Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MOBILESMITH, INC. | |
Entity Central Index Key | 0001113513 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 28,389,493 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-32634 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 95-4439334 | |
Entity Address Address Line 1 | 5400 Trinity Road | |
Entity Address Address Line 2 | Suite 208 | |
Entity Address City Or Town | Raleigh | |
Entity Address State Or Province | NC | |
Entity Address Postal Zip Code | 27607 | |
City Area Code | 855 | |
Local Phone Number | 516-2413 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and Cash Equivalents | $ 782,642 | $ 161,744 |
Restricted Cash and Cash Equivalents | 200,482 | 189,179 |
Accounts Receivable, Net of Allowance for Doubtful Accounts of $0 and $30,000 respectively | 111,391 | 113,906 |
Prepaid Expenses and Other Current Assets | 39,692 | 43,286 |
Total Current Assets | 1,134,207 | 508,115 |
Operating Lease Right-of-Use Asset | 385,674 | 512,124 |
Total Assets | 1,519,881 | 1,020,239 |
Current Liabilities | ||
Accounts Payable | 58,301 | 155,850 |
Interest Payable | 16,040 | 271,868 |
Other Liabilities And Accrued Expenses | 237,105 | 237,750 |
Operating Lease Liability Current | 149,525 | 161,936 |
Contract With Customer Liability | 640,621 | 649,789 |
First PPP Loan, Current | 0 | 423,067 |
Bank Loans | 5,000,000 | 0 |
Total Current Liabilities | 6,101,592 | 1,900,260 |
First PPP Loan, Long-Term | 0 | 119,033 |
Operating Lease Liability | 324,236 | 432,058 |
Convertible Notes Payable, Net of Discount | 0 | 972,108 |
Banks Loan | 0 | 5,000,000 |
Total Liabilities | 6,425,828 | 8,423,459 |
Commitments and Contingencies (Note 3) | 0 | 0 |
Stockholders' Deficit | ||
Preferred Stock, $0.001 Par Value, 5,000,000 Shares Authorized, Including 1,750,000 Authorized and Designated for Series A Convertible Preferred Shares: 1,379,966 Issued and Outstanding as of September 30, 2021 and 1,166,297 Issued and Outstanding as of December 31, 2020. | 126,162,277 | 103,649,344 |
Common Stock, $0.001 Par Value, 100,000,000 Shares Authorized at September 30, 2021 and December 31, 2020; 28,389,493 Shares Issued and Outstanding at September 30, 2021 and 28,389,493 Shares Issued and Outstanding at December 31, 2020. | 28,390 | 28,390 |
Additional Paid-in Capital - Common Shares | 122,351,798 | 130,103,361 |
Accumulated Deficit | (253,448,412) | (241,184,315) |
Total Stockholders' Deficit | (4,905,947) | (7,403,220) |
Total Liabilities and Stockholders' Deficit | $ 1,519,881 | $ 1,020,239 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for Doubtful Accounts | $ 0 | $ 30,000 |
Stockholders' Deficit | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Issued | 1,379,966 | 1,166,297 |
Designated for series A convertible preferred shares | 1,750,000 | 1,750,000 |
Preferred Stock, Outstanding | 1,379,966 | 1,166,297 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Authorized | 100,000,000 | 100,000,000 |
Common Stock, Issued | 28,389,493 | 28,389,493 |
Common Stock, Outstanding | 28,389,493 | 28,389,493 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES: | ||||
Subscriptions and Support | $ 387,051 | $ 464,809 | $ 1,203,394 | $ 1,475,575 |
Services and Others | 0 | 46,602 | 0 | 268,180 |
Total Revenue | 387,051 | 511,411 | 1,203,394 | 1,743,755 |
COST OF REVENUE: | ||||
Subscription and Support | 189,948 | 196,031 | 595,195 | 542,653 |
Services and Other | 0 | 3,000 | 9,000 | 96,162 |
Total Cost of Revenues | 189,948 | 199,031 | 604,195 | 638,815 |
GROSS PROFIT | 197,103 | 312,380 | 599,199 | 1,104,940 |
OPERATING EXPENSES: | ||||
Selling and Marketing | 571,122 | 249,565 | 1,575,563 | 917,931 |
Research and Development | 964,557 | 719,043 | 2,698,794 | 2,097,276 |
General and Administrative | 716,902 | 835,775 | 2,328,275 | 2,485,093 |
Total Operating Expenses | 2,252,581 | 1,804,383 | 6,602,632 | 5,500,300 |
LOSS FROM OPERATIONS | (2,055,478) | (1,492,003) | (6,003,433) | (4,395,360) |
OTHER INCOME (EXPENSE): | ||||
Other Income | 17 | 5,387 | 616 | 17,073 |
Interest Expense, Net | (49,195) | (1,118,422) | (240,333) | (4,728,698) |
Gain on Debt Extinguishment - PPP Loan Forgiveness | 542,000 | 0 | 1,084,100 | 0 |
Losses on Debt Extinguishments | (607,285) | 0 | (7,114,422) | (4,864,750) |
Other gains (losses) | 9,375 | 0 | 9,375 | 0 |
Total Other Expense | 105,088 | (1,113,035) | (6,260,664) | (9,576,375) |
NET LOSS | (2,160,566) | (2,605,038) | (12,264,097) | (13,971,735) |
Plus: Dividend on Series A Convertible Preferred Stock | (10,315,099) | 0 | (10,315,099) | 0 |
Plus: Deemed Dividend on Series A Convertible Preferred Stock | (2,762,014) | 0 | (9,031,415) | 0 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (15,237,679) | $ (2,605,038) | $ (31,610,611) | $ (13,971,735) |
NET LOSS PER COMMON SHARE: | ||||
Basic and Fully Diluted from Continuing Operations | $ (0.54) | $ (0.09) | $ (1.11) | $ (0.49) |
WEIGHTED-AVERAGE NUMBER OF SHARES USED IN COMPUTING NET LOSS PER COMMON SHARE: Basic And Fully Diluted | 28,389,493 | 28,389,493 | 28,389,493 | 28,389,493 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (12,264,097) | $ (13,971,735) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Depreciation and Amortization | 0 | 15,730 |
Amortization of Debt Discount | 78,120 | 2,417,888 |
Amortization of Debt Premium | 0 | (775,615) |
Share Based Compensation | 2,563,536 | 2,290,363 |
Gain of Debt Extinguishment (PPP Loan Forgiveness) | (1,084,100) | 0 |
Losses on Debt Extinguishments | 7,114,421 | 4,864,750 |
Changes in Assets and Liabilities: | ||
Accounts Receivable | 2,515 | (65,041) |
Prepaid Expenses and Other Assets | 3,594 | 29,130 |
Accounts Payable | (97,549) | (162,714) |
Contract Liability | (9,168) | (228,404) |
Operating Lease Right-of-use Asset | 126,450 | 120,772 |
Operating Lease Liability | (120,233) | (111,018) |
Accrued and Other Expenses | 15,012 | (743,427) |
Net Cash Used in Operating Activities | (3,671,499) | (6,319,321) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds From Issuance of Subordinated Promissory Notes, Related Party | 0 | 1,610,000 |
Proceeds From Issuance of Convertible Notes Payable, Related Party | 0 | 1,400,000 |
Proceeds From Issuance of Convertible Notes Payable | 0 | 2,900,000 |
Repayments of Financing Lease Obligations | 0 | (6,378) |
Proceeds From First PPP Loan | 0 | 542,100 |
Proceeds From Second PPP Loan | 542,000 | 0 |
Proceeds From Issuance of Shares of Series A Preferred Stock | 3,761,700 | 0 |
Net Cash Provided by Financing Activities | 4,303,700 | 6,445,722 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 632,201 | 126,401 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 350,923 | 314,967 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 983,124 | 441,368 |
Composition of Cash, Cash Equivalents and Restricted Cash Balance: | ||
Cash and Cash Equivalents | 782,642 | 253,452 |
Restricted Cash | 200,482 | 187,916 |
Total Cash, Cash Equivalents and Restricted Cash | 983,124 | 441,368 |
Supplemental Disclosures of Cash Flow Information: | ||
Operating Lease Payments | 154,053 | 127,601 |
Cash Paid During the Period for Interest | 146,514 | 3,825,607 |
Non-Cash Investing and Financing Activities: | ||
Recorded Debt Discount Associated with Beneficial Conversion Feature | 0 | 8,235,278 |
Recorded Discount Associated with Beneficial Conversion Feature on Issuance of Series A Convertible Preferred Shares | 9,031,415 | 0 |
Issued Series A Preferred Shares Fair Valued At $7,660,970 in Exchange for Carrying Value of Debt (Including Accrued Interest, Premiums And Discounts) of $1,153,833 | 6,507,137 | 0 |
Issued 55,057 Shares of Series A Preferred Shares Fair Valued at $4,815,280 as dividend paid in kind | 10,315,099 | 0 |
Issued 3,912Shares of Series A Preferred Shares Fair Valued at $361,866 to Settle Accrued And Unpaid Interest | 775,164 | 0 |
Conversion of Notes Payable into Common Shares | $ 0 | $ 156,980 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Total | Additional Paid-In Capital, Series A Convertible Preferred Stock [Member] | Common Stock | Additional Paid-In Capital, Common Stock [Member] | Retained Earnings (Accumulated Deficit) | Convertible Preferred Stock [Member] |
Balance, shares at Jan. 01, 2020 | 28,271,598 | |||||
Balance, amount at Jan. 01, 2020 | $ (51,314,325) | $ 28,272 | $ 0 | $ 118,431,878 | $ (169,774,475) | $ 0 |
Equity-Based Compensation | 721,681 | 721,681 | 0 | |||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Convertible Debt | 2,000,000 | 2,000,000 | ||||
Conversion of Notes Payable to Common Stock, shares | 48,951 | |||||
Conversion of Notes Payable to Common Stock, amount | 65,240 | $ 49 | 65,191 | |||
Net Loss | (3,299,000) | 0 | (3,299,000) | |||
Balance, shares at Mar. 31, 2020 | 28,320,549 | |||||
Balance, amount at Mar. 31, 2020 | (51,826,404) | $ 28,321 | 0 | 121,218,750 | (173,073,475) | 0 |
Equity-Based Compensation | 780,776 | 780,776 | ||||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Convertible Debt | 6,035,278 | 6,035,278 | ||||
Conversion of Notes Payable to Common Stock, shares | 68,944 | |||||
Conversion of Notes Payable to Common Stock, amount | 91,740 | $ 69 | 91,671 | |||
Net Loss | (8,067,697) | (8,067,697) | ||||
Balance, shares at Jun. 30, 2020 | 28,389,493 | |||||
Balance, amount at Jun. 30, 2020 | (52,986,307) | $ 28,390 | 0 | 128,126,475 | (181,141,172) | 0 |
Equity-Based Compensation | 787,906 | 787,906 | ||||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Convertible Debt | 200,000 | 200,000 | ||||
Net Loss | (2,605,038) | (2,605,038) | ||||
Balance, shares at Sep. 30, 2020 | 28,389,493 | |||||
Balance, amount at Sep. 30, 2020 | (54,603,439) | $ 28,390 | 0 | 129,114,381 | (183,746,210) | $ 0 |
Balance, amount at Dec. 31, 2020 | (7,403,220) | |||||
Net Loss | (12,264,097) | |||||
Balance, shares at Sep. 30, 2021 | 28,389,493 | 1,379,966 | ||||
Balance, amount at Sep. 30, 2021 | (4,905,947) | $ 28,390 | 126,162,277 | 122,351,798 | (253,488,412) | $ 1,379 |
Balance, shares at Jan. 01, 2021 | 28,389,493 | 1,166,297 | ||||
Balance, amount at Jan. 01, 2021 | (7,403,220) | $ 28,390 | 103,648,178 | 130,103,361 | (241,184,315) | $ 1,166 |
Equity-Based Compensation | 886,935 | 886,935 | ||||
Net Loss | (8,213,663) | (8,213,663) | ||||
Exchange of Debt for Series A Convertible Preferred Shares on January 28, 2021, shares | 70,014 | |||||
Exchange of Debt for Series A Convertible Preferred Shares on January 28, 2021, amount | 7,660,970 | 7,660,900 | $ 70 | |||
Issuance of Series A Convertible Preferred for Cash, shares | 41,066 | |||||
Issuance of Series A Convertible Preferred for Cash, amount | 1,761,700 | 1,761,659 | $ 41 | |||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Series A Convertible Preferred Shares | 5,269,401 | 5,269,401 | ||||
Deemed Dividend to the Holders of Series A Preferred Shares Resulting From Amortization of Discount Associated with the Beneficial Conversion Feature | (5,269,401) | (5,269,401) | ||||
Balance, shares at Mar. 31, 2021 | 28,389,493 | 1,277,377 | ||||
Balance, amount at Mar. 31, 2021 | (5,307,278) | $ 28,390 | 113,070,737 | 130,990,296 | (249,397,978) | $ 1,277 |
Equity-Based Compensation | 806,673 | 806,673 | ||||
Net Loss | (1,889,868) | (1,889,868) | ||||
Issuance of Series A Convertible Preferred for Cash, shares | 23,310 | |||||
Issuance of Series A Convertible Preferred for Cash, amount | 1,000,000 | 999,977 | $ 23 | |||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Series A Convertible Preferred Shares | 1,000,000 | 1,000,000 | ||||
Deemed Dividend to the Holders of Series A Preferred Shares Resulting From Amortization of Discount Associated with the Beneficial Conversion Feature | (1,000,000) | (1,000,000) | ||||
Balance, shares at Jun. 30, 2021 | 28,389,493 | 1,300,687 | ||||
Balance, amount at Jun. 30, 2021 | (5,390,473) | $ 28,390 | 114,070,714 | 131,796,969 | (251,287,846) | $ 1,300 |
Equity-Based Compensation | 869,928 | 869,928 | ||||
Net Loss | (2,160,566) | (2,160,566) | ||||
Beneficial Conversion Feature Recorded as a Result Of Issuance Of Series A Convertible Preferred Shares | 2,762,014 | 2,762,014 | ||||
Deemed Dividend to the Holders of Series A Preferred Shares Resulting From Amortization of Discount Associated with the Beneficial Conversion Feature | (2,762,014) | (2,762,014) | ||||
Issuance of Series A Convertible Preferred Shares for Cash, shares | 23,310 | |||||
Issuance of Series A Convertible Preferred Shares for Cash, amount | 1,000,000 | 999,977 | $ 23 | |||
Issuance of Series A Convertible Preferred Shares to Settle Accrued and Unpaid Interest, shares | 3,912 | |||||
Issuance of Series A Convertible Preferred Shares to Settle Accrued and Unpaid Interest, amount | 775,164 | 775,160 | $ 4 | |||
Issuance of Dividend on Series A Convertible Preferred Shares, shares | 52,057 | |||||
Issuance of Dividend on Series A Convertible Preferred Shares, amount | 0 | 10,315,047 | (10,315,099) | $ 52 | ||
Balance, shares at Sep. 30, 2021 | 28,389,493 | 1,379,966 | ||||
Balance, amount at Sep. 30, 2021 | $ (4,905,947) | $ 28,390 | $ 126,162,277 | $ 122,351,798 | $ (253,488,412) | $ 1,379 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
Note 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION MobileSmith, Inc. (referred to herein as the “Company,” “us,” “we,” or “our”) was incorporated as Smart Online, Inc. in the State of Delaware in 1993. The Company changed its name to MobileSmith, Inc. effective July 1, 2013. The same year the Company focused exclusively on development of do-it-yourself customer facing platform that enabled organizations to rapidly create, deploy, and manage custom, native smartphone and tablet apps deliverable across iOS and Android mobile platforms without writing a single line of code. During 2017 the Company concluded that it had its highest rate of success with clients within the Healthcare industry and concentrated its development and sales and marketing efforts in that industry. During 2018 we further refined our Healthcare offering and redefined our product - a suite of e-health mobile solutions that consist of a catalog of ready to deploy mobile app solutions (App Blueprints) and support services. In 2019 and 2020, we consolidated our current solutions under a single offering branded Peri™. Peri™ is a cloud-based collection of applications that run of our architected healthcare technology ecosystem. The architecture is designed to do the following: ● improve experience of healthcare patients and consumers, who are often at the same time members of various medical insurance networks ● optimize delivery of healthcare and relationship between members and insurance networks ● increase adoption, utilization and intelligence of EMRs (electronic medical records), extend EMR’s usability to patients and consumers of healthcare Peri™ is designed to bridge the gap between healthcare industry system tools and healthcare consumer’s mobile device. Our flagship PeriOp offering is an EMR integrated mobile app based set of pre- and postoperative instructions (which we refer to as Clinical Pathways), that establishes a direct two-way clinical procedure management process between a patient and a healthcare provider and by doing so improves patient engagement and procedural adherence. The Company prepared the accompanying unaudited condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its audited annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its financial position, results of operations, cash flows, and stockholders’ deficit as of September 30, 2021. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These condensed financial statements and accompanying notes should be read in conjunction with the audited annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 on file with the SEC (the “Annual Report”). Except as otherwise noted, there have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the Annual Report. The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the nine months ended September 30, 2021, the Company incurred net losses as well as negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern depends upon its ability to generate sufficient cash flows to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations and positive cash flows. Since November 2007, the Company has been funding its operations, in part, from the proceeds from the issuance of notes under a convertible secured subordinated note purchase agreement facility which was established in 2007 (the "2007 NPA"), and an unsecured convertible subordinated note purchase agreement facility established in 2014 (the "2014 NPA"), and subordinated promissory notes to related parties. In December of 2020 and January of 2021, we exchanged all our non-bank debt, including the debt issued under the 2007 NPA and the 2014 NPA, into Series A Convertible Preferred Stock (the "Series A Preferred Stock") with the same investors. We expect to finance our operations through the issuance of Series A Preferred Stock going forward. If financing through issuance of Series A Preferred Stock becomes unavailable, we will need to seek other sources of funding, although there is no guarantee that we would be able to secure such funding or that the terms of the funding would be acceptable to us. As such, there is substantial doubt about the Company's ability to continue as a going concern. Recently Issued Accounting Pronouncements and Their Impact on Significant Accounting Policies The Company’s significant accounting policies are detailed in “Note 2: Significant Accounting Policies” of the Company’s Annual Report. On August 5, 2020, the FASB issued ASU 2020-06 “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is not expected to have a material impact on the financial statements of the Company. For the Company the ASU is not effective until fiscal year 2024, but early adoption is permitted as early as current fiscal year ending December 31, 2021. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
DEBT | |
Note 2. DEBT | 2. DEBT The table below summarizes the Company’s debt outstanding on September 30, 2021 and December 31, 2020: Debt Description September 30, December 31, 2021 2020 Maturity Rate Comerica Bank Loan and Security Agreement $ 5,000,000 $ 5,000,000 June 2022 3.85 % First PPP Loan - 542,100 April 2022 1.00 % Convertible notes, net of discount of $1,927,892 - 972,108 November 2022 8.00 % Total debt 5,000,000 6,514,208 Less: current portion of long term debt 5,000,000 423,067 Debt - long term $ - $ 6,091,141 Bank Loan The Company has an outstanding Loan and Security Agreement with Comerica Bank (“Comerica”) dated June 9, 2014 (the “LSA”) in the amount of $5,000,000, with an extended maturity of June 9, 2022. The LSA is secured by an extended irrevocable letter of credit issued by UBS AG (Geneva, Switzerland) (“UBS AG”) with a renewed term expiring on May 31, 2022, which term is renewable for one year periods, unless notice of non-renewal is given by UBS AG at least 45 days prior to the then current expiration date. The LSA with Comerica has the following additional terms: ● a variable interest rate at prime plus 0.6% payable quarterly; ● secured by substantially all of the assets of the Company, including the Company’s intellectual property; ● acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, including but not limited to, failure by the Company to perform its obligations, observe the covenants made by it under the LSA, failure to renew the UBS AG SBLC, and insolvency of the Company. Convertible Notes and January 2021 Debt Exchange On January 28, 2021 the Company exchanged its remaining unsecured Convertible Subordinated Notes (the “2014 NPA Notes”) under its existing unsecured Convertible Subordinated Note Purchase Agreement dated December 10, 2014 (the “2014 NPA”) for our Series A Preferred Stock. The carrying value of 2014 NPA Notes of $1,075,713 consisting of face value of $2,900,000 net of unamortized discount of $1,849,773 plus accrued interest of $103,605 was exchanged for 70,014 shares of Series A Preferred Stock (the “January 2021 Debt Exchange”). The January 2021 Debt Exchange was accounted for as debt extinguishment and the newly issued shares of Series A Preferred Stock were recorded at fair value in accordance with ASC 470 “Debt”. The issued shares were fair valued at $7,660,970. The difference between the carrying amount of extinguished debt and fair value of the Series A Preferred Stock issued resulted in loss recorded on the statement of operations of $6,507,137. Forgiveness of Second PPP Loan On August 4, 2021 our second PPP Loan was forgiven by the SBA in its entirety. The forgiveness was accounted for as debt extinguishment which resulted in a gain of $542,000 recorded in our statement of operations. Forgiveness of First PPP Loan On February 18, 2021 our first PPP Loan was forgiven by the SBA in its entirety. The forgiveness was accounted for as debt extinguishment which resulted in a gain of $542,100 recorded in our statement of operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Note 3. COMMITMENTS AND CONTINGENCIES | 3. COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company may be subject to routine litigation, claims or disputes in the ordinary course of business. The Company defends itself vigorously in all such matters. In the opinion of management, no pending or known threatened claims, actions or proceedings against the Company are expected to have a material adverse effect on its financial position, results of operations or cash flows. However, the Company cannot predict with certainty the outcome or effect of any such litigation or investigatory matters or any other pending litigations or claims. There can be no assurance as to the ultimate outcome of any such lawsuits and investigations. The Company will record a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. The Company periodically evaluates developments in its legal matters that could affect the amount of liability that it has previously accrued, if any, and makes adjustments as appropriate. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company’s judgment may be incorrect. The outcome of any proceeding is not determinable in advance. Until the final resolution of any such matters that the Company may be required to accrue for, there may be an exposure to loss in excess of the amount accrued, and such amounts could be material. |
STOCKHOLDERS DEFICIT
STOCKHOLDERS DEFICIT | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS DEFICIT | |
Note 4. STOCKHOLDERS DEFICIT | 4. STOCKHOLDERS DEFICIT Preferred Stock On January 28, 2021 and as a result of the January 2021 Debt Exchange transaction the Company issued 70,014 shares of Series A Preferred Stock. On the date of the January 2021 Debt Exchange the market value of the common stock was above the Series A Preferred Stock conversion price of $1.43, which resulted in the conversion feature that was beneficial to the holder on the date of the exchange. The resulting beneficial conversion feature was recorded as a discount and amortized in its entirety as a deemed dividend on the date of the January 2021 Debt Exchange and charged to loss attributable to common shareholders on the Company’s Statement of Operations in the amount of $3,507,701. On August 31, 2021 the Company issued a total of 55,969 shares of Series A Preferred Stock as payment in kind for dividends declared by the board of directors and to settle accrued and unpaid interest in the amount of $167,000. Of the 55,969 shares issued, 3,912 shares were issued to settle the interest and 52,057 shares were issued as paid in kind dividends. The issuance of the Series A Preferred Stock was recorded at fair value determined on August 31, 2021: ● The value of the 52,057 shares of Series A Convertible Preferred Stock dividend was recorded at $10,315,099. In absence of retained earnings, the dividend resulted in a charge to additional paid in capital for Common Stock. In addition, on August 31, 2021 the market value of the common stock was above the Series A Preferred Stock conversion price of 1.43, which resulted in the conversion feature that was beneficial to the holder. The resulting beneficial conversion feature was recorded as a discount and amortized in its entirety as a deemed dividend and charged to loss attributable to common shareholders on the Company’s Statement of Operations in the amount of $2,451,888. ● In a similar manner, the value of the shares of Series A Preferred Stock issued to settle the interest was determined at $775,164. The transaction has also resulted in a conversion feature beneficial to the holder, which resulted in a deemed dividend charge of $184,616. In addition, during the nine month period ended September 30, 2021 the Company issued 87,686 shares of Series A Preferred Stock in exchange for $3,761,700 in cash funding. The shares were issued with beneficial conversions feature discount and resulted in a deemed dividend with charge to loss attributable to common shareholders of $2,887,573. Our Series A Preferred Stock has the following standard terms: ● Each share of Series A Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $42.90 (the “Stated Value “); ● Each share of the Series A Preferred Stock then outstanding shall be entitled to receive an annual dividend equal to $3.43, subject to proration related to the timing of issuance. Such dividend is designed to have an effective yield of 8% on the Stated Value; ● Each dividend shall be paid either in shares of Series A Preferred Stock or in cash, at the option of the Company, on the respective dividend date; ● The holders of Series A Preferred Stock shall have no voting rights with respect to any matters to be voted on by the stockholders of the Company; ● The holders of Series A Preferred Stock shall have certain Board observation and inspection rights administered through a designated agent; ● Each share of Series A Preferred Stock shall be convertible, at any time and from time to time, at the option of the Holder into 30 shares of Common Stock, which results in conversion ratio of $1.43 of the Stated Value of Series A Preferred Stock into one share of common stock; ● The shares are subject to automatic conversion immediately prior to the occurrence of a Fundamental Transaction, as defined in the Series A Preferred Stock Certificate of Designation. A Fundamental Transaction includes, but is not limited to, a sale, merger or similar change in ownership. Equity Compensation Plan The following is a summary of the stock option activity for the nine months ended September 30, 2021: Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($) Outstanding, December 31, 2020 10,683,300 $ 1.85 7.58 $ 17,060,533 Cancelled (1,433,706 ) 1.71 Issued 2,539,000 2.71 Outstanding, September 30, 2021 11,788,594 2.05 7.9 17,073,455 Vested and exercisable, September 30, 2021 5,683,496 $ 1.87 7.2 $ 9,266,678 Aggregate intrinsic value represents the difference between the closing price of the Company’s common stock on September 30, 2021, and the exercise price of outstanding, in-the-money stock options. The closing price of the common stock on September 30, 2021, as reported on the OTCQB, was $3.50 per share. On September 30, 2021, an amount of $11,686,998 unvested expense related to outstanding stock options has yet to be recorded over a weighted average period of 3.3 years. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS | |
Note 5. FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS We are required to provide financial statement users with information about assets and liabilities measured at fair value in the balance sheet or disclosed in the notes to the financial statements regarding (1) the valuation techniques and inputs used to develop fair value measurements, including the related judgments and assumptions made, (2) the uncertainty in the fair value measurements as of the reporting date, and (3) how changes in the measurements impact the performance and cash flows of the entity. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by the accounting literature contains three levels as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimations. The January 2021 Debt Exchange resulted in transaction which required the Company to recognize debt extinguishment and to record newly issued financing instrument at fair value at the date of the transaction on a non-recurring basis. Fair value measurement was categorized as Level 3 fair value measurement due to use of various unobservable inputs to the pricing model. A single most significant factor included in pricing models was the Level 1 input of observable market value of MobileSmith common stock on the date of the transaction, as quoted on the OTCQB. Despite the thinly traded nature of the Company stock, the quoted market value could not be ignored in determination of fair value in the transaction. The Company used the income (discounted cash flow) approach to arrive at the fair value of the Series A Stock on January 28, 2021 - the date of the exchange. Using this approach the value of Series A Preferred Stock is equal to the present value of the cash flow streams that can be expected to be generated by the holder in a combination of dividends and conversion of preferred shares into common and subsequent sale of the common shares. The Company used the Monte Carlo model to simulate future movement of our common stock and discounted the results back to January 28, 2021 transaction date. The model used the following notable inputs: ● the market price of the Company common stock on January 28, 2021 of $3.10 as a starting point of simulation ● the risk free rate and discount rate of 1.35%; ● volatility of 80%; ● term of simulation extended to 15 years; ● the model also considered the probability of a Fundamental Transaction (as defined in Series A Preferred Stock certificate of designation), probabilities of payment of dividend in cash or in additional preferred shares and discount for the lack of marketability. Issuance of Series A Preferred shares for paid in kind dividend and settlement of accrued and unpaid interest on August 31, 2021 required the Company to record newly issued financing instrument at fair value at the date of the transaction on a non-recurring basis. Fair value measurement was categorized as Level 3 fair value measurement due to use of various unobservable inputs to the pricing model. A single most significant factor included in pricing models was the Level 1 input of observable market value of MobileSmith common stock on the date of the transaction, as quoted on the OTCQB. Despite the thinly traded nature of the Company stock, the quoted market value could not be ignored in determination of fair value in the transaction. The Company used the income (discounted cash flow) approach to arrive at the fair value of the Series A Stock on August 31, 2021. Using this approach, the value of Series A Preferred Stock is equal to the present value of the cash flow streams that can be expected to be generated by the Company in the future. The Company used the Geometric Browinian Motion/Monte Carlo model to simulate future movement of equity securities and discounted the results back to the August 31, 2021 transaction date. The model used the following notable inputs: ● the market price of the Company common stock on August 31, 2021 of $3.00 as a starting point of simulation ● the risk free rate and discount rate of 1.58%; ● volatility of 67.5%; ● term of simulation is 15 years; ● the model also considered the probability of a Fundamental Transaction (as defined in Series A Preferred Stock certificate of designation), probabilities of payment of dividend in cash or in additional preferred shares and discount for the lack of marketability. The probability of payment of dividend in additional shares was increased to 90% and probability of dividend paid in cash was reduced to 10%. |
DISAGGREGATED PRESENTATION OF R
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION | |
Note 6. DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION | 6. DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION The tables below depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors, such as type of customer and type of contract. Customer size impact on billings and revenue: 9 Months Ended September 30, 2021 9 Months Ended September 30, 2020 Billings GAAP Revenue Billings GAAP Revenue Top 5 Customers (Measured By Amounts Billed) $ 374,000 $ 359,756 $ 527,160 $ 611,026 All Other Customers 820,225 843,637 993,869 1,132,729 $ 1,194,225 $ 1,203,394 $ 1,521,029 $ 1,743,755 For the nine months ended September 30, 2021, two customers accounted for 88% of the accounts receivable balance and no customer accounted for more than 10% of total revenue. For the nine months ended September 30, 2020, one customer accounted for 16% of total revenue and two customers accounted for 67% of accounts receivable balance. Below is a summary of new customer acquisition impact on billings and revenue: 9 Months Ended September 30, 2021 9 Months Ended September 30, 2020 Billings GAAP Revenue Billings GAAP Revenue Customers In Existence As Of The Beginning Of The Period (Including Upgrades) $ 1,194,225 $ 1,203,394 $ 1,387,693 $ 1,711,012 Customers Acquired During The Period - - 133,336 32,743 $ 1,194,225 $ 1,203,394 $ 1,521,029 $ 1,743,755 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Note 7. LEASES | 7. LEASES Leases (Topic 842) Disclosures We are a lessee for a non-cancellable operating lease for our corporate office in Raleigh, North Carolina. Financing leases are not significant in terms of both balances and period expenses. The operating lease for the corporate office expires on April 30, 2024. The following table summarizes the information about operating lease: Nine Months Ended September 30, 2021 Operating lease expense $ 154,053 Remaining Lease Term (Years) 2.5 Years Discount Rate 8 % Maturities of operating lease liability as of September 30, 2021 were as follows: Operating Lease Expense Variable Lease Expense Total Lease Expense 2021 (remaining 3 months) 47,769 3,422 51,190 2022 191,074 14,096 205,170 2023 191,074 14,519 205,593 2024 63,691 4,840 68,531 Total lease payments $ 493,608 $ 36,877 $ 530,484 Less imputed interest (56,723 ) Total $ 473,761 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |
Note 8. SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS Subsequent to September 30, 2021 the Company issued 23,310 shares of Series A Convertible Preferred stock in exchange for $1,000,000 of cash investment. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DEBT | |
Summary of Company Debt | Debt Description September 30, December 31, 2021 2020 Maturity Rate Comerica Bank Loan and Security Agreement $ 5,000,000 $ 5,000,000 June 2022 3.85 % First PPP Loan - 542,100 April 2022 1.00 % Convertible notes, net of discount of $1,927,892 - 972,108 November 2022 8.00 % Total debt 5,000,000 6,514,208 Less: current portion of long term debt 5,000,000 423,067 Debt - long term $ - $ 6,091,141 |
STOCKHOLDERS DEFICIT (Tables)
STOCKHOLDERS DEFICIT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS DEFICIT | |
Summary of stock options outstanding | The following is a summary of the stock option activity for the nine months ended September 30, 2021: Number of Shares Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($) Outstanding, December 31, 2020 10,683,300 $ 1.85 7.58 $ 17,060,533 Cancelled (1,433,706 ) 1.71 Issued 2,539,000 2.71 Outstanding, September 30, 2021 11,788,594 2.05 7.9 17,073,455 Vested and exercisable, September 30, 2021 5,683,496 $ 1.87 7.2 $ 9,266,678 |
DISAGGREGATED PRESENTATION OF_2
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION | |
Summary of Disaggregation of revenue | 9 Months Ended September 30, 2021 9 Months Ended September 30, 2020 Billings GAAP Revenue Billings GAAP Revenue Top 5 Customers (Measured By Amounts Billed) $ 374,000 $ 359,756 $ 527,160 $ 611,026 All Other Customers 820,225 843,637 993,869 1,132,729 $ 1,194,225 $ 1,203,394 $ 1,521,029 $ 1,743,755 |
Summary of Disaggregation of revenue New customer | 9 Months Ended September 30, 2021 9 Months Ended September 30, 2020 Billings GAAP Revenue Billings GAAP Revenue Customers In Existence As Of The Beginning Of The Period (Including Upgrades) $ 1,194,225 $ 1,203,394 $ 1,387,693 $ 1,711,012 Customers Acquired During The Period - - 133,336 32,743 $ 1,194,225 $ 1,203,394 $ 1,521,029 $ 1,743,755 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Summary of Operating Lease | The following table summarizes the information about operating lease: Nine Months Ended September 30, 2021 Operating lease expense $ 154,053 Remaining Lease Term (Years) 2.5 Years Discount Rate 8 % |
Summary of Maturity of operating lease liability | Maturities of operating lease liability as of September 30, 2021 were as follows: Operating Lease Expense Variable Lease Expense Total Lease Expense 2021 (remaining 3 months) 47,769 3,422 51,190 2022 191,074 14,096 205,170 2023 191,074 14,519 205,593 2024 63,691 4,840 68,531 Total lease payments $ 493,608 $ 36,877 $ 530,484 Less imputed interest (56,723 ) Total $ 473,761 |
DEBT (Details)
DEBT (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Total debt | $ 5,000,000 | $ 6,514,208 |
Less: current portion of long term debt | 5,000,000 | 423,067 |
Debt - long term | 0 | 6,091,141 |
Debt Instrument 1 | ||
Total debt | $ 5,000,000 | $ 5,000,000 |
Debt description | Comerica Bank Loan and Security Agreement | Comerica Bank Loan and Security Agreement |
Maturity Date | June 2022 | |
Interest rate | 3.85% | |
Debt Instrument 2 | ||
Total debt | $ 0 | $ 542,100 |
Debt description | First PPP Loan | First PPP Loan |
Maturity Date | April 2022 | |
Interest rate | 1.00% | |
Debt Instrument 3 | ||
Total debt | $ 0 | $ 972,108 |
Debt description | Convertible notes, net of discount of $1,927,892 | Convertible notes, net of discount of $1,927,892 |
Maturity Date | November 2022 | |
Interest rate | 8.00% |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Aug. 04, 2021 | Jun. 09, 2014 | Feb. 18, 2021 | Jan. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Series A preferred stock , amount | $ 7,660,970 | $ 126,162,277 | $ 103,649,344 | ||||
Loss on debt extinguishment | $ 6,507,137 | ||||||
Series A preferred stock, shares | 64,376 | 1,379,966 | 1,166,297 | ||||
Net unamortized discount | $ 78,120 | $ 2,417,888 | |||||
Comerica Bank [Member] | |||||||
Outstanding loan | $ 5,000,000 | ||||||
Extended maturity date | Jun. 9, 2022 | ||||||
Interest rate | 0.60% | ||||||
Second PPP Loan [Member] | |||||||
Loss on debt extinguishment | $ 542,100 | ||||||
First PPP Loan [Member] | |||||||
Loss on debt extinguishment | $ 542,000 | ||||||
Note Purchase Agreement [Member] | |||||||
Series A preferred stock, shares | 70,014 | ||||||
Convertible notes value | $ 1,075,713 | ||||||
Face value convertible notes | 2,900,000 | ||||||
Net unamortized discount | 1,849,773 | ||||||
Accrued interest | $ 103,605 |
STOCKHOLDERS DEFICIT (Details)
STOCKHOLDERS DEFICIT (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
STOCKHOLDERS DEFICIT | |
Number of shares outstanding, beginning | shares | 10,683,300 |
Number of shares cancelled | shares | (1,433,706) |
Number of shares issued | shares | 2,539,000 |
Number of shares outstanding, ending | shares | 11,788,594 |
Number of shares vested and exercisable | shares | 5,683,496 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 1.85 |
Weighted average exercise price cancelled | $ / shares | 1.71 |
Weighted average exercise price issued | $ / shares | 2.71 |
Weighted average exercise price outstanding, ending | $ / shares | 2.05 |
Weighted average exercise price vested and exercisable | $ / shares | $ 1.87 |
Weighted average remaining contractual life (in years) outstanding, beginning | 7 years 6 months 29 days |
Weighted average remaining contractual life (in years) outstanding, ending | 7 years 10 months 24 days |
Weighted average remaining contractual life (in years) vested and exercisable | 7 years 2 months 12 days |
Aggregate intrinsic value outstanding, beginning | $ | $ 17,060,533 |
Aggregate intrinsic value outstanding, ending | $ | 17,073,455 |
Aggregate intrinsic value vested and exercisable | $ | $ 9,266,678 |
STOCKHOLDERS DEFICIT (Details N
STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2021 | Jan. 28, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Unvested expense not yet recorded | $ 11,686,998 | |||
Weighted average period of unvested expense not yet recorded | 3 years 3 months 18 days | |||
Preferred stock shares issued | 64,376 | 1,379,966 | 1,166,297 | |
Accrued and unpaid interest | $ 16,040 | $ 271,868 | ||
Preffered stock par value | $ 0.001 | $ 0.001 | ||
Convertible Preferred Stock [Member] | ||||
Conversion price | $ 1.43 | |||
Shares issued to settle the interest | 3,912 | |||
Shares issued | 55,969 | |||
Accrued and unpaid interest | $ 167,000 | |||
Shares issued as paid in kind dividend | 52,057 | |||
Preferred Stocks [Member] | ||||
Loss attributable to common shareholders | $ 3,507,701 | |||
Preferred stock shares issued | 70,014 | |||
Conversion price | $ 1.43 | |||
Series A Preferred Stocks [Member] | ||||
Loss attributable to common shareholders | $ 2,451,888 | $ 12,887,573 | ||
Preferred stock shares issued | 87,686 | |||
Conversion price | $ 1.43 | |||
Shares issued to settle interest, value | 775,164 | |||
Deemed dividend charge | 184,616 | |||
Proceeds from issuance of shares | $ 3,761,700 | |||
Convertible Preferred stock issued, value | $ 10,315,099 | |||
Convertible Preferred stock issued, shares | 52,057 | |||
Preffered stock par value | $ 0.001 | |||
Preferred Stock Stated Value | $ 42.90 | |||
Preferred Stock , description | Each share of the Series A Preferred Stock then outstanding shall be entitled to receive an annual dividend equal to $3.43, subject to proration related to the timing of issuance. Such dividend is designed to have an effective yield of 8% on the Stated Value; | |||
Closing price per share | $ 3.50 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Narrative) - $ / shares | 1 Months Ended | |
Aug. 31, 2021 | Jan. 28, 2021 | |
FAIR VALUE MEASUREMENTS (Details Narrative) | ||
Risk free rate and discount rate | 1.58% | 1.35% |
Market price of common stock | $ 3 | $ 3.10 |
Volatility | 67.50% | 80.00% |
Extended term | 15 years | 15 years |
DISAGGREGATED PRESENTATION OF_3
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | $ 1,203,394 | $ 1,743,755 | ||
Billings | 1,194,225 | 1,521,029 | $ 1,194,225 | $ 1,521,029 |
Revenue | 387,051 | 511,411 | 1,203,394 | 1,743,755 |
Top 5 Customers (Measured By Amounts Billed) | ||||
Billings | 374,000 | 527,160 | 374,000 | 527,160 |
Revenue | 359,756 | 611,026 | ||
All Other Customers | ||||
Billings | 820,225 | 993,869 | 820,225 | 993,869 |
Revenue | 843,637 | 1,132,729 | ||
Customers In Existence As Of The Beginning Of The Period (Including Upgrades) | ||||
Billings | 1,194,225 | 1,387,693 | 1,194,225 | 1,387,693 |
Revenue | 1,203,394 | 1,711,012 | ||
Customers Acquired During The Period | ||||
Billings | 0 | 133,336 | 0 | 133,336 |
Revenue | 0 | 32,743 | ||
New Customer Acquisition [Member] | ||||
Billings | $ 1,194,225 | $ 1,521,029 | 1,194,225 | 1,521,029 |
Revenue | $ 1,203,394 | $ 1,743,755 |
DISAGGREGATED PRESENTATION OF_4
DISAGGREGATED PRESENTATION OF REVENUE AND OTHER RELEVANT INFORMATION (Details Narrative) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Concentration risk percentage | 10.00% | |
Two Customers [Member] | Account Receivable [Member] | ||
Concentration risk percentage | 88.00% | 67.00% |
One Customers [Member] | Revenue [Member] | ||
Concentration risk percentage | 16.00% |
LEASES (Details)
LEASES (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
LEASES | |
Operating lease expense | $ 154,053 |
Weighted average Remaining Lease Term (Years) | 2 years 6 months |
Weighted average discount rate | 8.00% |
LEASES (Details 1)
LEASES (Details 1) | Sep. 30, 2021USD ($) |
2021 (remaining 3 months) | $ 51,190 |
2022 | 205,170 |
2023 | 205,593 |
2024 | 68,531 |
Total lease payments | 530,484 |
Less: imputed interest | (56,723) |
Total | 473,761 |
Operating Lease Expense | |
2021 (remaining 3 months) | 47,769 |
2022 | 191,074 |
2023 | 191,074 |
2024 | 63,691 |
Total lease payments | 493,608 |
Vairable Lease Expense | |
2021 (remaining 3 months) | 3,422 |
2022 | 14,096 |
2023 | 14,519 |
2024 | 4,840 |
Total lease payments | $ 36,877 |