankar Katyal [Member] | Deepankar Katyal [Member] | |||||||||
Debt converted, shares issued | 65,625 | ||||||||
AVNG Note [Member] | Deepankar Katyal [Member] | Warrants [Member] | |||||||||
Warrants issued | 32,812,500 | ||||||||
Warrant exercise price | $ 0.12 | ||||||||
Gene Salkind [Member] | |||||||||
Proceeds from convertible note | $ 2,300,000 | ||||||||
Debt stated interest rate | 15.00% | ||||||||
Debt maturity date | Sep. 30, 2029 | ||||||||
Accounts Receivable [Member] | Four Customers [Member] | |||||||||
Concentration risk percentage | 47.00% | ||||||||
Accounts Receivable [Member] | Five Customers [Member] | |||||||||
Concentration risk percentage | 57.00% | ||||||||
Sales Revenue, Net [Member] | Four Customers [Member] | |||||||||
Concentration risk percentage | 47.00% | ||||||||
Sales Revenue, Net [Member] | Three Customers [Member] | |||||||||
Concentration risk percentage | 78.00% | ||||||||
Advangelists [Member] | |||||||||
Promissory note assumed | $ 7,512,500 | ||||||||
Ownership interest | 51.00% | 48.00% | 100.00% | ||||||
GEAL [Member] | Advangelists [Member] | |||||||||
Note payable | $ 9,500,000 | ||||||||
Ownership interest | 49.00% | 52.00% | |||||||
Advangelists [Member] | |||||||||
Payment for investment | $ 600,000 | ||||||||
GTECH [Member] | Stock Purchase Agreement [Member] | |||||||||
Stock exchanged, shares transferred | 110,000 | ||||||||
MOBQ [Member] | Stock Purchase Agreement [Member] | |||||||||
Stock exchanged, shares received | 15,000,000 | ||||||||
Advangelists [Member] | |||||||||
Warrants issued | 107,753,750 | ||||||||
Warrant exercise price | $ 0.14 | ||||||||
Cash paid for acquisition | $ 500,000 | ||||||||
Advangelists [Member] | Gopher Protocol, Inc. [Member] | |||||||||
Stock issued for acquisition, shares | 9,209,722 | ||||||||
Advangelists [Member] | GEAL [Member] | |||||||||
Cash paid for acquisition | $ 500,000 |
3. Acquisition of Advangelist_3
3. Acquisition of Advangelists, LLC (Details) - Advangelists [Member] - Merger Agreement [Member] - GEAL [Member] | 11 Months Ended |
Dec. 06, 2018USD ($) | |
Promissory note | $ 9,500,000 |
Cash paid for acquisition | 500,000 |
Warrants issued | 3,844,444 |
Gopher common stock issued | 6,155,556 |
Total amount transferred | $ 20,000,000 |
3. Acquisition of Advangelists
3. Acquisition of Advangelists (Details - Consideration paid, identifiable assets acquired, and liabilities assumed) - Advangelists [Member] | Dec. 06, 2018USD ($) |
Recognized identifiable assets acquired and liabilities assumed | |
Cash and cash equivalents | $ 216,799 |
Accounts receivable, net | 2,679,698 |
Property and equipment, net | 20,335 |
Intangible assets (a) | 10,000,000 |
Accounts payable and accrued liabilities | (2,871,673) |
Purchase price expensed | 9,954,841 |
Total amount identifiable assets and liabilities | $ 20,000,000 |
3. Acquisition of Advangelist_4
3. Acquisition of Advangelists (Details - Intangible assets) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible asset, gross | $ 13,003,676 | $ 1,856,358 |
Accumulated amortization | 1,555,186 | 30,939 |
Intangible assets, net | 11,448,490 | 1,825,419 |
Customer Relationships [Member] | ||
Intangible asset, gross | $ 3,003,676 | 1,856,358 |
Useful life | 5 years | |
ATOS Platform [Member] | ||
Intangible asset, gross | $ 10,000,000 | $ 0 |
Useful life | 5 years |
3. Acquistionof Advangelists (D
3. Acquistionof Advangelists (Details - Future amortization) | Dec. 31, 2019USD ($) |
Business Combinations [Abstract] | |
2020 | $ 2,600,736 |
2021 | 2,600,736 |
2022 | 2,600,736 |
2023 | 2,600,736 |
2024 | 1,045,546 |
Thereafter | $ 0 |
3. Acquisition of Advangelist_5
3. Acquisition of Advangelists (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | ||
Dec. 07, 2018 | Dec. 06, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss on sale of stock | $ (3,755,381) | $ (14,732,825) | ||
Advangelists [Member] | ||||
Percentage ownership | 48.00% | |||
Fair value of stock issued | $ 3,844,444 | |||
Fair value of warrants issued | 18,200,000 | |||
Loss on sale of stock | (5,681,633) | |||
Business combination consideration transferred | $ 10,000,000 | |||
Advangelists [Member] | Gopher Protocol, Inc. [Member] | ||||
Stock transferred | 9,209,722 | |||
Warrants issued, shares | 107,753,750 | |||
Advangelists [Member] | Gopher Protocol, Inc. [Member] | Consultants [Member] | ||||
Stock transferred | 1,901,389 | |||
Warrants issued, shares | 22,246,250 |
4. Notes Payable And Derivati_3
4. Notes Payable And Derivative Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total debt | $ 2,866,250 | $ 150,000 |
Current portion of debt | 566,250 | 150,000 |
Long-term portion of debt | 2,300,000 | 0 |
Cavu Notes [Member] | ||
Total debt | 0 | 100,000 |
Berg Notes [Member] | ||
Total debt | 50,000 | 50,000 |
Dr. Salkind, et al [Member] | ||
Total debt | 2,550,000 | 0 |
Business Capital Providers [Member] | ||
Total debt | $ 266,250 | $ 0 |
4. Notes Payable And Derivati_4
4. Notes Payable And Derivative Liabilities (Details- Derivative Instruments ) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Debt Disclosure [Abstract] | |
Beginning balance | $ (666,123) |
New Issuances | 0 |
Discount on new derivatives in excess of note face value | 0 |
Effect of debt extinguishment | 666,123 |
Ending balance | $ 0 |
4. Notes Payable And Derivati_5
4. Notes Payable And Derivative Liabilities (Details Narrative) - USD ($) | 4 Months Ended | 6 Months Ended | 7 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended |
May 10, 2019 | Jun. 26, 2019 | Aug. 01, 2019 | Sep. 13, 2019 | Dec. 09, 2019 | Dec. 31, 2018 | |
Deepankar Katyal [Member] | ||||||
Debt face amount | $ 7,512,500 | |||||
Debt payment frequency | monthly | |||||
Debt periodic payment | $ 250,000 | |||||
Repayment of debt | $ 1,500,000 | |||||
Business Capital Providers [Member] | ||||||
Proceeds from loan payable | $ 250,000 | $ 250,000 | ||||
Debt face amount | $ 250,000 | |||||
Debt payment frequency | daily | daily | ||||
Debt periodic payment | $ 2,557 | $ 2,557 | ||||
Two Non-affilated persons [Member] | ||||||
Proceeds from loan payable | $ 250,000 | |||||
Stock issued for origination fee, shares | 3,500,000 | |||||
Gene Salkind [Member] | ||||||
Proceeds from related party | $ 2,300,000 | $ 1,000,000 | ||||
Debt stated interest rate | 15.00% | |||||
Debt maturity date | Sep. 30, 2029 | |||||
Gene Salkind [Member] | Gene Salkind [Member] | ||||||
Stock issued for origination fee, shares | 1,000,000 | |||||
Thomas Arnost [Member] | ||||||
Proceeds from related party | $ 125,000 |
5. Income Taxes (Details-Provis
5. Income Taxes (Details-Provision) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Total Current | 0 | 0 |
Deferred: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total Deferred | $ 0 | $ 0 |
5. Income Taxes (Details-Deferr
5. Income Taxes (Details-Deferred Taxes) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets: | ||
Net operating loss carry-forwards | $ (42,155,000) | $ (31,073,000) |
Stock based compensation - options/awards | 4,257,000 | 2,541,000 |
Stock issued for services | 971,000 | 971,000 |
Gain on derivative instrument | 781,000 | 781,000 |
Disallowed entertainment expense | 50,000 | 43,000 |
Charitable contribution limitation | 7,000 | 7,000 |
Preferred stock | 25,000 | 25,000 |
Bad debt expense and reserves | 33,000 | 33,000 |
Penalties | 3,000 | 1,000 |
Loss on extinguishment of debt | 1,133,000 | 1,133,000 |
Beneficial Conversion Feature | 77,000 | 77,000 |
Mobiquity-Spain - net loss | 540,000 | 540,000 |
Impairment of long lived assets | 58,000 | 58,000 |
Stock issued for interest | 245,000 | 245,000 |
Nondeductible insurance | 13,000 | 10,000 |
Stock incentives | 15,000 | 15,000 |
Derivative expense | 480,000 | 480,000 |
Professional Fees | 774,000 | 2,835,000 |
Gain / Loss on stock for investment | 4,456,000 | 3,831,000 |
Gain / Loss on company stock | 2,757,000 | 2,757,000 |
Gain / Loss on sale of warrants | 6,931,000 | 1,190,000 |
Unrealized loss on securities | 1,943,000 | 1,871,000 |
Acquisition expense | 3,904,000 | 3,132,000 |
Amortization of debt discount | 2,058,000 | 2,058,000 |
Deferred Tax Assets | (10,644,000) | (6,439,000) |
Less Valuation Allowance | 10,644,000 | 6,439,000 |
Net Deferred Tax Asset | $ 0 | $ 0 |
5. Income Taxes (Details-Federa
5. Income Taxes (Details-Federal Statutory Rate) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory Tax Rate | 21.00% | 21.00% |
State Taxes, net of Federal benefit | 5.00% | 5.00% |
Change in Valuation Allowance | (26.00%) | (26.00%) |
Total Tax Expense | 0.00% | 0.00% |
5. Income Taxes (Details Narrat
5. Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 162,134,640 | $ 119,387,265 |
6. Stockholders' Equity (Defi_2
6. Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
Proceeds from sale of equity | $ 2,483,600 | $ 9,051,192 | |
Series AAA Preferred Stock Conversion [Member] | Warrants [Member] | |||
Class of Stock [Line Items] | |||
Stock converted, warrants issued | 104,417,500 | ||
Subscription Agreements [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from sale of equity | $ 960,000 | ||
Stock issued new shares | 16,000,001 | ||
Warrants issued, shares | 8,000,000 | ||
Sale of Equity [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from sale of equity | $ 3,434,500 | ||
Stock issued new shares | 49,215,137 | ||
Warrants issued, shares | 24,369,834 | ||
Warrant Exchange [Member] | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Warrants converted | 30,000,000 | ||
Warrants converted, shares issued | 10,000,000 | ||
Value of warrant exchange | $ 3,600,000 | ||
Common Stock | |||
Class of Stock [Line Items] | |||
Stock issued for original issue discount, shares | 11,500,000 | ||
Stock issued for original issue discount, value | $ 406,375 | ||
Stock issued for services, shares | 6,835,090 | ||
Common Stock | Series AAA Preferred Stock Conversion [Member] | |||
Class of Stock [Line Items] | |||
Stock converted, common shares issued | 104,417,500 | ||
Common Stock | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Stock converted, common shares issued | 20,000,000 | ||
AAAA Preferred Stock | |||
Class of Stock [Line Items] | |||
Stock converted, common shares issued | 80,000,000 | ||
AAAA Preferred Stock | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Stock converted, shares converted | 200 | ||
AAAA Preferred Stock | MOBQ Agreement [Member] | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Stock issued for agreement, shares | 1,000 | ||
Gopher Common Stock [Member] | Consultants [Member] | |||
Class of Stock [Line Items] | |||
Stock issued new shares | 1,901,389 | ||
Gopher Common Stock [Member] | MOBQ Agreement [Member] | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Stock received for agreement, shares | 10,000,000 | ||
Stock issued for transaction fee, shares | 10,000,000 | ||
Warrants [Member] | |||
Class of Stock [Line Items] | |||
Warrants exercised | 11,755,200 | ||
Warrants [Member] | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from warrant exercised | $ 146,940 | ||
Notes receivable from warrants exercised | $ 440,820 | ||
Warrants [Member] | Gopher Protocol, Inc. [Member] | |||
Class of Stock [Line Items] | |||
Stock converted, warrants issued | 30,000,000 | ||
Warrants [Member] | Consultants [Member] | |||
Class of Stock [Line Items] | |||
Warrants issued, shares | 22,246,250 | ||
Series E Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from warrant conversions | $ 1,132,210 | ||
Debt converted, shares issued | 65,625 | ||
Debt converted, amount converted | $ 5,250,000 |
7. Options and Warrants (Detail
7. Options and Warrants (Details-Stock compensation expense) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total stock-based compensation expense | $ 29,812,197 | $ 2,681,863 |
Employees [Member] | Options [Member] | ||
Total stock-based compensation expense | 6,599,000 | 273,945 |
Employees [Member] | Stock Grants [Member] | ||
Total stock-based compensation expense | 0 | 0 |
Non-Employees [Member] | Options [Member] | ||
Total stock-based compensation expense | 0 | 53,460 |
Non-Employees [Member] | Stock Grants [Member] | ||
Total stock-based compensation expense | 0 | 0 |
Non-Employees [Member] | Warrants [Member] | ||
Total stock-based compensation expense | $ 23,213,197 | $ 2,354,458 |
8. Stock Option Plans (Details
8. Stock Option Plans (Details - Assumptions) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Options [Member] | ||
Expected volatility | 242.39% | 181.80% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.32% | 2.83% |
Expected term (in years) | 6 years | 5 years |
Warrants [Member] | ||
Expected volatility | 164.85% | 173.58% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 7.48% | 2.88% |
Expected term (in years) | 3 years 2 months 12 days | 5 years 5 months 1 day |
8. Stock Option Plans (Details-
8. Stock Option Plans (Details- Option Activity) - Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Shares outstanding - beginning | 42,000,000 | 17,515,001 |
Shares granted | 70,700,000 | 36,250,000 |
Shares exercised | 0 | 0 |
Shares cancelled and expired | (300,000) | (11,765,001) |
Shares outstanding - ending | 112,400,000 | 42,000,000 |
Shares exercisable | 95,375,000 | 42,000,000 |
Weighted Average Exercise Price | ||
Weighted average exercise price - beginning | $ 0.10 | $ 0.39 |
Weighted average exercise price - shares granted | 0.13 | 0.06 |
Weighted average exercise price - shares Exercised | 0 | 0 |
Weighted average exercise price - shares Cancelled | 0 | 0 |
Weighted average exercise price - ending | 0.12 | 0.10 |
Weighted average exercise price - exercisable | $ 0.12 | $ 0.10 |
Weighted Average Remaining Contractural Term | ||
Weighted average contractural term - beginning | 4 years 4 months 17 days | 4 years 5 months 5 days |
Weighted average contractural term - granted | 7 years 10 months 17 days | 4 years 4 months 20 days |
Weighted average contractural term - ending | 6 years 1 month 24 days | 4 years 4 months 17 days |
Weighted average contractural term - exercisable | 5 years 11 months 12 days | 4 years 4 months 17 days |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value - beginning | $ 2,981,875 | $ 0 |
Aggregate intrinsic value - granted | 0 | 2,887,500 |
Aggregate intrinsic value - ending | 769,500 | 2,981,875 |
Aggregate intrinsic value - exercisable | $ 0 | $ 2,981,875 |
8. Stock Options Plans (Details
8. Stock Options Plans (Details-Warrants Outstanding) - Warrants [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of warrants | ||
Warrants outstanding - beginning | 175,526,201 | 11,814,167 |
Warrants granted | 246,244,634 | 164,752,034 |
Warrants exercised | (178,857,666) | 0 |
Warrants cancelled and expired | (7,540,836) | (1,040,000) |
Warrants outstanding - ending | 235,372,333 | 175,526,201 |
Warrants exercisable | 235,372,333 | 175,526,201 |
Weighted Average Exercise Price of Warrants | ||
Weighted average exercise price - beginning | $ 0.14 | $ 0.2 |
Weighted average exercise price - shares granted | 0.02 | 0.13 |
Weighted average exercise price - shares Exercised | 0 | 0 |
Weighted average exercise price - shares Cancelled | 0 | 0 |
Weighted average exercise price - ending | 0.11 | 0.14 |
Weighted average exercise price - exercisable | $ 0.11 | $ 0.14 |
Weighted Average Remaining Contractural Term of Warrants | ||
Weighted average contractural term - beginning | 8 years 4 months 13 days | 2 years 6 months 29 days |
Weighted average contractural term - granted | 4 months 17 days | 8 years 9 months 18 days |
Weighted average contractural term - ending | 5 years 9 months 22 days | 8 years 4 months 13 days |
Weighted average contractural term - exercisable | 5 years 9 months 22 days | 8 years 4 months 13 days |
Aggregate Intrinsic Value of Warrants | ||
Aggregate intrinsic value - beginning | $ 1,504,784 | $ 0 |
Aggregate intrinsic value - granted | $ 2,318,002 | $ 904,784 |
Aggregate intrinsic value - ending | $ 2,500,502 | $ 1,504,784 |
Aggregate intrinsic value - exercisable | $ 2,500,502 | $ 1,504,784 |
8. Stock Option Plans (Detail_2
8. Stock Option Plans (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unamortized compensation cost related to stock option awards | $ 2,272,000 | ||
Options [Member] | |||
Weighted average grant date fair value of options | $ 0.13 | $ 0.11 | |
Options outstanding | 112,400,000 | 42,000,000 | 17,515,001 |
Options Outside the Plan [Member] | |||
Options outstanding | 1,825,000 | 2,075,000 | |
Plans [Member] | |||
Shares authorized under plan | 30,000,000 |