Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | SurgePays, Inc. | ||
Entity Central Index Key | 0001392694 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 27,157,139 | ||
Entity Common Stock, Shares Outstanding | 147,917,608 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 673,995 | $ 346,040 |
Accounts receivable, less allowance for doubtful accounts of $116,664 and $774,841, respectively | 180,499 | 3,056,213 |
Note receivable | 14,959 | |
Lifeline revenue due from USAC | 212,621 | 60,790 |
Inventory | 178,309 | |
Prepaid expenses | 5,605 | 96,883 |
Total current assets | 1,251,029 | 3,574,885 |
Property and Equipment, less accumulated depreciation of $105,484 and $38,656, respectively | 236,810 | 294,616 |
Intangible assets less accumulated amortization of $1,627,779 and $519,404, respectively | 4,125,742 | 4,769,117 |
Goodwill | 866,782 | 866,782 |
Investment in Centercom | 414,612 | 203,700 |
Operating lease right of use asset, net | 368,638 | 210,816 |
Other long-term assets | 61,458 | 66,457 |
Total assets | 7,325,071 | 9,986,373 |
Current liabilities: | ||
Accounts payable and accrued expenses - others | 5,589,547 | 3,637,577 |
Accounts payable and accrued expenses - related party | 1,753,837 | 998,517 |
Credit card liability | 383,073 | 449,158 |
Deferred revenue | 443,300 | 38,040 |
Derivative liability | 1,357,528 | 190,846 |
Operating lease liability | 210,556 | 90,944 |
Line of credit | 912,870 | 912,870 |
Debt - related party | 2,369,000 | |
Notes payable and current portion of long-term debt, net | 2,283,950 | 736,172 |
Total current liabilities | 15,306,509 | 7,054,124 |
Long-term debt less current portion - related party | 1,120,440 | 2,205,440 |
Operating lease liability - net | 155,167 | 119,872 |
Trade payables - long term | 854,868 | 869,868 |
Notes payable and long term portion of debt - net | 616,901 | |
Convertible promissory notes payable - net | 4,436,684 | |
Total liabilities | 18,051,037 | 14,685,988 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock: $0.001 par value; 500,000,000 shares authorized; 127,131,210 shares and 102,193,579 shares issued and outstanding at December 31, 2020 and 2019, respectively | 127,131 | 102,193 |
Additional paid in capital | 10,725,380 | 6,055,042 |
Accumulated deficit | (21,592,199) | (10,870,572) |
Total stockholders' deficit | (10,725,966) | (4,699,615) |
Total liabilities and stockholders' deficit | 7,325,071 | 9,986,373 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock, value | 13,000 | 13,000 |
Total stockholders' deficit | 13,000 | 13,000 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock, value | 722 | 722 |
Total stockholders' deficit | $ 722 | $ 722 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 116,664 | $ 774,841 |
Accumulated depreciation of property and equipment | 105,484 | 38,656 |
Accumulated amortization of intangible assets | $ 1,627,779 | $ 519,404 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 127,131,210 | 102,193,579 |
Common stock, shares outstanding | 127,131,210 | 102,193,579 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 13,000,000 | 13,000,000 |
Preferred stock, shares outstanding | 13,000,000 | 13,000,000 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 721,598 | 721,598 |
Preferred stock, shares outstanding | 721,598 | 721,598 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 54,406,788 | $ 25,742,941 |
Cost of revenue (exclusive of depreciation and amortization shown below) | 51,938,111 | 22,623,521 |
Gross profit | 2,468,677 | 3,119,420 |
Cost and expenses | ||
Depreciation and amortization | 1,173,369 | 227,322 |
Selling, general and administrative | 11,440,976 | 10,660,126 |
Total costs and expenses | 12,614,345 | 10,887,448 |
Operating loss | (10,145,668) | (7,768,028) |
Other income (expense): | ||
Interest expense | (3,383,996) | (227,016) |
Derivative expense | (566,789) | |
Change in fair value of derivative liability | 577,936 | 4,013 |
Gain on investment in Centercom | 210,912 | 25,192 |
Gain/(loss) on settlement of liabilities | 2,575,978 | (481,187) |
Other income | 10,000 | |
Total other income (expense) | (575,959) | (678,998) |
Net loss before provision for income taxes | (10,721,627) | (8,447,026) |
Provision for income taxes | ||
Net loss | $ (10,721,627) | $ (8,447,026) |
Net loss per common share, basic and diluted | $ (0.10) | $ (0.09) |
Weighted average common shares outstanding - basic and diluted | 106,720,836 | 96,186,742 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Series A Preferred Stock [Member] | Series C Preferred [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 13,000 | $ 643 | $ 88,047 | $ 333,623 | $ (2,423,546) | $ (1,988,233) |
Balance, shares at Dec. 31, 2018 | 13,000,000 | 643,366 | 88,046,391 | |||
Sale of Common Stock and warrants | $ 9,172 | 3,201,328 | 3,210,500 | |||
Sale of Common Stock and warrants, shares | 9,172,855 | |||||
Issuance of common stock and warrants for services rendered | $ 666 | 328,908 | $ 329,574 | |||
Issuance of common stock and warrants for services rendered, shares | 666,000 | |||||
Make whole Common Stock issued pursuant to SPA | ||||||
Issuance of Common Stock for settlement of accounts payable | $ 875 | 506,625 | 507,500 | |||
Issuance of Common Stock for settlement of accounts payable, shares | 875,000 | |||||
Issuance of Common Stock and warrants with debt | $ 100 | 119,960 | 120,060 | |||
Issuance of Common Stock and warrants with debt, shares | 100,000 | |||||
Issuance of Series C Preferred Stock for investment in Centercom | $ 72 | 178,436 | 178,508 | |||
Issuance of Series C Preferred Stock for investment in Centercom, shares | 72,000 | |||||
Issuance of Series C Preferred Stock for conversion of related party advances | $ 7 | 389,495 | 389,502 | |||
Issuance of Series C Preferred Stock for conversion of related party advances, shares | 6,232 | |||||
Issuance of common shares for asset purchase | $ 3,333 | 996,667 | 1,000,000 | |||
Issuance of common shares for asset purchase, shares | 3,333,333 | |||||
Net loss | (8,447,026) | (8,447,026) | ||||
Balance at Dec. 31, 2019 | $ 13,000 | $ 722 | $ 102,193 | 6,055,042 | (10,870,572) | (4,699,615) |
Balance, shares at Dec. 31, 2019 | 13,000,000 | 721,598 | 102,193,579 | |||
Issuance of Common Stock and options for services rendered | $ 86 | 182,882 | 182,968 | |||
Issuance of Common Stock and options for services rendered, shares | 86,000 | |||||
Sale of Common Stock and warrants | $ 5,678 | 1,062,822 | 1,068,500 | |||
Sale of Common Stock and warrants, shares | 5,678,174 | |||||
Issuance of Common Stock with debt recorded as debt discount | $ 2,892 | 990,888 | 993,780 | |||
Issuance of Common Stock with debt recorded as debt discount, shares | 2,892,000 | |||||
Shares issued for conversion of debt | $ 13,427 | $ 2,271,613 | $ 2,285,040 | |||
Shares issued for conversion of debt, shares | 13,426,698 | |||||
Make whole Common Stock issued pursuant to SPA | $ 3,981 | $ 373,511 | $ 377,492 | |||
Make whole Common Stock issued pursuant to SPA, shares | 3,980,711 | |||||
Issuance of Common Stock for modification of debt | $ 480 | $ 67,170 | $ 67,650 | |||
Issuance of Common Stock for modification of debt, shares | 480,000 | |||||
Issuance of Common Stock for an acquisition | $ 775 | $ 219,071 | $ 219,846 | |||
Issuance of Common Stock for an acquisition, shares | 775,000 | |||||
Repurchase of shares for cash | $ (2,381) | (497,619) | (500,000) | |||
Repurchase of shares for cash, shares | (2,380,952) | |||||
Net loss | (10,721,627) | (10,721,627) | ||||
Balance at Dec. 31, 2020 | $ 13,000 | $ 722 | $ 127,131 | $ 10,725,380 | $ (21,592,199) | $ (10,725,966) |
Balance, shares at Dec. 31, 2020 | 13,000,000 | 721,598 | 127,131,210 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Net loss | $ (10,721,627) | $ (8,447,026) | |
Adjustments to reconcile net income loss to net cash used in operating activities: | |||
Depreciation and amortization | 1,173,369 | 227,322 | |
Amortization of right of use assets | 197,381 | 55,608 | |
Amortization of debt discount | 2,016,764 | 68,764 | |
Stock-based compensation | 182,968 | 329,574 | |
Change in fair value of derivative liability | (577,936) | (4,013) | |
Derivative expense | 566,789 | ||
Bad debt expense | 1,750,239 | 977,792 | |
Accrued interest on note receivable | (38,471) | ||
(Gain) loss on settlement of liabilities | (2,644,960) | 474,953 | |
Gain on equity investment in Centercom | (210,912) | (25,192) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,146,611 | (3,599,534) | |
Lifeline revenue due from USAC | (151,831) | 790,176 | |
Customer phone supply | 1,356,701 | ||
Inventory | (178,309) | ||
Prepaid expenses | 91,278 | (86,021) | |
Other assets | 4,999 | (4,999) | |
Credit card liability | (63,156) | 54,317 | |
Deferred revenue | 405,260 | (50,000) | |
Loss contingency | (31,690) | ||
Current portion of operating lease liability | (200,296) | (55,608) | |
Accounts payable and accrued expenses | 2,887,321 | 1,474,476 | |
Net cash used in operating activities | (4,326,048) | (6,533,141) | |
Investing activities | |||
Advances under notes receivable | (14,959) | ||
Repayments of notes receivable | 14,959 | ||
Purchase of equipment | (6,605) | (227,630) | |
Net cash received in business combination | 210,348 | ||
Net cash provided by (used) in investing activities | 8,354 | (32,241) | |
Financing activities | |||
Issuance of Common Stock and warrants | 1,068,500 | 3,210,500 | |
Repurchase of Common Stock | (500,000) | ||
Note payable, related party - borrowings | 1,579,710 | ||
Note payable, related party - repayments | (295,710) | ||
Note payable - borrowings | 3,481,582 | 250,000 | |
Note payable - repayments | (280,636) | (70,000) | |
Convertible promissory notes - borrowings | 638,000 | ||
Convertible promissory notes - repayments | (245,797) | ||
Cash paid for debt issuance costs | (162,000) | ||
Line of credit - advances | 1,130,000 | ||
Line of credit - repayments | (217,130) | ||
Loan proceeds under related party financing arrangement | 2,199,440 | ||
Loan repayments under related party financing arrangement | (674,000) | ||
Net cash provided by financing activities | 4,645,649 | 6,466,810 | |
Net change in cash and cash equivalents | 327,955 | (98,572) | |
Cash and cash equivalents, beginning of period | 346,040 | 444,612 | |
Cash and cash equivalents, end of period | 673,995 | 346,040 | $ 444,612 |
Supplemental cash flow information | |||
Cash paid for Interest | 98,113 | 77,825 | |
Cash paid for Income taxes | |||
Non-cash investing and financing activities: | |||
Exchange of related party advances for Series C Preferred Stock | 389,502 | ||
Exchange of investment in CenterCom for Series C Preferred Stock | 178,508 | ||
Common Stock issued for an acquisition | 210,794 | 1,000,000 | |
Debt acquired in acquisition | 4,000,000 | ||
Common Stock and warrants issued with debt recorded as debt discount | 993,780 | 120,060 | |
Derivative liability on convertible notes recorded as debt discount | 1,457,402 | 176,348 | |
Operating lease liability | 355,203 | 266,424 | |
Make whole Common Stock issued pursuant to SPA | 377,492 | ||
Issuance of Common Stock for modification of debt | $ 67,650 |
Business
Business | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Business | 1 BUSINESS The accompanying consolidated financial statements include the accounts of SurgePays Inc., (“Surge”), formerly Ksix Media Holdings, Inc. and Surge Holdings, Inc., incorporated in Nevada on August 18, 2006, and its wholly owned subsidiaries, Ksix Media, Inc. (“Media”), incorporated in Nevada on November 5, 2014; Ksix, LLC (“KSIX”), a Nevada limited liability company that was formed on September 14, 2011; Surge Blockchain, LLC (“Blockchain”), formerly Blvd. Media Group, LLC (“BLVD”), a Nevada limited liability company that was formed on January 29, 2009; DigitizeIQ, LLC (“DIQ”) an Illinois limited liability company that was formed on July 23, 2014; Surge Cryptocurrency Mining, Inc. (“Crypto”), formerly North American Exploration, Inc. (“NAE”), a Nevada corporation that was incorporated on August 18, 2006 (since January 1, 2019, this has been a dormant entity that does not own any assets); Surge Logics Inc. (“Logics”), an Nevada corporation that was formed on October 2, 2018; SurgePays Fintech Inc (“Tech”), an Nevada corporation that was formed on August 22, 2019; Surge Payments LLC (“Payments”), an Nevada corporation that was formed on December 17, 2018; SurgePhone Wireless LLC (“Surge Phone”), an Nevada corporation that was formed on August 29, 2019 and True Wireless, Inc., an Oklahoma corporation (formerly True Wireless, LLC) (“TW”), (collectively the “Company” or “we”). On October 29, 2020, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation to change its name to SurgePays, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Recent Developments On September 30, 2019, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with GBT Technologies Inc., a Nevada corporation (“GBT”). Under the Purchase Agreement, the Company has purchased substantially all of the assets, and specified liabilities, of GBT’s ECS Prepaid business, Electronic Check Services business, and the Central State Legal Services business (collectively the “ECS Business”). The Purchase Agreement provides that the Company assumed GBT’s liabilities incurred after the effective date of the Purchase Agreement, but only to the extent such obligations and liabilities were not caused by or related to any action or inaction by GBT prior to the effective date of the Purchase Agreement. The Purchase Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, the Company acquired substantially all of the assets related to the ECS Business for total consideration of five million dollars ($5,000,000). The Purchase Agreement provides that the consideration is to be paid by the Company through the issuance of a convertible promissory note in the amount of four million dollars ($4,000,000) to GBT (the “Note”), and through the issuance of three million three hundred thirty-three thousand three hundred thirty-three (3,333,333) restricted shares of the Company’s Common Stock to GBT (the “Shares”). GBT may not convert the Note to the extent that such conversion would result in beneficial ownership by GBT and/or its affiliates of more than 4.99% of the issued and outstanding Common Stock of the Company. Membership Interest Purchase Agreement On January 30, 2020, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) by and among the Company, ECS Prepaid, LLC, a Missouri limited liability company (“ECS Prepaid”), Dennis R. Winfrey, an individual, and Peggy S. Winfrey, an individual (together, the “Winfreys”), whereby the Company purchased from the Winfreys all of the Membership Interests of ECS Prepaid owned by the Winfreys (the “ECS Prepaid Membership Interests”). In consideration for the ECS Prepaid Membership Interests, the Company issued to Suray Holdings LLC, an entity jointly controlled by the Winfreys, 450,000 shares of Common Stock of the Company. ECS and CSLS Stock Purchase Agreement On January 30, 2020, the Company entered into a Stock Purchase Agreement (the “ECS and CSLS SPA”) by and among the Company, Electronic Check Services, Inc., a Missouri corporation (“ECS”), Central States Legal Services, Inc., a Missouri corporation (“CSLS”), and the Winfreys, whereby the Company purchased from the Winfreys all of the issued and outstanding stock of each of ECS and CSLS (the “ECS and CSLS Stock”). In consideration for the ECS and CSLS Stock, the Company issued 50,000 shares of Common Stock to Suray (the “ECS and CLS Purchase Share Issuance”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Risks and Uncertainties The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Concentration of Credit Risk Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. Accounts receivables potentially subject the Company to concentrations of credit risk. Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management’s expectations. One customer accounted for more than 11% of revenues in 2020. One customer accounted for more than 16% of revenues in 2019. Method of Accounting Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at December 31, 2020 and 2019. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of December 31, 2020 and 2019, the Company had reserves of $116,664 and $774,841, respectively. Concentrations As of December 31, 2020 and 2019, one customer represented approximately 47% and 80% of total gross outstanding receivables, respectively. Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. As of December 31, 2020 and 2019, the Company had inventory of $178,309 and $0, respectively. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheets related to the operating lease for office space. Results for the years ended December 31, 2020 and 2019 are presented under ASC 842. As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Refer to Note 12. Leases for additional disclosures required by ASC 842. Fair value measurements The Company adopted the provisions of ASC Topic 820, “ Fair Value Measurements and Disclosures The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: ● Level 1 — quoted prices in active markets for identical assets or liabilities. ● Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. ● Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). Derivative Liabilities The Company evaluates its options, warrants, convertible notes, or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. The change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“ Section 815-40-15 The Company utilizes a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations. The Company had derivative liabilities of $1,357,528 and $190,846 as of December 31, 2020 and 2019, respectively. Revenue recognition The Company recognizes revenue in accordance with ASC 606 to more closely align revenue recognition with the delivery of the Company’s services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of December 31, 2020 and 2019 contained a significant financing component. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer. Disaggregation of Revenue from Contracts with Customers. For the Years Ended December 31, 2020 December 31, 2019 True Wireless, Inc. $ 2,372,977 $ 3,446,003 Surge Blockchain, LLC 535,315 4,233,263 Surge Logics, Inc. 16,430,057 7,234,366 ECS 34,861,891 10,767,138 Other 206,548 62,171 Total revenue $ 54,406,788 $ 25,742,941 True Wireless is licensed to provide wireless services to qualifying low-income customers in five states. Revenues are recognized when the services have been provided and the government subsidy has been earned. Surge Blockchain revenues are generated through the SurgePaysPortal multi-purpose software are recognized when the goods and services have been delivered and earned. Surge Logics is a full-service digital advertising agency and revenues are recognized at a period in time once performance obligations are met and services are provided as customer deposits are received in advance. The majority of the revenue is recognized within the month the obligation was created and recognized, after the lead is identified and sent to the customer. ECS is a leading provider of prepaid wireless load and top-ups, check cashing and wireless SIM activation to convenience stores and bodegas nationwide. Revenues are generated and recognized at time of sale. Earnings per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance For the Year Ended December 31, 2020 For the Year Ended December 31,2019 Convertible note 26,031,553 1,129,013 Common stock options 850,176 - Common stock warrants 9,715,865 6,849,635 Total contingent shares issuance arrangement, stock options or warrants 36,597,594 7,978,648 Income taxes We use the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes”. Through December 23, 2014, KSIX and BLVD operated as limited liability companies and all income and losses were passed through to the owners. Through October 12, 2015, DIQ operated as a limited liability company and all income and losses were passed through to its owner. Subsequent to the acquisition dates, these limited liability companies were owned by Surge and became subject to income tax. Through April 1, 2018, TW operated as a limited liability company and all income and losses were passed through to the owners. In order to facilitate the merger discussed above, TW converted from a limited liability company to a Subchapter C Corporation. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the year ended December 31, 2020. Reclassifications Certain prior period amounts have been reclassified to conform to the current year’s presentation. Recent adopted accounting pronouncements In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other (“ASC 350”): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”) In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. Recent issued accounting pronouncements In August 2020, the FASB issued ASU 2020-06 Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In March 2020, the FASB issued ASU No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes income Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, when adopted, will have a material impact on the financial statements of the Company. |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 3 LIQUIDITY At December 31, 2020 and 2019, our current assets were $1,251,029 and $3,574,885, respectively, and our current liabilities were $15,306,509 and $7,054,124, respectively, which resulted in a working capital deficit of $14,055,480 and $3,479,239, respectively. Total assets at December 31, 2020 and 2019 amounted to $7,325,071 and $9,986,373, respectively. At December 31, 2020, assets consisted of current assets of $1,251,029, net property and equipment of $236,810, net intangible assets of $4,125,742, goodwill of $866,782, equity investment in Centercom of $414,612, and operating lease right of use asset of $368,638, as compared to current assets of $3,574,885, net property and equipment of $294,616, net intangible assets of $4,769,117, goodwill of $866,782, equity investment in Centercom of $203,700 and operating lease right of use asset of $210,816 at December 31, 2019. At December 31, 2020, our total liabilities of $18,051,037 increased $3,365,049 from $14,685,988 at December 31, 2019. At December 31, 2020, our total stockholders’ deficit was $10,725,966 as compared to $4,699,615 at December 31, 2019. The principal reason for the increase in stockholders’ deficit was the impact of the net loss of $10,721,626 offset by equity issuances during 2020. The following table sets forth the major sources and uses of cash for the years ended December 31, 2020 and 2019. 2020 2019 Net cash used in operating activities $ (4,348,049 ) $ (6,533,141 ) Net cash used in investing activities 8,354 (32,241 ) Net cash provided by financing activities 4,645,649 6.466,810 Net change in cash and cash equivalents $ 305,954 $ (98,572 ) At December 31, 2020, the Company had the following material commitments and contingencies. Notes payable – related party Notes payable and long-term debt Convertible promissory notes Related party transactions Cash requirements and capital expenditures Known trends and uncertainties We believe we will continue to incur net losses and do not expect positive cash flows from operations until the 4 th On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and included a provision for the Small Business Administration (“SBA”) to implement its Paycheck Protection Program (“PPP”). The PPP provides small businesses with funds to pay up to eight (8) weeks of payroll costs, including benefits. Funds received under the PPP may also be used to pay interest on mortgages, rent, and utilities. Subject to certain criteria being met, all or a portion of the loans may be forgiven. The loans bear interest at an annual rate of one percent (1%), are due two (2) years from the date of issuance, and all payments are deferred for the first six (6) months of the loan. Any unforgiven balance of loan principal and accrued interest at the end of the six (6) month loan deferral period is amortized in equal monthly installments over the remaining 18-months of the loan term. On April 17, 2020, the Company closed a $498,082 SBA guaranteed PPP loan with Bank3. The Company expects to use the loan proceeds as permitted and apply for and receive forgiveness for the entire loan amount. In addition, the Company received $636,600 in several Economic Injury Disaster Loans with the Small Business Administration. These loans all carry a 3.75% interest rate payable over 30 years. First payment due 12 months from date of note. |
Asset Purchase Agreement
Asset Purchase Agreement | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Asset Purchase Agreement | 4 ASSET PURCHASE AGREEMENT On September 30, 2019, the Company entered into the Purchase Agreement with GBT. Under the Purchase Agreement, the Company has purchased substantially all of the assets, and specified liabilities, of GBT’s ECS Prepaid business, Electronic Check Services business, and the Central State Legal Services business. The Purchase Agreement provides that the Company assumed GBT’s liabilities incurred after the effective date of the Purchase Agreement, but only to the extent such obligations and liabilities were not caused by or related to any action or inaction by GBT prior to the effective date of the Purchase Agreement. The Purchase Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, the Company acquired substantially all of the assets related to the ECS Business for total consideration of five million dollars ($5,000,000). The Purchase Agreement provides that the consideration is to be paid by the Company through the issuance of a convertible promissory note in the amount of four million dollars ($4,000,000) to GBT, and through the issuance of three million three hundred thirty-three thousand three hundred thirty-three (3,333,333) restricted shares of the Company’s Common Stock to GBT. As of the date of this report, the purchase price allocation has yet to be valued. GBT may not convert the Note to the extent that such conversion would result in beneficial ownership by GBT and/or its affiliates of more than 4.99% of the issued and outstanding Common Stock of the Company. The Note has an effective date of September 27, 2019 and has a term of eighteen (18) months until the maturity date. The Note shall not bear interest and shall be convertible at the option of GBT starting from the sixth month anniversary of the effective date. The conversion price of the Note shall equal the volume weighted average price of the Company’s Common Stock on the trading market which the common stock is then trading over the previous twenty (20) days prior to the conversion date, provided that the conversion price shall never be lower than $0.10 or higher than $0.70. The Note provides that the Company retains the right to prepay all or any portion of the principal without any prepayment penalty. In addition, in connection with the issuance of the Note, GBT agreed that, for the eighteen (18) months following the effective date, GBT will not dispose of the Shares or shares issued as a result of the conversion of the Note, in an amount greater than seven and one-half percent (7.5%) of the trading volume of the Company’s shares of Common Stock during the previous month. Following the closing of the merger transaction, the Company’s investment in ECS consisted of the following: Purchase Price Convertible note $ 4,000,000 Common stock 1,000,000 Total purchase price $ 5,000,000 Allocation of purchase price Cash $ 210,348 Equipment 63,289 Intangibles 4,903,876 Accounts payable and accrued expenses (177,513 ) Total allocation of purchase price $ 5,000,000 (1) The 3,333,333 restricted shares of the Company’s Common Stock issued at closing of the merger transaction had a closing price of approximately $0.30 per share on the date of the transaction. Following the closing of the merger transaction, ECS’s financial statements as of the closing were consolidated with the consolidated financial statements of the Company. The following presents the unaudited pro-forma combined results of operations of the Company with the ECS Business as if the entities were combined on January 1, 2019. Year Ended December 31, 2019 Revenues $ 59,064,637 Net loss $ (8,902,134 ) Net loss per share $ (0.09 ) Weighted average number of shares outstanding 96,186,742 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5 PROPERTY AND EQUIPMENT Property and equipment stated at cost, less accumulated depreciation, consisted of the following: December 31, 2020 December 31, 2019 Computer Equipment and Software $ 312,796 $ 312,760 Furniture and Fixtures 9,774 1,416 Leasehold Improvements 19,724 21,513 342,294 335,689 Less: Accumulated Depreciation (105,484 ) (41,073 ) $ 236,810 $ 294,616 Depreciation expense was $64,413 and $27,293 for the years ended December 31, 2020 and 2019, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6 INTANGIBLE ASSETS Property and equipment stated at cost, less accumulated depreciation, consisted of the following: December 31, 2020 December 31, 2019 ECS Membership agreement $ 465,000 $ - Customer relationships 183,255 183,255 Noncompetition agreement 201,389 201,389 Trade names 617,474 617,474 Proprietary software 4,286,403 4,286,402 5,753,521 5,288,520 Less: Accumulated Depreciation (1,627,779 ) (519,403 ) $ 4,125,742 $ 4,769,117 Amortization expense of intangible assets for the years ended December 31, 2020 and 2019 total $1,108,375 and $200,028, respectively. As of December 31, 2020, the weighted average remaining useful lives of these assets were 6.80 years. The carrying amount of goodwill was $866,782 at December 31, 2020 and 2019. There were no changes in the carrying amount of goodwill during the period. No impairment in the carrying amount of goodwill was recognized during the years ended December 31, 2020 and 2019. |
Credit Card Liability
Credit Card Liability | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Card Liability | 7 CREDIT CARD LIABILITY The Company previously utilized a credit card issued in the name of DIQ to pay for certain of its trade obligations. During the year ended December 31, 2020 and 2019, the Company utilized a credit card issued in the name of Surge Holdings, Inc. to pay certain trade obligations totaling $102,941 and $1,106,280, respectively. At December 31, 2020 and 2019, the Company’s total credit card liability was $383,073 and $449,158, respectively. |
Notes Payable - Related Party
Notes Payable - Related Party | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Party | 8 NOTES PAYABLE – RELATED PARTY In December 2018, the Company executed a promissory note payable agreement with SMDMM Funding, LLC (“SMDMM”), an entity that is owned by the Company’s Chief Executive Officer. The promissory note was for a principal sum up to $1.1 million at an annual interest rate of 6%, due on December 27, 2021. During the year ended December 31, 2020, the Company did not withdraw any net advances on the note. In August 2019, the Company executed a promissory note payable agreement with SMDMM. The promissory note was for a principal sum up to $217,000 at an annual interest rate of 6%, due on August 15, 2022. During the year ended December 31, 2020, the Company did not withdraw any net advances on the note. During the fourth quarter 2019, the Company executed a promissory note payable agreement with SMDMM. The promissory note was for a principal sum up to $883,000 at an annual interest rate of 15%, due on November 21, 2022. During the year ended December 31, the Company did not withdraw any net advances on the note. During the year ended December 31, the Company executed a series of promissory notes payable agreement with SMDMM. The promissory notes were for a principal sum up to $1,136,500 at an annual interest rate of 10%, due on demand. During the year ended December 31, the Company drew advances on the note totaling $1,136,500 million. During the year ended December 31, 2020, the Company made accrued interest payments of $39,600. The outstanding principal balance under the promissory notes due to SMDMM was $3,341,940 and $2,205,440 at December 31, 2020 and 2019, respectively. Accrued interest owed to SMDMM was $272,127 and $64,741 at December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, the Company executed a series of promissory notes with AN Holdings, LLC, an entity owned by the Company’s President. The promissory notes were for an aggregate principal sum of $443,210 at an annual interest rate of 15%, due on demand. During the year ended December 31, 2020, the Company made accrued interest payments of $15,164. The Company repaid $295,710. As of December 31, 2020, the outstanding balance on the notes was $147,500. Accrued interest owed to was $5,888 at December 31, 2020. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable and Long-Term Debt | 9 NOTES PAYABLE AND LONG-TERM DEBT As of December 31, 2020 and 2019, notes payable and long-term debt, net of debt discount, consists of: December 31, 2020 December 31, 2019 Notes payable to seller of DigitizeIQ, LLC due as noted below 1 $ - $ 485,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into Common Stock 2 - 27,500 Promissory note payable to a lender dated November 4, 2019; accruing interest at 18% per annum; due November 3, 2020; 100,000 shares of restricted Common Stock granted on execution recorded as a debt discount 3 250,000 250,000 Promissory note payable to Bank3 dated April 17, 2020; accruing interest at 1% per annum, due October 17, 2021. 498,082 - Note payable to US Small Business Administration dated May 25, 2020; accruing interest at 3.75% per annum; due May 25, 2050. 150,000 - Note payable to US Small Business Administration dated July 5, 2020; accruing interest at 3.75% per annum; due July 5, 2050. 150,000 - Note payable to US Small Business Administration dated July 5, 2020; accruing interest at 3.75% per annum; due July 5, 2050. 15,100 - Note payable to US Small Business Administration dated July 7, 2020; accruing interest at 3.75% per annum; due July 7, 2050. 150,000 - Note payable to US Small Business Administration dated July 21, 2020; accruing interest at 3.75% per annum; due July 21, 2050. 150,000 - Note payable to US Small Business Administration dated July 21, 2020; accruing interest at 3.75% per annum; due July 21, 2050. 21,500 - Promissory note payable to BHP Capital NY dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 100,343 - Promissory note payable to Armada Capital Partners LLC dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 118,394 - Promissory note payable to Jefferson Street Capital LLC dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 148,500 - Promissory note payable to GS Capital Partners dated February 7, 2020 with interest at 14% per annum; due February 6, 2021; convertible into shares of Common Stock upon default 5 216,000 - Promissory note payable to Fourth Man LLC dated February 7, 2020 with interest at 14% per annum; due April 5, 2021; convertible into shares of Common Stock upon default 5 187,018 - Promissory note payable to GS Capital Partners dated March 5, 2020 with interest at 14% per annum; due February 6, 2021; convertible into shares of Common Stock upon default 6 378,000 - Promissory note payable to Tangiers Global LLC dated March 15, 2020 with interest at 14% per annum; due March 15, 2021; convertible into shares of Common Stock upon default 7 50,695 - Promissory note payable to LGH Investments LLC dated May 29, 2020 with interest at 10% per annum; due March 29, 2021; convertible into shares of Common Stock upon default 8 400,000 - Promissory note payable to Vista Capital LLC dated July 21, 2020 with interest at 10% per annum; due March 29, 2021; convertible into shares of Common Stock upon default 9 270,000 - Promissory note payable to Lucas Ventures dated December 14, 2020 with interest at 10% per annum; due September 10, 2021; convertible into shares of Common Stock upon default 10 165,000 - 3,418,632 762,500 Less: Debt discount (517,781 ) (26,328 ) $ 2,900,851 $ 736,172 1 Notes due seller of DigitizeIQ, LLC ● A second non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2020 and 2019 - $0 and $235,000). ● A third non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on March 12, 2016 and was repaid as of December 31, 2020. In January 2020, the Company and the sellers settled the outstanding promissory notes and a gain on settlement for the outstanding principal balance $485,000 and related accrued interest of $97,806, was recorded on the consolidated statements of operations. 2 3 4 The January 2020 Notes shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on February 5, 2021. No payments of principal or interest are due through July 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. On August 7, 2020, the Company executed agreements with the January 2020 investors to postpone the first and second principal and interest payment due date to maturity date and extend the maturity date until April 5, 2021 in exchange for 195,000 shares of Common Stock. The shares were valued on day of grant with a fair value of $30,225 and is included as a component of interest expense in the consolidated statements of operations. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a $260,001 debt discount relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 750,000 shares upon day of grant with a fair value of $240,000 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the statements of operations. There was total unamortized debt discount related to the January 2020 SPAs of $52,258 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $487,743. 5 The terms of the February 2020 Notes are substantially the same as the terms of the January 2020 Notes. The Company recorded a debt discount of $214,000 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 600,000 shares upon day of grant with a fair value of $186,000 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the February 2020 SPAs of $42,658 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $389,342. 6 The March 2020 Note shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on March 5, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $241,200 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 400,000 shares upon day of grant with a fair value of $108,800 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the March 2020 SPAs of $47,018 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $330,982. 7 The April 2020 Note shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on March 15, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $103,560 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 172,000 shares upon day of grant with a fair value of $46,400 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the April 2020 SPA of $32,843 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $129,157. 8 The May 2020 Note shall accrue interest at a rate of fourteen percent (10%) per annum and will mature on March 29, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $149,604 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 400,000 shares upon day of grant with a fair value of $124,000 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. The warrants were issued to the Buyers by the Company on May 29, 2020 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 500,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after May 29, 2020 through May 29, 2023. Each warrant contains an exercise price per share of $0.40, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants upon day of grant with a fair value of $96,396 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the May 2020 SPA of $80,000 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $320,000. 9 The July 2020 Note shall accrue interest at a rate of fourteen percent (10%) per annum and will mature on April 20, 2021. No payments of principal or interest are due through January 2020 (six (6) months following issuance) and then there are three (3) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.70 (representing a 30% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $145,538 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 270,000 shares upon day of grant with a fair value of $62,100 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. The warrants were issued to the Buyers by the Company on July 20, 2020 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 338,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after July 20, 2020 through July 19, 2023. Each warrant contains an exercise price per share of $0.40, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants upon day of grant with a fair value of $42,362 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the July 2020 SPA of $108,394 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $161,606. 10 The December 2020 Note shall accrue interest at a rate of ten percent (10%) per annum and will mature on September 14, 2021. No payments of principal or interest are due through January 2021 (six (6) months following issuance) and then there are three (3) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.70 (representing a 30% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $77,318 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 300,000 shares upon day of grant with a fair value of $48,600 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. The warrants were issued to the Buyers by the Company on December 14, 2020 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 150,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after December 14, 2020 through December 14, 2023. Each warrant contains an exercise price per share of $0.40, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants upon day of grant with a fair value of $39,082 and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was total unamortized debt discount related to the December 2020 SPA of $154,611 as of December 31, 2020. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $10,389. |
Convertible Promissory Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | 10 CONVERTIBLE PROMISSORY NOTES As of December 31, 2020 and 2019, convertible promissory notes payable consists of: December 31, 2020 December 31, 2019 Convertible note payable to GBT Technologies Inc. dated September 27, 2019 with no interest; due March 27, 2021; convertible into Common Stock 1 $ - $ 4,000,000 Convertible note payable to Power Up Lending Group Ltd. dated September 18, 2019 with at 12% per annum; due September 18, 2020; convertible into Common Stock 2 - 233,000 Convertible note payable to BHP Capital NY dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 Convertible note payable to Armada Capital Partners LLC dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 Convertible note payable to Jefferson Street Capital LLC dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 - 4,638,000 Less: Debt discount - (201,316 ) $ - $ 4,436,684 1 2 3 Pursuant to the SPA, each of the Buyers purchased from the Company, for a purchase price of $125,000, a convertible promissory note, in the principal amount of $135,000. The purchase of each note was accompanied by the Company’s issuance of a warrant to purchase 125,000 shares of the Company’s Common Stock to each Buyer. On October 7, 2019, each Buyer delivered the purchase price to the Company as payment for each note. Each note became effective as of October 7, 2019 and is due and payable on April 7, 2021. The notes entitle the Buyers to 8% interest per annum. Upon an Event of Default (as defined in the notes), the notes entitle the Buyers to interest at the rate of 18% per annum. The notes may be converted into shares of the Company’s Common Stock at a conversion price equal to 0.75 (representing a 25% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price (“VWAP”) for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a $266,181 debt discount relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The warrants were issued to the Buyers by the Company on October 7, 2019 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 125,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after October 7, 2019 through October 7, 2022. Each warrant contains an exercise price per share of $0.80, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it as debt discount on the consolidated balance sheets. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $0 and $75,078 as of December 31, 2020 and 2019, respectively, related to the warrants issued. During the year ended December 31, 2020, the Company recorded amortization of debt discount related to these warrants totaling $161,217. During the year ended December 31, 2020, the Company paid $95,000 for the cancellation of 250,000 warrants. During the year ended December 31, 2020, the Company paid $245,797 of the outstanding balance in addition to converting $159,203 of outstanding balance to 13,426,98 shares of Company Common Stock. The aggregate outstanding balance on the notes was $0 and $405,000 as of December 31, 2020 and 2019, respectively. Future maturities of all debt (excluding debt discount discussed above in Notes 8 and 9) are as follows: For the Years Ending December 31, 2021 $ 5,565,820 2022 2,255,122 $ 7,820,942 |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Liability [Abstract] | |
Derivative Liabilities | 11 DERIVATIVE LIABILITIES As discussed above in Note 10, during the year ended December 31, 2020, the Company executed convertible notes with lenders and received gross proceeds of $2,182,000. The Company identified certain features embedded in the notes requiring the Company to classify the features as derivative liabilities. The conversion price of the notes is subject to adjustment for issuances of the Company’s Common Stock or any equity linked instruments or securities convertible into the Company’s Common Stock at a purchase price of less than the prevailing conversion price or exercise price. Such adjustment shall result in the conversion price and exercise price being reduced to such lower purchase price. The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2020: Fair Value Measurement Total Balance, December 31, 2019 $ 190,846 Change in fair value of derivative liabilities (577,936 ) Derivative liabilities recorded on issuance of convertible notes 2,024,191 Write-off of derivative liabilities upon settlement of debt (279,573 ) Balance, December 31, 2020 $ 1,357,528 During the year ended December 31, 2020, the fair value of the derivative feature was calculated using the following weighted average assumptions: December 31, 2020 Risk-free interest rate 0.08 – 1.51 % Expected life of grants 0.75 year Expected volatility of underlying stock 96 - 132 % Dividends 0 % As of December 31, 2020 and 2019, the derivative liability was $1,357,528 and $190,846, respectively. In addition, for the year ended December 31, 2020, the Company recorded $577,936 as a gain on the change in fair value of the derivative on the consolidated statement of operations. The Company determined that upon measuring the fair value of the derivative features, the total amount recorded as a debt discount exceed the face value of the notes issued and the Company therefore recorded derivative expense of $566,789 on the consolidated income statements. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | 12 LINE OF CREDIT On January 25, 2018 the Company obtained a $500,000 line of credit (LOC) with a Bank. The LOC bears interest at 5% per annum and is secured by essentially all of the Company’s assets. The note is personally guaranteed by the owner of the majority of the Company’s voting shares. On December 21, 2018, the Company and the bank agreed to increase the LOC to $1,000,000 at an interest rate of 6% per annum. As of December 31, 2020 and 2019, the outstanding balance on the LOC was $912,870. The LOC matures on April 24, 2021. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 13 LEASES The Company determines if an arrangement contains a lease at inception. Right of use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company leases office space in Memphis, TN and a call center space in El Salvador. The term of the office is for 2 years beginning on November 1, 2019 commencing with monthly payments of $1,600. The term of the call center lease is for 3 years beginning on March 1, 2019 commencing with monthly payments of $6,680. As part of the ECS transaction discussed above, the Company acquired office space in Springfield, MO. The term of the lease is for 3 years commencing on January 1, 2020 with monthly payments of $12,000. During the year ended December 31, 2020 and 2019, the Company paid lease obligations of $200,296 and $55,608, respectively, under the leases. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. The lease terms include options to extend the leases when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. Leases with a term of 12 months or less are not recorded on the balance sheets, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense, including short term leases, were as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Operating lease $ 324,728 $ 80,760 Interest on lease liabilities 50,062 7,002 Total net lease cost $ 374,790 $ 87,762 Supplemental balance sheet information related to leases was as follows: December 31, 2020 December 31, 2019 Operating leases: Operating lease ROU assets - net $ 368,638 $ 210,816 Current operating lease liabilities, included in current liabilities $ 210,556 $ 90,944 Noncurrent operating lease liabilities, included in long-term liabilities 155,167 119,872 Total operating lease liabilities $ 365,723 $ 210,816 Supplemental cash flow and other information related to leases was as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 200,296 $ 55,608 ROU assets obtained in exchange for lease liabilities: Operating leases $ 355,203 $ 266,424 Weighted average remaining lease term (in years): Operating leases 1.80 2.12 Weighted average discount rate: Operating leases 11.4 % 5.5 % Total future minimum payments required under the lease obligations as of December 31, 2020 are as follows: Twelve Months Ending December 31, 2020 (remainder of year) $ 240,160 2021 164,041 2022 - Total lease payments $ 404,201 Less: amounts representing interest (38,474 ) Total lease obligations $ 365,723 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 14 STOCKHOLDERS’ EQUITY Preferred Stock Series “A” Preferred Stock The Company, pursuant to the consent of the Board of Directors filed a Certificate of Designation with the Nevada Secretary of State which designated 10,000,000 shares of the Company’s authorized preferred stock as Series “A” Preferred Stock, par value $0.001. The Series “A” Preferred Stock has the following attributes: ● Ranks senior only to any other class or series of designated and outstanding preferred shares of the Company; ● Bears no dividend; ● Has no liquidation preference, other than the ability to convert to Common Stock of the Company; ● The Company does not have any rights of redemption; ● Voting rights equal to ten shares of Common Stock for each share of Series “A” Preferred Stock; ● Entitled to same notice of meeting provisions as common stockholders; ● Protective provisions require approval of 75% of the Series “A” Preferred Shares outstanding to modify the provisions or increase the authorized Series “A” Preferred Shares; and ● Each one Series “A” Preferred Shares can be converted into ten common shares at the option of the holder. On April 11, 2018, the Company issued 3,000,000 shares of Series A Preferred Stock as consideration for the True Wireless, Inc. merger. As discussed in Note 1, the equity of the Company is the historical equity of TW retroactively restated to reflect the number of shares issued by the Company in the transaction. These preferred shares were recorded as a retroactive 2017 transaction as incentive to complete the merger. Upon close of the merger, the Company recorded 10,000,000 shares of Series A Preferred Stock as a part of the recapitalization transaction for services previously rendered by the Company’s former Chief Executive Officer and Chairman of the Board of Directors. As of December 31, 2020 and 2019, there were 13,000,000 shares of Series A issued and outstanding. Series “C” Convertible Preferred Stock On June 22, 2018, the Board of Directors approved a Certificate of Designation for Company Series C Convertible Preferred stock, which was filed with the Secretary of State of the State of Nevada on that date. The Certificate of Designations approved the creation of a new series of preferred stock consisting of 1,000,000 shares of Series C Convertible Preferred Stock par value $0.001 (“Series C Preferred Stock”) with an original issue price of $100.00 per share. The Series “C” Preferred Stock has the following attributes: ● Ranks junior only to any other class or series of designated and outstanding preferred shares of the Company; ● Bears a dividend per share of Series C Preferred Stock equal to the per share amount (as converted), and in the same form as, the dividend payable to the holders of the Common Stock; ● With respect to such liquidation, dissolution or winding up, the holders of Series C Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of Junior Securities but after distribution of such assets among, or payment thereof to holders of any Senior Preferred Stock, an amount equal to the Series C Original Issue Price for each share of Series C Preferred Stock plus an amount equal to all declared but unpaid dividends on Series C Preferred Stock; ● The Company does not have any rights of redemption; ● Voting rights equal to 250 shares of Common Stock for each share of Series “C” Preferred Stock; ● Entitled to same notice of meeting provisions as common stockholders; ● Protective provisions require approval of 75% of the Series “C” Preferred Shares outstanding to modify the provisions or increase the authorized Series “C” Preferred Shares; and ● Each one Series “C” Preferred Shares can be converted into ten common shares at the option of the holder. As noted above, each share of Series C Preferred Stock is convertible into 250 shares of Company Common Stock (the same conversion rate utilized in the exchange transaction), but is only convertible on the first to occur of the following events: (i) The Volume Weighted Average Price (“VWAP”) of the Company’s Common Stock during any then consecutive trading days is at least $2.00 per share; or (ii) June 30, 2019. On June 29, 2018, each of Kevin Brian Cox (“Cox”), the Company’s Chief Executive Officer, and Thirteen Nevada LLC (“13”) entered into separate Exchange Agreements with the Company whereby the Shareholders agreed to exchange an aggregate of 148,741,531 shares of previously issued Company Common Stock for an aggregate of 594,966 shares of newly-issued Company Series C Convertible Preferred Stock. The calculation of weighted average shares was retroactively restated in order to properly account for the above noted share exchange. During the year ended December 31, 2018, the Company issued 48,400 shares of Series C Preferred in exchange for the conversion of a note payable of $3,000,000 and accrued interest of $24,952. As discussed above in Note 1, on January 17, 2019, the Company announced the completion of an agreement to acquire a 40% equity ownership of Centercom. Upon execution of the agreement, the Company issued 72,000 shares of Preferred C stock (convertible into 18,000,000 shares of Common Stock) to a director, officer and minority owner of the Company who has a 50% interest in Centercom. The Company recorded its investment in Centercom of $178,508, which is the Company’s 40% ownership of Centercom’s net book value upon close of the completion of the transaction, as “Investment in Centercom” in long term assets on the accompanying consolidated balance sheets. On February 15, 2019, Carter Matzinger elected to exchange outstanding non-interest-bearing debt totaling $389,502 owed by the Company into 6,232 shares of Preferred C stock. As of December 31, 2020 and 2019, there were 721,598 shares of Series C issued and outstanding. Common Stock As discussed above in Note 1, on January 30, 2020, the Company entered into a Membership Interest Purchase Agreement and Stock Purchase Agreement with ECS Prepaid, ECS, CSLS and the Winfreys. Pursuant to the agreements, the Company acquired all of the membership interests of ECS Prepaid and all of the issued and outstanding stock of each ECS and CSLS. The agreements provide that the consideration is to be paid by the Company through the issuance of 500,000 shares of the Company’s Common Stock. In addition, the agreements called for 25,000 shares of Common Stock to be issued to the Winfreys on a monthly basis over a 12-month period. During the year ended December 31, 2020, the Company issued 275,000 shares of Common Stock pursuant to the agreements. As discussed in Note 10 above, during the year ended December 31, 2020, the Company granted 2,892,000 shares of Common Stock pursuant to debt agreements executed with various lenders. The shares were valued on execution date and recorded as a debt discount on the consolidated balance sheets. As discussed in Note 10 above, during the year ended December 31, 2020, the Company issued 13,426,698 shares of Common Stock for the conversion of debt totaling $2,280,040 in principal and interest. During year ended December 31, 2020, the Company sold an aggregate of 5,678,174 shares of Common Stock and 2,839,087 warrants, with each warrant exercisable for one share of Common Stock at an exercise price of $0.75, resulting in gross proceeds to the Company of $1,068,500. During the year ended December 31, 2020, the Company executed consulting agreements with third parties for professional services. Upon execution of the agreement, the Company agreed to issue 86,000 shares of the Company’s Common Stock. The 86,000 shares have an aggregated fair value of approximately $11,103 which was expensed immediately upon execution of the agreement. During the year ended December 31, 2019, the Company granted consultants 96,000 restricted shares for services pursuant to consulting agreements. On March 27, 2019, the Company reached a settlement with a consultant to issue 875,000 shares for services rendered. Upon execution of the settlement, the Company recorded a loss on settlement of $507,500. As discussed above in Note 5, on September 30, 2019, the Company entered into a Purchase Agreement with GBT Technologies Inc. Pursuant to the agreement, the Company acquired substantially all of the assets related to the ECS Business for total consideration of five million dollars ($5,000,000). The Purchase Agreement provides that the consideration is to be paid by the Company through the issuance of a convertible promissory note in the amount of $4,000,000 and through the issuance of 3,333,333 restricted shares of the Company’s Common Stock. In October 2019, the Company issued 70,000 shares of Common Stock to a consultant valued at $0.31 per share. On November 4, 2019, the Company granted 100,000 shares of Common Stock pursuant to a debt agreement executed with a lender. The shares were valued at $0.31 per share and was recorded as a debt discount. During the year ended December 31, 2019, the Company sold an aggregate of 9,172,855 shares of Common Stock and 4,462,135 warrants, with each warrant exercisable for one share of Common Stock at an exercise price of $0.75, resulting in gross proceeds to the Company of $3,210,500. During the year ended December 31, 2019 and 2018, the Company recorded total stock-based compensation expense of $295,900 and $146,000, respectively, in relation to shares issued for services. As of December 31, 2020 and 2019, there were 127,131,210 and 102,193,579 shares of Common Stock issued and outstanding, respectively. Stock Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Outstanding – January 31, 2019 2,012,500 $ 0.43 Exercisable – December 31, 2019 2,012,500 $ 0.43 Granted 984,284 $ 0.48 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 6,849,635 $ 0.71 Granted 3,116,230 $ 0.53 Exercised - $ - Forfeited/Cancelled (250,000 ) $ - Outstanding – December 31, 2020 9,715,865 $ 0.65 Exercisable – December 31, 2020 9,715,865 $ 0.6 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 – 3.00 9,715,865 1.52 years $ 0.65 9,715,865 $ 0. 65 At December 31, 2020 the total intrinsic value of warrants outstanding and exercisable was $0. As discussed in Note 9, during the year ended December 31, 2020, the Company paid $95,000 for the cancellation of 250,000 warrants. On February 15, 2019, the Company executed a consulting agreement with a third party for professional services. Upon execution of the agreement, the Company agreed to issue 100,000 warrants to purchase the Company’s Common Stock with an exercise price of $3.00 per share, a term of 3 years, and immediate vesting. In addition, the consultant is eligible to receive 150,000 warrants upon achievement of certain milestones as discussed in the agreement. The 250,000 warrants have an aggregated fair value of approximately $30,782 that was calculated using the Black-Scholes. For the year ended December 31, 2019, when computing fair value of share-based payments, the Company has considered the following variables: December 31, 2019 Risk-free interest rate 2.50 % Expected life of grants 3 years Expected volatility of underlying stock 168.71 % Dividends 0 % The estimated warrant life was determined based on the “simplified method,” giving consideration to the overall vesting period and the contractual terms of the award. The Company did not issue any warrants as compensation for services during the year ended December 31, 2020. During the year ended December 31, 2020 and 2019, the Company recorded total stock-based compensation expense related to the warrants of $0 and $33,700, respectively. The unrecognized compensation expense at December 31, 2020 was approximately $0. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15 RELATED PARTY TRANSACTIONS The Company’s former Chief Executive Officer has advanced the Company various amounts on a non-interest-bearing basis, which is being used for working capital. The advance had no fixed maturity. As noted, Mr. Matzinger elected to exchange outstanding non-interest-bearing debt totaling $389,502 owed by the Company into 6,232 shares of Preferred C stock. As of December 31, 2020 and 2019, the outstanding balance due was $0. For the years ended December 31, 2020 and 2019, outsourced management services fees of $0 and $1,020,000, respectively, were paid to Axia Management, LLC (“Axia”) as compensation for services provided. These costs are included in Selling, general and administrative expenses in the consolidated statements of operations. Axia is owned by the Company’s Chief Executive Officer. At December 31, 2020 and 2019, the Company had trade payables to Axia of $373,012 and $666,112, respectively. For the years ended December 31, 2020 and 2019, the Company purchased telecom services and access to wireless networks from 321 Communications in the amount of $218,334 and $704,683, respectively. These costs are included in Cost of revenue in the consolidated statements of operations. The Company’s Chief Executive Officer is a minority owner of 321 Communications. At December 31, 2020 and 2019, the Company had trade payables to 321 Communications of $25,336 and $140,923, respectively. The Company contracted with CenterCom Global, S.A. de C.V. At December 31, 2020 and 2019, the Company had trade payables to CenterCom Global of $1,252,331 and $282,159, respectively. See Note 9 long-term debt due to related parties. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16 COMMITMENTS AND CONTINGENCIES On November 1, 2013, The Federal Communications Commission (“FCC”) issued a Notice of Apparent Liability for Forfeiture to the Company for requesting and/or receiving support for ineligible subscriber lines between the months of October 2012 and May 2013 and proposed a monetary forfeiture of $5,501,285. The Company has annual compliance audits with FCC approved audit firms that have found no compliance deficiencies. Management believes the proposed monetary forfeiture is without merit and if anything should result from this notice, the amount would not materially affect the financial position of the Company. On January 15, 2020, the Company and Carter Matzinger (a member of the Company’s Board of Directors) (collectively, the “Surge Party”), and the former owners of the Company’s wholly-owned subsidiary, DigitizeIQ, LLC (collectively, the “DigitizeIQ Party” and, together with the Surge Party, the “Parties”), entered into a settlement agreement (the “DigitizeIQ Settlement Agreement”) to settle any claims the Parties may have had against each other. The parties made claims against each other with regard to alleged breaches of an Exchange Agreement, a Non-Compete Agreement, and promissory notes issued by the Company to the DigitzeIQ Party (the “DigitzeIQ Promissory Notes”). Pursuant to the DigitizeIQ Settlement Agreement, the Parties, in addition to releasing all claims against each other, agreed to cooperate to ensure the complete transfer and assignment of the domain “digitizeiq.com” to the Company and agreed that the DigitizeIQ Promissory Notes are deemed terminated. As a result of the DigitizeIQ Promissory Notes being terminated, the Company reduced its liabilities by approximately $580,000. On March 1, 2020, in connection with Mr. Evers’ appointment as Chief Financial Officer of the Company, the Company and Mr. Evers entered into an employment agreement (the “Evers Employment Agreement”), whereby as compensation for his services, the Company shall pay Mr. Evers a salary of $270,000 per year. Pursuant to the terms of the Evers Employment Agreement, the Company will pay the full cost of Mr. Evers’ health insurance premiums. In the event Mr. Evers’ employment with the Company shall terminate, Mr. Evers shall be entitled to a severance payment of a full year of salary and benefits. In addition, Mr. Evers is eligible for equity awards as approved by the Board as defined in the agreement. On July 9, 2020, the Company entered into a settlement and release agreement with Unimax Communications, LLC (“Unimax”). The settlement is related to a complaint filed by Unimax alleging the Company is indebted pursuant to a purchase order and additional financing terms. The Company agreed to pay Unimax the total sum of $785,000 over a 24-month period. The settlement amount is included accounts payable and accrued expenses – other on the consolidated balance sheets. Subsequent to December 31, 2021, the Company has agreed to pay off the balance by April 30, 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17 INCOME TAXES Deferred Tax Assets On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Bill”) was signed into law. Prior to the enactment of the Tax Reform Bill, the Company measured its deferred tax assets at the federal rate of 34%. The Tax Reform Bill reduced the federal tax rate to 21% resulting in the re-measurement of the deferred tax asset as of December 31, 2017. Beginning January 1, 2018, the lower tax rate of 21% will be used to calculate the amount of any federal income tax due on taxable income earned during 2018. For the periods from inception through the date of conversion to a C corporation in April 2018, the Company reported its income under True Wireless LLC, a limited liability company. As a result, the Company’s income for federal and state income tax purposes were reportable on the tax returns of the individual partners. Accordingly, no recognition has been made for federal or state income taxes in the accompanying financial statements of the Company through the date of conversion. At December 31, 2020, the Company has available for U.S. federal income tax purposes a net operating loss (“NOL”) carry-forwards of approximately $18.1 million that may be used to offset future taxable income through the fiscal year ending December 31, 2040. If not used, these NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. The Company plans on undertaking a detailed analysis of any historical and/or current Section 382 ownership changes that may limit the utilization of the net operating loss carryovers. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements since the Company believes that the realization of its net deferred tax asset of approximately $3.9 million was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $3.9 million. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. The valuation allowance increased by approximately $1.9 million and $1.7 million for the years ended December 31, 2020 and 2019, respectively. The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other expenses – Interest expense” in the statement of operations. Penalties would be recognized as a component of “General and administrative.” No material interest or penalties on unpaid tax were recorded during the year ended December 31, 2020 and 2019. As of December 31, 2020 and 2019, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. Components of deferred tax assets are as follows: December 31, December 31, Net deferred tax assets – Non-current: Expected income tax benefit from NOL carry-forwards $ 3,913,365 $ 2,002,427 Less valuation allowance (3,913,365 ) (2,002,427 ) Deferred tax assets, net of valuation allowance $ - $ - Income Tax Provision in the Consolidated Statements of Operations A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: For the Year For the Year Federal statutory income tax rate 21.0 % 21.0 % Change in valuation allowance on net operating loss carry-forwards (21.0 )% (21.0 )% Effective income tax rate 0.0 % 0.0 % |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 18 SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company evaluated performance of its operating segments based on revenue and operating loss. Segment information for the years ended December 31, 2020 and 2019, are as follows: Surge Blockchain & Other Surge Logics TW ECS Total Year ended December 31, 2020 Revenue $ 741,863 $ 16,430,057 $ 2,372,977 $ 34,861,891 $ 54,406,788 Cost of revenue (exclusive of depreciation and amortization) (849,225 ) (14,213,769 ) (3,003,099 ) (33,872,018 ) (51,938,111 ) Gross margin (107,362 ) 2,216,288 (630,122 ) 989,873 2,468,677 Costs and expenses (8,066,653 ) (2,147,406 ) (937,196 ) (1,463,090 ) (12,614,345 ) Operating profit (loss) $ (8,174,015 ) $ 68,882 $ (1,567,318 ) $ (473,217 ) $ (10,145,668 ) Year ended December 31, 2019 Revenue $ 4,295,434 $ 7,234,366 $ 3,446,003 $ 10,767,138 $ 25,742,941 Cost of revenue (exclusive of depreciation and amortization) (1,665,839 ) (4,721,923 ) (5,845,663 ) (10,390,096 ) (22,623,521 ) Gross margin 2,629,595 2,512,443 (2,399,660 ) 377,042 3,119,420 Costs and expenses (6,340,282 ) (2,388,181 ) (1,749,975 ) (409,010 ) (10,887,448 ) Operating loss $ (3,710,687 ) $ 124,262 $ (4,149,635 ) $ (31,968 ) $ (7,768,028 ) December 31, 2020 Total assets $ 1,729,041 $ 199,366 $ (353,476 ) $ 4,883,357 $ 7,325,071 Total liabilities 10,912,205 2,450,888 4,301,249 386,695 18,051,037 December 31, 2019 Total assets $ 4,782,722 $ 249,196 $ (33,718 ) $ 4,988,173 $ 9,986,373 Total liabilities 10,115,799 734,875 3,815,175 20,139 14,685,988 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18 SUBSEQUENT EVENTS On March 8, 2021, the Company entered an agreement for a 15% OID convertible promissory note in the amount of $2,3000,000. The proceeds from this transaction and cash on hand was used to pay down $2,284,075 of a total of $2,485,250 of promissory notes with various rates and maturities. On February 12, 2021, the Company filed Form S-1/A with the Securities and Exchange Commission with the intent of listing on Nasdaq within 90 days. On January 22, 2021, we entered into a stock purchase agreement (the “Digitize IQ Agreement”), by and between us and Surge Logics, Inc. Pursuant to the Digitize IQ Agreement, we sold one hundred percent (100%) of its ownership interests in Digitize IQ, LLC to Surge Logics, Inc. for a purchase price of $10. On January 22, 2021, we entered into a stock purchase agreement (the “KSIX Agreement”), by and between us and Surge Logics, Inc. Pursuant to the KSIX Agreement, we sold one hundred percent (100%) of its ownership interests in KSIX, LLC to Surge Logics, Inc. for a purchase price of $10. On February 11, 2021, David C Ansani and Carter Matzinger resigned from the Board of Directors of SurgePays, Inc. Neither Mr. Matzinger’s nor Mr. Ansani’s resignations were due to any disagreements with the Company on any of the Company’s operations, policies or practices. On February 23, 2021, Jay Jones and David May were appointed to the Board of Directors. There are no family relationships between either Mr. May or Mr. Jones and any director or other executive officer of the Company, nor are there any transactions to which the Company was or are a participant and in which either Mr. May or Mr. Jones have a material interest subject to disclosure under Item 404(a) of Regulation S-K. There are no arrangements or understandings between either Mr. May or Mr. Jones and any other person pursuant to which they were selected as members of the Board. Mr. May and Mr. Jones will both enter into compensatory arrangements with the Company at a later date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. Accounts receivables potentially subject the Company to concentrations of credit risk. Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management’s expectations. One customer accounted for more than 11% of revenues in 2020. One customer accounted for more than 16% of revenues in 2019. |
Method of Accounting | Method of Accounting Investments held in stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted for by one of three methods: (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323), or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to Paragraph 323-10-05-5, the equity method tends to be most appropriate if an investment enables the investor to influence the operating or financial policies of the investee. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at December 31, 2020 and 2019. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of December 31, 2020 and 2019, the Company had reserves of $116,664 and $774,841, respectively. Concentrations As of December 31, 2020 and 2019, one customer represented approximately 47% and 80% of total gross outstanding receivables, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. As of December 31, 2020 and 2019, the Company had inventory of $178,309 and $0, respectively. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheets related to the operating lease for office space. Results for the years ended December 31, 2020 and 2019 are presented under ASC 842. As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Refer to Note 12. Leases for additional disclosures required by ASC 842. |
Fair Value Measurements | Fair value measurements The Company adopted the provisions of ASC Topic 820, “ Fair Value Measurements and Disclosures The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: ● Level 1 — quoted prices in active markets for identical assets or liabilities. ● Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. ● Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). |
Derivative Liabilities | Derivative Liabilities The Company evaluates its options, warrants, convertible notes, or other contracts, if any, to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. The change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“ Section 815-40-15 The Company utilizes a binomial option pricing model to compute the fair value of the derivative liability and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations. The Company had derivative liabilities of $1,357,528 and $190,846 as of December 31, 2020 and 2019, respectively. |
Revenue Recognition | Revenue recognition The Company recognizes revenue in accordance with ASC 606 to more closely align revenue recognition with the delivery of the Company’s services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of December 31, 2020 and 2019 contained a significant financing component. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer. Disaggregation of Revenue from Contracts with Customers. For the Years Ended December 31, 2020 December 31, 2019 True Wireless, Inc. $ 2,372,977 $ 3,446,003 Surge Blockchain, LLC 535,315 4,233,263 Surge Logics, Inc. 16,430,057 7,234,366 ECS 34,861,891 10,767,138 Other 206,548 62,171 Total revenue $ 54,406,788 $ 25,742,941 True Wireless is licensed to provide wireless services to qualifying low-income customers in five states. Revenues are recognized when the services have been provided and the government subsidy has been earned. Surge Blockchain revenues are generated through the SurgePaysPortal multi-purpose software are recognized when the goods and services have been delivered and earned. Surge Logics is a full-service digital advertising agency and revenues are recognized at a period in time once performance obligations are met and services are provided as customer deposits are received in advance. The majority of the revenue is recognized within the month the obligation was created and recognized, after the lead is identified and sent to the customer. ECS is a leading provider of prepaid wireless load and top-ups, check cashing and wireless SIM activation to convenience stores and bodegas nationwide. Revenues are generated and recognized at time of sale. |
Earnings Per Share | Earnings per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance For the Year Ended December 31, 2020 For the Year Ended December 31,2019 Convertible note 26,031,553 1,129,013 Common stock options 850,176 - Common stock warrants 9,715,865 6,849,635 Total contingent shares issuance arrangement, stock options or warrants 36,597,594 7,978,648 |
Income Taxes | Income taxes We use the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes”. Through December 23, 2014, KSIX and BLVD operated as limited liability companies and all income and losses were passed through to the owners. Through October 12, 2015, DIQ operated as a limited liability company and all income and losses were passed through to its owner. Subsequent to the acquisition dates, these limited liability companies were owned by Surge and became subject to income tax. Through April 1, 2018, TW operated as a limited liability company and all income and losses were passed through to the owners. In order to facilitate the merger discussed above, TW converted from a limited liability company to a Subchapter C Corporation. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. The Company is no longer subject to tax examinations by tax authorities for years prior to 2017. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the year ended December 31, 2020. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year’s presentation. |
Recent Adopted Accounting Pronouncements | Recent adopted accounting pronouncements In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other (“ASC 350”): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”) In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. |
Recent Issued Accounting Pronouncements | Recent issued accounting pronouncements In August 2020, the FASB issued ASU 2020-06 Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In March 2020, the FASB issued ASU No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes income Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, when adopted, will have a material impact on the financial statements of the Company. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue from Contracts with Customers | The following table disaggregates gross revenue by entity for the years ended December 31, 2020 and 2019: For the Years Ended December 31, 2020 December 31, 2019 True Wireless, Inc. $ 2,372,977 $ 3,446,003 Surge Blockchain, LLC 535,315 4,233,263 Surge Logics, Inc. 16,430,057 7,234,366 ECS 34,861,891 10,767,138 Other 206,548 62,171 Total revenue $ 54,406,788 $ 25,742,941 |
Schedule of Diluted Net Income (Loss) Per Share | The following table shows the outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: Contingent shares issuance For the Year Ended December 31, 2020 For the Year Ended December 31,2019 Convertible note 26,031,553 1,129,013 Common stock options 850,176 - Common stock warrants 9,715,865 6,849,635 Total contingent shares issuance arrangement, stock options or warrants 36,597,594 7,978,648 |
Liquidity (Tables)
Liquidity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Liquidity Abstract | |
Schedule of Net Change in Cash | The following table sets forth the major sources and uses of cash for the years ended December 31, 2020 and 2019. 2020 2019 Net cash used in operating activities $ (4,348,049 ) $ (6,533,141 ) Net cash used in investing activities 8,354 (32,241 ) Net cash provided by financing activities 4,645,649 6.466,810 Net change in cash and cash equivalents $ 305,954 $ (98,572 ) |
Asset Purchase Agreement (Table
Asset Purchase Agreement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Merger Transaction Investment | Following the closing of the merger transaction, the Company’s investment in ECS consisted of the following: Purchase Price Convertible note $ 4,000,000 Common stock 1,000,000 Total purchase price $ 5,000,000 Allocation of purchase price Cash $ 210,348 Equipment 63,289 Intangibles 4,903,876 Accounts payable and accrued expenses (177,513 ) Total allocation of purchase price $ 5,000,000 (1) The 3,333,333 restricted shares of the Company’s Common Stock issued at closing of the merger transaction had a closing price of approximately $0.30 per share on the date of the transaction. |
Schedule of Unaudited Pro-forma Combined Results of Operations | The following presents the unaudited pro-forma combined results of operations of the Company with the ECS Business as if the entities were combined on January 1, 2019. Year Ended December 31, 2019 Revenues $ 59,064,637 Net loss $ (8,902,134 ) Net loss per share $ (0.09 ) Weighted average number of shares outstanding 96,186,742 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment stated at cost, less accumulated depreciation, consisted of the following: December 31, 2020 December 31, 2019 Computer Equipment and Software $ 312,796 $ 312,760 Furniture and Fixtures 9,774 1,416 Leasehold Improvements 19,724 21,513 342,294 335,689 Less: Accumulated Depreciation (105,484 ) (41,073 ) $ 236,810 $ 294,616 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Property and equipment stated at cost, less accumulated depreciation, consisted of the following: December 31, 2020 December 31, 2019 ECS Membership agreement $ 465,000 $ - Customer relationships 183,255 183,255 Noncompetition agreement 201,389 201,389 Trade names 617,474 617,474 Proprietary software 4,286,403 4,286,402 5,753,521 5,288,520 Less: Accumulated Depreciation (1,627,779 ) (519,403 ) $ 4,125,742 $ 4,769,117 |
Notes Payable and Long-Term D_2
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Long-Term Debt | As of December 31, 2020 and 2019, notes payable and long-term debt, net of debt discount, consists of: December 31, 2020 December 31, 2019 Notes payable to seller of DigitizeIQ, LLC due as noted below 1 $ - $ 485,000 Convertible note payable to River North Equity LLC dated July 13, 2016 with interest at 10% per annum; due April 13, 2017; convertible into Common Stock 2 - 27,500 Promissory note payable to a lender dated November 4, 2019; accruing interest at 18% per annum; due November 3, 2020; 100,000 shares of restricted Common Stock granted on execution recorded as a debt discount 3 250,000 250,000 Promissory note payable to Bank3 dated April 17, 2020; accruing interest at 1% per annum, due October 17, 2021. 498,082 - Note payable to US Small Business Administration dated May 25, 2020; accruing interest at 3.75% per annum; due May 25, 2050. 150,000 - Note payable to US Small Business Administration dated July 5, 2020; accruing interest at 3.75% per annum; due July 5, 2050. 150,000 - Note payable to US Small Business Administration dated July 5, 2020; accruing interest at 3.75% per annum; due July 5, 2050. 15,100 - Note payable to US Small Business Administration dated July 7, 2020; accruing interest at 3.75% per annum; due July 7, 2050. 150,000 - Note payable to US Small Business Administration dated July 21, 2020; accruing interest at 3.75% per annum; due July 21, 2050. 150,000 - Note payable to US Small Business Administration dated July 21, 2020; accruing interest at 3.75% per annum; due July 21, 2050. 21,500 - Promissory note payable to BHP Capital NY dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 100,343 - Promissory note payable to Armada Capital Partners LLC dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 118,394 - Promissory note payable to Jefferson Street Capital LLC dated January 30, 2020 with interest at 14% per annum; due February 5, 2021; convertible into shares of Common Stock upon default 4 148,500 - Promissory note payable to GS Capital Partners dated February 7, 2020 with interest at 14% per annum; due February 6, 2021; convertible into shares of Common Stock upon default 5 216,000 - Promissory note payable to Fourth Man LLC dated February 7, 2020 with interest at 14% per annum; due April 5, 2021; convertible into shares of Common Stock upon default 5 187,018 - Promissory note payable to GS Capital Partners dated March 5, 2020 with interest at 14% per annum; due February 6, 2021; convertible into shares of Common Stock upon default 6 378,000 - Promissory note payable to Tangiers Global LLC dated March 15, 2020 with interest at 14% per annum; due March 15, 2021; convertible into shares of Common Stock upon default 7 50,695 - Promissory note payable to LGH Investments LLC dated May 29, 2020 with interest at 10% per annum; due March 29, 2021; convertible into shares of Common Stock upon default 8 400,000 - Promissory note payable to Vista Capital LLC dated July 21, 2020 with interest at 10% per annum; due March 29, 2021; convertible into shares of Common Stock upon default 9 270,000 - Promissory note payable to Lucas Ventures dated December 14, 2020 with interest at 10% per annum; due September 10, 2021; convertible into shares of Common Stock upon default 10 165,000 - 3,418,632 762,500 Less: Debt discount (517,781 ) (26,328 ) $ 2,900,851 $ 736,172 1 Notes due seller of DigitizeIQ, LLC ● A second non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2020 and 2019 - $0 and $235,000). ● A third non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on March 12, 2016 and was repaid as of December 31, 2020. In January 2020, the Company and the sellers settled the outstanding promissory notes and a gain on settlement for the outstanding principal balance $485,000 and related accrued interest of $97,806, was recorded on the consolidated statements of operations. 2 3 4 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Promissory Notes | As of December 31, 2020 and 2019, convertible promissory notes payable consists of: December 31, 2020 December 31, 2019 Convertible note payable to GBT Technologies Inc. dated September 27, 2019 with no interest; due March 27, 2021; convertible into Common Stock 1 $ - $ 4,000,000 Convertible note payable to Power Up Lending Group Ltd. dated September 18, 2019 with at 12% per annum; due September 18, 2020; convertible into Common Stock 2 - 233,000 Convertible note payable to BHP Capital NY dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 Convertible note payable to Armada Capital Partners LLC dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 Convertible note payable to Jefferson Street Capital LLC dated October 7, 2019 with interest at 8% per annum; due April 7, 2021; convertible into shares of Common Stock 3 - 135,000 - 4,638,000 Less: Debt discount - (201,316 ) $ - $ 4,436,684 1 2 3 |
Schedule of Future Maturities of Debt | Future maturities of all debt (excluding debt discount discussed above in Notes 8 and 9) are as follows: For the Years Ending December 31, 2021 $ 5,565,820 2022 2,255,122 $ 7,820,942 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Liability [Abstract] | |
Summary of Changes in Fair Value | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2020: Fair Value Measurement Total Balance, December 31, 2019 $ 190,846 Change in fair value of derivative liabilities (577,936 ) Derivative liabilities recorded on issuance of convertible notes 2,024,191 Write-off of derivative liabilities upon settlement of debt (279,573 ) Balance, December 31, 2020 $ 1,357,528 |
Schedule of Weighted Average Assumptions | During the year ended December 31, 2020, the fair value of the derivative feature was calculated using the following weighted average assumptions: December 31, 2020 Risk-free interest rate 0.08 – 1.51 % Expected life of grants 0.75 year Expected volatility of underlying stock 96 - 132 % Dividends 0 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Expense | The components of lease expense, including short term leases, were as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Operating lease $ 324,728 $ 80,760 Interest on lease liabilities 50,062 7,002 Total net lease cost $ 374,790 $ 87,762 |
Schedule of Supplemental Information Related to Leases | Supplemental balance sheet information related to leases was as follows: December 31, 2020 December 31, 2019 Operating leases: Operating lease ROU assets - net $ 368,638 $ 210,816 Current operating lease liabilities, included in current liabilities $ 210,556 $ 90,944 Noncurrent operating lease liabilities, included in long-term liabilities 155,167 119,872 Total operating lease liabilities $ 365,723 $ 210,816 Supplemental cash flow and other information related to leases was as follows: For the Year Ended For the Year Ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 200,296 $ 55,608 ROU assets obtained in exchange for lease liabilities: Operating leases $ 355,203 $ 266,424 Weighted average remaining lease term (in years): Operating leases 1.80 2.12 Weighted average discount rate: Operating leases 11.4 % 5.5 % |
Schedule of Future Minimum Payments | Total future minimum payments required under the lease obligations as of December 31, 2020 are as follows: Twelve Months Ending December 31, 2020 (remainder of year) $ 240,160 2021 164,041 2022 - Total lease payments $ 404,201 Less: amounts representing interest (38,474 ) Total lease obligations $ 365,723 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Outstanding – December 31, 2019 2,012,500 $ 0.43 Exercisable – December 31, 2019 2,012,500 $ 0.43 Granted 984,284 $ 0.48 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – December 31, 2019 6,849,635 $ 0.71 Granted 3,116,230 $ 0.53 Exercised - $ - Forfeited/Cancelled (250,000 ) $ - Outstanding – December 31, 2020 9,715,865 $ 0.65 Exercisable – December 31, 2020 9,715,865 $ 0.6 |
Schedule of Warrants Outstanding and Exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.40 – 3.00 9,715,865 1.52 years $ 0.65 9,715,865 $ 0. 65 |
Schedule of Assumption Used Value of Options | For the year ended December 31, 2019, when computing fair value of share-based payments, the Company has considered the following variables: December 31, 2019 Risk-free interest rate 2.50 % Expected life of grants 3 years Expected volatility of underlying stock 168.71 % Dividends 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | Components of deferred tax assets are as follows: December 31, December 31, Net deferred tax assets – Non-current: Expected income tax benefit from NOL carry-forwards $ 3,913,365 $ 2,002,427 Less valuation allowance (3,913,365 ) (2,002,427 ) Deferred tax assets, net of valuation allowance $ - $ - |
Schedule of Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: For the Year For the Year Federal statutory income tax rate 21.0 % 21.0 % Change in valuation allowance on net operating loss carry-forwards (21.0 )% (21.0 )% Effective income tax rate 0.0 % 0.0 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | The Company evaluated performance of its operating segments based on revenue and operating loss. Segment information for the years ended December 31, 2020 and 2019, are as follows: Surge Blockchain & Other Surge Logics TW ECS Total Year ended December 31, 2020 Revenue $ 741,863 $ 16,430,057 $ 2,372,977 $ 34,861,891 $ 54,406,788 Cost of revenue (exclusive of depreciation and amortization) (849,225 ) (14,213,769 ) (3,003,099 ) (33,872,018 ) (51,938,111 ) Gross margin (107,362 ) 2,216,288 (630,122 ) 989,873 2,468,677 Costs and expenses (8,066,653 ) (2,147,406 ) (937,196 ) (1,463,090 ) (12,614,345 ) Operating profit (loss) $ (8,174,015 ) $ 68,882 $ (1,567,318 ) $ (473,217 ) $ (10,145,668 ) Year ended December 31, 2019 Revenue $ 4,295,434 $ 7,234,366 $ 3,446,003 $ 10,767,138 $ 25,742,941 Cost of revenue (exclusive of depreciation and amortization) (1,665,839 ) (4,721,923 ) (5,845,663 ) (10,390,096 ) (22,623,521 ) Gross margin 2,629,595 2,512,443 (2,399,660 ) 377,042 3,119,420 Costs and expenses (6,340,282 ) (2,388,181 ) (1,749,975 ) (409,010 ) (10,887,448 ) Operating loss $ (3,710,687 ) $ 124,262 $ (4,149,635 ) $ (31,968 ) $ (7,768,028 ) December 31, 2020 Total assets $ 1,729,041 $ 199,366 $ (353,476 ) $ 4,883,357 $ 7,325,071 Total liabilities 10,912,205 2,450,888 4,301,249 386,695 18,051,037 December 31, 2019 Total assets $ 4,782,722 $ 249,196 $ (33,718 ) $ 4,988,173 $ 9,986,373 Total liabilities 10,115,799 734,875 3,815,175 20,139 14,685,988 |
Business (Details Narrative)
Business (Details Narrative) - USD ($) | Jun. 23, 2020 | Jan. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt conversion, amount | $ 2,285,040 | |||
Debt conversion, shares issued | ||||
Surge telecom description | SurgePhone Wireless offers discounted talk, text, and 4G LTE data wireless plans at prices that average 30% - 50% lower than competitors. | |||
Investment | $ 414,612 | $ 203,700 | ||
Convertible Promissory Note [Member] | ||||
Debt conversion, amount | $ 156,140 | |||
Number of shares of common stock | 1,409,040 | |||
ECS Business [Member] | ||||
Business consideration | $ 5,000,000 | |||
Asset Purchase Agreement [Member] | ECS Business [Member] | ||||
Business consideration | 5,000,000 | 5,000,000 | ||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | ||||
Debt conversion, amount | $ 8,000,000 | $ 4,000,000 | $ 4,000,000 | |
Debt conversion, shares issued | 3,333,333 | 3,333,333 | ||
Minimum percentage of beneficial ownership for debt conversion | 4.99% | |||
Membership Interest Purchase Agreement [Member] | Suray Holdings LLC [Member] | ||||
Number of shares of common stock | 450,000 | |||
ECS and CSLS Stock Purchase Agreement [Member] | Suray Holdings LLC [Member] | ||||
Number of shares of common stock | 50,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash insured by FDIC | $ 250,000 | |
Cash equivalents | ||
Allowance for doubtful accounts | 116,664 | 774,841 |
inventory | 178,309 | |
Derivative liability | 1,357,528 | 190,846 |
Deferred revenue | $ 443,300 | $ 38,040 |
Income tax, description | On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Bill") was signed into law. Prior to the enactment of the Tax Reform Bill, the Company measured its deferred tax assets at the federal rate of 34%. The Tax Reform Bill reduced the federal tax rate to 21% resulting in the re-measurement of the deferred tax asset as of December 31, 2017. Beginning January 1, 2018, the lower tax rate of 21% will be used to calculate the amount of any federal income tax due on taxable income earned during 2018. | |
CARES Act [Member] | ||
Income tax, description | The CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the nine months ended September 30, 2020. | |
Tax Cuts and Jobs Act of 2017 [Member] | ||
Income tax, description | The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. | |
One Customer [Member] | Sales Revenue [Member] | ||
Concentration of credit risk percentage | 16.00% | 11.00% |
One Customer [Member] | Accounts Receivable [Member] | ||
Concentration of credit risk percentage | 47.00% | 80.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue from Contracts with Customers (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 54,406,788 | $ 25,742,941 |
True Wireless, Inc. [Member] | ||
Total revenue | 2,372,977 | 3,446,003 |
Surge Blockchain, LLC [Member] | ||
Total revenue | 535,315 | 4,233,263 |
Surge Logics, Inc. [Member] | ||
Total revenue | 16,430,057 | 7,234,366 |
ECS [Member] | ||
Total revenue | 34,861,891 | 10,767,138 |
Other [Member] | ||
Total revenue | $ 206,548 | $ 62,171 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Diluted Net Income (Loss) Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total contingent shares issuance arrangement, stock options or warrants | 36,597,594 | 7,978,648 |
Convertible Note [Member] | ||
Total contingent shares issuance arrangement, stock options or warrants | 26,031,553 | 1,129,013 |
Common Stock Options [Member] | ||
Total contingent shares issuance arrangement, stock options or warrants | 850,176 | |
Common Stock Warrants [Member] | ||
Total contingent shares issuance arrangement, stock options or warrants | 9,715,865 | 6,849,635 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | Apr. 17, 2020 | Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | $ 1,251,029 | $ 3,574,885 | |||
Current liabilities | 15,306,509 | 7,054,124 | |||
Working capital deficit | 14,055,480 | 3,479,239 | |||
Total assets | 7,325,071 | 9,986,373 | |||
Property and equipment net | 236,810 | 294,616 | |||
Intangible assets | 4,125,742 | 4,769,117 | |||
Goodwill | 866,782 | 866,782 | |||
Equity investment | 414,612 | 203,700 | |||
Operating lease right of use asset | 368,638 | 210,816 | |||
Total liabilities | 18,051,037 | 14,685,988 | |||
Increase total liabilities | 3,365,049 | ||||
Total stockholders' deficit | (10,725,966) | (4,699,615) | $ (1,988,233) | ||
Net loss | (10,721,627) | (8,447,026) | |||
Financing activities | $ 4,645,649 | $ 6,466,810 | |||
CARES Act [Member] | |||||
Debt interest rate | 3.75% | 1.00% | |||
Debt instrument description | First payment due 12 months from date of note. | The loans bear interest at an annual rate of one percent (1%), are due two (2) years from the date of issuance, and all payments are deferred for the first six (6) months of the loan. Any unforgiven balance of loan principal and accrued interest at the end of the six (6) month loan deferral period is amortized in equal monthly installments over the remaining 18-months of the loan term. | |||
Debt instrument face amount | $ 498,082 | ||||
Economic injury disaster loans | $ 636,000 | ||||
Debt instrument term | 30 years | 18 months |
Liquidity - Schedule of Net Cha
Liquidity - Schedule of Net Change in Cash (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net cash used in operating activities | $ (4,326,048) | $ (6,533,141) |
Net cash used in investing activities | 8,354 | (32,241) |
Net cash provided by financing activities | 4,645,649 | 6,466,810 |
Net change in cash and cash equivalents | $ 327,955 | $ (98,572) |
Asset Purchase Agreement (Detai
Asset Purchase Agreement (Details Narrative) - USD ($) | Jun. 23, 2020 | Sep. 27, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt conversion, amount | $ 2,285,040 | |||
Debt conversion, shares issued | ||||
Convertible Promissory Note [Member] | ||||
Debt conversion, amount | $ 156,140 | |||
ECS Business [Member] | ||||
Business consideration | 5,000,000 | |||
Asset Purchase Agreement [Member] | ECS Business [Member] | ||||
Business consideration | $ 5,000,000 | $ 5,000,000 | ||
Asset Purchase Agreement [Member] | ECS Business [Member] | Minimum [Member] | ||||
Debt conversion, price | $ 0.10 | |||
Debt trading volume, percentage | 7.50% | |||
Asset Purchase Agreement [Member] | ECS Business [Member] | Maximum [Member] | ||||
Debt conversion, price | $ 0.70 | |||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | ||||
Debt instrument, term | 18 months | |||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | ||||
Debt conversion, amount | $ 8,000,000 | $ 4,000,000 | $ 4,000,000 | |
Debt conversion, shares issued | 3,333,333 | 3,333,333 | ||
Minimum percentage of beneficial ownership for debt conversion | 4.99% | |||
Debt conversion, price | $ 0.24 | |||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | Minimum [Member] | ||||
Debt conversion, price | $ 0.10 | |||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | Maximum [Member] | ||||
Debt conversion, price | $ 0.70 |
Asset Purchase Agreement - Sche
Asset Purchase Agreement - Schedule of Merger Transaction Investment (Details) - ECS Business [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Purchase Price: Convertible note | $ 4,000,000 |
Purchase Price: Common stock | 1,000,000 |
Total purchase price | 5,000,000 |
Allocation of purchase price: Cash | 210,348 |
Allocation of purchase price: Equipment | 63,289 |
Allocation of purchase price: Intangibles | 4,903,876 |
Allocation of purchase price: Accounts payable and accrued expenses | (177,513) |
Total allocation of purchase price | $ 5,000,000 |
Asset Purchase Agreement - Sc_2
Asset Purchase Agreement - Schedule of Merger Transaction Investment (Details) (Parenthetical) - ECS Business [Member] - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Business acquisition common stock shares issued | shares | 3,333,333 |
Merger transaction per share price | $ / shares | $ 0.30 |
Asset Purchase Agreement - Sc_3
Asset Purchase Agreement - Schedule of Unaudited Pro-forma Combined Results of Operations (Details) - ECS Business [Member] | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Revenues | $ 59,064,637 |
Net loss | $ (8,902,134) |
Net loss per share | $ / shares | $ (0.09) |
Weighted average number of shares outstanding | shares | 96,186,742 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 64,413 | $ 27,293 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Computer Equipment and Software | $ 312,796 | $ 312,760 |
Furniture and Fixtures | 9,774 | 1,416 |
Leasehold Improvements | 19,724 | 21,513 |
Property and equipment, gross | 342,294 | 335,689 |
Less: Accumulated Depreciation | (105,484) | (38,656) |
Property and equipment, net | $ 236,810 | $ 294,616 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1,108,375 | $ 200,028 |
Weighted average remaining useful lives | 6 years 9 months 18 days | |
Goodwill carrying amount | $ 866,782 | 866,782 |
Impairment charge |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible Assets Gross | $ 5,753,521 | $ 5,288,520 |
Less: Accumulated Depreciation | (1,627,779) | (519,404) |
Intangible Assets | 4,125,742 | 4,769,117 |
ECS Membership Agreement [Member] | ||
Intangible Assets Gross | 465,000 | |
Customer Relationships [Member] | ||
Intangible Assets Gross | 183,255 | 183,255 |
Noncompetition Agreement [Member] | ||
Intangible Assets Gross | 201,389 | 201,389 |
Trade Names [Member] | ||
Intangible Assets Gross | 617,474 | 617,474 |
Proprietary Software [Member] | ||
Intangible Assets Gross | $ 4,286,403 | $ 4,286,402 |
Credit Card Liability (Details
Credit Card Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Trade obligations | $ 102,941 | $ 1,106,280 |
Credit card liability | $ 383,073 | $ 449,158 |
Notes Payable - Related Party (
Notes Payable - Related Party (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt due date | Apr. 24, 2021 | |||
Repayment of debt | $ 674,000 | |||
SMDMM Funding, LLC [Member] | ||||
Promissory note, interest percentage | 6.00% | 10.00% | 15.00% | 6.00% |
Debt due date | Aug. 15, 2022 | Nov. 21, 2022 | Dec. 27, 2021 | |
Debt due date description | due on demand | |||
Drew advances | $ 1,136,500 | |||
Payments of accrued interest | 39,600 | |||
Debt outstanding balance | 3,341,940 | $ 2,205,440 | ||
Accrued interest | 272,127 | 64,741 | ||
SMDMM Funding, LLC [Member] | Maximum [Member] | ||||
Promissory note of annual payments | $ 217,000 | 1,136,500 | $ 883,000 | $ 1,100,000 |
AN Holdings LLC[Member] | ||||
Promissory note of annual payments | $ 443,210 | |||
Promissory note, interest percentage | 15.00% | |||
Payments of accrued interest | $ 15,164 | |||
Debt outstanding balance | 147,500 | |||
Accrued interest | 5,888 | |||
Repayment of debt | $ 295,710 |
Notes Payable and Long-Term D_3
Notes Payable and Long-Term Debt (Details Narrative) | Dec. 14, 2020USD ($)$ / sharesshares | Aug. 07, 2020USD ($)$ / sharesshares | Aug. 05, 2020USD ($)shares | Apr. 01, 2020USD ($)shares | Mar. 05, 2020USD ($)$ / sharesshares | Feb. 06, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Jan. 30, 2020USD ($)shares | Jul. 31, 2020USD ($) | Jul. 20, 2020USD ($)$ / sharesshares | May 29, 2020USD ($)$ / sharesshares | Apr. 30, 2020USD ($)$ / sharesshares | Feb. 29, 2020USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Jan. 31, 2020USD ($) |
Debt instrument, maturity date | Apr. 24, 2021 | ||||||||||||||||
Long term notes payable | $ 616,901 | ||||||||||||||||
Debt discount, amount | 2,906 | 26,328 | |||||||||||||||
Amortization of debt discount | 2,016,764 | 68,764 | |||||||||||||||
Promissory Note [Member] | |||||||||||||||||
Debt discount, amount | $ 31,200 | ||||||||||||||||
Restricted shares of common stock granted | shares | 100,000 | ||||||||||||||||
Amortization of debt discount | $ 28,294 | ||||||||||||||||
January 2020 Notes [Member] | |||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||
Debt instrument face amount | $ 540,000 | ||||||||||||||||
Debt discount, amount | $ 260,001 | 40,000 | $ 214,000 | 52,258 | |||||||||||||
Amortization of debt discount | 487,743 | ||||||||||||||||
Aggregate purchase price | $ 500,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 250,000 | ||||||||||||||||
Number of common stock issued | shares | 750,000 | 750,000 | |||||||||||||||
Exchange of common stock | shares | 195,000 | ||||||||||||||||
Fair value of grant shares | $ 30,225 | 600,000 | |||||||||||||||
Common stock conversion price | $ / shares | $ 0.65 | ||||||||||||||||
Debt discount price | 0.35 | ||||||||||||||||
February 2020 Notes [Member] | |||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||
Debt instrument face amount | $ 432,000 | $ 432,000 | |||||||||||||||
Debt discount, amount | $ 186,000 | 32,000 | 32,000 | 389,342 | |||||||||||||
Aggregate purchase price | $ 400,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 300,000 | ||||||||||||||||
Number of common stock issued | shares | 600,000 | ||||||||||||||||
Exchange of common stock | shares | 225,000 | 600,000 | |||||||||||||||
Fair value of grant shares | $ 28,695 | ||||||||||||||||
the January 2020 Notes | Securities Purchase Agreements [Member] | |||||||||||||||||
Debt discount, amount | $ 186,000 | ||||||||||||||||
the February 2020 Notes [Member] | Securities Purchase Agreements [Member] | |||||||||||||||||
Debt discount, amount | 42,658 | ||||||||||||||||
Amortization of debt discount | 389,342 | ||||||||||||||||
the March 2020 Notes [Member] | Securities Purchase Agreements [Member] | |||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||
Debt instrument face amount | $ 378,000 | ||||||||||||||||
Debt discount, amount | 28,000 | 47,018 | |||||||||||||||
Amortization of debt discount | 330,982 | ||||||||||||||||
Aggregate purchase price | $ 350,000 | ||||||||||||||||
Number of common stock issued | shares | 400,000 | ||||||||||||||||
Fair value of grant shares, shares | shares | 400,000 | ||||||||||||||||
Common stock conversion price | $ / shares | $ 0.65 | ||||||||||||||||
Debt instrument, interest per annum | 35.00% | ||||||||||||||||
the December 2020 SPA [Member] | |||||||||||||||||
Debt discount, amount | 154,611 | ||||||||||||||||
Amortization of debt discount | 10,389 | ||||||||||||||||
Fair value of grant shares | 39,082 | ||||||||||||||||
River North Equity, LLC [Member] | |||||||||||||||||
Debt discount, amount | 23,190 | ||||||||||||||||
Seller [Member] | |||||||||||||||||
Debt instrument face amount | $ 485,000 | ||||||||||||||||
Accrued interest | $ 97,806 | ||||||||||||||||
Two Accredited Investors [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt instrument face amount | $ 432,000 | 432,000 | |||||||||||||||
Debt discount, amount | 32,000 | $ 32,000 | |||||||||||||||
Aggregate purchase price | $ 400,000 | ||||||||||||||||
Number of common stock issued | shares | 600,000 | ||||||||||||||||
Accredited Investors Two [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt instrument, maturity date | Mar. 15, 2021 | Apr. 5, 2021 | |||||||||||||||
Debt instrument face amount | $ 162,000 | ||||||||||||||||
Debt discount, amount | $ 48,600 | $ 145,538 | $ 241,200 | ||||||||||||||
Aggregate purchase price | $ 150,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 172,000 | ||||||||||||||||
Number of common stock issued | shares | 300,000 | ||||||||||||||||
Exchange of common stock | shares | 225,000 | ||||||||||||||||
Fair value of grant shares | $ 28,965 | $ 42,362 | |||||||||||||||
Fair value of grant shares, shares | shares | 300,000 | 270,000 | |||||||||||||||
Common stock conversion price | $ / shares | $ 0.70 | ||||||||||||||||
Debt discount price | 0.30 | ||||||||||||||||
Debt instrument, interest per annum | 14.00% | ||||||||||||||||
Exercise warrant shares | shares | 150,000 | ||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.40 | ||||||||||||||||
Accredited Investors Two [Member] | the April 2020 SPA [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt discount, amount | $ 103,560 | 32,843 | |||||||||||||||
Amortization of debt discount | 129,157 | ||||||||||||||||
Fair value of grant shares | $ 46,400 | ||||||||||||||||
Fair value of grant shares, shares | shares | 172,000 | ||||||||||||||||
Common stock conversion price | $ / shares | $ 0.65 | ||||||||||||||||
Debt instrument, interest per annum | 35.00% | ||||||||||||||||
Accredited Investors Two [Member] | the May 2020 SPA [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt instrument face amount | $ 400,000 | ||||||||||||||||
Debt discount, amount | 80,000 | ||||||||||||||||
Aggregate purchase price | $ 370,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 400,000 | ||||||||||||||||
Number of common stock issued | shares | 500,000 | ||||||||||||||||
Fair value of grant shares | $ 96,396 | ||||||||||||||||
Fair value of grant shares, shares | shares | 400,000 | ||||||||||||||||
Common stock conversion price | $ / shares | $ 0.65 | ||||||||||||||||
Debt instrument, interest per annum | 10.00% | ||||||||||||||||
Exercise warrant shares | shares | 500,000 | ||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.40 | ||||||||||||||||
Accredited Investors Two [Member] | the July 2020 SPA [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt instrument face amount | $ 270,000 | ||||||||||||||||
Aggregate purchase price | $ 250,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 270,000 | ||||||||||||||||
Debt instrument, interest per annum | 10.00% | ||||||||||||||||
Accredited Investors Two [Member] | the December 2020 SPA [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt instrument, maturity date | Sep. 14, 2021 | ||||||||||||||||
Debt instrument face amount | $ 165,000 | ||||||||||||||||
Debt discount, amount | 77,318 | ||||||||||||||||
Aggregate purchase price | $ 153,000 | ||||||||||||||||
Issuance of common stock to investor | shares | 300,000 | ||||||||||||||||
Number of common stock issued | shares | 150,000 | ||||||||||||||||
Common stock conversion price | $ / shares | $ 0.70 | ||||||||||||||||
Debt discount price | 0.30 | ||||||||||||||||
Debt instrument, interest per annum | 10.00% | ||||||||||||||||
Accredited Investors [Member] | Securities Purchase Agreement and Note [Member] | |||||||||||||||||
Debt discount, amount | $ 108,394 | $ 62,100 | |||||||||||||||
Amortization of debt discount | $ 161,606 | ||||||||||||||||
Exercise warrant shares | shares | 338,000 | ||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.40 | ||||||||||||||||
Second Non-Interest-Bearing Promissory Note Payable [Member] | |||||||||||||||||
Long term notes payable | 0 | $ 235,000 | |||||||||||||||
Second Non-Interest-Bearing Promissory Note Payable [Member] | Seller [Member] | |||||||||||||||||
Payable in equal monthly installments | $ 250,000 | ||||||||||||||||
Debt instrument, maturity date | Jan. 12, 2016 | ||||||||||||||||
Third Non-Interest-Bearing Promissory Note Payable [Member] | Seller [Member] | |||||||||||||||||
Payable in equal monthly installments | $ 250,000 | ||||||||||||||||
Debt instrument, maturity date | Mar. 12, 2016 |
Notes Payable and Long-Term D_4
Notes Payable and Long-Term Debt - Schedule of Notes Payable and Long-Term Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |||
Less: Debt discount | $ (2,906) | $ (26,328) | |||
Promissory Note Payable Dated January 30, 2020 [Member] | BHP Capital NY [Member] | |||||
Long term debt gross | 100,343 | [1] | |||
Promissory Note Payable Dated January 30, 2020 [Member] | Armada Capital Partners LLC [Member] | |||||
Long term debt gross | 118,394 | [1] | |||
Promissory Note Payable Dated January 30, 2020 [Member] | Jefferson Street Capital LLC [Member] | |||||
Long term debt gross | 148,500 | [1] | |||
Promissory Note Payable Dated February 7, 2020 [Member] | GS Capital [Member] | |||||
Long term debt gross | 216,000 | [2] | |||
Promissory Note Payable Dated February 7, 2020 [Member] | Fourth Man LLC [Member] | |||||
Long term debt gross | 187,018 | [1] | |||
Promissory Note Payable Dated March 5, 2020 [Member] | GS Capital [Member] | |||||
Long term debt gross | 378,000 | [3] | |||
Promissory Note Payable Dated March 15, 2020 [Member] | Tangiers Global LLC [Member] | |||||
Long term debt gross | 50,695 | [4] | |||
Promissory Note Payable Dated May 29, 2020 [Member] | LGH Investments LLC [Member] | |||||
Long term debt gross | 400,000 | [5] | |||
Promissory Note Payable Dated July 21, 2020 [Member] | Vista Capital LLC [Member] | |||||
Long term debt gross | 270,000 | [6] | |||
Promissory Note Payable Dated December 14, 2020 [Member] | Lucas Ventures [Member] | |||||
Long term debt gross | 165,000 | [7] | |||
Notes Payable and Long-term Debt [Member] | |||||
Long term debt gross | 3,418,632 | 762,500 | |||
Less: Debt discount | (517,781) | (26,328) | |||
Notes payable | 2,900,851 | 736,172 | |||
Notes Payable To Seller of DigitizeIQ, LLC [Member] | |||||
Long term debt gross | [8] | 485,000 | [9] | ||
Convertible Note Payable To River North Equity LLC [Member] | |||||
Long term debt gross | [8] | 27,500 | [10] | ||
Promissory Note Payable to a Lender [Member] | |||||
Long term debt gross | [11] | 250,000 | 250,000 | ||
Less: Debt discount | (2,906) | (2,906) | |||
Promissory note payable to Bank3 [Member] | |||||
Long term debt gross | 498,082 | ||||
Note payable to US Small Business [Member] | |||||
Long term debt gross | 150,000 | ||||
Note payable to US Small Business Dated July 5, 2020 [Member] | |||||
Long term debt gross | 150,000 | ||||
Note payable to US Small Business Dated July 5, 2020 One [Member] | |||||
Long term debt gross | 15,100 | ||||
Note payable to US Small Business Dated July 7, 2020 [Member] | |||||
Long term debt gross | 150,000 | ||||
Note payable to US Small Business Dated July 21, 2020 [Member] | |||||
Long term debt gross | 150,000 | ||||
Note payable to US Small Business Dated July 21, 2020 One [Member] | |||||
Long term debt gross | $ 21,500 | ||||
[1] | On January 30, 2020, the Company entered into Securities Purchase Agreements (the "January 2020 SPAs"), with severally and not jointly, with BHP, Armada, Jefferson (the "January 2020 Investors"), pursuant to which the January 2020 Investors purchased from the Company, for an aggregate purchase price of $500,000 (the "January 2020 Purchase Price"), Promissory Notes in the aggregate principal amount of $540,000 (the "January 2020 Notes"). The January 2020 Notes will be repaid according to a schedule of fixed interest and principal payments beginning in August 2020. As additional consideration for the January 2020 Investors loaning the January 2020 Purchase Price to the Company, the Company issued to each of the January 2020 Investors 250,000 shares of Common Stock for a total of 750,000 shares (the "January 2020 Share Issuance"). In connection with the January 2020 SPAs, the Company paid issuance costs of $40,000 which is accounted for as a debt discount on the consolidated balance sheets and is being amortized over the life of the notes. | ||||
[2] | On February 3 and February 6, 2020, the Company entered into Securities Purchase Agreements (the "February 2020 SPAs"), with severally and not jointly, with GS Capital Partners ("GSC") and Fourth Man LLC ("Fourth"), (the "February 2020 Investors"), pursuant to which the February 2020 Investors purchased from the Company, for an aggregate purchase price of $400,000 (the "February 2020 Purchase Price"), Promissory Notes in the principal amount of $432,000 (the "February 2020 Notes"). The February 2020 Notes will be repaid according to a schedule of fixed interest and principal payments beginning in August 2020. As additional consideration for the February 2020 Investors loaning the February 2020 Purchase Price to the Company, the Company issued to each of the February 2020 Investors 300,000 shares of Common Stock for a total of 600,000 shares (the "February Share Issuance"). In connection with the February 2020 SPAs, the Company paid issuance costs of $32,000 which is accounted for as a debt discount on the consolidated balance sheets and is being amortized over the life of the notes. On August 5, 2020 and September 24, 2020, the Company executed agreements with the February 2020 Investors to postpone the first principal and interest payment due date to October 5, 2020 and extend the maturity date until April 5, 2021 in exchange for 225,000 shares of Common Stock. The shares were valued on day of grant with a fair value of $28,965 and is included as a component of interest expense in the consolidated statements of operations. | ||||
[3] | On March 5, 2020, the Company entered into a Securities Purchase Agreement (the "March 2020 SPA"), with GSC (the "March 2020 Investor"), pursuant to which the March 2020 Investor purchased from the Company, for an aggregate purchase price of $350,000 (the "March 2020 Purchase Price"), a Promissory Note in the principal amount of $378,000 (the "March 2020 Note"). The March 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the March 2020 Investor loaning the March 2020 Purchase Price to the Company, the Company issued to the March 2020 Investor 400,000 shares of Common Stock of the Company. In connection with the March 2020 SPAs, the Company paid issuance costs of $28,000 which is accounted for as a debt discount on the consolidated balance sheets and is being amortized over the life of the notes. | ||||
[4] | On April 1, 2020, the Company entered into a Securities Purchase Agreement (the "April 2020 SPA"), with Tangiers Global ("Tangiers") (the "April 2020 Investor"), pursuant to which the April 2020 Investor purchased from the Company, for an aggregate purchase price of $150,000 (the "April 2020 Purchase Price"), a Promissory Note in the principal amount of $162,000 (the "April 2020 Note"). The April 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the April 2020 Investor loaning the April 2020 Purchase Price to the Company, the Company issued to the April 2020 Investor 172,000 shares of Common Stock of the Company. | ||||
[5] | On May 29, 2020, the Company entered into a Securities Purchase Agreement (the "May 2020 SPA"), with LGH Investments LLC ("LGH") (the "May 2020 Investor"), pursuant to which the May 2020 Investor purchased from the Company, for an aggregate purchase price of $370,000 (the "May 2020 Purchase Price"), a Promissory Note in the principal amount of $400,000 (the "May 2020 Note"). The May 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the May 2020 Investor loaning the May 2020 Purchase Price to the Company, the Company issued to the May 2020 Investor 400,000 shares of Common Stock of the Company in addition to three-year warrants to purchase 500,000 shares of Common Stock. | ||||
[6] | On July 20, 2020, the Company entered into a Securities Purchase Agreement (the "July 2020 SPA"), with Vista Capital Investments LLC ("Vista") (the "July 2020 Investor"), pursuant to which the July 2020 Investor purchased from the Company, for an aggregate purchase price of $250,000 (the "July 2020 Purchase Price"), a Promissory Note in the principal amount of $270,000 (the "July 2020 Note"). The July 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the July 2020 Investor loaning the July 2020 Purchase Price to the Company, the Company issued to the July 2020 Investor 270,000 shares of Common Stock of the Company in addition to three-year warrants to purchase 338,000 shares of Common Stock. | ||||
[7] | On December 14, 2020, the Company entered into a Securities Purchase Agreement (the "December 2020 SPA"), with Lucas Ventures LLC ("Lucas") (the "December 2020 Investor"), pursuant to which the December 2020 Investor purchased from the Company, for an aggregate purchase price of $153,000 (the "December 2020 Purchase Price"), a Promissory Note in the principal amount of $165,000 (the "December 2020 Note"). The December 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the December 2020 Investor loaning the December 2020 Purchase Price to the Company, the Company issued to the December 2020 Investor 300,000 shares of Common Stock of the Company in addition to three-year warrants to purchase 150,000 shares of Common Stock. | ||||
[8] | Notes due seller of DigitizeIQ, LLC includes a series of notes as follows: A second non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on January12, 2016; (Balance at December 31, 2020 and 2019 - $0 and $235,000). A third non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on March 12,2016 and was repaid as of December 31, 2020. | ||||
[9] | A second non-interest-bearing promissory note made payable to the seller in the amount of $250,000, which was due on January 12, 2016; (Balance at December 31, 2020 and 2019 - $0 and $235,000). | ||||
[10] | Convertible note payable to River North Equity, LLC ("RNE") - The Company evaluated the embedded conversion for derivative treatment and recorded an initial derivative liability and debt discount of $23,190. The debt discount is fully amortized. In February 2020, the Company and RNE settled the outstanding debt. | ||||
[11] | Promissory note - The Company evaluated the 100,000 restricted shares of the Company's Common Stock granted with the note and recorded a debt discount of $31,200. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $0 and $26,328 as of December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, the Company recorded amortization of debt discount totaling $28,294. |
Notes Payable and Long-Term D_5
Notes Payable and Long-Term Debt - Schedule of Notes Payable and Long-Term Debt (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt instrument, maturity date | Apr. 24, 2021 | |
Debt discount, amount | $ 2,906 | $ 26,328 |
Promissory Note Payable Dated January 30, 2020 [Member] | BHP Capital NY [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Feb. 5, 2021 | Feb. 5, 2021 |
Promissory Note Payable Dated January 30, 2020 [Member] | Armada Capital Partners LLC [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Feb. 5, 2021 | Feb. 5, 2021 |
Promissory Note Payable Dated January 30, 2020 [Member] | Jefferson Street Capital LLC [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Feb. 5, 2021 | Feb. 5, 2021 |
Promissory Note Payable Dated February 7, 2020 [Member] | GS Capital [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Feb. 6, 2021 | Feb. 6, 2021 |
Promissory Note Payable Dated February 7, 2020 [Member] | Fourth Man LLC [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Apr. 5, 2021 | Apr. 5, 2021 |
Promissory Note Payable Dated March 5, 2020 [Member] | GS Capital [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Feb. 6, 2021 | Feb. 6, 2021 |
Promissory Note Payable Dated March 15, 2020 [Member] | Tangiers Global LLC [Member] | ||
Debt instrument, interest per annum | 14.00% | 14.00% |
Debt instrument, maturity date | Mar. 15, 2021 | Mar. 15, 2021 |
Promissory Note Payable Dated May 29, 2020 [Member] | LGH Investments LLC [Member] | ||
Debt instrument, interest per annum | 10.00% | 10.00% |
Debt instrument, maturity date | Mar. 29, 2021 | Mar. 29, 2021 |
Promissory Note Payable Dated July 21, 2020 [Member] | Vista Capital LLC [Member] | ||
Debt instrument, interest per annum | 10.00% | 10.00% |
Debt instrument, maturity date | Mar. 29, 2021 | Mar. 29, 2021 |
Promissory Note Payable Dated December 14, 2020 [Member] | Lucas Ventures [Member] | ||
Debt instrument, interest per annum | 10.00% | 10.00% |
Debt instrument, maturity date | Sep. 10, 2021 | Sep. 10, 2021 |
Convertible Note Payable To River North Equity LLC [Member] | ||
Debt instrument, interest per annum | 10.00% | 10.00% |
Debt instrument, maturity date | Apr. 13, 2017 | Apr. 13, 2017 |
Promissory Note Payable to a Lender [Member] | ||
Debt instrument, interest per annum | 18.00% | 18.00% |
Debt instrument, maturity date | Nov. 3, 2020 | Nov. 3, 2020 |
Restricted shares of common stock granted | 100,000 | 100,000 |
Debt discount, amount | $ 2,906 | $ 2,906 |
Promissory note payable to Bank3 [Member] | ||
Debt instrument, interest per annum | 1.00% | 1.00% |
Debt instrument, maturity date | Oct. 17, 2021 | Oct. 17, 2021 |
Note payable to US Small Business [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | May 25, 2050 | May 25, 2050 |
Note payable to US Small Business Dated July 5, 2020 [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | Jul. 5, 2050 | Jul. 5, 2050 |
Note payable to US Small Business Dated July 5, 2020 One [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | Jul. 5, 2050 | Jul. 5, 2050 |
Note payable to US Small Business Dated July 7, 2020 [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | Jul. 7, 2050 | Jul. 7, 2050 |
Note payable to US Small Business Dated July 21, 2020 [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | Jul. 21, 2050 | Jul. 21, 2050 |
Note payable to US Small Business Dated July 21, 2020 One [Member] | ||
Debt instrument, interest per annum | 3.75% | 3.75% |
Debt instrument, maturity date | Jul. 21, 2050 | Jul. 21, 2050 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details Narrative) | Aug. 07, 2020USD ($)$ / sharesshares | Aug. 07, 2020USD ($)$ / sharesshares | Jul. 20, 2020USD ($)Integer$ / sharesshares | Jun. 23, 2020USD ($)$ / shares | May 29, 2020USD ($)Integer$ / sharesshares | Apr. 02, 2020USD ($)Integer$ / sharesshares | Mar. 06, 2020USD ($) | Mar. 05, 2020USD ($)Integer$ / sharesshares | Feb. 06, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Feb. 03, 2020USD ($)shares | Jan. 30, 2020USD ($)Integer$ / sharesshares | Jan. 30, 2020USD ($)$ / sharesshares | Oct. 07, 2019USD ($)Integer$ / sharesshares | Sep. 24, 2020USD ($)shares | Dec. 31, 2020USD ($)Integer$ / sharesshares | Dec. 31, 2019USD ($)shares | Aug. 05, 2020USD ($) | Feb. 29, 2020USD ($) |
Debt conversion, amount | $ 2,285,040 | ||||||||||||||||||
Debt instrument, maturity date | Apr. 24, 2021 | ||||||||||||||||||
Debt discount, amount | $ 2,906 | $ 26,328 | |||||||||||||||||
Amortization of debt discount related to warrants | 2,016,764 | 68,764 | |||||||||||||||||
Payments of debt issuance cost | $ 162,000 | ||||||||||||||||||
Debt conversion, shares issued | shares | |||||||||||||||||||
Shares value during the period of issue / grant | 178,508 | ||||||||||||||||||
January 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.65 | $ 0.65 | |||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||||
Aggregate purchase price | $ 500,000 | ||||||||||||||||||
Debt instrument face amount | $ 540,000 | 540,000 | |||||||||||||||||
Debt discount, amount | $ 260,001 | $ 260,001 | 40,000 | $ 40,000 | $ 52,258 | $ 214,000 | |||||||||||||
Amortization of debt discount related to warrants | 487,743 | ||||||||||||||||||
Number of shares of common stock | shares | 750,000 | 750,000 | |||||||||||||||||
February 2020 Notes [Member] | |||||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||||
Aggregate purchase price | $ 400,000 | ||||||||||||||||||
Debt instrument face amount | $ 432,000 | 432,000 | |||||||||||||||||
Debt discount, amount | $ 32,000 | $ 32,000 | 389,342 | $ 186,000 | |||||||||||||||
Number of shares of common stock | shares | 600,000 | ||||||||||||||||||
Convertible Promissory Note [Member] | |||||||||||||||||||
Debt conversion, amount | 156,140 | ||||||||||||||||||
Debt discount, amount | 0 | 75,078 | |||||||||||||||||
Amortization of debt discount related to warrants | $ 88,860 | ||||||||||||||||||
Number of shares of common stock | shares | 1,409,040 | ||||||||||||||||||
Debt outstanding balance | $ 108,860 | 405,000 | |||||||||||||||||
Payment towards cancellation of warrants | $ 95,000 | ||||||||||||||||||
Cancelled warrants | shares | 250,000 | ||||||||||||||||||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | |||||||||||||||||||
Debt conversion, amount | $ 8,000,000 | $ 4,000,000 | $ 4,000,000 | ||||||||||||||||
Debt conversion, price | $ / shares | $ 0.24 | ||||||||||||||||||
Gain on settlement | $ 2,080,000 | ||||||||||||||||||
Debt conversion, shares issued | shares | 3,333,333 | 3,333,333 | |||||||||||||||||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | Minimum [Member] | |||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.10 | ||||||||||||||||||
Asset Purchase Agreement [Member] | GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | Maximum [Member] | |||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.70 | ||||||||||||||||||
Asset Purchase Agreement [Member] | Power Up Lending Group Ltd. [Member] | Convertible Promissory Note [Member] | |||||||||||||||||||
Debt instrument, average price | 65.00% | ||||||||||||||||||
Trading days | Integer | 20 | ||||||||||||||||||
Prepayment amount | $ 233,000 | ||||||||||||||||||
Debt instrument, maturity date | Sep. 18, 2020 | ||||||||||||||||||
Securities Purchase Agreement [Member] | January 2020 Notes [Member] | Investors [Member] | |||||||||||||||||||
Debt discount, amount | $ 260,001 | $ 260,001 | $ 150,157 | ||||||||||||||||
Number of shares of common stock | shares | 300,000 | 300,000 | 750,000 | ||||||||||||||||
Shares value during the period of issue / grant | $ 240,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | February 2020 Notes [Member] | Investors [Member] | |||||||||||||||||||
Amortization of debt discount related to warrants | 281,843 | ||||||||||||||||||
Securities Purchase Agreement [Member] | March 2020 Notes [Member] | Investors [Member] | |||||||||||||||||||
Debt discount, amount | 141,246 | ||||||||||||||||||
Amortization of debt discount related to warrants | 236,754 | ||||||||||||||||||
Number of shares of common stock | shares | 400,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Buyers [Member] | |||||||||||||||||||
Aggregate purchase price | $ 375,000 | ||||||||||||||||||
Debt instrument face amount | $ 405,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Three Accredited Investors [Member] | January 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, amount | $ 240,000 | ||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.65 | $ 0.65 | |||||||||||||||||
Debt instrument, average price | 35.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | Feb. 5, 2021 | |||||||||||||||||
Aggregate purchase price | $ 500,000 | ||||||||||||||||||
Debt instrument face amount | $ 540,000 | $ 540,000 | |||||||||||||||||
Debt instrument, interest per annum | 14.00% | 14.00% | |||||||||||||||||
Debt instrument, description | No payments of principal or interest are due through July 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. | ||||||||||||||||||
Debt discount, amount | 185,805 | ||||||||||||||||||
Amortization of debt discount related to warrants | 220,647 | ||||||||||||||||||
Number of shares of common stock | shares | 750,000 | ||||||||||||||||||
Payments of debt issuance cost | $ 40,000 | ||||||||||||||||||
Debt discount of conversion feature | $ 260,001 | ||||||||||||||||||
Debt conversion, shares issued | shares | 195,000 | ||||||||||||||||||
Shares value during the period of issue / grant | $ 30,225 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Two Accredited Investors [Member] | February 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, amount | $ 186,000 | $ 186,000 | |||||||||||||||||
Debt instrument, maturity date | Apr. 5, 2021 | ||||||||||||||||||
Aggregate purchase price | 400,000 | 400,000 | |||||||||||||||||
Debt instrument face amount | $ 432,000 | $ 432,000 | $ 432,000 | ||||||||||||||||
Number of shares of common stock | shares | 600,000 | 600,000 | |||||||||||||||||
Payments of debt issuance cost | $ 32,000 | $ 32,000 | |||||||||||||||||
Debt discount of conversion feature | 214,000 | $ 214,000 | |||||||||||||||||
Debt conversion, shares issued | shares | 225,000 | ||||||||||||||||||
Shares value during the period of issue / grant | $ 28,965 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor [Member] | March 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, amount | $ 108,800 | ||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.65 | ||||||||||||||||||
Debt instrument, average price | 35.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Debt instrument, maturity date | Mar. 5, 2021 | ||||||||||||||||||
Aggregate purchase price | $ 350,000 | ||||||||||||||||||
Debt instrument face amount | $ 378,000 | ||||||||||||||||||
Debt instrument, interest per annum | 14.00% | ||||||||||||||||||
Debt instrument, description | No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity | ||||||||||||||||||
Payments of debt issuance cost | $ 28,000 | ||||||||||||||||||
Debt discount of conversion feature | $ 241,200 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | Buyers [Member] | |||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.75 | ||||||||||||||||||
Debt instrument, average price | 25.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Debt instrument, maturity date | Apr. 7, 2021 | ||||||||||||||||||
Aggregate purchase price | $ 125,000 | ||||||||||||||||||
Debt instrument face amount | $ 135,000 | ||||||||||||||||||
Warrant to purchase | shares | 125,000 | ||||||||||||||||||
Debt instrument, interest per annum | 8.00% | ||||||||||||||||||
Debt instrument, default interest rate | 18.00% | ||||||||||||||||||
Debt instrument, description | The warrants permit the Buyers to exercise the purchase rights at any time on or after October 7, 2019 through October 7, 2022. | ||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.80 | ||||||||||||||||||
Debt discount of conversion feature | $ 266,181 | ||||||||||||||||||
April Securities Purchase Agreement and Note [Member] | Accredited Investor [Member] | |||||||||||||||||||
Debt conversion, amount | $ 46,400 | ||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.65 | ||||||||||||||||||
Debt instrument, average price | 35.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Aggregate purchase price | $ 150,000 | ||||||||||||||||||
Debt instrument face amount | $ 162,000 | ||||||||||||||||||
Warrant to purchase | shares | 500,000 | ||||||||||||||||||
Debt instrument, interest per annum | 14.00% | ||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.40 | ||||||||||||||||||
Debt discount, amount | $ 96,396 | $ 103,560 | |||||||||||||||||
Number of shares of common stock | shares | 172,000 | ||||||||||||||||||
April Securities Purchase Agreement and Note [Member] | Accredited Investor [Member] | April 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, amount | $ 46,400 | ||||||||||||||||||
Amortization of debt discount related to warrants | $ 88,324 | ||||||||||||||||||
Number of shares of common stock | shares | 172,000 | 73,676 | |||||||||||||||||
April Securities Purchase Agreement and Note [Member] | Accredited Investor [Member] | May 2020 Notes [Member] | |||||||||||||||||||
Debt conversion, amount | $ 124,000 | ||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.65 | ||||||||||||||||||
Debt instrument, average price | 35.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Debt instrument, maturity date | May 29, 2020 | ||||||||||||||||||
Aggregate purchase price | $ 370,000 | ||||||||||||||||||
Debt instrument face amount | $ 400,000 | ||||||||||||||||||
Debt instrument, interest per annum | 10.00% | ||||||||||||||||||
Debt discount, amount | $ 216,296 | ||||||||||||||||||
Amortization of debt discount related to warrants | 183,704 | ||||||||||||||||||
Number of shares of common stock | shares | 400,000 | ||||||||||||||||||
Payments of debt issuance cost | $ 500,000 | ||||||||||||||||||
Debt discount of conversion feature | $ 149,604 | ||||||||||||||||||
Debt conversion, shares issued | shares | 400,000 | ||||||||||||||||||
Securities Purchase Agreement and Note [Member] | July 2020 Notes [Member] | Investors [Member] | |||||||||||||||||||
Debt conversion, amount | $ 270,000 | ||||||||||||||||||
Debt conversion, price | $ / shares | $ 0.70 | ||||||||||||||||||
Debt instrument, average price | 30.00% | ||||||||||||||||||
Trading days | Integer | 10 | ||||||||||||||||||
Debt instrument, maturity date | Apr. 20, 2021 | ||||||||||||||||||
Aggregate purchase price | $ 250,000 | ||||||||||||||||||
Debt instrument face amount | $ 270,000 | ||||||||||||||||||
Debt instrument, interest per annum | 10.00% | ||||||||||||||||||
Debt discount, amount | 199,051 | ||||||||||||||||||
Amortization of debt discount related to warrants | $ 145,538 | $ 70,949 | |||||||||||||||||
Number of shares of common stock | shares | 270,000 | ||||||||||||||||||
Shares value during the period of issue / grant | $ 62,100 | ||||||||||||||||||
Securities Purchase Agreement and Note [Member] | Two Accredited Investors [Member] | |||||||||||||||||||
Aggregate purchase price | 400,000 | ||||||||||||||||||
Debt instrument face amount | 432,000 | 432,000 | |||||||||||||||||
Debt discount, amount | $ 32,000 | $ 32,000 | |||||||||||||||||
Number of shares of common stock | shares | 600,000 | ||||||||||||||||||
July 2020 Notes [Member] | Investors [Member] | |||||||||||||||||||
Warrant to purchase | shares | 338,000 | ||||||||||||||||||
Warrant exercise price per share | $ / shares | $ 0.40 | ||||||||||||||||||
Debt discount, amount | $ 42,362 |
Convertible Promissory Notes -
Convertible Promissory Notes - Schedule of Convertible Promissory Notes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Less: Debt discount | $ (2,906) | $ (26,328) | |
Convertible Promissory Note [Member] | |||
Convertible note payable | 2,290,860 | 4,638,000 | |
Less: Debt discount | (966,231) | (201,316) | |
Convertible note payable, net | 1,324,629 | 4,436,684 | |
Notes Payable To GBT Technologies Inc [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [1] | 4,000,000 | |
Notes Payable To Power Up Lending Group Ltd [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [2] | 233,000 | |
Notes Payable To BHP Capital NY [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [3] | 30,000 | 135,000 |
Notes Payable To BHP Capital NY [Member] | Convertible Promissory Note One [Member] | |||
Convertible note payable | [4] | 180,000 | |
Notes Payable To Armada Capital Partners LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [3] | 135,000 | |
Notes Payable To Armada Capital Partners LLC [Member] | Convertible Promissory Note One [Member] | |||
Convertible note payable | [4] | 180,000 | |
Notes Payable To Jefferson Street Capital LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [3] | 78,860 | 135,000 |
Notes Payable To Jefferson Street Capital LLC [Member] | Convertible Promissory Note One [Member] | |||
Convertible note payable | [4] | 180,000 | |
Notes Payable To GS Capital Partners [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [5] | 216,000 | |
Notes Payable To GS Capital Partners [Member] | Convertible Promissory Note One [Member] | |||
Convertible note payable | [6] | 378,000 | |
Notes Payable To Fourth Man LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [5] | 216,000 | |
Notes Payable To Tangiers Global LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [7] | 162,000 | |
Notes Payable To LGH Investments LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [8] | 400,000 | |
Notes Payable To Vista Capital LLC [Member] | Convertible Promissory Note [Member] | |||
Convertible note payable | [9] | $ 270,000 | |
[1] | As discussed above in Note 4, the Purchase Agreement provides that the consideration is to be paid by the Company through the issuance of a convertible promissory note in the amount of $4,000,000 to GBT, and through the issuance of three million three hundred thirty-three thousand three hundred thirty-three restricted shares of the Company's Common Stock. The conversion price of the note shall equal the volume weighted average price of the Company's Common Stock on the trading market which the Common Stock is then trading over the previous twenty (20) days prior to the conversion date, provided that the conversion price shall never be lower than $0.10 or higher than $0.70. The note provides that the Company retains the right to prepay all or any portion of the principal without any prepayment penalty. On June 23, 2020, the debt was converted into 8,000,000 shares of the Company's Common Stock with a per share fair value of $0.24 per share. Upon issuance of the shares, the Company recorded a gain on settlement of $2,080,000 on the condensed consolidated statements of operations. | ||
[2] | The Company executed a convertible note with Power Up Lending Group ("PowerUp") on September 18, 2019 and identified certain features embedded in the conversion feature of the note requiring the Company to classify it as a derivative liability. The conversion price of the note shall equal 65% the average price of the two lowest trading prices of the Company's Common Stock on the trading market which the Common Stock is then trading over the previous twenty (20) days prior to the conversion date. On March 6, 2020, Surge Holdings, Inc. the Company prepaid $233,000 in cash to fully satisfy the note which would have matured on September 18, 2020. No shares of the Company's Common Stock were issued or conveyed to PowerUp as a result of the prepayment. | ||
[3] | On October 7, 2019, the Company entered into a Securities Purchase Agreement (the "SPA"), severally and not jointly, with BHP Capital NY Inc., a New York Corporation ("BHP"), Armada Capital Partners LLC, a Delaware limited liability company ("Armada"), and Jefferson Street Capital LLC, a New Jersey limited liability company ("Jefferson"), ("Buyer" or collectively the "Buyers"). In connection with the SPA, the Company issued three (3) notes, one to each Buyer, and three (3) warrants to purchase the Company's Common Stock, one to each Buyer. The aggregate purchase price of the notes is $375,000 and the aggregate principal amount of the notes is $405,000. Pursuant to the SPA, each of the Buyers purchased from the Company, for a purchase price of $125,000, a convertible promissory note, in the principal amount of $135,000. The purchase of each note was accompanied by the Company's issuance of a warrant to purchase 125,000 shares of the Company's Common Stock to each Buyer. On October 7, 2019, each Buyer delivered the purchase price to the Company as payment for each note. Each note became effective as of October 7, 2019 and is due and payable on April 7, 2021. The notes entitle the Buyers to 8% interest per annum. Upon an Event of Default (as defined in the notes), the notes entitle the Buyers to interest at the rate of 18% per annum. The notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.75 (representing a 25% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The warrants were issued to the Buyers by the Company on October 7, 2019 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 125,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after October 7, 2019 through October 7, 2022. Each warrant contains an exercise price per share of $0.80, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it as debt discount on the consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $0 and $75,078 as of September 30, 2020 and December 31, 2019, respectively, related to the warrants issued. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount related to these warrants totaling $88,860. During the nine months ended September 30, 2020, the Company paid $95,000 for the cancellation of 250,000 warrants. During the nine months ended September 30, 2020, the Company paid $140,000 of the outstanding balance in addition to converting $156,140 of outstanding balance to 1,409,040 shares of Company Common Stock. The aggregate outstanding balance on the notes was $108,860 and $405,000 as of September 30, 2020 and December 31, 2019, respectively. | ||
[4] | On January 30, 2020, the Company entered into Securities Purchase Agreements (the "January 2020 SPAs"), with three (3) accredited investors (the "January 2020 Investors"), pursuant to which the January 2020 Investors purchased from the Company, for an aggregate purchase price of $500,000 (the "January 2020 Purchase Price"), Promissory Notes in the aggregate principal amount of $540,000 (the "January 2020 Notes"). The January 2020 Notes will be repaid according to a schedule of fixed interest and principal payments beginning in August 2020. As additional consideration for the January 2020 Investors loaning the January 2020 Purchase Price to the Company, the Company issued to each of the January 2020 Investors 250,000 shares of Common Stock for a total of 750,000 shares (the "January 2020 Share Issuance"). In connection with the January 2020 SPAs, the Company paid issuance costs of $40,000 which is accounted for as a debt discount on the condensed consolidated balance sheet and is being amortized over the life of the notes. The January 2020 Notes shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on February 5, 2021. No payments of principal or interest are due through July 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. On August 7, 2020, the Company executed agreements with the January 2020 investors to postpone the first and second principal and interest payment due date to maturity date and extend the maturity date until April 5, 2021 in exchange for 195,000 shares of Common Stock. The shares were valued on day of grant with a fair value of $30,225 and is included as a component of interest expense in the condensed consolidated statements of operations. In the event of default as defined in the agreements, the notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a $260,001 debt discount relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 750,000 shares upon day of grant with a fair value of $240,000 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the January 2020 SPAs of $185,805 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $354,195. | ||
[5] | On February 3 and February 6, 2020, the Company entered into Securities Purchase Agreements (the "February 2020 SPAs"), with two (2) accredited investor (the "February 2020 Investors"), pursuant to which the February 2020 Investors purchased from the Company, for an aggregate purchase price of $400,000 (the "February 2020 Purchase Price"), Promissory Notes in the principal amount of $432,000 (the "February 2020 Notes"). The February 2020 Notes will be repaid according to a schedule of fixed interest and principal payments beginning in August 2020. As additional consideration for the February 2020 Investors loaning the February 2020 Purchase Price to the Company, the Company issued to each of the February 2020 Investors 300,000 shares of Common Stock for a total of 600,000 shares (the "February Share Issuance"). In connection with the February 2020 SPAs, the Company paid issuance costs of $32,000 which is accounted for as a debt discount on the condensed consolidated balance sheet and is being amortized over the life of the notes. On August 5, 2020 and September 24, 2020, the Company executed agreements with the February 2020 Investors to postpone the first principal and interest payment due date to October 5, 2020 and extend the maturity date until April 5, 2021 in exchange for 225,000 shares of Common Stock. The shares were valued on day of grant with a fair value of $28,965 and is included as a component of interest expense in the condensed consolidated statements of operations. The terms of the February 2020 Notes are substantially the same as the terms of the January 2020 Notes. The Company recorded a debt discount of $214,000 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 600,000 shares upon day of grant with a fair value of $186,000 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the February 2020 SPAs of $150,157 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $281,843. | ||
[6] | On March 5, 2020, the Company entered into a Securities Purchase Agreement (the "March 2020 SPA"), with an accredited investor (the "March 2020 Investor"), pursuant to which the March 2020 Investor purchased from the Company, for an aggregate purchase price of $350,000 (the "March 2020 Purchase Price"), a Promissory Note in the principal amount of $378,000 (the "March 2020 Note"). The March 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the March 2020 Investor loaning the March 2020 Purchase Price to the Company, the Company issued to the March 2020 Investor 400,000 shares of Common Stock of the Company. In connection with the March 2020 SPAs, the Company paid issuance costs of $28,000 which is accounted for as a debt discount on the condensed consolidated balance sheet and is being amortized over the life of the notes. The March 2020 Note shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on March 5, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $241,200 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 400,000 shares upon day of grant with a fair value of $108,800 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the March 2020 SPAs of $141,246 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $236,754. | ||
[7] | On April 1, 2020, the Company entered into a Securities Purchase Agreement (the "April 2020 SPA"), with Tangiers Global ("Tangiers") (the "April 2020 Investor"), pursuant to which the April 2020 Investor purchased from the Company, for an aggregate purchase price of $150,000 (the "April 2020 Purchase Price"), a Promissory Note in the principal amount of $162,000 (the "April 2020 Note"). The April 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the April 2020 Investor loaning the April 2020 Purchase Price to the Company, the Company issued to the April 2020 Investor 172,000 shares of Common Stock of the Company. The April 2020 Note shall accrue interest at a rate of fourteen percent (14%) per annum and will mature on March 15, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $103,560 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 172,000 shares upon day of grant with a fair value of $46,400 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the April 2020 SPA of $73,676 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $88,324. | ||
[8] | On May 29, 2020, the Company entered into a Securities Purchase Agreement (the "May 2020 SPA"), with LGH Investments LLC ("LGH") (the "May 2020 Investor"), pursuant to which the May 2020 Investor purchased from the Company, for an aggregate purchase price of $370,000 (the "May 2020 Purchase Price"), a Promissory Note in the principal amount of $400,000 (the "May 2020 Note"). The May 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the May 2020 Investor loaning the May 2020 Purchase Price to the Company, the Company issued to the May 2020 Investor 400,000 shares of Common Stock of the Company in addition to three year warrants to purchase 500,000 shares of Common Stock. The May 2020 Note shall accrue interest at a rate of fourteen percent (10%) per annum and will mature on March 29, 2021. No payments of principal or interest are due through August 2020 (five (5) months following issuance) and then there are seven (7) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.65 (representing a 35% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $149,604 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 400,000 shares upon day of grant with a fair value of $124,000 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. The warrants were issued to the Buyers by the Company on May 29, 2020 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 500,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after May 29, 2020 through May 29, 2023. Each warrant contains an exercise price per share of $0.40, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants upon day of grant with a fair value of $96,396 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the May 2020 SPA of $216,296 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $183,704. | ||
[9] | On July 20, 2020, the Company entered into a Securities Purchase Agreement (the "July 2020 SPA"), with Vista Capital Investments LLC ("Vista") (the "July 2020 Investor"), pursuant to which the July 2020 Investor purchased from the Company, for an aggregate purchase price of $250,000 (the "July 2020 Purchase Price"), a Promissory Note in the principal amount of $270,000 (the "July 2020 Note"). The July 2020 Note will be repaid according to a schedule of fixed interest and principal payments beginning in September 2020. As additional consideration for the July 2020 Investor loaning the July 2020 Purchase Price to the Company, the Company issued to the July 2020 Investor 270,000 shares of Common Stock of the Company in addition to three year warrants to purchase 338,000 shares of Common Stock. The July 2020 Note shall accrue interest at a rate of fourteen percent (10%) per annum and will mature on April 20, 2021. No payments of principal or interest are due through January 2020 (six (6) months following issuance) and then there are three (3) fixed payments of principal and interest due on a monthly basis until maturity. In the event of default as defined in the agreements, the notes may be converted into shares of the Company's Common Stock at a conversion price equal to 0.70 (representing a 30% discount) multiplied by the lesser of (i) the lowest one day volume weighted average price ("VWAP") for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date, and (ii) the lowest one day VWAP for the Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the issue date. In the event of a default, without demand, presentment or notice, the note shall become immediately due and payable. The Company recorded a debt discount of $145,538 relating to the conversion feature of the notes. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost. The Company valued the 270,000 shares upon day of grant with a fair value of $62,100 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. The warrants were issued to the Buyers by the Company on July 20, 2020 in connection with the SPA. The warrants entitle the Buyers, respectively, to exercise purchase rights represented by the warrants up to 338,000 shares per warrant. The warrants permit the Buyers to exercise the purchase rights at any time on or after July 20, 2020 through July 19, 2023. Each warrant contains an exercise price per share of $0.40, subject to adjustment, and also contains a provision permitting the cashless exercise of such exercise rights as defined therein. The Company has maintained the right to redeem each warrant in full at any time following payment in full of the amounts owing under each respective note. The Company valued the warrants upon day of grant with a fair value of $42,362 and accounted for it as debt discount on the condensed consolidated balance sheet. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the effective interest method. The amortization of debt discount is included as a component of interest expense in the condensed consolidated statements of operations. There was total unamortized debt discount related to the May 2020 SPA of $199,051 as of September 30, 2020. During the nine months ended September 30, 2020, the Company recorded amortization of debt discount totaling $70,949. |
Convertible Promissory Notes _2
Convertible Promissory Notes - Schedule of Convertible Promissory Notes (Details) (Parenthetical) | Jul. 21, 2020 | May 29, 2020 | Mar. 15, 2020 | Mar. 05, 2020 | Feb. 07, 2020 | Jan. 30, 2020 | Oct. 07, 2019 | Sep. 27, 2019 | Sep. 18, 2019 | Dec. 31, 2020 |
Debt instrument, maturity date | Apr. 24, 2021 | |||||||||
Notes Payable To GBT Technologies Inc [Member] | ||||||||||
Debt instrument, interest per annum | ||||||||||
Debt instrument, maturity date | Mar. 27, 2021 | |||||||||
Notes Payable To Power Up Lending Group Ltd [Member] | ||||||||||
Debt instrument, interest per annum | 12.00% | |||||||||
Debt instrument, maturity date | Sep. 18, 2020 | |||||||||
Notes Payable To BHP Capital NY [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | 8.00% | ||||||||
Debt instrument, maturity date | Feb. 5, 2021 | Apr. 7, 2021 | ||||||||
Notes Payable To Armada Capital Partners LLC [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | 8.00% | ||||||||
Debt instrument, maturity date | Feb. 5, 2021 | Apr. 7, 2021 | ||||||||
Notes Payable To Jefferson Street Capital LLC [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | 8.00% | ||||||||
Debt instrument, maturity date | Feb. 5, 2021 | Apr. 7, 2021 | ||||||||
Notes Payable To GS Capital Partners [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | 14.00% | ||||||||
Debt instrument, maturity date | Feb. 6, 2021 | Feb. 6, 2021 | ||||||||
Notes Payable To Fourth Man LLC [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | |||||||||
Debt instrument, maturity date | Apr. 5, 2021 | |||||||||
Notes Payable To Tangiers Global LLC [Member] | ||||||||||
Debt instrument, interest per annum | 14.00% | |||||||||
Debt instrument, maturity date | Mar. 15, 2021 | |||||||||
Notes Payable To LGH Investments LLC [Member] | ||||||||||
Debt instrument, interest per annum | 10.00% | |||||||||
Debt instrument, maturity date | Mar. 29, 2021 | |||||||||
Notes Payable To Vista Capital LLC [Member] | ||||||||||
Debt instrument, interest per annum | 10.00% | |||||||||
Debt instrument, maturity date | Mar. 29, 2021 |
Convertible Promissory Notes _3
Convertible Promissory Notes - Schedule of Future Maturities of Debt (Details) | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 5,565,820 |
2022 | 2,255,122 |
Future maturities of debt (excluding debt discount) | $ 7,820,942 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Liability [Abstract] | ||
Gross proceeds from convertible note | $ 638,000 | |
Derivative liability | 1,357,528 | 190,846 |
Gain on change in fair value of derivative liability | 577,936 | |
Derivative expense | $ 566,789 |
Derivative Liabilities - Summar
Derivative Liabilities - Summary of Changes in Fair Value (Details) - Level 3 [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Balance, December 31, 2019 | $ 190,846 |
Change in fair value of derivative liabilities | (577,936) |
Derivative liabilities recorded on issuance of convertible notes | 2,024,191 |
Write-off of derivative liabilities upon settlement of debt | (279,573) |
Balance, December 31, 2020 | $ 1,357,528 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Weighted Average Assumptions (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Risk Free Interest Rate [Member] | Minimum [Member] | |
Fair value assumptions, measurement input, percentages | 0.08 |
Risk Free Interest Rate [Member] | Maximum [Member] | |
Fair value assumptions, measurement input, percentages | 1.51 |
Expected life of Grants [Member] | |
Fair value assumptions, measurement input, term | 9 months |
Expected volatility of underlying stock [Member] | Minimum [Member] | |
Fair value assumptions, measurement input, percentages | 96 |
Expected volatility of underlying stock [Member] | Maximum [Member] | |
Fair value assumptions, measurement input, percentages | 132 |
Dividends [Member] | |
Fair value assumptions, measurement input, percentages | 0 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | Dec. 21, 2018 | Jan. 25, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||||
Line of credit, obtained value | $ 500,000 | |||
Line of credit, interest rate | 6.00% | 5.00% | ||
Line of credit, increased value | $ 1,000,000 | |||
Line of credit, outstanding | $ 912,870 | $ 912,870 | ||
Line of credit, mature date | Apr. 24, 2021 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Jan. 02, 2020 | Nov. 01, 2019 | Mar. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | |||||
Operating lease, term | 3 years | 2 years | 3 years | 12 months | |
Monthly payments of rent | $ 12,000 | $ 1,600 | $ 6,680 | ||
Lease obligations | $ 200,296 | $ 55,608 |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease | $ 324,728 | $ 80,760 |
Interest on lease liabilities | 50,062 | 7,002 |
Total net lease cost | $ 374,790 | $ 87,762 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Information Related to Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease ROU assets - net | $ 368,638 | $ 210,816 |
Current operating lease liabilities, included in current liabilities | 210,556 | 90,944 |
Noncurrent operating lease liabilities, included in long-term liabilities | 155,167 | 119,872 |
Total operating lease liabilities | 365,723 | 210,816 |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | 200,296 | 55,608 |
ROU assets obtained in exchange for lease liabilities: Operating leases | $ 355,203 | $ 266,424 |
Weighted average remaining lease term (in years): Operating leases | 1 year 9 months 18 days | 2 years 1 month 13 days |
Weighted average discount rate: Operating leases | 11.40% | 5.50% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (remainder of year) | $ 240,160 | |
2021 | 164,041 | |
2022 | ||
Total lease payments | 404,201 | |
Less: amounts representing interest | (38,474) | |
Total lease obligations | $ 365,723 | $ 210,816 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 23, 2020 | Jan. 30, 2020 | Nov. 04, 2019 | Mar. 27, 2019 | Feb. 15, 2019 | Jan. 17, 2019 | Jun. 29, 2018 | Jun. 22, 2018 | Apr. 11, 2018 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Voting rights | As noted above, each share of Series C Preferred Stock is convertible into 250 shares of Company Common Stock (the same conversion rate utilized in the exchange transaction), but is only convertible on the first to occur of the following events: (i) The Volume Weighted Average Price ("VWAP") of the Company's Common Stock during any then consecutive trading days is at least $2.00 per share; or (ii) June 30, 2019. | ||||||||||||
Conversion of note payable | $ 2,285,040 | ||||||||||||
Debt converted into shares | |||||||||||||
Number of shares issued for services rendered, value | $ 182,968 | ||||||||||||
Number of shares sold | 9,172,855 | ||||||||||||
Loss on settlement | |||||||||||||
Proceeds from common stock and warrants | $ 1,068,500 | 3,210,500 | |||||||||||
Stock-based compensation expense | $ 295,900 | $ 146,000 | |||||||||||
Common stock, shares issued | 127,131,210 | 102,193,579 | |||||||||||
Common stock, shares outstanding | 127,131,210 | 102,193,579 | |||||||||||
Convertible Promissory Note [Member] | |||||||||||||
Conversion of note payable | $ 156,140 | ||||||||||||
Number of common stock issued | 1,409,040 | ||||||||||||
Common Stock [Member] | |||||||||||||
Conversion of note payable | $ 13,427 | ||||||||||||
Number of stock issued for acquisition | 775,000 | ||||||||||||
Debt converted into shares | 13,426,698 | ||||||||||||
Number of shares issued for services rendered | 86,000 | ||||||||||||
Number of shares issued for services rendered, value | $ 86 | ||||||||||||
Number of common stock issued | |||||||||||||
Warrants [Member] | |||||||||||||
Number of warrants issued | 4,462,135 | ||||||||||||
Warrant exercise price per share | $ 0.75 | ||||||||||||
Stock-based compensation expense | $ 0 | $ 33,700 | |||||||||||
Unrecognized compensation expense | $ 0 | ||||||||||||
Membership Interest Purchase Agreement and Stock Purchase Agreement [Member] | |||||||||||||
Number of stock issued for acquisition | 200,000 | ||||||||||||
Number of common stock issued | 500,000 | 275,000 | |||||||||||
Consulting Agreement [Member] | |||||||||||||
Number of shares issued for services rendered | 86,000 | ||||||||||||
Number of shares issued for services rendered, value | $ 11,103 | ||||||||||||
Various Lenders [Member] | Common Stock [Member] | |||||||||||||
Number of common stock issued | 2,892,000 | ||||||||||||
Consultants [Member] | Restricted Stock [Member] | |||||||||||||
Number of shares issued for services rendered | 96,000 | ||||||||||||
Consultant [Member] | |||||||||||||
Number of shares issued for services rendered | 875,000 | 70,000 | |||||||||||
Share issued price per shares | $ 0.31 | ||||||||||||
Loss on settlement | $ 507,500 | ||||||||||||
Consultant [Member] | Warrants [Member] | |||||||||||||
Number of warrants issued | 100,000 | ||||||||||||
Warrant exercise price per share | $ 3 | ||||||||||||
Warrant term | 3 years | ||||||||||||
Fair value of warrant | $ 30,782 | ||||||||||||
Number of warrant upon achievement of certain milestones | 150,000 | ||||||||||||
Lender [Member] | Debt Agreement [Member] | |||||||||||||
Number of common stock issued | 100,000 | ||||||||||||
Share issued price per shares | $ 0.31 | ||||||||||||
CenterCom Global [Member] | |||||||||||||
Equity ownership percentage | 50.00% | ||||||||||||
Winfreys [Member] | Membership Interest Purchase Agreement and Stock Purchase Agreement [Member] | |||||||||||||
Number of common stock issued | 25,000 | ||||||||||||
Warrant term | 12 months | ||||||||||||
ECS Business [Member] | |||||||||||||
Business consideration | $ 5,000,000 | ||||||||||||
ECS Business [Member] | Restricted Stock [Member] | |||||||||||||
Stock issued under merger agreement | 3,333,333 | ||||||||||||
ECS Business [Member] | Asset Purchase Agreement [Member] | |||||||||||||
Business consideration | $ 5,000,000 | $ 5,000,000 | |||||||||||
GBT Technologies Inc [Member] | Asset Purchase Agreement [Member] | Convertible Promissory Note [Member] | |||||||||||||
Conversion of note payable | $ 8,000,000 | $ 4,000,000 | $ 4,000,000 | ||||||||||
Debt converted into shares | 3,333,333 | 3,333,333 | |||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||||
Preferred shares outstanding to modify shares description | Protective provisions require approval of 75% of the Series "A" Preferred Shares outstanding to modify the provisions or increase the authorized Series "A" Preferred Shares | ||||||||||||
Number of preferred shares issued | 3,000,000 | ||||||||||||
Recapitalization in reverse merger, shares | 10,000,000 | ||||||||||||
Preferred stock, shares issued | 13,000,000 | 13,000,000 | |||||||||||
Preferred stock, shares outstanding | 13,000,000 | 13,000,000 | |||||||||||
Conversion of note payable | |||||||||||||
Number of stock issued for acquisition | |||||||||||||
Debt converted into shares | |||||||||||||
Number of shares issued for services rendered | |||||||||||||
Number of shares issued for services rendered, value | |||||||||||||
Number of common stock issued | |||||||||||||
Number of shares on settlement of debt | |||||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred shares outstanding to modify shares description | Protective provisions require approval of 75% of the Series "C" Preferred Shares outstanding to modify the provisions or increase the authorized Series "C" Preferred Shares. | ||||||||||||
Preferred stock, shares issued | 721,598 | 721,598 | |||||||||||
Preferred stock, shares outstanding | 721,598 | 721,598 | |||||||||||
Preferred stock, original issue price | $ 100 | ||||||||||||
Voting rights | Voting rights equal to 250 shares of common stock for each share of Series "C" Preferred Stock | ||||||||||||
Issuance of series c preferred stock in exchange for common stock, shares | 594,966 | ||||||||||||
Series C Convertible Preferred Stock [Member] | Carter Matzinger [Member] | |||||||||||||
Conversion of note payable | $ 389,502 | $ 389,502 | |||||||||||
Debt converted into shares | 6,232 | 6,232 | |||||||||||
Series C Convertible Preferred Stock [Member] | CenterCom Global [Member] | |||||||||||||
Equity ownership percentage | 50.00% | ||||||||||||
Number of stock issued for acquisition | 72,000 | ||||||||||||
Preferred stock converted into common stock | 18,000,000 | ||||||||||||
Payments to acquire investment | $ 178,508 | ||||||||||||
Series C Convertible Preferred Stock [Member] | CenterCom Global [Member] | |||||||||||||
Equity ownership percentage | 40.00% | ||||||||||||
Common Stock [Member] | |||||||||||||
Issuance of series c preferred stock in exchange for common stock, shares | 148,741,531 | ||||||||||||
Number of common stock issued | 13,426,698 | ||||||||||||
Settlement of debt, value | $ 2,280,040 | ||||||||||||
Number of shares sold | 5,678,174 | ||||||||||||
Proceeds from common stock and warrants | $ 1,068,500 | ||||||||||||
Series C Preferred [Member] | |||||||||||||
Issuance of series c preferred stock for conversion of promissory note and accrued interest, shares | 48,400 | ||||||||||||
Conversion of note payable | $ 3,000,000 | ||||||||||||
Accrued interest | $ 24,952 | ||||||||||||
Number of stock issued for acquisition | |||||||||||||
Debt converted into shares | |||||||||||||
Number of shares issued for services rendered | |||||||||||||
Number of shares issued for services rendered, value | |||||||||||||
Number of common stock issued | 72,000 | ||||||||||||
Number of shares on settlement of debt | 6,232 | ||||||||||||
Warrants [Member] | |||||||||||||
Number of warrants issued | 2,839,087 | ||||||||||||
Warrant exercise price per share | $ 0.75 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Warrants Outstanding, beginning balance | 6,849,635 | 2,012,500 |
Warrants Exercisable, beginning balance | 2,012,500 | |
Warrants Granted | 3,116,230 | 984,284 |
Warrants Exercised | ||
Warrants Forfeited/Cancelled | (250,000) | |
Warrants Outstanding, ending balance | 9,715,865 | 6,849,635 |
Warrants Exercisable, ending balance | 9,715,865 | |
Warrants, Weighted Average Exercise Price Outstanding, beginning balance | $ 0.71 | $ 0.43 |
Warrants, Weighted Average Exercise Price Exercisable, beginning balance | 0.53 | 0.43 |
Warrants, Weighted Average Exercise Price, Granted | 0.53 | 0.48 |
Warrants, Weighted Average Exercise Price, Exercised | ||
Warrants, Weighted Average Exercise Price, Forfeited/Cancelled | ||
Warrants, Weighted Average Exercise Price Outstanding, ending balance | 0.65 | 0.71 |
Warrants, Weighted Average Exercise Price Exercisable, ending balance | $ 0.65 | $ 0.53 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Equity [Abstract] | |
Warrants Exercise Price, Lower Range Limit | $ 0.40 |
Warrants Exercise Price, Upper Range Limit | $ 3 |
Warrants, Number Outstanding | shares | 9,715,865 |
Weighted Average Remaining Contractual Life (in years) | 1 year 6 months 7 days |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.65 |
Warrants, Number Exercisable | shares | 9,715,865 |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.65 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Assumption Used Value of Options (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Risk-free interest rate | 2.50% |
Expected life of grants | 3 years |
Expected volatility of underlying stock | 168.71% |
Dividends | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Feb. 15, 2019 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 17, 2019 |
Debt conversion, amount | $ 2,285,040 | ||||
Debt converted into shares | |||||
Advance from related party | $ 0 | $ 0 | |||
Axia [Member] | |||||
Management service fees | 0 | 1,020,000 | |||
Trade payables | 438,027 | 666,112 | |||
Communication expenses | 218,334 | 704,863 | |||
321 Communications [Member] | |||||
Trade payables | 25,336 | 140,923 | |||
Communication expenses | $ 499,356 | 168,714 | |||
CenterCom Global [Member] | |||||
Trade payables | 1,252,331 | $ 282,159 | |||
Communication expenses | $ 2,384,780 | $ 2,821,925 | |||
Ownership percentage | 50.00% | ||||
Series C Convertible Preferred Stock [Member] | CenterCom Global [Member] | |||||
Ownership percentage | 50.00% | ||||
Series C Convertible Preferred Stock [Member] | Carter Matzinger [Member] | |||||
Debt conversion, amount | $ 389,502 | $ 389,502 | |||
Debt converted into shares | 6,232 | 6,232 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jan. 15, 2020 | Jul. 09, 2020 | Mar. 01, 2020 | Nov. 01, 2013 |
Proposed monetary forfeiture | $ 5,501,285 | |||
DigitizeIQ Settlement Agreement [Member] | ||||
Reduction in liability | $ 580,000 | |||
Anthony Evers Employment Agreement [Member] | ||||
Salary | $ 270,000 | |||
Settlement and Release Agreement [Member] | Unimax Communications, LLC [Member] | ||||
Settlement payable | $ 785,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | |||
Income tax examination description | On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Bill") was signed into law. Prior to the enactment of the Tax Reform Bill, the Company measured its deferred tax assets at the federal rate of 34%. The Tax Reform Bill reduced the federal tax rate to 21% resulting in the re-measurement of the deferred tax asset as of December 31, 2017. Beginning January 1, 2018, the lower tax rate of 21% will be used to calculate the amount of any federal income tax due on taxable income earned during 2018. | ||
Federal income tax rate | 34.00% | 21.00% | 21.00% |
Net operating loss carry-forwards | $ 18,100,000 | ||
Operating loss carryforwards, limitations on use | The Company has available for U.S. federal income tax purposes a net operating loss ("NOL") carry-forwards of approximately $18.1 million that may be used to offset future taxable income through the fiscal year ending December 31, 2040. If not used, these NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. | ||
Deferred tax assets | $ 3,900,000 | ||
Deferred tax assets valuation allowance | 3,913,365 | $ 2,002,427 | |
Increase in valuation allowance | 1,900,000 | $ 1,700,000 | |
Interest or penalties | |||
Unrecognized tax benefits |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Expected income tax benefit from NOL carry-forwards | $ 3,913,365 | $ 2,002,427 |
Less valuation allowance | (3,913,365) | (2,002,427) |
Deferred tax assets, net of valuation allowance |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) | Dec. 22, 2017 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 34.00% | 21.00% | 21.00% |
Change in valuation allowance on net operating loss carry-forwards | (21.00%) | (21.00%) | |
Effective income tax rate | 0.00% | 0.00% |
Segment Information - Schedule
Segment Information - Schedule of Operating Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 54,406,788 | $ 25,742,941 |
Cost of revenue | (51,938,111) | (22,623,521) |
Gross margin | 2,468,677 | 3,119,420 |
Costs and expenses | (12,614,345) | (10,887,448) |
Operating profit (loss) | (10,145,668) | (7,768,028) |
Total assets | 7,325,071 | 9,986,373 |
Total liabilities | 18,051,037 | 14,685,988 |
Surge Blockchain & Other [Member] | ||
Revenue | 741,863 | 4,295,434 |
Cost of revenue | (849,225) | (1,665,839) |
Gross margin | (107,362) | 2,629,595 |
Costs and expenses | (8,066,653) | (6,340,282) |
Operating profit (loss) | (8,174,015) | (3,710,687) |
Total assets | 1,729,041 | 4,782,722 |
Total liabilities | 10,912,205 | 10,115,799 |
Surge Logics [Member] | ||
Revenue | 16,430,057 | 7,234,366 |
Cost of revenue | (14,213,769) | (4,721,923) |
Gross margin | 2,216,288 | 2,512,443 |
Costs and expenses | (2,147,406) | (2,388,181) |
Operating profit (loss) | 68,882 | 124,262 |
Total assets | 199,366 | 249,196 |
Total liabilities | 2,450,888 | 734,875 |
True Wireless, Inc. [Member] | ||
Revenue | 2,372,977 | 3,446,003 |
Cost of revenue | (3,003,099) | (5,845,663) |
Gross margin | (630,122) | (2,399,660) |
Costs and expenses | (937,196) | (1,749,975) |
Operating profit (loss) | (1,567,318) | (4,149,635) |
Total assets | (353,476) | (33,718) |
Total liabilities | 4,301,249 | 3,815,175 |
ECS Business [Member] | ||
Revenue | 34,861,891 | 10,767,138 |
Cost of revenue | (33,872,018) | (10,390,096) |
Gross margin | 989,873 | 377,042 |
Costs and expenses | (1,463,090) | (409,010) |
Operating profit (loss) | (473,217) | (31,968) |
Total assets | 4,883,357 | 4,988,173 |
Total liabilities | $ 386,695 | $ 20,139 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 08, 2021 | Jan. 22, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payments of promissory note | $ 280,636 | $ 70,000 | ||
Subsequent Event [Member] | ||||
Debt instrument face amount | $ 23,000,000 | |||
Debt instrument, interest per annum | 15.00% | |||
Cash on hand | $ 2,284,075 | |||
Payments of promissory note | $ 2,485,250 | |||
Subsequent Event [Member] | Digitize IQ Agreement [Member] | ||||
Aggregate purchase price | $ 10 | |||
Debt instrument, interest per annum | 10.00% | |||
Subsequent Event [Member] | KSIX Agreement [Member] | ||||
Aggregate purchase price | $ 10 | |||
Debt instrument, interest per annum | 10.00% |