Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 08, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | High Wire Networks, Inc. | ||
Trading Symbol | HWNI | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 52,901,773 | ||
Entity Public Float | $ 7,664,845 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001413891 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-53461 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 81-5055489 | ||
Entity Address, Address Line One | 980 N. Federal Highway | ||
Entity Address, Address Line Two | Suite 304 | ||
Entity Address, City or Town | Boca Raton | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33432 | ||
City Area Code | 407 | ||
Local Phone Number | 512-9102 | ||
Title of 12(b) Security | Common stock | ||
Security Exchange Name | NONE | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 3627 | ||
Auditor Name | Sadler, Gibb & Associates, LLC | ||
Auditor Location | Draper, UT |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 508,395 | $ 184,677 |
Accounts receivable, net of allowances of $74,881 and $0, respectively | 7,961,607 | 1,056,262 |
Contract assets | 60,862 | |
Prepaid expenses and deposits | 518,825 | 88,427 |
Current assets of discontinued operations | 2,083,395 | 1,544,900 |
Total current assets | 11,072,222 | 2,935,128 |
Property and equipment, net of accumulated depreciation of $160,674 and $21,973, respectively | 1,279,515 | 400,326 |
Goodwill | 21,696,040 | 1,732,431 |
Intangible assets, net of accumulated amortization of $1,224,261 and $770,856, respectively | 11,630,068 | 1,198,089 |
Operating lease right-of-use assets | 227,132 | 239,489 |
Noncurrent assets of discontinued operations | 52,618 | 1,153,371 |
Total assets | 45,957,595 | 7,658,834 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 3,686,082 | 834,241 |
Contract liabilities | 633,771 | 184,450 |
Loans payable to related parties, net of debt premium of $988,917 and $0, respectively | 1,442,949 | 557,858 |
Loans payable, current portion, net of debt discount of $239,214 and $0, respectively | 2,773,621 | 13,402 |
Convertible debentures, current portion, net of net debt discount/premium of $947,398 and $0, respectively | 3,924,557 | |
Factor financing | 3,387,070 | |
Derivative liabilities, current portion | 15,350,119 | |
Contingent consideration | 100,000 | |
Operating lease liabilities, current portion | 142,925 | 86,510 |
Current liabilities of discontinued operations | 419,204 | 741,988 |
Total current liabilities | 31,860,298 | 2,418,449 |
Long-term liabilities: | ||
Loans payable to related parties, net of current portion | 1,735,114 | |
Loans payable, net of current portion | 2,402,969 | 344,941 |
Convertible debentures, net of current portion, net of debt discount of $1,499,872 and $98,176, respectively | 208,374 | |
Derivative liabilities, net of current portion | 178,220 | |
Operating lease liabilities, net of current portion | 126,044 | 196,594 |
Noncurrent liabilities of discontinued operations | 33,496 | 250,800 |
Total long-term liabilities | 2,949,103 | 2,527,449 |
Total liabilities | 34,809,401 | 4,945,898 |
Commitments and contingencies | ||
Total mezzanine equity | 13,591,503 | |
Common stock; $0.00001 and $0.0000001 par value; 1,000,000,000 shares authorized; 46,151,188 and 0 issued and 46,149,117 and 0 outstanding as of December 31, 2021 and 2020, respectively | 462 | |
Additional paid-in capital | 8,630,910 | 298,542 |
(Accumulated deficit) retained earnings | (13,024,382) | 802,370 |
Total High Wire Networks, Inc. stockholders’ (deficit) equity | (4,393,010) | 1,100,912 |
Noncontrolling interest | 1,949,701 | 1,612,024 |
Total stockholders’ (deficit) equity | (2,443,309) | 2,712,936 |
Total liabilities and stockholders’ (deficit) equity | 45,957,595 | 7,658,834 |
Series A Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock value | 619,229 | |
Series B Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock value | ||
Series D Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock value | 6,658,457 | |
Series E Preferred Stock | ||
Long-term liabilities: | ||
Preferred stock value | $ 6,313,817 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable, net of allowances (in Dollars) | $ 74,881 | $ 0 |
Accumulated depreciation (in Dollars) | 230,478 | 21,973 |
Intangible assets, net of accumulated amortization (in Dollars) | 1,366,900 | 770,856 |
Related parties, net of debt premium (in Dollars) | 988,917 | 0 |
Net of debt discount (in Dollars) | 239,214 | 0 |
Convertible debentures, net of discount (in Dollars) | 947,398 | 0 |
Debt discount, net (in Dollars) | $ 1,499,872 | $ 98,176 |
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00 |
Common stock, shares authorized | 1,000,000,000 | 100,000 |
Common stock, shares issued | 46,151,188 | 1,886 |
Common stock, shares outstanding | 46,149,117 | 1,754 |
Series A Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 8,000,000 | 8,000,000 |
Preferred stock, shares issued | 300,000 | 0 |
Preferred stock, shares outstanding | 300,000 | 0 |
Series B Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 3,500 | $ 3,500 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 1,000 | 0 |
Preferred stock, shares outstanding | 1,000 | 0 |
Series D Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 10,000 | $ 10,000 |
Preferred stock, shares authorized | 1,590 | 1,590 |
Preferred stock, shares issued | 690 | 0 |
Preferred stock, shares outstanding | 645 | 0 |
Series E Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 10,000 | $ 10,000 |
Preferred stock, shares authorized | 650 | 650 |
Preferred stock, shares issued | 650 | 0 |
Preferred stock, shares outstanding | 650 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 27,206,689 | $ 9,909,157 |
Operating expenses: | ||
Cost of revenues | 19,013,428 | 4,954,285 |
Depreciation and amortization | 506,364 | 209,253 |
Salaries and wages | 6,901,236 | 4,703,972 |
General and administrative | 4,460,090 | 1,483,883 |
Total operating expenses | 30,881,118 | 11,351,393 |
Loss from operations | (3,674,429) | (1,442,236) |
Other (expenses) income: | ||
Interest expense | (538,279) | (167,521) |
Loss on settlement of debt | (6,251,954) | |
Amortization of discounts on convertible debentures and loans payable | (777,953) | |
Amortization of premiums on convertible debentures and loans payable to related parties | 837,974 | |
Loss on change in fair value of derivatives | (166,188) | |
Exchange (loss) gain | (3,558) | |
Initial derivative expense | (4,750,064) | |
Loss on settlement of warrants | (127,973) | |
Management fee income | 625,487 | |
Gain on PPP loan forgiveness | 873,734 | 873,400 |
Other income | 275,573 | 26,354 |
Total other (expense) income | (10,003,201) | 732,233 |
Net loss from continuing operations before income taxes | (13,677,630) | (710,003) |
Provision for income taxes | ||
Net loss from continuing operations | (13,677,630) | (710,003) |
Net income from discontinued operations, net of tax | 675,355 | 33,838 |
Less: net income from discontinued operations attributable to noncontrolling interest | (337,677) | (16,918) |
Net loss attributable to High Wire Networks, Inc. | (13,339,952) | (693,083) |
Less: deemed dividend - Series D preferred stock modification | (5,852,000) | |
Net loss attributable to High Wire Networks, Inc. common shareholders | $ (19,191,952) | $ (693,083) |
Loss per share attributable to High Wire Networks, Inc. common shareholders, basic and diluted: | ||
Net loss from continuing operations (in Dollars per share) | $ (1.04) | |
Net income from discontinued operations, net of taxes (in Dollars per share) | 0.04 | |
Net loss per share (in Dollars per share) | $ (1) | |
Weighted average common shares outstanding, basic and diluted (in Shares) | 19,146,572 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholder’s Deficit - USD ($) | Common stock | Additional paid-in capital | Treasury stock | (Accumulated deficit)/retained earnings | Noncontrolling interest |
Balance at Dec. 31, 2019 | $ 298,542 | $ 1,904,374 | $ 1,595,106 | $ 3,798,022 | |
Distributions to shareholders | (408,921) | (408,921) | |||
Net loss for the period | (693,083) | 16,918 | (676,165) | ||
Balance at Dec. 31, 2020 | 298,542 | 802,370 | 1,612,024 | 2,712,936 | |
Issuance of shares for reverse merger | $ 255 | 5,561,720 | 5,561,975 | ||
Issuance of shares for reverse merger (in Shares) | 25,474,625 | ||||
Stock compensation in connection with reverse merger | 729,292 | 729,292 | |||
Fair value of convertible debt issued to HWN shareholders | (486,800) | (486,800) | |||
Issuance of common stock to Cobra Equities upon conversion of convertible debentures | $ 112 | 4,176,722 | 4,176,834 | ||
Issuance of common stock to Cobra Equities upon conversion of convertible debentures (in Shares) | 11,216,512 | ||||
Issuance of common stock to Efrat Investments upon conversion of a convertible debenture | $ 6 | 223,733 | 223,739 | ||
Issuance of common stock to Efrat Investments upon conversion of a convertible debenture (in Shares) | 660,000 | ||||
Issuance of common stock to Dominion upon conversion of Series A preferred stock | $ 20 | 404,751 | 404,771 | ||
Issuance of common stock to Dominion upon conversion of Series A preferred stock (in Shares) | 2,011,292 | ||||
Issuance of common stock to Pawn Funding upon exercise of warrants | $ 1 | 18,601 | 18,602 | ||
Issuance of common stock to Pawn Funding upon exercise of warrants (in Shares) | 69,281 | ||||
Issuance of common stock to a related party upon conversion of a convertible debenture | $ 33 | 1,382,883 | 1,382,916 | ||
Issuance of common stock to a related party upon conversion of a convertible debenture (in Shares) | 3,333,333 | ||||
Issuance of common stock to Efrat Investments upon exercise of warrants | $ 14 | 739,841 | 739,855 | ||
Issuance of common stock to Efrat Investments upon exercise of warrants (in Shares) | 1,338,620 | ||||
Issuance of common stock to SCS, LLC upon conversion of Series D preferred stock | $ 21 | 464,523 | 464,544 | ||
Issuance of common stock to SCS, LLC upon conversion of Series D preferred stock (in Shares) | 2,045,454 | ||||
Stock-based compensation | 482,302 | 482,302 | |||
Series D preferred stock deemed dividend | (5,852,000,000,000) | (5,852,000,000,000) | |||
Net loss for the period | (13,339,952) | 337,677 | (13,002,275) | ||
Balance at Dec. 31, 2021 | $ 462 | $ 8,630,910 | $ (13,024,382) | $ 1,949,701 | $ (2,443,309) |
Balance (in Shares) at Dec. 31, 2021 | 46,149,117 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (13,677,630) | $ (693,083) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on change in fair value of derivative liability | 166,188 | |
Amortization of discounts on convertible debentures | 777,953 | |
Amortization of premiums on convertible debentures and loans payable to related parties | (837,974) | |
Depreciation and amortization | 506,364 | 209,253 |
Amortization of operating right-of-use assets | 12,357 | 84,203 |
Amortization of operating right-of-use liabilities | (120,750) | (77,450) |
Stock compensation | 1,211,594 | |
Loss on settlement of debt | 6,251,954 | |
Initial derivative expense | 4,750,064 | |
Gain on PPP loan forgiveness | (873,734) | (873,400) |
Gain on settlement of warrants | 127,973 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,905,345) | 1,015,517 |
Other assets | 487,509 | 236,221 |
Prepaid expenses and deposits | (417,505) | (1,065) |
Accounts payable and accrued liabilities | 3,180,185 | (681,913) |
Contract liabilities | 449,321 | (3,429) |
Net cash used in operating activities of continuing operations | (4,911,476) | (785,146) |
Net cash provided by operating activities of discontinued operations | 703,717 | 252,420 |
Net cash used in operating activities | (4,207,759) | (532,726) |
Cash flows from investing activities: | ||
Cash acquired in reverse acquisition | (2,500,000) | |
Restricted cash acquired in reverse merger | 2,000,000 | |
Purchase of equipment | (93,347) | (115,320) |
Net cash provided by/(used in) investing activities | (593,347) | (115,320) |
Cash flows from financing activities: | ||
Proceeds from loans payable | 970,000 | |
Repayments of loans payable | (377,440) | (52,509) |
Repayments of loans payable to related parties | (321,690) | |
Distributions to shareholders | (31,954) | |
Proceeds from Cares Act loans | 873,465 | 873,400 |
Proceeds from convertible debentures | 2,375,000 | |
Repayments of convertible debentures | (94,260) | |
Proceeds from factor financing | 10,678,029 | |
Repayments of factor financing | (9,259,775) | |
Net cash provided by financing activities of continuing operations | 5,165,019 | 467,247 |
Net cash used in financing activities of discontinued operations | (40,195) | (138,530) |
Net cash provided by financing activities | 5,124,824 | 328,717 |
Net increase (decrease) in cash | 323,718 | (319,329) |
Cash, beginning of period | 184,677 | 504,006 |
Cash, end of period | 508,395 | 184,677 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 234,748 | 167,521 |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Common stock issued for conversion of convertible debentures | 4,400,573 | |
Common stock issued for conversion of convertible loans payable to related parties | 1,382,916 | |
Common stock issued for conversion of Series A preferred stock | 404,771 | |
Common stock issued for conversion of Series D preferred stock | 464,544 | |
Common stock issued upon cashless exercise of warrants | 758,457 | |
Series D preferred stock deemed dividend | 5,852,000 | |
Related party note issued | 100,000 | |
Convertible debentures issued | 250,000 | |
Debt discount against derivative liability | 2,375,000 | |
Original issuance discounts on convertible debt | 125,000 | |
Original issuance discounts on loans payable | 280,000 | |
Fair value of Series E at issuance and net assets acquired in acquisition of SVC | 7,963,817 | |
Net assets acquired in reverse merger with SGSI | $ 21,334,282 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Going Concern [Abstract] | |
Organization | 1. Organization High Wire Networks, Inc., (f/k/a Spectrum Global Solutions, Inc.) (“High Wire”) was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, Spectrum reincorporated in the province of British Columbia, Canada. On April 25, 2017, High Wire entered into and closed on an Asset Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Asset Purchase Agreement, Spectrum purchased 80.1% of the assets associated with InterCloud’s AW Solutions, Inc., AW Solutions Puerto Rico, LLC (“AWS PR”), and Tropical Communications, Inc. (“Tropical”) (collectively “AWS” or the “AWS Entities”) subsidiaries. On November 15, 2017, High Wire changed its name to “High Wire Enterprises, Inc.” and reincorporated in the state of Nevada. On February 6, 2018, High Wire entered into and closed on a Stock Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Stock Purchase Agreement High Wire purchased all of the issued and outstanding capital stock and membership interests of ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively “ADEX” or the “ADEX Entities”). Spectrum completed the acquisition on February 27, 2018. On February 14, 2018, High Wire entered into an agreement with InterCloud providing for the sale, transfer, conveyance and delivery to High Wire of the remaining 19.9% of the assets associated with InterCloud’s AWS business not already purchased by Spectrum. On May 18, 2018, High Wire transferred all of its ownership interests in and to its subsidiaries Carbon Commodity Corporation, Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., Mantra Wind Inc., Climate ESCO Ltd. and Mantra Energy Alternatives Ltd. to an entity controlled by Mantra’s former Chief Executive Officer, Larry Kristof. The new owner of the aforementioned entities assumed all liabilities and obligations with respect to such entities. On January 4, 2019, High Wire entered into a Stock Purchase Agreement with InterCloud. Pursuant to the terms of the Purchase Agreement, InterCloud agreed to sell, and High Wire agreed to purchase, all of the issued and outstanding capital stock of TNS, Inc. (“TNS”), an Illinois corporation. During September 2019, High Wire formed ADEX Canada, which is included in the ADEX Entities. On September 30, 2020, High Wire sold its TNS subsidiary. On December 31, 2020, High Wire sold its AWS subsidiary. HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) (“High Wire” or the “Company”) was incorporated in Delaware on January 20, 2017. The Company is a global provider of managed security, professional services and commercial/industrial electrical solutions delivered exclusively through a channel sales model. The Company’s Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment. High Wire and JTM Electrical Contractors, Inc. (“JTM”), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM. On June 16, 2021, the Company completed a merger with Spectrum. The merger was accounted for as a reverse merger (refer to Note 3, Reverse Merger and Acquisition, for additional detail). At the time of the reverse merger, Spectrum’s subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively “ADEX” or the “ADEX Entities”), AW Solutions Puerto Rico, LLC (“AWS PR”), and Tropical Communications, Inc. (“Tropical”). On November 4, 2021, the Company closed on its acquisition of Secure Voice Corp (“SVC”). The closing of the acquisition was facilitated by the senior secured promissory note described (refer to Note 3, Reverse Merger and Acquisition, and Note 8, Convertible Debentures, for additional detail). On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. For accounting purposes, HWN is the surviving entity and is referred to throughout as “HWN”, “High Wire”, or “the Company”. On February 15, 2022, HWN sold its 50% interest in JTM (refer to Note 19, Subsequent Events, for additional detail). As of December 31, 2021, the Company classified JTM as held-for-sale. Additionally, the sale of High Wire’s 50% interest in JTM qualified for discontinued operations treatment (refer to Note 18, Discontinued Operations, for additional detail). The Company’s AWS PR and Tropical subsidiaries are professional, multi-service line, telecommunications infrastructure companies that provide outsourced services to the wireless and wireline industry. The Company’s ADEX Entities are a leading outsource provider of engineering and installation services, staffing solutions and other services which include consulting to the telecommunications industry, service providers and enterprise customers domestically and internationally. The Company’s SVC subsidiary is a wholesale network services provider with network footprint and licenses in the Northeast and Southeast United States as well as Texas. This network carries VoIP and other traffic for other service providers. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation/Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and SVC, as well as High Wire and its subsidiaries, the ADEX Entities, AWS PR, and Tropical. All subsidiaries are wholly-owned On February 15, 2022, HWN sold its 50% interest in JTM (refer to Note 19, Subsequent Events, for additional detail). The operations of JTM have been included as discontinued operations in the accompanying financial statements. All inter-company balances and transactions have been eliminated. Reverse Merger On January 27, 2021, Spectrum Global Solutions, Inc. HW Merger Sub, Inc., HWN, Inc. and the stockholders of HWN, Inc. (the “Stockholders”) entered into an Agreement and Plan of Merger (the “Agreement”) whereby the Stockholders agreed to sell to the Company all of the capital stock of HWN, Inc. On June 16, 2021, the transaction contemplated by the Agreement closed, and HWN, Inc. became a wholly-owned subsidiary of Spectrum Global Solutions, Inc. As previously disclosed, as part of the consideration for the transaction, Spectrum Global Solutions, Inc. issued shares of a newly established Series D Preferred Stock. The merger has been accounted for as a reverse merger in accordance with US GAAP. This determination was primarily based on High Wire’s business comprising the ongoing operations of the Company following the Merger, High Wire’s senior management comprising the senior management of the Company and High Wire’s stockholders having a majority of the voting power of the Company. For accounting purposes, Spectrum is considered the “acquired” company and High Wire is considered the “acquirer.” Accordingly, for accounting purposes, the Merger is treated as the equivalent of High Wire issuing stock for the net assets of Spectrum, accompanied by a recapitalization. The net assets of Spectrum have been remeasured at fair value and applied against the purchase price resulting in goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Closing Date of the merger are those of High Wire, and Spectrum’s assets, liabilities and results of operations are consolidated with High Wire beginning on the Closing Date. The shares and corresponding capital amounts and earnings per share available to common stockholders, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the merger. The historical financial information and operating results of Spectrum prior to the merger have not been separately presented in these consolidated financial statements. Impact of the COVID-19 Pandemic The extent to which the coronavirus (“COVID-19”) outbreak and measures taken in response thereto impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. Global health concerns relating to the COVID-19 outbreak have been weighing on the macroeconomic environment, and the outbreak has significantly increased economic uncertainty. Risks related to consumers and businesses lowering or changing spending, which impact domestic and international spend. The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and business shutdowns. These measures have not only negatively impacted consumer spending and business spending habits, they have also adversely impacted and may further impact the Company’s workforce and operations and the operations of its customers, suppliers and business partners. These measures may remain in place for a significant period of time and they are likely to continue to adversely affect the Company’s business, results of operations and financial condition. The spread of COVID-19 has caused the Company to modify its business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and the Company may take further actions as may be required by government authorities or that the Company determines are in the best interests of its employees, customers and business partners. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. The extent to which the COVID-19 outbreak impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impacts to its business as a result of its global economic impact, including any recession that has occurred or may occur in the future. There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19 and a global pandemic, and, as a result, the ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change. The Company does not yet know the full extent of the impacts on its business, its operations or the global economy as a whole. However, the effects could have a material impact on the Company’s results of operations, and the Company will continue to monitor the COVID-19 situation closely. As of November 2021, multiple variants of the COVID-19 virus are circulating globally that are highly transmissible, and there is uncertainty around vaccine effectiveness on the new strains of the virus. Uncertainty around vaccine distribution, supply and effectiveness will impact when the negative economic effects as a result of COVID-19 will abate or end and the timing of such recovery may affect the Company’s financial condition. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at December 31, 2021 and 2020 was $74,881 and $0, respectively. Property and Equipment Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: Computers and office equipment 3-7 years straight-line basis Vehicles 3-5 years straight-line basis Leasehold improvements 5 years straight-line basis Software 5 years straight-line basis Machinery and equipment 5 years straight-line basis Goodwill The Company tests its goodwill for impairment at least annually on December 31st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the years ended December 31, 2021 and 2020. Intangible Assets At December 31, 2021 and 2020, definite-lived intangible assets consist of tradenames and customer relationships which are being amortized over their estimated useful lives of 10 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. There were no impairment charges during the years ended December 31, 2021 and 2020. Long-lived Assets In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the years ended December 31, 2021 and 2020. Foreign Currency Translation Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting foreign exchange gains and losses are recognized in income. The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting foreign exchange gains or losses are recognized in income. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Accounting for Income Taxes The Company conducts business, and files federal and state income, franchise or net worth, tax returns in Canada, the United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines its filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2010 to 2021. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income. The Company follows the guidance set forth within ASC Topic 740, “ Income Taxes AWS PR received a tax notice from the Puerto Rican government requesting payment of taxes related to 2014. The amount due as of June 30, 2021 was $156,711 plus penalties and interest of $140,319 for a total obligation due of $297,030. During June 2021, AWS PR was notified that the Puerto Rican government would settle the outstanding debt for $11,105, which the Company paid during July 2021. Prior to 2021, the Company had elected to be treated as a Subchapter S Corporation for income tax purposes, and as such recognized no income tax liability or benefit. Revenue Recognition Adoption of New Accounting Guidance on Revenue Recognition The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Contract Types The Company’s contracts fall under two main types: 1) fixed-price and 2) time-and-materials. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working permanently at customer locations and materials costs incurred by those employees. A significant portion of the Company’s revenues come from customers with whom the Company has a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work. Revenue Service Types The following is a description of the Company’s revenue service types, which include professional services and construction: ● Professional services are services provided to the clients where the Company delivers distinct contractual deliverables and/or services. Deliverables may include but are not limited to: engineering drawings, designs, reports and specification. Services may include, but are not limited to: consulting or professional staffing to support our client’s objectives. Consulting or professional staffing services may be provided remotely or on client premises and under their direction and supervision. ● Construction Services are services provided to the client where the Company may self-perform or subcontract services that require the physical construction of infrastructure or installation of equipment and materials. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type, contract type, contract duration, and timing of transfer of goods or services. See the below tables: Revenue by contract duration Year Ended Year Ended Short-term $ 161,209 $ 56,509 Long-term 27,045,480 9,852,648 Total $ 27,206,689 $ 9,909,157 Revenue by contract type Year Ended Year Ended Fixed-price $ 17,290,122 $ 9,909,157 Time-and-materials 9,916,567 - Total $ 27,206,689 $ 9,909,157 The Company also disaggregates its revenue by operating segment and geographic location (refer to Note 16, Segment Disclosures, for additional information). Accounts Receivable Accounts receivable include amounts from work completed in which the Company has billed. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Contract Assets and Liabilities Contract assets include costs and services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. At December 31, 2021 and 2020, contract assets totaled $0 and $60,862, respectively. Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the consolidated balance sheets. At December 31, 2021 and 2020, contract liabilities totaled $633,771 and $184,450, respectively. Cost of Revenues Cost of revenues includes all direct costs of providing services under the Company’s contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs. Research and Development Costs Research and development costs are expensed as incurred. Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. Loss per Share The Company computes (loss) per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted (loss) per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2021 and 2020, respectively, the Company had 133,801,817 and 0 common stock equivalents outstanding. Leases The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) on January 1, 2019. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the Company’s lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities. Going Concern Assessment Management assesses going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date of the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. The Company has generated losses in 2021 and 2020 and High Wire has generated losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cash flow from operations. As of and for the year ended December 31, 2021, the Company had an operating loss of $3,886,872 (before deducting losses attributable to noncontrolling interests, cash flows used in operations of $4,207,759 and a working capital deficit of $20,788,076. Management has prepared estimates of operations for 2022 and believes that sufficient funds will be generated from operations to fund its operations and to service its debt obligations for one year from the date of the filing of the consolidated financial statements in the Company’s Annual Report on Form 10-K, which indicate improved operations and the Company’s ability to continue operations as a going concern. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is too early to know the full impact of COVID-19 or its timing on a return to more normal operations. Further, the recently enacted CARES Act provides for economic assistance loans through the SBA. As of December 31, 2021, ADEX had $2,010,000 of PPP loans outstanding from the SBA under the CARES Act. The PPP provides that the PPP loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. ADEX used the proceeds from the PPP loans for qualifying expenses and is applying for forgiveness of the PPP loans in accordance with the terms of the CARES Act. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts for one year from the date of the filing of the consolidated financial statements in the Company’s Annual Report on Form 10-K indicate improved operations and the Company’s ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months. Recent Accounting Pronouncements ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2019-12, Simplifying the Accounting for Income Taxes ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Derivatives and Hedging: Contracts in Entity’s Own Equity ASU 2021-08, Business Combination (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the year ended December 31, 2021, three customers accounted for 17%, 17%, and 13%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 6%, 7%, and 15%, respectively, of trade accounts receivable as of December 31, 2021. Two other customers accounted for 18% and 15%, respectively, of trade accounts receivable as of December 31, 2021. For the year ended December 31, 2020, four customers accounted for 31%, 14%, 12%, and 12%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 46%, 9%, 1%, and 0%, respectively, of trade accounts receivable as of December 31, 2020. The Company’s customers are primarily located within the domestic United States of America, Puerto Rico, and Canada. Revenues generated within the domestic United States of America accounted for approximately 95% of consolidated revenues for the year ended December 31, 2021. Revenues generated from customers in Puerto Rico and Canada accounted for approximately 5% of consolidated revenues for the year ended December 31, 2021. Revenues generated within the domestic United States of America accounted for 100% of consolidated revenues for the year ended December 31, 2020. Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fa |
Reverse Merger and Acquisition
Reverse Merger and Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Reverse Merger and Acquisition [Abstract] | |
Reverse Merger and Acquisition | 3. Reverse Merger and Acquisition Reverse Merger As noted in Note 2, on June 16, 2021, the Company consummated a reverse merger in which HWN, Inc. became a legal subsidiary of Spectrum Global Solutions, Inc., but HWN, Inc. was deemed to be the accounting acquirer. HWN shareholders exchanged 100% of the common stock of HWN for 350 shares newly issued shares of the Company’s Series D preferred stock and 1,000 shares of the Company’s previously issued Series B preferred stock (formerly held by management of legacy Spectrum Global Solutions, Inc.). The purpose of the acquisition was to continue to increase revenue. The acquisition was accounted for under the acquisition method of accounting which requires the consideration given, assets acquired, and liabilities assumed to be measured at fair value. In measuring the consideration transferred, since this was a reverse merger between a public company (as the legal acquirer) and a private company (as the accounting acquirer), the fair value of the legal acquirer’s public stock generally was more reliably determinable than the fair value of the accounting acquirer’s private stock. As such, the determination and measurement of the consideration transferred was based on the fair value of the legal acquirer’s stock rather than the fair value of the accounting acquirer’s stock. Further, since this was a reverse merger for accounting purposes, the consideration transferred includes the equity-based instruments retained by the legacy shareholders of Spectrum Global Solutions, Inc. The fair value of the assets acquired, liabilities assumed and consideration transferred denoted below are final and based on the management’s best estimates using information that it has obtained as of the reporting date. The fair value of the consideration transferred and liabilities assumed are as follows: Purchase consideration Fair Value Common stock $ 5,561,975 Convertible debt 1,049,638 Derivative liabilities 6,929,000 Loans payable 2,377,400 Loans payable, related parties 2,447,252 Lease liabilities 106,615 Fair value of stock options 204,715 Fair value of warrants 362,687 Fair value of Series A Preferred 1,024,000 Fair value of Series D Preferred 1,271,000 Total purchase price $ 21,334,282 The fair value of the net assets acquired (provisional) are as follows: Allocation of purchase consideration Working capital $ 781,470 Other assets 12,893 Contract assets 426,647 Goodwill 13,667,934 Customer lists 4,720,863 Tradenames 1,724,475 Total enterprise value 21,334,282 Acquisition of SVC As noted in Note 2, on November 4, 2021 the Company closed on a Stock Purchase Agreement with Secure Voice Corp. (“SVC”) and Telecom Assets Corp. (the “Seller”) whereby the Seller sold SVC to Spectrum, in exchange for $2,500,000 in cash and up to $6,500,000 (less up to $2,000,000 in assumed liabilities) of a newly established series of convertible preferred stock of Spectrum (refer to the Series E section of Note 12, Preferred Stock, for additional detail). SVC is a wholesale network services provider with network footprint and licenses in the Northeast and Southeast United States as well as Texas. This network carries VoIP and other traffic for other service providers. The purpose of the acquisition was to continue to increase revenue. The closing of the acquisition was facilitated by the senior secured promissory note described in Note 8, Convertible Debentures. The acquisition was accounted for under the acquisition method of accounting which requires the consideration given, assets acquired, and liabilities assumed to be measured at fair value. The fair value of the assets acquired, liabilities assumed and consideration transferred denoted below are provisional in nature and based on the management’s best estimates using information that it has obtained as of the reporting date. The Company is awaiting additional valuation information and expects to finalize the purchase price allocation before the end of the fiscal year. The fair value of the consideration transferred (provisional), liabilities assumed (provisional) are as follows: Provisional Purchase consideration Fair Value Cash $ 2,500,000 Series E preferred stock 6,313,817 Assumed debt 1,650,000 Total provisional purchase price $ 10,463,817 The fair value of the net assets acquired (provisional) are as follows: Allocation of purchase consideration Working capital $ (1,110,703 ) Fixed assets 838,800 Goodwill 6,295,674 Customer relationships 3,885,979 Tradenames 554,067 Total provisional enterprise value 10,463,817 The preliminary allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition date fair values are considered preliminary and may change within the permissible measurement period, not to exceed one year. Pro Forma The following shows pro forma results for the years ended December 31, 2021 and 2020 as if the reverse merger and acquisition had occurred on January 1, 2020. Year December 31, 2021 Year December 31, 2020 As Reported Pro Forma As Reported Pro Forma Revenue $ 27,206,689 $ 39,354,718 $ 9,909,157 $ 36,461,635 Net loss attributable to HWN, Inc. common shareholders (19,191,952 ) (26,160,463 ) (693,083 ) (15,565,886 ) Loss per common share, basic and diluted: (1.00 ) (1.37 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment as of December 31, 2021 and 2020 consisted of the following: December 31 December 31 2021 2020 Computers and office equipment $ 141,100 $ 43,283 Vehicles 11,938 - Leasehold improvements 6,113 6,113 Software 442,238 372,904 Machinery and equipment 838,800 - Total 1,440,189 422,300 Less: accumulated depreciation (160,674 ) (21,974 ) Equipment, net $ 1,279,515 $ 400,326 During the years ended December 31, 2021 and 2020, the Company recorded depreciation expense of $52,959 and $11,819, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets Intangible assets as of December 31, 2021 and 2020 consisted of the following: Cost Accumulated Impairment Net carrying Net carrying Customer relationship and lists $ 9,987,873 $ (871,070 ) $ - $ 9,116,803 $ 840,346 Trade names 2,866,456 (353,191 ) - 2,513,265 357,743 Total intangible assets $ 12,854,329 $ (1,224,261 ) $ - $ 11,630,068 $ 1,198,089 During the years ended December 31, 2021 and 2020, the Company recorded amortization expense of $453,405 and $189,465, respectively. The estimated future amortization expense for the next five years and thereafter is as follows: Year ending December 31, 2022 $ 1,070,567 2023 1,070,567 2024 1,070,567 2025 1,070,567 2026 1,070,567 Thereafter 6,277,233 Total $ 11,630,068 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions Exchange of Shares of Common Stock for Series B Preferred Stock On June 16, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company’s Chief Executive Officer, Mark Porter, exchanged 350 shares of Series D Preferred Stock for 1,000 shares of Series B Preferred Stock from Roger Ponder and Keith Hayter, the former Chief Executive Officer and President, respectively, of Spectrum. This resulted in an increase to additional paid in capital of $1,271,000. Loans Payable to Related Parties As of December 31, 2021 and 2020, the Company had outstanding the following loans payable to related parties: December 31, December 31, 2021 2020 Convertible promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 31, 2022, debt premium of $988,917 $ 1,342,949 $ - Promissory note issued to Mark Porter, 9% interest, unsecured, matures December 15, 2021 100,000 - Promissory note issued to the James Marsh and Jeffrey Gardner, 5.5% interest, unsecured, due February 27, 2022 - * 2,292,972 Total $ 1,442,949 $ 2,292,972 Less: Long-term portion of loans payable - (1,735,114 ) Loans payable, current portion, net of debt discount $ 1,442,949 $ 557,858 * During the year ended December 31, 2021, this note was assigned to the Mark Munro 1996 Charitable Remainder UniTrust by Jeffrey Gardner and James Marsh. The assigned note was then exchanged for a convertible note on December 28, 2021 (refer to Note 8, Convertible Debentures, for additional detail). The Company’s loans payable to related parties have an effective interest rate range of 9.6% to 11.3%. Promissory note issued to Jeffrey Gardner and James Marsh, 5.5% interest, matures February 27, 2022 On February 17, 2019, the Company issued a promissory note to Jeffrey Gardner and James Marsh with an original principal amount of $4,000,000. The note accrues interest at a rate of 5.5% per annum and the maturity date is February 27, 2022. On January 1, 2021, this note was assigned by Jeffrey Gardner and James Marsh to the Mark Munro 1996 Charitable Remainder UniTrust. As a result of the assignment, the note was no longer a related party note. During the year ended December 31, 2021, the Company did not make any cash payments for principal. During the year ended December 31, 2020, the Company made cash payments for principal of $321,487. On December 28, 2021, the note was exchanged for a convertible note (refer to Note 8, Convertible Debentures, for additional detail). At the time of the exchange, the outstanding principal balance was $2,292,971. Roger Ponder Related Party Reclassification During September 2021, as a result of shares of, as a result of his resignation as a director and the potential shares to be issued about conversion of his debt and Series D preferred stock, the Company determined that Roger Ponder was no longer a related party. The effective date of the reclassification was June 16, 2021. Convertible promissory note, Keith Hayter, 10% interest, unsecured, matures August 31, 2022 On June 15, 2021, in connection with the merger transaction discussed in Note 3 and Acquisition, Reverse Merger, the Company assumed Spectrum’s convertible promissory note issued to Keith Hayter. The note was originally issued on August 31, 2020 in the principal amount of $554,031. Interest accrues at 10% per annum. All principal and accrued but unpaid interest under the note is due on August 31, 2022. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.06 per share, subject to adjustment based on the terms of the note. The embedded conversion option does not qualify for derivative accounting. As a result of the conversion price being fixed at $0.06, the note has a conversion premium of $1,359,761, and the fair value of the note is $378,000. During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $200,000 of principal into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional detail ). As a result of these conversions, the Company recorded a loss on settlement of debt of $1,182,972 to the consolidated statement of operations for the year ended December 31, 2021. As of December 31, 2021, the Company owed $354,031 pursuant to this agreement and will amortize the remaining premium of $988,917 over the remaining term of the note. The total liability as of December 31, 2021 was $1,342,949. Promissory note, Mark Porter, 9% interest, unsecured, matures December 15, 2021 On June 1, 2021, the Company issued a $100,000 promissory note to the Chief Executive Officer of the Company in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition. The note is due on December 15, 2021 and bears interest at a rate of 9% per annum. On December 15, 2021, this note matured and is now due on demand. As of December 31, 2021, the Company owed $100,000 pursuant to this agreement. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable [Abstract] | |
Loans Payable | 7. Loans Payable As of December 31, 2021 and 2020, the Company had outstanding the following loans payable: December 31, December 31, 2021 2020 Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, unsecured, matures on October 9, 2024 $ 304,187 $ 358,343 Promissory note issued to Dominion Capital., LLC., 10% interest, unsecured, matures on September 30, 2022 1,552,500 - Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures August 31, 2022, net of debt discount of $191,371 754,575 - Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 31, 2022, net of debt discount of $47,843 188,644 - EIDL Loan, 3.75% interest, matures October 12, 2050 149,284 - CARES Act Loans 2,010,000 - Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand 217,400 - Total $ 5,176,590 $ 358,343 Less: Long-term portion of loans payable (2,402,969 ) (344,941 ) Loans payable, current portion, net of debt discount $ 2,773,621 $ 13,402 Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, matures October 9, 2024 On October 21, 2019, the Company issued a promissory note to Cornerstone National Bank & Trust with an original principal amount of $420,000. The note bears interest at a rate of 4.5% per annum and the maturity date is October 9, 2024. The Company is to make monthly payments of principal and interest of $5,851, with a final balloon payment of $139,033 due on October 9, 2024. During the year ended December 31, 2021, the Company made cash payments for principal of $54,770. During the year ended December 31, 2020, the Company made cash payments for principal of $52,509. As of December 31, 2021, the Company owed $304,186 pursuant to this agreement. Loan with Cedar Advance LLC On December 14, 2021, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Cedar Advance LLC. Under the Financing Agreement, the Financing Parties sold to Cedar Advance future receivables in an aggregate amount equal to $1,000,000 for a purchase price of $800,000. The Company received cash of $776,000 and recorded a debt discount of $224,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $27,027 each week based upon an anticipated 25% of its future receivables until such time as $1,000,000 has been paid, a period Cedar Advance and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. Additionally, in connection with the Financing Agreement, the Company issued Cedar Advance a warrant to purchase 400,000 shares of the Company’s common stock at an exercise price of $0.25 per share. These warrants expire on December 14, 2024. The warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the warrant of $102,696 resulted in an initial derivative expense of $102,696. During the year ended December 31, 2021, the Company paid $54,054 of the original balance under the agreement. At December 31, 2021, the Company owed $945,946 pursuant to this agreement and will record accretion equal to the debt discount of $191,370 over the remaining term of the note. Loan with Pawn Funding On December 14, 2021, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $250,000 for a purchase price of $200,000. The Company received cash of $194,000 and recorded a debt discount of $56,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $6,757 each week based upon an anticipated 25% of its future receivables until such time as $250,000 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. Additionally, in connection with the Financing Agreement, the Company issued Pawn Funding a warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $0.25 per share. These warrants expire on December 14, 2024. The warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the warrant of $51,348 resulted in an initial derivative expense of $51,348. During the year ended December 31, 2021, the Company paid $13,514 of the original balance under the agreement. At December 31, 2021, the Company owed $236,486 pursuant to this agreement and will record accretion equal to the debt discount of $47,843 over the remaining term of the note. Promissory note issued to Dominion Capital., LLC., 10% interest, unsecured, matures on September 30, 2022 On June 15, 2021, in connection with the acquisition of SVC discussed in Note 3, Reverse Merger and Acquisition, the Company assumed SVC’s promissory note issued to Dominion Capital, LLC. The note was originally issued on March 31, 2021 in the principal amount of $2,750,000. As of June 15, 2021, $1,650,000 remained outstanding. The note bears interest at a rate of 10% per annum and the maturity date is September 30, 2022. During the period of June 16, 2021 through December 31, 2021, the Company made cash payments of $255,000. As of December 31, 2021, the Company owed $1,552,500 pursuant to this agreement. Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed Spectrum’s promissory note issued to InterCloud Systems, Inc. The note was originally issued on February 27, 2018 in the principal amount of $500,000. As of June 15, 2021, $217,400 remained outstanding. The note is non-interest bearing and is due on demand. As of December 31, 2021, the Company owed $217,400 pursuant to this agreement. EIDL Loan On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed ADEX’s EIDL loan. The note was originally issued on October 10, 2022 in the principal amount of $150,000. As of June 15, 2021, $150,000 remained outstanding. The note bears interest at a rate of 3.75% per annum and the maturity date is October 12, 2050. During the period of June 16, 2021 through December 31, 2021, the Company made cash payments of $716. As of December 31, 2021, the Company owed $149,284 pursuant to this agreement. CARES Act Loans On April 8, 2020 and March 31, 2021, High Wire received $873,400 and $873,465, respectively. On June 15, 2021, in connection with the merger transaction described in Note 3, Reverse Merger and Acquisition, the Company assumed CARES Act Loans totaling $2,010,000 that were originally received by ADEX. Collectively, these amounts are the “PPP Funds.” These loan agreements were pursuant to the CARES Act. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act is eligible to be forgiven provided that (a) the Company uses the PPP Funds during the eight week period after receipt thereof, and (b) the PPP Funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. The amount of loan forgiveness will be reduced if, among other reasons, the Company does not maintain staffing or payroll levels. Principal and interest payments on any unforgiven portion of the PPP Funds will be deferred for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the CARES Act Loan. On November 4, 2020, High Wire received approval for forgiveness of its $873,400 CARES Act Loan. On August 6, 2021, High Wire received approval for forgiveness of its $873,465 CARES Act Loan. As a result, the Company recorded a gain on PPP loan forgiveness to the consolidated statement of operations for the year ended December 31, 2021. As of December 31, 2021 and 2020, the aggregate balance of these loans was $2,010,000 and $0, respectively, and is included in loans payable on the consolidated balance sheets. |
Convertible Debentures
Convertible Debentures | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Debentures | 8. Convertible Debentures As of December 31, 2021 and 2020, the Company had outstanding the following convertible debentures: December 31, December 31, 2021 2020 Convertible promissory note, Cobra Equities SPV, LLC, 18% interest, unsecured, matured June 1, 2019 $ 200,000 $ - Convertible promissory note, Cobra Equities SPV, LLC, 12% interest, secured, due on demand 89,047 * - Convertible promissory note, Cobra Equities SPV, LLC, 10% interest, secured, due on demand 125,680 * - Convertible promissory note, Cobra Equities SPV, LLC, Tranche 1, 9% interest, secured, matures January 1, 2023, net of debt discount of $117,556 171,918 - Convertible promissory note, Cobra Equities SPV, LLC, Tranche 2, 9% interest, secured, matures January 1, 2023, net of debt discount of $148,173 203,932 - Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, matured September 15, 2021, due on demand 125,000 - Convertible promissory note, James Marsh, 6% interest, unsecured, matured September 15, 2021, due on demand 125,000 - Convertible promissory note issued to Roger Ponder, 10% interest, unsecured, matures August 31, 2022, debt premium of $42,435 66,329 ** - Convertible promissory note, Dominion Capital, LLC, 9.9% interest, senior secured, matures December 29, 2023, net of debt discount of $2,223,975 276,025 - Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due September 1, 2022 2,750,000 - Total 4,132,931 - Less: Long-term portion of convertible debentures, net of debt discount (208,374 ) - Convertible debentures, current portion, net of debt discount $ 3,924,557 $ - * On September 23, 2021, these notes were assigned from SCS, LLC to Cobra Equities SPV, LLC. ** During September 2021, as a result of shares of, as a result of his resignation as a director and the potential shares to be issued about conversion of his debt and Series D preferred stock, the Company determined that Roger Ponder was no longer a related party. The effective date of the reclassification was June 16, 2021. The Company’s convertible debentures have an effective interest rate range of 8.4% to 78.8%. Convertible promissory note, Cobra Equities SPV, LLC, 18% interest, unsecured, matured June 1, 2019 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a convertible promissory note issued to Cobra Equities SPV, LLC. The note had been previously assigned to Cobra Equities SPV, LLC by another lender. The amount outstanding as of June 15, 2021 was $406,000, with accrued interest of $16,030. Interest accrues on the note at 18% per annum. The note is convertible into shares of the Company’s common stock at a conversion price equal to 60% of the lowest VWAP for the 10 consecutive trading days immediately preceding the conversion. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $206,000 of principal and $3,620 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional detail). As a result of these conversions, the Company recorded a loss on settlement of debt of $268,770 to the consolidated statement of operations for the year ended December 31, 2021. The Company owed $200,000 as of December 31, 2021. Convertible promissory note, SCS Capital Partners, LLC, 12% interest, secured, matures December 30, 2021 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a convertible promissory note issued to SCS, LLC. The note had been previously assigned to SCS, LLC by another lender. The amount outstanding as of June 15, 2021 was $235,989, with accrued interest of $16,763. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. All principal and accrued but unpaid interest under the note is due on December 30, 2021. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.0275 per share. On or after the date of the closing of a subsequent offering, the fixed conversion price shall be 105% of the price of the common stock issued in the subsequent offering. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” On September 23, 2021, the holder of the note assigned the note to Cobra Equities SPV, LLC (refer to the “Convertible promissory note, Cobra Equities SPV, LLC, 12% interest, secured, due on demand” section of this note for additional detail). Convertible promissory note, Cobra Equities SPV, LLC, 12% interest, secured, due on demand On September 23, 2021, the holder of the note described in the “Convertible promissory note, SCS Capital Partners, LLC, 12% interest, secured, matures December 30, 2021” section of this note assigned the note to Cobra Equities SPV, LLC. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.0275 per share. On or after the date of the closing of a subsequent offering, the fixed conversion price shall be 105% of the price of the common stock issued in the subsequent offering. During the period of September 23, 2021 through December 31, 2021, the holder of the note converted $146,942 of principal and $112,700 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional detail). As a result of these conversions, the Company recorded a loss on settlement of debt of $3,438,801 to the consolidated statement of operations for the year ended December 31, 2021. The note matured on December 30, 2021 and is now due on demand. At December 31, 2021, the Company owed $89,047 pursuant to this agreement. Convertible promissory note, SCS Capital Partners, LLC, 10% interest, secured, matures December 31, 2021 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a convertible promissory note issued to SCS, LLC. The amount outstanding as of June 15, 2021 was $219,941, with accrued interest of $7,991. The note was originally issued on December 29, 2020 in the principal amount of $175,000. The interest on the outstanding principal due under the note accrues at a rate of 10% per annum. All principal and accrued but unpaid interest under the note is due on December 31, 2021. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.04 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” During the period of June 16, 2021 through September 23, 2021, the Company made cash payments for principal of $94,260. On September 23, 2021, the holder of the note assigned the note to Cobra Equities SPV, LLC (refer to the “Convertible promissory note, Cobra Equities SPV, LLC, 10% interest, secured, due on demand” section of this note for additional detail). Convertible promissory note, Cobra Equities SPV, LLC, 10% interest, secured, due on demand On September 23, 2021, the holder of the note described in the “Convertible promissory note, SCS Capital Partners, LLC, 10% interest, secured, matures December 31, 2021” section of this note assigned the note to Cobra Equities SPV, LLC. The interest on the outstanding principal due under the note accrues at a rate of 10% per annum. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.04 per share. The note matured on December 31, 2021 and is now due on demand. At December 31, 2021, the Company owed $125,680 pursuant to this agreement. Convertible promissory note, Cobra Equities SPV, LLC, 9% interest, secured, matures January 1, 2023 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a convertible promissory note issued to IQ Financial Inc. and assigned to Cobra Equities SPV, LLC. The amount outstanding for Tranche 1 as of June 15, 2021 was $289,473, with accrued interest of $11,202. The amount outstanding for Tranche 2 as of June 15, 2021 was $342,105, with accrued interest of $10,446. The note was originally issued to IQ Financial Inc. on January 27, 2021 in the aggregate principal amount of $631,579. The note was assigned to Cobra Equities SPV, LLC on March 2, 2021. The funds were received in two disbursements – $275,000 on January 28, 2021 and $325,000 on March 1, 2021 (refer to the “Convertible promissory note, Cobra Equities SPV, LLC Tranche 1, 9% interest, secured, matures January 1, 2023” and “Convertible promissory note, Cobra Equities SPV, LLC Tranche 2, 9% interest, secured, matures January 1, 2023” sections below for additional detail. Convertible promissory note, Cobra Equities SPV, LLC Tranche 1, 9% interest, secured, matures January 1, 2023 On January 28, 2021, Spectrum received the first tranche of the note discussed in the “Convertible promissory note, Cobra Equities SPV, LLC, 9% interest, secured, matures January 1, 2023” above. Spectrum received $275,000, with an original issue discount of $14,474. The interest on the outstanding principal due under the secured note accrues at a rate of 9% per annum. All principal and accrued but unpaid interest under the secured note is due on January 1, 2023. The holder may begin converting the note into shares of the Company’s common stock six months after issuance when it is Rule 144 eligible. The conversion price is fixed at $0.05 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” At December 31, 2021, the Company owed $289,474 pursuant to this agreement and will record accretion equal to the debt discount of $117,556 over the remaining term of the note. Convertible promissory note, Cobra Equities SPV, LLC Tranche 2, 9% interest, secured, matures January 1, 2023 On March 1, 2021, Spectrum received the second tranche of the note discussed in the “Convertible promissory note, Cobra Equities SPV, LLC, 9% interest, secured, matures January 1, 2023” above. Spectrum received $325,000, with an original issue discount of $17,105. The interest on the outstanding principal due under the secured note accrues at a rate of 9% per annum. All principal and accrued but unpaid interest under the secured note is due on January 1, 2023. The holder may begin converting the note into shares of the Company’s common stock six months after issuance when it is Rule 144 eligible. The conversion price is fixed at $0.05 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” During the period of June 16, 2021 through December 31, 2021, $10,000 was added to the principal balance. At December 31, 2021, the Company owed $352,105 pursuant to this agreement and will record accretion equal to the debt discount of $38,638 over the remaining term of the note. Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, due on demand On June 15, 2021 the Company issued to Jeffrey Gardner an unsecured convertible promissory note in the aggregate principal amount of $125,000 in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition. The interest on the outstanding principal due under the note accrues at a rate of 6% per annum. All principal and accrued but unpaid interest under the note is due on September 15, 2021. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.075 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” On September 15, 2021, this note matured and is now due on demand. Additionally, the interest rate increased to 18% per annum. At December 31, 2021, the Company owed $125,000 pursuant to this agreement. Convertible promissory note, James Marsh, 6% interest, unsecured, due on demand On June 15, 2021 the Company issued to James Marsh an unsecured convertible promissory note in the aggregate principal amount of $125,000 in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition. The interest on the outstanding principal due under the note accrues at a rate of 6% per annum. All principal and accrued but unpaid interest under the note is due on September 15, 2021. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.075 per share. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” On September 15, 2021, this note matured and is now due on demand. Additionally, the interest rate increased to 18% per annum. At December 31, 2021, the Company owed $125,000 pursuant to this agreement. Convertible promissory note, Roger Ponder, 10% interest, unsecured, matures August 31, 2022 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed Spectrum’s convertible promissory note issued to Roger Ponder. The note was originally issued on August 31, 2020 in the principal amount of $23,894. Interest accrues at 10% per annum. All principal and accrued but unpaid interest under the note is due on August 31, 2022. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.06 per share, subject to adjustment based on the terms of the note. The embedded conversion option does not qualify for derivative accounting. As a result of the conversion price being fixed at $0.06, the note has a conversion premium of $58,349, and the fair value of the note is $19,000. As of December 31, 2021, the Company owed $23,894 pursuant to this agreement and will amortize the remaining premium of $42,435 over the remaining term of the note. The total liability as of December 31, 2021 was $66,329. Convertible promissory note, Dominion Capital, LLC, 9.9% interest, senior secured, matures December 29, 2023 On November 3, 2021, the Company closed on a private placement transaction (the “Transaction”) whereby it issued a senior secured convertible promissory note with a principal amount of $2,500,000 to an institutional investor for net proceeds of $2,375,000, a debt discount of $125,000. The note facilitated the acquisition of SVC discussed in Note 3, Reverse Merger and Acquisition. The note accrues interest at the rate of 9.9% per annum and is convertible into shares of the Company’s common stock at a fixed conversion price of $0.50 per share, subject to adjustment as set forth in the note. The note amortizes beginning ten months following issuance, in 18 monthly installments. Additionally, the Company issued to the investor a common stock purchase warrant to purchase up to 5,400,000 shares of the Company’s common stock at an exercise price of $0.50 per share. The warrants expire on November 3, 2024. In connection with the Transaction, the Company agreed to file a registration statement registering the resale of the shares of common stock issuable upon conversion of the note within 30 days of the closing of the Transaction. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $4,183,000 and the warrant of $2,788,020 resulted in an additional debt discount of $2,425,000 and an initial derivative expense of $4,596,020. At December 31, 2021, the Company owed $2,500,000 pursuant to this agreement and will record accretion equal to the debt discount of $2,223,975 over the remaining term of the note. Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due September 1, 2022 On December 28, 2021, the Mark Munro 1996 Charitable Remainder UniTrust, the holder of a note with a principal balance of $2,292,971 described in Note 6, Loans Payable to Related Parties, exchanged the note for a new convertible promissory note in the principal amount of $2,750,000. The note bears interest at a rate of 9% per annum and is due on September 1, 2022. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.15 per share, subject to adjustment as set forth in the note. The note calls for monthly payments of $75,000 from April 2022 through August 2022, with a balloon payment of $2,375,000 due on September 1, 2022. The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $5,129,000 resulted in loss on settlement of debt of of $5,129,000. At December 31, 2021, the Company owed $2,750,000 pursuant to this agreement. Convertible promissory note, Efrat Investments LLC, 10% interest, secured, matures October 5, 2021 On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a convertible promissory note issued to Efrat Investments, LLC. The amount outstanding as of June 15, 2021 was $33,000, with accrued interest of $8,282. The note was originally issued on September 14, 2020 in the aggregate principal amount of $165,000 for an aggregate purchase price of $146,000. The Company also assumed a warrant issued equal to the face amount of the note with a term of two years to purchase 1,650,000 shares of common stock at an exercise price of $0.10 per share. The interest on the outstanding principal due under the note accrued at a rate of 10% per annum. All principal and accrued but unpaid interest under the note was due on October 5, 2021. The note was convertible into shares of the Company’s common stock at a fixed conversion price of $0.05 per share. The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging.” During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $33,000 of principal into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional information). As a result of these conversions, the amount owed at December 31, 2021 was $0. The Company recorded a gain on settlement of debt of $208,567 to the consolidated statement of operations for the year ended December 31, 2021. During the period of June 16, 2021 through December 31, 2021, the holder of the warrants associated with the note converted the warrants on a cashless basis (refer to Note 11, Common Stock, for additional information). As a result of the exercise, the Company recorded a loss on settlement of warrants of $133,045 to the consolidated statement of operations for the year ended December 31, 2021. |
Factor Financing
Factor Financing | 12 Months Ended |
Dec. 31, 2021 | |
Factor Financing Disclosure [Abstract] | |
Factor Financing | 9. Factor Financing On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed a factor financing agreement between ADEX and Bay View Funding. The amount outstanding as of June 15, 2021 was $1,968,816. The agreement began on February 11, 2020 when, pursuant to an assignment and consent agreement, Bay View Funding purchased and received all of a previous lender’s right, title, and interest in the loan and security agreement with Spectrum’s wholly-owned subsidiary, ADEX. In connection with the agreement, Spectrum received $3,024,532 from Bay View Funding. This money was used to pay off the amounts owed to the previous lender at the time of the assignment and consent agreement. The initial term of the factoring agreement is twelve months from the initial funding date. Under the factoring agreement, Spectrum’s ADEX subsidiary may borrow up to the lesser of $5,000,000 or an amount equal to the sum of all undisputed purchased receivables multiplied by the advance percentage, less any funds in reserve. ADEX will pay to Bay View Funding a factoring fee upon purchase of receivables by Bay View Funding equal to 0.75% of the gross face value of the purchased receivable for the first 30 day period from the date said purchased receivable is first purchased by Bay View Funding, and a factoring fee of 0.35% per 15 days thereafter until the date said purchased receivable is paid in full or otherwise repurchased by ADEX or otherwise written off by Bay View Funding within the write off period. ADEX will also pay a finance fee to Bay View Funding on the outstanding advances under the agreement at a floating rate per annum equal to the Prime Rate plus 3%. The finance rate will increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate, but at no time will the finance fee be less than 7.75%. During the period of June 16, 2021 through December 31, 2021, the Company paid $315,039 in factoring fees. These amounts are included within general and administrative expenses on the consolidated statement of operations. During the period of June 16, 2021 through December 31, 2021, the Company received an aggregate of $10,678,029 and repaid an aggregate of $9,259,775. The Company owed $3,387,070 under the agreement as of December 31, 2021. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 10. Derivative Liabilities On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed Spectrum’s derivative liabilities. As of June 15, 2021, the derivative liability balance of $7,496,482 was comprised of $6,929,000 of derivatives related to Spectrum’s convertible debentures, and $567,482 of derivatives related to Spectrum’s share purchase warrants and stock options. Not all of the Company’s stock options qualify for derivative treatment. The embedded conversion options of the convertible debentures described in Note 8, Convertible Debentures, which were assumed as part of the merger transaction, contain conversion features that qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period and the change in fair value is reported in the statement of operations as a gain or loss on change in fair value of derivatives. Derivative liabilities also include the fair value of the Company’s share purchase warrants and stock options discussed in Note 13, Share Purchase Warrants and Stock Options. As of December 31, 2021, the derivative liability balance of $15,528,339 was comprised of $14,050,806 of derivatives related to the Company’s convertible debentures, and $1,477,533 of derivatives related to the Company’s share purchase warrants and stock options. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the period of June 16, 2021 through December 31, 2021: December 31, 2021 Balance at the beginning of the period $ - Initial value of derivatives after reverse merger 7,496,482 Change in fair value of embedded conversion option (166,188 ) Initial value of derivatives upon issuance 1,808,000 Effect of debt extinguishment 5,129,000 Conversion of derivative liability (3,932,335 ) Fair value of option derivative at issuance 3,448,864 Discounts on new derivative in excess of note face value 2,375,000 Fair value of warrant exercises (630,484 ) Balance at the end of the period $ 15,528,339 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected Risk-free Expected dividend Expected life At December 31, 2021 110 - 257% 0.06 - 0.97% 0 % 0.25 - 2.95 |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 11. Common Stock Authorized shares The Company has 1,000,000,000 common shares authorized with a par value of $0.00001. Issuance of shares for reverse merger As a result of the reverse merger on June 15, 2021, the Company issued 25,474,625 shares of common stock. Issuance of shares pursuant to a Cobra Equities SPV, LLC convertible debenture On June 16, 2021, the Company issued 1,086,917 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $116,000 of principal and $2,300 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $306,510, resulting in a loss on debt conversion of $188,211. On July 15, 2021, the Company issued 688,069 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $90,000 of principal and $1,320 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $171,880, resulting in a loss on debt conversion of $80,560. On August 12, 2021, the Company issued 1,363,636 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $37,500 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $353,864, resulting in a loss on debt conversion of $316,364. On September 23, 2021, the Company issued 1,272,727 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $35,000 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $458,182, resulting in a loss on debt conversion of $423,182. On October 6, 2021, the Company issued 1,761,527 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $12,442 of principal and $36,000 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $880,587, resulting in a loss on debt conversion of $832,145. On October 25, 2021, the Company issued 1,254,545 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $33,000 of principal and $1,500 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $721,363, resulting in a loss on debt conversion of $686,863. On November 4, 2021, the Company issued 1,181,818 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $32,500 of principal pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $583,227, resulting in a loss on debt conversion of $550,727. On November 24, 2021, the Company issued 1,345,455 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $35,500 of principal and $1,500 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $390,182, resulting in a loss on debt conversion of $353,182. On December 15, 2021, the Company issued 1,261,818 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $33,500 of principal and $1,200 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $311,038, resulting in a loss on debt conversion of $276,338. Issuance of shares pursuant to an Efrat Investments LLC convertible debenture On June 17, 2021, the Company issued 660,000 shares of common stock to Efrat Investments LLC upon the conversion of $33,000 of principal and $8,307 of accrued interest pursuant to the convertible debenture described in Note 8, Convertible Debentures. There was also a derivative of $330,000 associated with the note. The shares had a fair value of $223,740, resulting in a gain of debt conversion of $160,567. Issuance of shares pursuant to a related party convertible debenture On September 22, 2021, the Company issued 1,500,000 shares of common stock to Keith Hayter upon the conversion of $90,000 of principal pursuant to the related party convertible debenture described in Note 6, Loans Payable to Related Parties. The shares had a fair value of $521,250, resulting in a loss on debt conversion of $431,250. On November 8, 2021, the Company issued 1,833,333 shares of common stock to Keith Hayter upon the conversion of $110,000 of principal pursuant to the related party convertible debenture described in Note 6, Loans Payable to Related Parties. The shares had a fair value of $861,667, resulting in a loss on debt conversion of $751,667. Issuance of Shares Pursuant to Conversion of Series A Preferred Stock On June 24, 2021, the Company issued 985,651 shares of common stock to Dominion Capital upon the conversion of 96,101 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $209,016, which was the carrying value of the Series A preferred converted. On August 12, 2021, the Company issued 1,025,641 shares of common stock to Dominion Capital upon the conversion of 100,000 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $206,410, which was the carrying value of the Series A preferred converted. Issuance of Shares Pursuant to Conversion of Series D Preferred Stock On December 16, 2021, the Company issued 2,045,454 shares of common stock to SCS, LLC upon the conversion of 45 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $464,543, which was the carrying value of the Series D preferred converted. Issuance of shares pursuant to a Pawn Funding warrant On June 29, 2021, the Company issued 69,281 shares of common stock to Pawn Funding upon the cashless exercise of a warrant. The Company recognized a gain on settlement of warrants of $5,072. Issuance of shares pursuant to an Efrat Investments LLC warrant On September 30, 2021, the Company issued 1,338,620 shares of common stock to Efrat Investments LLC upon the cashless exercise of a warrant. The Company recognized a loss on settlement of warrants of $133,045. Issuance of convertible debt to HWN shareholders On June 16, 2021, the Company issued $250,000 aggregate principal amount of convertible notes to Jeffrey Gardner and James Marsh., who are shareholders of HWN. The debt had a fair value of $486,400, which was recorded as a reduction to retained earnings. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Preferred Stock | 12. Preferred Stock On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed Spectrum’s Series A preferred stock obligations. Additionally, the holders of Spectrum’s Series B preferred stock transferred their shares to the Company’s Chief Executive Officer. Lastly, a new class of preferred stock, Series D, was designated and issued. At the time of the merger transaction, the fair value of the Series A and Series B preferred stock was $1,024,000 and $0, respectively. The fair value of the Series D preferred stock which was received in the exchange was $1,271,000, which was recorded as additional paid in capital. See below for a description of each of the Company’s outstanding classes of preferred stock, including historical and current information. Series A On November 15, 2017, Spectrum created one series of the 20,000,000 preferred shares it is authorized to issue, consisting of 8,000,000 shares, to be designated as Series A preferred stock. On October 29, 2018, Spectrum made the first amendment to the Certificate of Designation of its Series A convertible preferred stock. This amendment updated the conversion price to be equal to the greater of 75% of the lowest VWAP during the ten trading day period immediately preceding the date a conversion notice is delivered or $120.00, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. On August 16, 2019, Spectrum made the second amendment to the Certificate of Designation of its Series A convertible preferred stock. As a result of this amendment, the Company recorded a deemed dividend in accordance with ASC 260-10-599-2. On April 8, 2020, Spectrum made the third amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price and the conversion price floor to $3.00 per share. On June 18, 2020, Spectrum made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share. On January 27, 2021, Spectrum made the fifth amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price to $0.0975 per share. Spectrum accounted for the amendment as an extinguishment and recorded a deemed dividend in accordance with ASC 260-10-599-2. Subsequent to the fifth amendment, the principal terms of the Series A preferred stock shares are as follows: Voting rights Dividend rights Conversion rights Liquidation rights On June 24, 2021, the Company issued 985,651 shares of common stock to Dominion Capital upon the conversion of 96,101 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $209,016, which was the carrying value of the Series A preferred converted. On August 12, 2021, the Company issued 1,025,641 shares of common stock to Dominion Capital upon the conversion of 100,000 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $206,410, which was the carrying value of the Series A preferred converted. As a result of the conversions, on December 31, 2021, the fair value of the Series A Preferred Stock was $619,229. In accordance with ASC 480 Distinguishing Liabilities from Equity Series B On April 16, 2018, Spectrum designated 1,000 shares of Series B preferred stock with a stated value of $3,500 per share. The Series B preferred stock is neither redeemable nor convertible into common stock. The principal terms of the Series B preferred stock shares are as follows: Issue Price - Redemption - Dividends - Preference of Liquidation - Voting - Conversion - In accordance with ASC 480 Distinguishing Liabilities from Equity Series D On June 14, 2021, Spectrum designated 1,590 shares of Series D preferred stock with a stated value of $10,000 per share. The Series D preferred stock is not redeemable. On December 13, 2021, the Company made the first amendment to the Certificate of Designation of its Series D preferred stock which changed the conversion right. As a result of this amendment, the Company recorded a deemed dividend of $5,852,000 for the year ended December 31, 2021 in accordance with ASC 260-10-599-2. Subsequent to the first amendment, the principal terms of the Series D preferred stock shares are as follows: Issue Price - Redemption - Dividends - Preference of Liquidation - Voting - Conversion - Vote to Change the Terms of or Issuance of Series D On October 20, 2021, Keith Hayter assigned 140 shares of Series D preferred stock to Cobra Equities SPV, LLC. On December 16, 2021, the Company issued 2,045,454 shares of common stock to SCS, LLC upon the conversion of 45 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $464,543, which was the carrying value of the Series D preferred converted. As of December 31, 2021, the fair value of the Series D Preferred Stock was $6,658,457. In accordance with ASC 480 Distinguishing Liabilities from Equity Series E On December 20, 2021, the Company designated 650 shares of Series E preferred stock with a stated value of $10,000 per share. The Series E preferred stock is not redeemable. The principal terms of the Series E preferred stock shares are as follows: Issue Price - Redemption - Dividends - Preference of Liquidation - Voting - Conversion - Vote to Change the Terms of or Issuance of Series E As of December 31, 2021, the fair value of the Series E Preferred Stock was $6,313,817. In accordance with ASC 480 Distinguishing Liabilities from Equity |
Share Purchase Warrants and Sto
Share Purchase Warrants and Stock Options | 12 Months Ended |
Dec. 31, 2021 | |
Share Purchase Warrants and Stock Options [Abstract] | |
Share Purchase Warrants and Stock Options | 13. Share Purchase Warrants and Stock Options On June 15, 2021, in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed Spectrum’s share purchase warrants and stock options. As of June 15, 2021, the total fair value of Spectrum’s share purchase warrants and stock options was $567,402. The total fair value of the Company’s share purchase warrants and stock options was $1,477,533 as of December 31, 2021. This amount is included in derivative liabilities on the consolidated balance sheet. The valuation methodology, including the assumptions used in the valuation, are discussed in Note 10, Derivative Liabilities. The weighted-average remaining life on the share purchase warrants as of December 31, 2021 was 2.9 years. The weighted-average remaining life on the stock options as of December 31, 2021 was 4.5 years. The stock options outstanding at December 31, 2021 were not subject to any vesting terms with the exception of those issued during August and November 2021. The following table summarizes the activity of share purchase warrants for the period of December 31, 2020 through December 31, 2021: Number of Weighted Intrinsic Balance at December 31, 2020 - $ - $ - Assumed in merger transaction 1,852,882 0.73 Granted 6,000,000 0.48 Exercised (1,850,000 ) 0.11 Expired (382 ) 324.00 Outstanding at December 31, 2021 6,002,500 $ 0.50 $ - Exercisable at December 31, 2021 6,002,500 $ 0.50 $ - As of December 31, 2021, the following share purchase warrants were outstanding: Number of warrants Exercise price Issuance Date Expiry date Remaining life 2,500 30.00 11/21/2019 11/21/2022 0.89 5,400,000 0.50 11/3/2021 11/3/2024 2.84 200,000 0.25 12/14/2021 12/14/2024 2.96 400,000 0.25 12/14/2021 12/14/2024 2.96 6,002,500 The following table summarizes the activity of stock options for the period of December 31, 2020 through December 31, 2021: Number of Weighted Intrinsic Balance at December 31, 2020 - $ - $ - Assumed in merger transaction 966,330 0.62 Issued 9,929,987 0.26 Exercised - - Cancelled/expired (52,078 ) 1.09 Outstanding at December 31, 2021 10,844,239 $ 0.29 $ - Exercisable at December 31, 2021 6,345,879 $ 0.30 $ - As of December 31, 2021, the following stock options were outstanding: Number of Exercise Issuance Expiry date Remaining 323,763 0.58 2/23/2021 2/23/2026 4.15 482,393 0.58 2/23/2021 2/23/2026 4.15 77,587 0.58 2/23/2021 2/23/2026 4.15 77,587 0.58 2/23/2021 2/23/2026 4.15 3,318,584 0.25 6/16/2021 6/16/2026 4.46 100,603 0.25 8/11/2021 8/11/2026 4.61 6,278,468 0.25 8/18/2021 8/18/2026 4.63 185,254 0.54 11/3/2021 11/3/2026 4.84 10,844,239 The remaining stock-based compensation expense on unvested stock options was $2,069,363 as of December 31, 2021. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | 14. Leases The Company leases certain office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The following table sets forth the operating lease right of use (“ROU”) assets and liabilities as of December 31, 2021 and 2020: December 31, December 31, 2021 2020 Operating lease assets $ 227,132 $ 239,489 Operating lease liabilities: Current operating lease liabilities 142,925 86,510 Lonmg term operating lease liabilities 126,044 196,594 Total operating lease liabilities $ 268,969 $ 283,104 Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the years ended December 31, 2021 and 2020, the Company recognized operating lease expense of $161,577 and $100,544, respectively. Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of income and comprehensive income. During the year ended December 31, 2021, short-term lease costs were $34,400. The Company did not incur any short-term lease costs during the year ended December 31, 2020. Cash paid for amounts included in the measurement of operating lease liabilities were $155,259 and $93,792, respectively, for the years ended December 31, 2021 and 2020. These amounts are included in operating activities in the consolidated statements of cash flows. During the years ended December 31, 2021, the Company reduced its operating lease liabilities by $119,031 and $77,450, respectively, for cash paid. The operating lease liabilities as of December 31, 2021 reflect a weighted average discount rate of 19%. The weighted average remaining term of the leases is 1.5 years. Remaining lease payments as of December 31, 2021 are as follows: Year ending December 31, 2022 $ 207,767 2023 96,839 Total lease payments 304,606 Less: imputed interest (35,637 ) Total $ 268,969 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Leases The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 14, Leases, for amounts expensed during the years ended December 31, 2021 and 2020). Legal proceedings In the normal course of business or otherwise, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. On December 16, 2021, a former employee filed a lawsuit against the Company and its Chief Executive Officer for unpaid commissions. The claim is for $100,000. On March 7, 2022, the Company filed a response and counterclaim against the former employee. The Company believes it will prevail and has not recorded a loss contingency as of December 31, 2021. |
Segment Disclosures
Segment Disclosures | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Disclosures | 16. Segment Disclosures During the year ended December 31, 2021, the Company had two operating segments including: ● Technology. which is comprised of the ADEX Entities, AWS PR, SVC, Tropical, and HWN. ● High Wire, which consists of the rest of the Company’s operations. During the year ended December 31, 2020, the Company had only one operating segment, comprised of the operations of High Wire. Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the High Wire reporting segment in one geographical area (the United States) and the ADEX/AWS PR/SVC/Tropical/HWN operating segment in three geographical areas (the United States, Puerto Rico, and Canada). Financial statement information by operating segment for the year ended December 31, 2021 is presented below: Year Ended December 31, 2021 High Wire Technology Total Net sales $ - $ 27,206,689 $ 27,206,689 Operating loss (2,184,740 ) (1,489,689 ) (3,674,429 ) Interest expense 293,359 244,920 538,279 Depreciation and amortization - 506,364 506,364 Total assets as of December 31, 2021 506,835 43,314,747 43,821,582 Geographic information as of and for the year ended December 31, 2021 is presented below: Revenues Long-lived Puerto Rico and Canada $ 1,226,594 $ 11,082 United States 25,980,095 34,821,673 Consolidated total 27,206,689 34,832,755 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes The Company’s pre-tax loss for the years ended December 31, 2021 and 2020 consisted of the following: Years Ended December 31, 2021 2020 Domestic $ (13,934,179 ) $ (710,003 ) Foreign 256,549 - Pre-tax Loss $ (13,677,630 ) $ (710,003 ) The provision for income taxes for the years ended December 31, 2021 and 2020 was as follows: Years Ended December 31, 2021 2020 Federal $ - $ - State - - Foreign - - Total current $ - $ - Deferred: Federal $ - $ - State - - Total deferred - - Total provision for income taxes $ - $ - The Company’s income taxes were calculated on the basis of foreign pre-tax income and domestic pre-tax loss of $256,549 and $13,934,179, respectively, for the year ended December 31, 2021. During 2020, the Company had elected to be treated as a Subchapter S Corporation for income tax purposes, and as such recognized no income tax liability or benefit. The Company’s effective tax rate for the years ended December 31, 2021 and 2020 differed from the U.S. federal statutory rate as follows: Years Ended December 31, 2021 2020 % % Federal tax benefit at statutory rate (21.0 ) - Permanent differences 20.0 - State tax benefit, net of Federal benefits - - Other - - Effect of foreign income taxed in rates other than the U.S. Federal statutory rate - - Net change in valuation allowance 1.0 - Provision - - The tax effects of temporary differences and carryforwards that gave rise to significant portions of the deferred tax assets and liabilities were as follows: Years Ended December 31, 2021 2020 Net operating loss carryforwards $ 27,447,714 $ - Depreciation 3,634 - Total assets 27,451,348 - Total liabilities - - Less: Valuation allowance (27,451,348 ) - Net deferred tax liabilities $ - $ - As of December 31, 2021 and 2020, the Company had federal net operating loss carryforwards (“NOL’s”) of $27,447,714 and $0, respectively that will be available to reduce future taxable income, if any. These NOL’s begin to expire in 2027. The NOL was acquired in the reverse merger and there is more likely than not a Section 382 limitation. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, provide for annual limitations on the utilization of net operating loss, capital loss and credit carryforwards if the Company were to undergo an ownership change, as defined in Section 382 of the Code. In general, an ownership change occurs whenever the percentage of the shares of a corporation owned, directly or indirectly, by 5-percent shareholders, as defined in Section 382 of the Code, increases by more than 50 percentage points over the lowest percentage of the shares of such corporation owned, directly or indirectly, by such 5-percent shareholders at any time over the preceding three years. In the event such ownership change occurs, the annual limitation may result in the expiration of net operating losses capital losses and credits prior to full utilization. The Company has not completed a study to assess whether ownership change occurred as a result of the reverse merger. However, as a result of the reverse merger in 2021, the Company believes an ownership change under Sec. 382 may have occurred. As a result of this potential ownership change, certain of the Company’s net operating loss, capital loss and credit carryforwards could expire prior to full utilization. Additionally, further share issuances, such as the share issuances for debt conversions or acquisitions, may cause a change in ownership. The Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets. The Company’s recent operating results and projections of future income weighed heavily in the Company’s overall assessment. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters as a component of income tax expense. As of December 31, 2021 and 2020, there was no accrued interest and penalties related to uncertain tax positions. The Company is subject to U.S. federal income taxes and to income taxes in various states in the United States. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Due to the Company’s net operating loss carryforwards all years remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. In addition, all of the net operating loss and credit carryforwards that may be used in future years are still subject to adjustment. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 18. Discontinued Operations On February 15, 2022, High Wire sold its 50% interest in JTM. As of December 31, 2021, the Company classified JTM as held-for-sale. Additionally, the sale of High Wire’s 50% interest in JTM qualified for discontinued operations treatment. The assets and liabilities of JTM as of December 31, 2021 and 2020 have been included within the consolidated balance sheets as current assets of discontinued operations, noncurrent assets of discontinued operations, current liabilities of discontinued operations, and noncurrent liabilities of discontinued operations. The results of operations of JTM have been included within net income from discontinued operations, net of tax, on the statements of operations for the years ended December 31, 2021 and 2020. The following table shows the balance sheet of the Company’s discontinued operations as of December 31, 2021 and 2020: December 31, 2021 2020 Current assets: Cash $ 809,917 $ 251,771 Accounts receivable 1,067,995 1,229,761 Contract assets 147,568 - Prepaid expenses and deposits 57,915 63,368 Current assets of discontinued operations $ 2,083,395 $ 1,544,900 Noncurrent assets: Property and equipment, net of accumulated depreciation of $73,733 and $51,237, respectively $ 52,618 $ 75,115 Goodwill - 875,201 Intangible assets, net of accumulated amortization of $96,882 - 203,055 Noncurrent assets of discontinued operations $ 52,618 $ 1,153,371 Current liabilities: Accounts payable and accrued liabilities $ 402,142 $ 659,937 Contract liabilities 4,700 30,000 Loans payable 12,362 52,051 Current liabilities of discontinued operations $ 419,204 $ 741,988 Noncurrent liabilities: Loans payable, net of current portion $ 33,496 $ 250,800 Noncurrent liabilities of discontinued operations $ 33,496 $ 250,800 The following table shows the statement of operations for the Company’s discontinued operations for the years ended December 31, 2021 and 2020: For the years ended December 31, 2021 2020 Revenue $ 9,509,419 $ 5,847,787 Operating expenses: Cost of revenues 7,043,944 4,943,433 Depreciation and amortization 49,597 75,318 Salaries and wages 366,654 302,685 General and administrative 567,346 493,092 Goodwill impairment 875,201 - Intangible asset impairment 175,954 - Total operating expenses 9,078,696 5,814,528 Loss from operations 430,723 33,259 Other (expenses) income: Interest expense (6,168 ) (250 ) PPP loan forgiveness 250,800 - Other income - 829 Total other expense 244,632 579 Pre-tax loss from operations 675,355 33,838 Provision for income taxes - - Net income from discontinued operations, net of tax $ 675,355 $ 33,838 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events Issuance of shares pursuant to a Cobra Equities SPV, LLC convertible debenture or assignment On January 11, 2022, the Company issued 1,261,818 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $33,600 of assigned principal and $1,100 of assigned accrued interest pursuant a convertible debenture. On February 22, 2022, the Company issued 1,160,000 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $31,900 of assigned principal pursuant a convertible debenture. On March 16, 2022, the Company issued 1,679,322 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $45,000 of assigned principal and $1,181 of assigned accrued interest pursuant a convertible debenture. On April 4, 2022, the Company issued 1,515,152 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $150,000 of assigned principal pursuant a convertible debenture. Issuance of shares pursuant to a Series D Preferred Stock conversion On February 7, 2022, the Company issued 1,136,364 shares of common stock to SCS, LLC upon the conversion of 25 shares of Series D preferred stock with a stated value of $10,000 per share. Sale of JTM On February 15, 2022, High Wire sold its 50% interest in JTM for $525,000, to be paid with an initial payment of $200,000 and thirteen monthly payments of $25,000. PPP loan forgiveness On March 1, 2022, the Company’s ADEX Subsidiary received notification that its $2,000,000 PPP loan had been forgiven by the Small Business Administration. Dominion Capital LLC Note Amendment On March 20, 2022, Dominion Capital LLC, amended the terms of the Company’s note payable to Dominion Capital LLC. The maturity date was amended from September 15, 2022 to February 15, 2023. The note amortization was also amended and the current amortization of principal and interest of $150,000 per month were reduced to $0 through July 15, 2022 and resume from August 15, 2022 through February 15, 2023. Note Transfer Agreement On April 1, 2022, Dominion Capital LLC assigned its $2,500,000 convertible promissory note from the Company to Cobra Equities SPV, LLC. The terms of the note remain the same. Mark Munro 1996 Charitable Remainder Unitrust Note Amendment On April 11, 2022, the Mark Munro 1996 charitable Remainder Unitrust amended the terms of the Company’s convertible promissory note payable. The note maturity was amended from September 30, 2022 to April 30, 2024. Payment terms were also amended, and no payments are due until October 1, 2022. All other terms of the note remain the same. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation/Principles of Consolidation | Basis of Presentation/Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and SVC, as well as High Wire and its subsidiaries, the ADEX Entities, AWS PR, and Tropical. All subsidiaries are wholly-owned On February 15, 2022, HWN sold its 50% interest in JTM (refer to Note 19, Subsequent Events, for additional detail). The operations of JTM have been included as discontinued operations in the accompanying financial statements. All inter-company balances and transactions have been eliminated. |
Reverse Merger | Reverse Merger On January 27, 2021, Spectrum Global Solutions, Inc. HW Merger Sub, Inc., HWN, Inc. and the stockholders of HWN, Inc. (the “Stockholders”) entered into an Agreement and Plan of Merger (the “Agreement”) whereby the Stockholders agreed to sell to the Company all of the capital stock of HWN, Inc. On June 16, 2021, the transaction contemplated by the Agreement closed, and HWN, Inc. became a wholly-owned subsidiary of Spectrum Global Solutions, Inc. As previously disclosed, as part of the consideration for the transaction, Spectrum Global Solutions, Inc. issued shares of a newly established Series D Preferred Stock. The merger has been accounted for as a reverse merger in accordance with US GAAP. This determination was primarily based on High Wire’s business comprising the ongoing operations of the Company following the Merger, High Wire’s senior management comprising the senior management of the Company and High Wire’s stockholders having a majority of the voting power of the Company. For accounting purposes, Spectrum is considered the “acquired” company and High Wire is considered the “acquirer.” Accordingly, for accounting purposes, the Merger is treated as the equivalent of High Wire issuing stock for the net assets of Spectrum, accompanied by a recapitalization. The net assets of Spectrum have been remeasured at fair value and applied against the purchase price resulting in goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Closing Date of the merger are those of High Wire, and Spectrum’s assets, liabilities and results of operations are consolidated with High Wire beginning on the Closing Date. The shares and corresponding capital amounts and earnings per share available to common stockholders, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the merger. The historical financial information and operating results of Spectrum prior to the merger have not been separately presented in these consolidated financial statements. |
Impact of the COVID-19 Pandemic | Impact of the COVID-19 Pandemic The extent to which the coronavirus (“COVID-19”) outbreak and measures taken in response thereto impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. Global health concerns relating to the COVID-19 outbreak have been weighing on the macroeconomic environment, and the outbreak has significantly increased economic uncertainty. Risks related to consumers and businesses lowering or changing spending, which impact domestic and international spend. The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and business shutdowns. These measures have not only negatively impacted consumer spending and business spending habits, they have also adversely impacted and may further impact the Company’s workforce and operations and the operations of its customers, suppliers and business partners. These measures may remain in place for a significant period of time and they are likely to continue to adversely affect the Company’s business, results of operations and financial condition. The spread of COVID-19 has caused the Company to modify its business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and the Company may take further actions as may be required by government authorities or that the Company determines are in the best interests of its employees, customers and business partners. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. The extent to which the COVID-19 outbreak impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impacts to its business as a result of its global economic impact, including any recession that has occurred or may occur in the future. There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19 and a global pandemic, and, as a result, the ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change. The Company does not yet know the full extent of the impacts on its business, its operations or the global economy as a whole. However, the effects could have a material impact on the Company’s results of operations, and the Company will continue to monitor the COVID-19 situation closely. As of November 2021, multiple variants of the COVID-19 virus are circulating globally that are highly transmissible, and there is uncertainty around vaccine effectiveness on the new strains of the virus. Uncertainty around vaccine distribution, supply and effectiveness will impact when the negative economic effects as a result of COVID-19 will abate or end and the timing of such recovery may affect the Company’s financial condition. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Accounts Receivable | Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at December 31, 2021 and 2020 was $74,881 and $0, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: |
Goodwill | Goodwill The Company tests its goodwill for impairment at least annually on December 31st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the years ended December 31, 2021 and 2020. |
Intangible Assets | Intangible Assets At December 31, 2021 and 2020, definite-lived intangible assets consist of tradenames and customer relationships which are being amortized over their estimated useful lives of 10 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. |
Long-lived Assets | Long-lived Assets In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the years ended December 31, 2021 and 2020. |
Foreign Currency Translation | Foreign Currency Translation Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting foreign exchange gains and losses are recognized in income. The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting foreign exchange gains or losses are recognized in income. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Accounting for Income Taxes The Company conducts business, and files federal and state income, franchise or net worth, tax returns in Canada, the United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines its filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2010 to 2021. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income. The Company follows the guidance set forth within ASC Topic 740, “ Income Taxes AWS PR received a tax notice from the Puerto Rican government requesting payment of taxes related to 2014. The amount due as of June 30, 2021 was $156,711 plus penalties and interest of $140,319 for a total obligation due of $297,030. During June 2021, AWS PR was notified that the Puerto Rican government would settle the outstanding debt for $11,105, which the Company paid during July 2021. Prior to 2021, the Company had elected to be treated as a Subchapter S Corporation for income tax purposes, and as such recognized no income tax liability or benefit. |
Revenue Recognition | Revenue Recognition Adoption of New Accounting Guidance on Revenue Recognition The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Contract Types The Company’s contracts fall under two main types: 1) fixed-price and 2) time-and-materials. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working permanently at customer locations and materials costs incurred by those employees. A significant portion of the Company’s revenues come from customers with whom the Company has a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work. Revenue Service Types The following is a description of the Company’s revenue service types, which include professional services and construction: ● Professional services are services provided to the clients where the Company delivers distinct contractual deliverables and/or services. Deliverables may include but are not limited to: engineering drawings, designs, reports and specification. Services may include, but are not limited to: consulting or professional staffing to support our client’s objectives. Consulting or professional staffing services may be provided remotely or on client premises and under their direction and supervision. ● Construction Services are services provided to the client where the Company may self-perform or subcontract services that require the physical construction of infrastructure or installation of equipment and materials. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type, contract type, contract duration, and timing of transfer of goods or services. See the below tables: Revenue by contract duration Year Ended Year Ended Short-term $ 161,209 $ 56,509 Long-term 27,045,480 9,852,648 Total $ 27,206,689 $ 9,909,157 Revenue by contract type Year Ended Year Ended Fixed-price $ 17,290,122 $ 9,909,157 Time-and-materials 9,916,567 - Total $ 27,206,689 $ 9,909,157 The Company also disaggregates its revenue by operating segment and geographic location (refer to Note 16, Segment Disclosures, for additional information). Accounts Receivable Accounts receivable include amounts from work completed in which the Company has billed. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Contract Assets and Liabilities Contract assets include costs and services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets. At December 31, 2021 and 2020, contract assets totaled $0 and $60,862, respectively. Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the consolidated balance sheets. At December 31, 2021 and 2020, contract liabilities totaled $633,771 and $184,450, respectively. |
Cost of Revenues | Cost of Revenues Cost of revenues includes all direct costs of providing services under the Company’s contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. |
Stock-based Compensation | Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASU 2018-07. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. |
Loss per Share | Loss per Share The Company computes (loss) per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted (loss) per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2021 and 2020, respectively, the Company had 133,801,817 and 0 common stock equivalents outstanding. |
Leases | Leases The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) on January 1, 2019. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the Company’s lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities. |
Going Concern Assessment | Going Concern Assessment Management assesses going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date of the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. The Company has generated losses in 2021 and 2020 and High Wire has generated losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cash flow from operations. As of and for the year ended December 31, 2021, the Company had an operating loss of $3,886,872 (before deducting losses attributable to noncontrolling interests, cash flows used in operations of $4,207,759 and a working capital deficit of $20,788,076. Management has prepared estimates of operations for 2022 and believes that sufficient funds will be generated from operations to fund its operations and to service its debt obligations for one year from the date of the filing of the consolidated financial statements in the Company’s Annual Report on Form 10-K, which indicate improved operations and the Company’s ability to continue operations as a going concern. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is too early to know the full impact of COVID-19 or its timing on a return to more normal operations. Further, the recently enacted CARES Act provides for economic assistance loans through the SBA. As of December 31, 2021, ADEX had $2,010,000 of PPP loans outstanding from the SBA under the CARES Act. The PPP provides that the PPP loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. ADEX used the proceeds from the PPP loans for qualifying expenses and is applying for forgiveness of the PPP loans in accordance with the terms of the CARES Act. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts for one year from the date of the filing of the consolidated financial statements in the Company’s Annual Report on Form 10-K indicate improved operations and the Company’s ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2019-12, Simplifying the Accounting for Income Taxes ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Derivatives and Hedging: Contracts in Entity’s Own Equity ASU 2021-08, Business Combination (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the year ended December 31, 2021, three customers accounted for 17%, 17%, and 13%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 6%, 7%, and 15%, respectively, of trade accounts receivable as of December 31, 2021. Two other customers accounted for 18% and 15%, respectively, of trade accounts receivable as of December 31, 2021. For the year ended December 31, 2020, four customers accounted for 31%, 14%, 12%, and 12%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 46%, 9%, 1%, and 0%, respectively, of trade accounts receivable as of December 31, 2020. The Company’s customers are primarily located within the domestic United States of America, Puerto Rico, and Canada. Revenues generated within the domestic United States of America accounted for approximately 95% of consolidated revenues for the year ended December 31, 2021. Revenues generated from customers in Puerto Rico and Canada accounted for approximately 5% of consolidated revenues for the year ended December 31, 2021. Revenues generated within the domestic United States of America accounted for 100% of consolidated revenues for the year ended December 31, 2020. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows: Level 1 – quoted prices for identical instruments in active markets; Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the years ended December 31, 2021 and 2020. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. The Company’s financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2021 and 2020 consisted of the following: Total fair value at Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Description: Derivative liability (1) $ 15,528,339 $ - $ - $ 15,528,339 Total fair Quoted prices Quoted prices Quoted prices Description: N/A $ - $ - $ - $ - (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Refer to Note 10, Derivative Liabilities, for additional information. |
Derivative Liabilities | Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, “ Derivatives and Hedging |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment estimated useful lives | Computers and office equipment 3-7 years straight-line basis Vehicles 3-5 years straight-line basis Leasehold improvements 5 years straight-line basis Software 5 years straight-line basis Machinery and equipment 5 years straight-line basis |
Schedule of disaggregates its revenue from contracts with customers by service type | Revenue by contract duration Year Ended Year Ended Short-term $ 161,209 $ 56,509 Long-term 27,045,480 9,852,648 Total $ 27,206,689 $ 9,909,157 Revenue by contract type Year Ended Year Ended Fixed-price $ 17,290,122 $ 9,909,157 Time-and-materials 9,916,567 - Total $ 27,206,689 $ 9,909,157 |
Schedule of financial assets and liabilities fair value measured on a recurring basis | Total fair value at Quoted prices in active markets (Level 1) Quoted prices in active markets (Level 2) Quoted prices in active markets (Level 3) Description: Derivative liability (1) $ 15,528,339 $ - $ - $ 15,528,339 Total fair Quoted prices Quoted prices Quoted prices Description: N/A $ - $ - $ - $ - |
Reverse Merger and Acquisition
Reverse Merger and Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reverse Merger and Acquisition [Abstract] | |
Schedule of estimates and valuations of management | Purchase consideration Fair Value Common stock $ 5,561,975 Convertible debt 1,049,638 Derivative liabilities 6,929,000 Loans payable 2,377,400 Loans payable, related parties 2,447,252 Lease liabilities 106,615 Fair value of stock options 204,715 Fair value of warrants 362,687 Fair value of Series A Preferred 1,024,000 Fair value of Series D Preferred 1,271,000 Total purchase price $ 21,334,282 Allocation of purchase consideration Working capital $ 781,470 Other assets 12,893 Contract assets 426,647 Goodwill 13,667,934 Customer lists 4,720,863 Tradenames 1,724,475 Total enterprise value 21,334,282 Provisional Purchase consideration Fair Value Cash $ 2,500,000 Series E preferred stock 6,313,817 Assumed debt 1,650,000 Total provisional purchase price $ 10,463,817 Allocation of purchase consideration Working capital $ (1,110,703 ) Fixed assets 838,800 Goodwill 6,295,674 Customer relationships 3,885,979 Tradenames 554,067 Total provisional enterprise value 10,463,817 |
Schedule of estimated acquisition date fair values | Year December 31, 2021 Year December 31, 2020 As Reported Pro Forma As Reported Pro Forma Revenue $ 27,206,689 $ 39,354,718 $ 9,909,157 $ 36,461,635 Net loss attributable to HWN, Inc. common shareholders (19,191,952 ) (26,160,463 ) (693,083 ) (15,565,886 ) Loss per common share, basic and diluted: (1.00 ) (1.37 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31 December 31 2021 2020 Computers and office equipment $ 141,100 $ 43,283 Vehicles 11,938 - Leasehold improvements 6,113 6,113 Software 442,238 372,904 Machinery and equipment 838,800 - Total 1,440,189 422,300 Less: accumulated depreciation (160,674 ) (21,974 ) Equipment, net $ 1,279,515 $ 400,326 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Cost Accumulated Impairment Net carrying Net carrying Customer relationship and lists $ 9,987,873 $ (871,070 ) $ - $ 9,116,803 $ 840,346 Trade names 2,866,456 (353,191 ) - 2,513,265 357,743 Total intangible assets $ 12,854,329 $ (1,224,261 ) $ - $ 11,630,068 $ 1,198,089 |
Schedule of estimated future amortization expense | Year ending December 31, 2022 $ 1,070,567 2023 1,070,567 2024 1,070,567 2025 1,070,567 2026 1,070,567 Thereafter 6,277,233 Total $ 11,630,068 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of outstanding loans payable to related parties | December 31, December 31, 2021 2020 Convertible promissory note issued to Keith Hayter, 10% interest, unsecured, matures August 31, 2022, debt premium of $988,917 $ 1,342,949 $ - Promissory note issued to Mark Porter, 9% interest, unsecured, matures December 15, 2021 100,000 - Promissory note issued to the James Marsh and Jeffrey Gardner, 5.5% interest, unsecured, due February 27, 2022 - * 2,292,972 Total $ 1,442,949 $ 2,292,972 Less: Long-term portion of loans payable - (1,735,114 ) Loans payable, current portion, net of debt discount $ 1,442,949 $ 557,858 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable [Abstract] | |
Schedule of loans payable | December 31, December 31, 2021 2020 Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, unsecured, matures on October 9, 2024 $ 304,187 $ 358,343 Promissory note issued to Dominion Capital., LLC., 10% interest, unsecured, matures on September 30, 2022 1,552,500 - Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures August 31, 2022, net of debt discount of $191,371 754,575 - Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 31, 2022, net of debt discount of $47,843 188,644 - EIDL Loan, 3.75% interest, matures October 12, 2050 149,284 - CARES Act Loans 2,010,000 - Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand 217,400 - Total $ 5,176,590 $ 358,343 Less: Long-term portion of loans payable (2,402,969 ) (344,941 ) Loans payable, current portion, net of debt discount $ 2,773,621 $ 13,402 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of convertible promissory note | December 31, December 31, 2021 2020 Convertible promissory note, Cobra Equities SPV, LLC, 18% interest, unsecured, matured June 1, 2019 $ 200,000 $ - Convertible promissory note, Cobra Equities SPV, LLC, 12% interest, secured, due on demand 89,047 * - Convertible promissory note, Cobra Equities SPV, LLC, 10% interest, secured, due on demand 125,680 * - Convertible promissory note, Cobra Equities SPV, LLC, Tranche 1, 9% interest, secured, matures January 1, 2023, net of debt discount of $117,556 171,918 - Convertible promissory note, Cobra Equities SPV, LLC, Tranche 2, 9% interest, secured, matures January 1, 2023, net of debt discount of $148,173 203,932 - Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, matured September 15, 2021, due on demand 125,000 - Convertible promissory note, James Marsh, 6% interest, unsecured, matured September 15, 2021, due on demand 125,000 - Convertible promissory note issued to Roger Ponder, 10% interest, unsecured, matures August 31, 2022, debt premium of $42,435 66,329 ** - Convertible promissory note, Dominion Capital, LLC, 9.9% interest, senior secured, matures December 29, 2023, net of debt discount of $2,223,975 276,025 - Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due September 1, 2022 2,750,000 - Total 4,132,931 - Less: Long-term portion of convertible debentures, net of debt discount (208,374 ) - Convertible debentures, current portion, net of debt discount $ 3,924,557 $ - * On September 23, 2021, these notes were assigned from SCS, LLC to Cobra Equities SPV, LLC. ** During September 2021, as a result of shares of, as a result of his resignation as a director and the potential shares to be issued about conversion of his debt and Series D preferred stock, the Company determined that Roger Ponder was no longer a related party. The effective date of the reclassification was June 16, 2021. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of changes in the fair value of the Company's Level 3 financial liabilities | December 31, 2021 Balance at the beginning of the period $ - Initial value of derivatives after reverse merger 7,496,482 Change in fair value of embedded conversion option (166,188 ) Initial value of derivatives upon issuance 1,808,000 Effect of debt extinguishment 5,129,000 Conversion of derivative liability (3,932,335 ) Fair value of option derivative at issuance 3,448,864 Discounts on new derivative in excess of note face value 2,375,000 Fair value of warrant exercises (630,484 ) Balance at the end of the period $ 15,528,339 |
Schedule of fair value measurement | Expected Risk-free Expected dividend Expected life At December 31, 2021 110 - 257% 0.06 - 0.97% 0 % 0.25 - 2.95 |
Share Purchase Warrants and S_2
Share Purchase Warrants and Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share Purchase Warrants And Stock Options [Abstract] | |
Schedule of share purchase warrants | Number of Weighted Intrinsic Balance at December 31, 2020 - $ - $ - Assumed in merger transaction 1,852,882 0.73 Granted 6,000,000 0.48 Exercised (1,850,000 ) 0.11 Expired (382 ) 324.00 Outstanding at December 31, 2021 6,002,500 $ 0.50 $ - Exercisable at December 31, 2021 6,002,500 $ 0.50 $ - |
Schedule of share purchase warrants outstanding | Number of warrants Exercise price Issuance Date Expiry date Remaining life 2,500 30.00 11/21/2019 11/21/2022 0.89 5,400,000 0.50 11/3/2021 11/3/2024 2.84 200,000 0.25 12/14/2021 12/14/2024 2.96 400,000 0.25 12/14/2021 12/14/2024 2.96 6,002,500 |
Schedule of activity of stock options | Number of Weighted Intrinsic Balance at December 31, 2020 - $ - $ - Assumed in merger transaction 966,330 0.62 Issued 9,929,987 0.26 Exercised - - Cancelled/expired (52,078 ) 1.09 Outstanding at December 31, 2021 10,844,239 $ 0.29 $ - Exercisable at December 31, 2021 6,345,879 $ 0.30 $ - |
Schedule of stock options outstanding | Number of Exercise Issuance Expiry date Remaining 323,763 0.58 2/23/2021 2/23/2026 4.15 482,393 0.58 2/23/2021 2/23/2026 4.15 77,587 0.58 2/23/2021 2/23/2026 4.15 77,587 0.58 2/23/2021 2/23/2026 4.15 3,318,584 0.25 6/16/2021 6/16/2026 4.46 100,603 0.25 8/11/2021 8/11/2026 4.61 6,278,468 0.25 8/18/2021 8/18/2026 4.63 185,254 0.54 11/3/2021 11/3/2026 4.84 10,844,239 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of operating leases related to assets and liabilities | December 31, December 31, 2021 2020 Operating lease assets $ 227,132 $ 239,489 Operating lease liabilities: Current operating lease liabilities 142,925 86,510 Lonmg term operating lease liabilities 126,044 196,594 Total operating lease liabilities $ 268,969 $ 283,104 |
Schedule of operating lease liabilities | Year ending December 31, 2022 $ 207,767 2023 96,839 Total lease payments 304,606 Less: imputed interest (35,637 ) Total $ 268,969 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of information by operating segment | Year Ended December 31, 2021 High Wire Technology Total Net sales $ - $ 27,206,689 $ 27,206,689 Operating loss (2,184,740 ) (1,489,689 ) (3,674,429 ) Interest expense 293,359 244,920 538,279 Depreciation and amortization - 506,364 506,364 Total assets as of December 31, 2021 506,835 43,314,747 43,821,582 |
Schedule of geographic information | Revenues Long-lived Puerto Rico and Canada $ 1,226,594 $ 11,082 United States 25,980,095 34,821,673 Consolidated total 27,206,689 34,832,755 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of pre-tax loss | Years Ended December 31, 2021 2020 Domestic $ (13,934,179 ) $ (710,003 ) Foreign 256,549 - Pre-tax Loss $ (13,677,630 ) $ (710,003 ) |
Schedule of provision for income taxes | Years Ended December 31, 2021 2020 Federal $ - $ - State - - Foreign - - Total current $ - $ - Deferred: Federal $ - $ - State - - Total deferred - - Total provision for income taxes $ - $ - |
Schedule of effective income tax rate | Years Ended December 31, 2021 2020 % % Federal tax benefit at statutory rate (21.0 ) - Permanent differences 20.0 - State tax benefit, net of Federal benefits - - Other - - Effect of foreign income taxed in rates other than the U.S. Federal statutory rate - - Net change in valuation allowance 1.0 - Provision - - |
Schedule of deferred tax assets and liabilities | Years Ended December 31, 2021 2020 Net operating loss carryforwards $ 27,447,714 $ - Depreciation 3,634 - Total assets 27,451,348 - Total liabilities - - Less: Valuation allowance (27,451,348 ) - Net deferred tax liabilities $ - $ - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of balance sheet of the Company’s discontinued operations | December 31, 2021 2020 Current assets: Cash $ 809,917 $ 251,771 Accounts receivable 1,067,995 1,229,761 Contract assets 147,568 - Prepaid expenses and deposits 57,915 63,368 Current assets of discontinued operations $ 2,083,395 $ 1,544,900 Noncurrent assets: Property and equipment, net of accumulated depreciation of $73,733 and $51,237, respectively $ 52,618 $ 75,115 Goodwill - 875,201 Intangible assets, net of accumulated amortization of $96,882 - 203,055 Noncurrent assets of discontinued operations $ 52,618 $ 1,153,371 Current liabilities: Accounts payable and accrued liabilities $ 402,142 $ 659,937 Contract liabilities 4,700 30,000 Loans payable 12,362 52,051 Current liabilities of discontinued operations $ 419,204 $ 741,988 Noncurrent liabilities: Loans payable, net of current portion $ 33,496 $ 250,800 Noncurrent liabilities of discontinued operations $ 33,496 $ 250,800 |
Schedule of statement of operations for the Company’s discontinued operations | For the years ended December 31, 2021 2020 Revenue $ 9,509,419 $ 5,847,787 Operating expenses: Cost of revenues 7,043,944 4,943,433 Depreciation and amortization 49,597 75,318 Salaries and wages 366,654 302,685 General and administrative 567,346 493,092 Goodwill impairment 875,201 - Intangible asset impairment 175,954 - Total operating expenses 9,078,696 5,814,528 Loss from operations 430,723 33,259 Other (expenses) income: Interest expense (6,168 ) (250 ) PPP loan forgiveness 250,800 - Other income - 829 Total other expense 244,632 579 Pre-tax loss from operations 675,355 33,838 Provision for income taxes - - Net income from discontinued operations, net of tax $ 675,355 $ 33,838 |
Organization (Details)
Organization (Details) | 1 Months Ended | 12 Months Ended | ||
Feb. 15, 2022 | Dec. 31, 2021 | Feb. 14, 2018 | Apr. 25, 2017 | |
Organization (Details) [Line Items] | ||||
Interest percentage | 50.00% | |||
Financial Support, Purchase Agreement of Financial Assets [Member] | ||||
Organization (Details) [Line Items] | ||||
Purchased assets percentage | 19.90% | 80.10% | ||
Business acquisition, percentage | 50.00% | |||
Financial Support, Purchase Agreement of Financial Assets [Member] | Subsequent Event [Member] | ||||
Organization (Details) [Line Items] | ||||
Interest percentage | 50.00% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Feb. 15, 2022 | |
Significant Accounting Policies (Details) [Line Items] | |||||
Allowance for doubtful accounts (in Dollars) | $ 74,881 | $ 0 | |||
Definite-lived intangible assets useful lives | 10 years | ||||
Income tax and penalties amount (in Dollars) | $ 156,711 | ||||
Interest expense (in Dollars) | 140,319 | ||||
Income tax obligations due (in Dollars) | $ 297,030 | ||||
Outstanding debt (in Dollars) | $ 11,105 | ||||
Contract assets (in Dollars) | $ 0 | 60,862 | |||
Contract liabilities (in Dollars) | $ 633,771 | $ 184,450 | |||
Common stock equivalents outstanding (in Shares) | shares | 133,801,817 | 0 | |||
Operating loss (in Dollars) | $ 3,886,872 | ||||
Cash flow used in operations (in Dollars) | 4,207,759 | ||||
Working capital deficit (in Dollars) | 20,788,076 | ||||
PPP loans outstanding (in Dollars) | $ 2,010,000 | ||||
Number of customers | 3 | 4 | |||
Customers risk, percentage | 95.00% | ||||
Derivative liability (in Dollars) | $ 15,528,339 | $ 0 | |||
Revenue [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 5.00% | 100.00% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 17.00% | 31.00% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 17.00% | 14.00% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 13.00% | 12.00% | |||
Revenue [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 12.00% | ||||
Accounts Receivable [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 6.00% | 46.00% | |||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 9.00% | ||||
Accounts Receivable [Member] | Customer Three [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 15.00% | 1.00% | |||
Accounts Receivable [Member] | JTM [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 7.00% | ||||
Accounts Receivable [Member] | Customer Four [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 0.00% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 18.00% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Customers risk, percentage | 15.00% | ||||
JTM [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Owned percentage | 50.00% | ||||
JTM [Member] | Subsequent Event [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Owned percentage | 50.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives | 12 Months Ended |
Dec. 31, 2021 | |
Computers and office equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 3 years |
Computers and office equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 7 years |
Vehicles [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 3 years |
Vehicles [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Leasehold improvements [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Software [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Machinery and Equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, useful lives | 5 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of disaggregates its revenue from contracts with customers by service type - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Short-Term [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 161,209 | $ 56,509 |
Long-Term [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 27,045,480 | 9,852,648 |
Revenue by Service Type [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 27,206,689 | 9,909,157 |
Revenue by Contract Type [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 17,290,122 | 9,909,157 |
Time-and-Materials [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,916,567 | |
Revenue by Contract Duration [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 27,206,689 | $ 9,909,157 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis - USD ($) | Dec. 31, 2021 | [1] | Dec. 31, 2020 |
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | $ 15,528,339 | ||
Quoted prices in active markets (Level 1) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | |||
Quoted prices in active markets (Level 2) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | |||
Quoted prices in active markets (Level 3) [Member] | |||
Significant Accounting Policies (Details) - Schedule of financial assets and liabilities fair value measured on a recurring basis [Line Items] | |||
Derivative liability | $ 15,528,339 | ||
[1] | The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
Reverse Merger and Acquisitio_2
Reverse Merger and Acquisition (Details) - USD ($) | Nov. 04, 2021 | Jun. 16, 2021 | Dec. 31, 2021 |
Reverse Merger and Acquisition (Details) [Line Items] | |||
Merger transaction, description | HWN shareholders exchanged 100% of the common stock of HWN for 350 shares newly issued shares of the Company’s Series D preferred stock and 1,000 shares of the Company’s previously issued Series B preferred stock (formerly held by management of legacy Spectrum Global Solutions, Inc.). | ||
Cash | $ 2,500,000 | ||
Fair value exceed period | 1 year | ||
Maximum [Member] | |||
Reverse Merger and Acquisition (Details) [Line Items] | |||
Assumed liabilities | 6,500,000 | ||
Minimum [Member] | |||
Reverse Merger and Acquisition (Details) [Line Items] | |||
Assumed liabilities | $ 2,000,000 |
Reverse Merger and Acquisitio_3
Reverse Merger and Acquisition (Details) - Schedule of estimates and valuations of management | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of estimates and valuations of management [Abstract] | |
Common stock | $ 5,561,975 |
Convertible debt | 1,049,638 |
Derivative liabilities | 6,929,000 |
Loans payable | 2,377,400 |
Loans payable, related parties | 2,447,252 |
Lease liabilities | 106,615 |
Fair value of stock options | 204,715 |
Fair value of warrants | 362,687 |
Fair value of Series A Preferred | 1,024,000 |
Fair value of Series D Preferred | 1,271,000 |
Total purchase price | 21,334,282 |
Working capital | 781,470 |
Other assets | 12,893 |
Contract assets | 426,647 |
Goodwill | 13,667,934 |
Customer lists | 4,720,863 |
Tradenames | 1,724,475 |
Total enterprise value | 21,334,282 |
Cash | 2,500,000 |
Series E preferred stock | 6,313,817 |
Assumed debt | 1,650,000 |
Total provisional purchase price | 10,463,817 |
Working capital | (1,110,703) |
Fixed assets | 838,800 |
Goodwill | 6,295,674 |
Customer relationships | 3,885,979 |
Tradenames | 554,067 |
Total provisional enterprise value | $ 10,463,817 |
Reverse Merger and Acquisitio_4
Reverse Merger and Acquisition (Details) - Schedule of estimated acquisition date fair values - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
As Reported [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenue | $ 27,206,689 | $ 9,909,157 |
Net loss attributable to HWN, Inc. common shareholders | $ (19,191,952) | (693,083) |
Loss per common share, basic and diluted: (in Dollars per share) | $ (1) | |
Pro Forma [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenue | $ 39,354,718 | 36,461,635 |
Net loss attributable to HWN, Inc. common shareholders | $ (26,160,463) | $ (15,565,886) |
Loss per common share, basic and diluted: (in Dollars per share) | $ (1.37) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 52,959 | $ 11,819 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - Property, Plant and Equipment [Member] - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,440,189 | $ 422,300 |
Less: accumulated depreciation | (160,674) | (21,974) |
Equipment, net | 1,279,515 | 400,326 |
Computers and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 141,100 | 43,283 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 11,938 | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6,113 | 6,113 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 442,238 | $ 372,904 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 838,800 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 453,405 | $ 189,465 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 12,854,329 | |
Accumulated Amortization | (1,224,261) | |
Impairment | ||
Net carrying value | 11,630,068 | $ 1,198,089 |
Customer relationship and lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 9,987,873 | |
Accumulated Amortization | (871,070) | |
Impairment | ||
Net carrying value | 9,116,803 | 840,346 |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,866,456 | |
Accumulated Amortization | (353,191) | |
Impairment | ||
Net carrying value | $ 2,513,265 | $ 357,743 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of estimated future amortization expense | Dec. 31, 2021USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
2022 | $ 1,070,567 |
2023 | 1,070,567 |
2024 | 1,070,567 |
2025 | 1,070,567 |
2026 | 1,070,567 |
Thereafter | 6,277,233 |
Total | $ 11,630,068 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 15, 2021 | Jun. 16, 2021 | Jun. 01, 2021 | Mar. 01, 2021 | Feb. 17, 2019 | Aug. 31, 2022 | Feb. 27, 2022 | Jun. 15, 2021 | Aug. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 28, 2021 | Dec. 31, 2020 |
Related Party Transactions (Details) [Line Items] | |||||||||||||
Increase to additional paid in capital | $ 1,271,000 | ||||||||||||
Bearing interest rate, per annum | 9.00% | 9.00% | |||||||||||
Principal amount | $ 4,000,000 | $ 2,292,971 | $ 321,487 | ||||||||||
Interest accrued percentage | 5.50% | ||||||||||||
Fixed conversion price per share (in Dollars per share) | $ 0.06 | ||||||||||||
Conversion price per share (in Dollars per share) | $ 0.06 | ||||||||||||
Amount of conversion premium | $ 1,359,761 | ||||||||||||
Fair value of note | $ 378,000 | ||||||||||||
Principal shares value | $ 200,000 | ||||||||||||
Settlement of debt | $ 1,182,972 | ||||||||||||
Pursuant to agreement amount | 354,031 | ||||||||||||
Remaining premium | 988,917 | ||||||||||||
Total liability | 1,342,949 | ||||||||||||
Pursuant agreement | $ 100,000 | ||||||||||||
Maturity date | Feb. 27, 2022 | Aug. 31, 2022 | |||||||||||
Minimum [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Effective interest rate | 9.60% | ||||||||||||
Maximum [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Effective interest rate | 11.30% | ||||||||||||
Series D Preferred Stock [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Common stock exchanged, shares (in Shares) | 350 | ||||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Common stock aggregate, shares (in Shares) | 1,000 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Bearing interest rate, per annum | 5.50% | ||||||||||||
Chief Executive Officer [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Proceeds from issuance of promissory notes | $ 100,000 | ||||||||||||
President [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Bearing interest rate, per annum | 9.00% | ||||||||||||
Roger Ponder [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Bearing interest rate, per annum | 10.00% | ||||||||||||
Interest accrued percentage | 10.00% | ||||||||||||
Principal amount | $ 554,031 | ||||||||||||
Debt convertible promissory note, description | All principal and accrued but unpaid interest under the note is due on August 31, 2022. | ||||||||||||
Roger Ponder [Member] | Subsequent Event [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Bearing interest rate, per annum | 10.00% |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of outstanding loans payable to related parties - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Total | $ 1,442,949 | $ 2,292,972 | |
Less: Long-term portion of loans payable | (1,735,114) | ||
Loans payable, current portion, net of debt discount | 1,442,949 | 557,858 | |
Convertible promissory note issued to Keith Hayter [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 1,342,949 | ||
Promissory note issued to Mark Porter [Member] | |||
Related Party Transaction [Line Items] | |||
Total | 100,000 | ||
Promissory note issued to the James Marsh and Jeffrey Gardner [Member] | |||
Related Party Transaction [Line Items] | |||
Total | [1] | $ 2,292,972 | |
[1] | During the year ended December 31, 2021, this note was assigned to the Mark Munro 1996 Charitable Remainder UniTrust by Jeffrey Gardner and James Marsh. The assigned note was then exchanged for a convertible note on December 28, 2021 (refer to Note 8, Convertible Debentures, for additional detail). |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | Dec. 14, 2021 | Dec. 14, 2021 | Jun. 15, 2021 | Oct. 21, 2019 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 28, 2021 | Mar. 31, 2021 | Apr. 08, 2020 | Feb. 17, 2019 | Feb. 27, 2018 |
Loans Payable (Details) [Line Items] | ||||||||||||
Interest rate | 5.50% | |||||||||||
Principal amount | $ 321,487 | $ 2,292,971 | $ 4,000,000 | |||||||||
Cash payments | $ 255,000 | |||||||||||
Purchase price | $ 1,000,000 | |||||||||||
Cash | $ 508,395 | $ 508,395 | $ 184,677 | |||||||||
Debt financing agreement, description | Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $27,027 each week based upon an anticipated 25% of its future receivables until such time as $1,000,000 has been paid, a period Cedar Advance and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. Additionally, in connection with the Financing Agreement, the Company issued Cedar Advance a warrant to purchase 400,000 shares of the Company’s common stock at an exercise price of $0.25 per share. These warrants expire on December 14, 2024. The warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the warrant of $102,696 resulted in an initial derivative expense of $102,696. During the year ended December 31, 2021, the Company paid $54,054 of the original balance under the agreement. At December 31, 2021, the Company owed $945,946 pursuant to this agreement and will record accretion equal to the debt discount of $191,370 over the remaining term of the note. Loan with Pawn Funding On December 14, 2021, the Company, together with its subsidiaries (collectively with the Company, the “Financing Parties”), entered into an Agreement of Sale of Future Receipts (the “Financing Agreement”) with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $250,000 for a purchase price of $200,000. The Company received cash of $194,000 and recorded a debt discount of $56,000. Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $6,757 each week based upon an anticipated 25% of its future receivables until such time as $250,000 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. | |||||||||||
Exercise price (in Dollars per share) | $ 0.5 | $ 0.5 | ||||||||||
Initial fair value of warrant | $ 102,696 | $ 102,696 | ||||||||||
initial derivative expense | 102,696 | 102,696 | ||||||||||
Original balance under agreement | 54,054 | 54,054 | ||||||||||
Company owed pursuant agreement | 945,946 | 945,946 | ||||||||||
Debt discount | $ 191,370 | $ 191,370 | ||||||||||
Aggregate amount | $ 250,000 | |||||||||||
Purchase price | 200,000 | |||||||||||
Company received cash | 194,000 | |||||||||||
Debt discount recorded | 56,000 | |||||||||||
Financing term description | Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $6,757 each week based upon an anticipated 25% of its future receivables until such time as $250,000 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately nine months. | |||||||||||
Pawn funding warrant to purchase (in Shares) | 200,000 | 200,000 | ||||||||||
Common stock exercise price (in Dollars per share) | $ 0.25 | |||||||||||
Matures | Sep. 30, 2022 | |||||||||||
Promissory note issued description | in connection with the acquisition of SVC discussed in Note 3, Reverse Merger and Acquisition, the Company assumed SVC’s promissory note issued to Dominion Capital, LLC. The note was originally issued on March 31, 2021 in the principal amount of $2,750,000. As of June 15, 2021, $1,650,000 remained outstanding. The note bears interest at a rate of 10% per annum and the maturity date is September 30, 2022. | |||||||||||
Description of loan payable | On June 15, 2021, in connection with the merger transaction described in Note 3, Reverse Merger and Acquisition, the Company assumed CARES Act Loans totaling $2,010,000 that were originally received by ADEX. Collectively, these amounts are the “PPP Funds.” | |||||||||||
Financing Agreement [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Purchase price | 800,000 | |||||||||||
Cash | 776,000 | 776,000 | ||||||||||
Debt discount | $ 224,000 | $ 224,000 | ||||||||||
Warrants expire | Dec. 14, 2024 | |||||||||||
Loan with Cedar Advance LLC [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Warrant to purchase (in Shares) | 400,000 | 400,000 | ||||||||||
Exercise price (in Dollars per share) | $ 0.25 | $ 0.25 | ||||||||||
Loan with Pawn Funding [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Initial fair value of warrant | $ 51,348 | $ 51,348 | ||||||||||
initial derivative expense | 51,348 | 51,348 | ||||||||||
Original balance under agreement | 13,514 | 13,514 | ||||||||||
Company owed pursuant agreement | 236,486 | 236,486 | ||||||||||
Debt discount | $ 47,843 | $ 47,843 | ||||||||||
Warrants expire | Dec. 14, 2024 | |||||||||||
Promissory Note Two [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Interest rate | 4.50% | 4.50% | ||||||||||
Principal amount | $ 420,000 | |||||||||||
Accrued interest rate | 4.50% | |||||||||||
Principal and interest | $ 5,851 | |||||||||||
Final balloon payment | $ 139,033 | |||||||||||
Cash payments | $ 54,770 | $ 52,509 | ||||||||||
Owed value | $ 304,186 | $ 304,186 | ||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||
Due Date | Oct. 9, 2024 | |||||||||||
Promissory note issued to Dominion Capital [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Company owed pursuant agreement | $ 1,552,500 | $ 1,552,500 | ||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||
Promissory Note Issued to InterCloud Systems, Inc. [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Principal amount | $ 500,000 | |||||||||||
Owed value | $ 217,400 | $ 217,400 | ||||||||||
Interest rate | 3.75% | 3.75% | ||||||||||
Outstanding principal | $ 217,400 | |||||||||||
EIDL Loan [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Cash payments | $ 716 | |||||||||||
Owed value | $ 149,284 | $ 149,284 | ||||||||||
Reverse merger and acquisition description | in connection with the merger transaction discussed in Note 3, Reverse Merger and Acquisition, the Company assumed ADEX’s EIDL loan. The note was originally issued on October 10, 2022 in the principal amount of $150,000. As of June 15, 2021, $150,000 remained outstanding. The note bears interest at a rate of 3.75% per annum and the maturity date is October 12, 2050. | |||||||||||
CARES Act Loans [Member] | ||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||
Loan received | $ 873,465 | $ 873,400 |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of loans payable - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Dividends Payable [Line Items] | ||
Loans payable | $ 5,176,590 | $ 358,343 |
Less: Long-term portion of loans payable | (2,402,969) | (344,941) |
Loans payable, current portion, net of debt discount | 2,773,621 | 13,402 |
Promissory note issued to Cornerstone National Bank & Trust [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 304,187 | $ 358,343 |
Promissory note issued to Dominion Capital., LLC [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 1,552,500 | |
Future receivables financing agreement with Cedar Advance LLC [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 754,575 | |
Future receivables financing agreement with Pawn Funding [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 188,644 | |
EIDL Loan [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 149,284 | |
CARES Act Loans [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | 2,010,000 | |
Promissory note issued to InterCloud Systems, Inc. [Member] | ||
Dividends Payable [Line Items] | ||
Loans payable | $ 217,400 |
Loans Payable (Details) - Sch_2
Loans Payable (Details) - Schedule of loans payable (Parentheticals) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Promissory note issued to Cornerstone National Bank & Trust [Member] | |
Dividends Payable [Line Items] | |
Interest bearing, maturity date | Oct. 9, 2024 |
Interest rate | 4.50% |
Promissory note issued to Dominion Capital., LLC [Member] | |
Dividends Payable [Line Items] | |
Interest bearing, maturity date | Sep. 30, 2022 |
Interest rate | 10.00% |
Future receivables financing agreement with Cedar Advance LLC [Member] | |
Dividends Payable [Line Items] | |
Interest bearing, maturity date | Aug. 31, 2022 |
Debt discount | $ 191,371 |
Future receivables financing agreement with Pawn Funding [Member] | |
Dividends Payable [Line Items] | |
Interest bearing, maturity date | Aug. 31, 2022 |
Debt discount | $ 47,843 |
EIDL Loan [Member] | |
Dividends Payable [Line Items] | |
Interest bearing, maturity date | Oct. 12, 2050 |
Interest rate | 3.75% |
Convertible Debentures (Details
Convertible Debentures (Details) - USD ($) | Dec. 15, 2021 | Dec. 14, 2021 | Nov. 03, 2021 | Mar. 01, 2021 | Jan. 28, 2021 | Jan. 27, 2021 | Sep. 14, 2020 | Feb. 17, 2019 | Dec. 28, 2021 | Sep. 23, 2021 | Jun. 15, 2021 | Dec. 29, 2020 | Aug. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 15, 2021 | Jun. 16, 2021 | Jun. 18, 2020 |
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 12.00% | ||||||||||||||||||
Principal amount | $ 10,000 | ||||||||||||||||||
Debt Instrument, description | On June 15, 2021, in connection with the merger transaction described in Note 3, Reverse Merger and Acquisition, the Company assumed CARES Act Loans totaling $2,010,000 that were originally received by ADEX. Collectively, these amounts are the “PPP Funds.” | ||||||||||||||||||
Modification Fee, description | During the period of September 23, 2021 through December 31, 2021, the holder of the note converted $146,942 of principal and $112,700 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional detail). As a result of these conversions, the Company recorded a loss on settlement of debt of $3,438,801 to the consolidated statement of operations for the year ended December 31, 2021 | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.0275 | $ 0.01 | |||||||||||||||||
Fixed conversion percentage | 105.00% | ||||||||||||||||||
Promissory note interest rate | 9.00% | 9.00% | |||||||||||||||||
Secured intrest | 9.00% | 9.00% | |||||||||||||||||
Aggregate principal amount | $ 250,000 | ||||||||||||||||||
Convertible, net of discount | $ 239,214 | $ 239,214 | $ 0 | ||||||||||||||||
Debt discount | $ 56,000 | ||||||||||||||||||
Debt instrument, interest rate | 5.50% | ||||||||||||||||||
Due date | Feb. 27, 2022 | Aug. 31, 2022 | |||||||||||||||||
Fair value | $ 1,049,638 | $ 1,049,638 | |||||||||||||||||
Fair value warrant | 362,687 | ||||||||||||||||||
Initial derivative expense | $ 4,750,064 | ||||||||||||||||||
Warrant term | 2 years 10 months 24 days | 2 years 10 months 24 days | |||||||||||||||||
Loss on settlement of warrants | $ (127,973) | ||||||||||||||||||
Minimum [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Effective interest rate | 8.40% | 8.40% | |||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Effective interest rate | 78.80% | 78.80% | |||||||||||||||||
Jeffrey Gardner [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Accrued rate per annum | 6.00% | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.075 | $ 0.075 | |||||||||||||||||
Debt instrument, interest rate | 18.00% | ||||||||||||||||||
Jeffrey Gardner [Member] | Convertible promissory note [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 125,000 | ||||||||||||||||||
James Marsh [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 125,000 | ||||||||||||||||||
Accrued rate per annum | 6.00% | ||||||||||||||||||
Exercise price (in Dollars per share) | 0.075 | $ 0.075 | |||||||||||||||||
Aggregate principal amount | $ 125,000 | ||||||||||||||||||
Debt instrument, interest rate | 18.00% | ||||||||||||||||||
Roger Ponder [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 23,894 | ||||||||||||||||||
Promissory note interest rate | 10.00% | ||||||||||||||||||
Aggregate principal amount | $ 23,894 | ||||||||||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||||||||||
Conversion price per share (in Dollars per share) | 0.06 | $ 0.06 | |||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.06 | $ 0.06 | |||||||||||||||||
Conversion premium | $ 58,349 | $ 58,349 | |||||||||||||||||
Fair value | $ 19,000 | 19,000 | |||||||||||||||||
Remaining premium | 42,435 | ||||||||||||||||||
Total liability | $ 66,329 | ||||||||||||||||||
Debt convertible promissory note, description | All principal and accrued but unpaid interest under the note is due on August 31, 2022. | ||||||||||||||||||
Efrat Investments, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 10.00% | ||||||||||||||||||
Loss on settlement of warrants | $ (133,045) | ||||||||||||||||||
Cobra Equities SPV, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 12.00% | 18.00% | |||||||||||||||||
Principal amount | $ 406,000 | ||||||||||||||||||
Accrued interest | 16,030 | ||||||||||||||||||
Debt Instrument, description | Interest accrues on the note at 18% per annum. The note is convertible into shares of the Company’s common stock at a conversion price equal to 60% of the lowest VWAP for the 10 consecutive trading days immediately preceding the conversion. | ||||||||||||||||||
Modification Fee, description | During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $206,000 of principal and $3,620 of accrued interest into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional detail). As a result of these conversions, the Company recorded a loss on settlement of debt of $268,770 to the consolidated statement of operations for the year ended December 31, 2021. | ||||||||||||||||||
Owned amount | $ 200,000 | ||||||||||||||||||
SCS Capital Partners, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 12.00% | 12.00% | |||||||||||||||||
Principal amount | 235,989 | ||||||||||||||||||
Accrued interest | 16,763 | ||||||||||||||||||
Accrued rate per annum | 12.00% | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.0275 | $ 0.0275 | |||||||||||||||||
Fixed conversion percentage | 105.00% | 105.00% | |||||||||||||||||
SCS Capital Partners, LLC Two [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 10.00% | 10.00% | |||||||||||||||||
Accrued rate per annum | 10.00% | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.04 | ||||||||||||||||||
Outstanding principal due, percentage | 12.00% | ||||||||||||||||||
Cobra Equities SPV, LLC Two [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 10.00% | ||||||||||||||||||
Accrued rate per annum | 10.00% | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 0.04 | $ 0.04 | |||||||||||||||||
Promissory note interest rate | 10.00% | ||||||||||||||||||
IQ Financial Inc. [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 289,474 | ||||||||||||||||||
Face owed amount | $ 117,556 | $ 117,556 | |||||||||||||||||
Promissory note interest rate | 9.00% | ||||||||||||||||||
Convertible promissory note, description | The funds were received in two disbursements – $275,000 on January 28, 2021 and $325,000 on March 1, 2021 (refer to the “Convertible promissory note, Cobra Equities SPV, LLC Tranche 1, 9% interest, secured, matures January 1, 2023” and “Convertible promissory note, Cobra Equities SPV, LLC Tranche 2, 9% interest, secured, matures January 1, 2023” sections below for additional detail. | ||||||||||||||||||
Company received notes | $ 275,000 | ||||||||||||||||||
Convertible, net of discount | $ 14,474 | ||||||||||||||||||
Accrues rate | 9.00% | 9.00% | |||||||||||||||||
Fixed price per share (in Dollars per share) | $ 0.05 | $ 0.05 | |||||||||||||||||
Cobra Equities SPV, LLC Tranche 1 [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 9.00% | ||||||||||||||||||
Cobra Equities SPV, LLC Tranche 2 [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 9.00% | ||||||||||||||||||
Jeffrey Gardner [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 6.00% | ||||||||||||||||||
James Marsh [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 6.00% | ||||||||||||||||||
Roger Ponder [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 10.00% | ||||||||||||||||||
Dominion Capital, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 9.90% | ||||||||||||||||||
Owned amount | $ 2,500,000 | ||||||||||||||||||
Accrued rate per annum | 9.90% | ||||||||||||||||||
Debt discount | $ 2,223,975 | $ 2,223,975 | |||||||||||||||||
Fixed price per share (in Dollars per share) | $ 0.5 | ||||||||||||||||||
Debt discount | $ 125,000 | ||||||||||||||||||
Aggregate principal amount | 2,500,000 | ||||||||||||||||||
Net proceeds | $ 2,375,000 | ||||||||||||||||||
Additional stock purchased (in Shares) | 5,400,000 | ||||||||||||||||||
Exercise price per share (in Dollars per share) | $ 0.5 | $ 0.5 | |||||||||||||||||
Warrants expire date | Nov. 3, 2024 | ||||||||||||||||||
Fair value conversion price | $ 4,183,000 | ||||||||||||||||||
Fair value warrant | 2,788,020 | ||||||||||||||||||
Additional debt discount | 2,425,000 | ||||||||||||||||||
Initial derivative expense | 4,596,020 | ||||||||||||||||||
Mark Munro 1996 Charitable Remainder UniTrust [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible promissory note percentage | 9.00% | ||||||||||||||||||
Owned amount | 2,750,000 | ||||||||||||||||||
Aggregate principal amount | $ 2,750,000 | ||||||||||||||||||
Fair value conversion price | 5,129,000 | ||||||||||||||||||
Initial derivative expense | $ 5,129,000 | ||||||||||||||||||
Principle balance | $ 2,292,971 | ||||||||||||||||||
Payment Description | The note bears interest at a rate of 9% per annum and is due on September 1, 2022. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.15 per share, subject to adjustment as set forth in the note. The note calls for monthly payments of $75,000 from April 2022 through August 2022, with a balloon payment of $2,375,000 due on September 1, 2022. | ||||||||||||||||||
Efrat Investments, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Accrued interest | 8,282 | ||||||||||||||||||
Principal and accrued but unpaid interest, description | During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $33,000 of principal into shares of the Company’s common stock (refer to Note 11, Common Stock, for additional information). As a result of these conversions, the amount owed at December 31, 2021 was $0. The Company recorded a gain on settlement of debt of $208,567 to the consolidated statement of operations for the year ended December 31, 2021. | ||||||||||||||||||
Efrat Investments, LLC [Member] | Convertible Note Six [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Accrued rate per annum | 10.00% | ||||||||||||||||||
Fixed price per share (in Dollars per share) | $ 0.05 | ||||||||||||||||||
Warrant term | 2 years | ||||||||||||||||||
Purchase shares of common stock | $ 1,650,000 | ||||||||||||||||||
Debt convertible promissory note, description | All principal and accrued but unpaid interest under the note was due on October 5, 2021. | ||||||||||||||||||
Convertible Note Three [Member] | SCS, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Face owed amount | $ 89,047 | $ 89,047 | |||||||||||||||||
Convertible Note Seven[Member] | SCS Capital Partners, LLC Two [Member] | Securities Purchase Agreement One [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Principal amount | 219,941 | $ 175,000 | |||||||||||||||||
Accrued interest | 7,991 | ||||||||||||||||||
Convertible Note [Member] | SCS Capital Partners, LLC Two [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Principal amount | 94,260 | ||||||||||||||||||
Convertible Note [Member] | Cobra Equities SPV, LLC Two [Member] | Securities Purchase Agreement One [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 125,680 | ||||||||||||||||||
Convertible Note One [Member] | SCS, LLC One [Member] | Securities Purchase Agreement One [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Debt instrument of purchase price | 289,473 | ||||||||||||||||||
Original issue discount | 11,202 | ||||||||||||||||||
Notes payable | 342,105 | ||||||||||||||||||
Debt discount | 10,446 | ||||||||||||||||||
Aggregate principal amount | $ 631,579 | ||||||||||||||||||
Convertible Note Nine [Member] | Efrat Investments, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Aggregate principal amount | 165,000 | ||||||||||||||||||
Aggregate purchase price | $ 146,000 | ||||||||||||||||||
Convertible Note Nine [Member] | IQ Financial Inc. [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Convertible, net of discount | $ 17,105 | ||||||||||||||||||
Notes receivable | $ 325,000 | ||||||||||||||||||
Convertible Note Eight [Member] | IQ Financial Inc. [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Debt Instrument, description | The interest on the outstanding principal due under the secured note accrues at a rate of 9% per annum. All principal and accrued but unpaid interest under the secured note is due on January 1, 2023. The holder may begin converting the note into shares of the Company’s common stock six months after issuance when it is Rule 144 eligible. The conversion price is fixed at $0.05 per share. | ||||||||||||||||||
Convertible Note Eight [Member] | CCAG Investments, LLC [Member] | Jeffrey Gardner [Member] | Securities Purchase Agreement One [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Aggregate principal amount | 125,000 | ||||||||||||||||||
Convertible Note Eleven [Member] | IQ Financial Inc. [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Owned amount | $ 352,105 | ||||||||||||||||||
Debt discount | $ 38,638 | ||||||||||||||||||
Convertible Note Ten [Member] | Efrat Investments, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Principal amount | $ 33,000 | ||||||||||||||||||
Convertible Note Six [Member] | Efrat Investments, LLC [Member] | |||||||||||||||||||
Convertible Debentures (Details) [Line Items] | |||||||||||||||||||
Exercise price per share (in Dollars per share) | $ 0.1 |
Convertible Debentures (Detai_2
Convertible Debentures (Details) - Schedule of convertible promissory note - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | $ 4,132,931 | ||
Less: Long-term portion of convertible debentures, net of debt discount | (208,374) | ||
Convertible debentures, current portion, net of debt discount | 3,924,557 | ||
Cobra Equities SPV, LLC [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 200,000 | ||
Cobra Equities SPV, LLC One [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 89,047 | [1] | |
Cobra Equities SPV, LLC Two [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 125,680 | [1] | |
Cobra Equities SPV, LLC Three [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 171,918 | ||
Cobra Equities SPV, LLC Four [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 203,932 | ||
Jeffrey Gardner [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 125,000 | ||
James Marsh [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 125,000 | ||
Roger Ponder [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 66,329 | [2] | |
Dominion Capital, LLC [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | 276,025 | ||
Mark Munro 1996 Charitable Remainder UniTrust [Member] | |||
Convertible Debentures (Details) - Schedule of convertible promissory note [Line Items] | |||
Total | $ 2,750,000 | ||
[1] | On September 23, 2021, these notes were assigned from SCS, LLC to Cobra Equities SPV, LLC. | ||
[2] | During September 2021, as a result of shares of, as a result of his resignation as a director and the potential shares to be issued about conversion of his debt and Series D preferred stock, the Company determined that Roger Ponder was no longer a related party. The effective date of the reclassification was June 16, 2021. |
Convertible Debentures (Detai_3
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Cobra Equities SPV, LLC [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 18.00% |
Debt instrument maturity date | Jun. 1, 2019 |
Cobra Equities SPV, LLC One [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 12.00% |
Cobra Equities SPV, LLC Two [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 10.00% |
Cobra Equities SPV, LLC Three [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 19.00% |
Debt instrument maturity date | Jan. 1, 2023 |
Convertible debentures, net of discount (in Dollars) | $ 117,556 |
Cobra Equities SPV, LLC Four [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 29.00% |
Debt instrument maturity date | Jan. 1, 2023 |
Convertible debentures, net of discount (in Dollars) | $ 148,173 |
Jeffrey Gardner [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 6.00% |
Debt instrument maturity date | Sep. 15, 2021 |
James Marsh [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 6.00% |
Debt instrument maturity date | Sep. 15, 2021 |
Roger Ponder [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 10.00% |
Debt instrument maturity date | Aug. 31, 2022 |
Debt Premium (in Dollars) | $ 42,435 |
Dominion Capital, LLC [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 9.90% |
Debt instrument maturity date | Dec. 29, 2023 |
Convertible debentures, net of discount (in Dollars) | $ 2,223,975 |
Mark Munro 1996 Charitable Remainder UniTrust [Member] | |
Convertible Debentures (Details) - Schedule of convertible promissory note (Parentheticals) [Line Items] | |
Debt instrument, interest rate | 9.00% |
Debt instrument maturity date | Sep. 1, 2022 |
Factor Financing (Details)
Factor Financing (Details) - USD ($) | Feb. 11, 2020 | Jun. 15, 2021 | Dec. 31, 2021 | Dec. 31, 2021 |
Factor Financing (Details) [Line Items] | ||||
Outstanding amount | $ 1,968,816 | |||
Amount from bay view funding | $ 3,024,532 | |||
Factoring fees | $ 315,039 | |||
Debt received | 10,678,029 | $ 10,678,029 | ||
Aggregate of repaid | 9,259,775 | |||
Company owed amount | $ 3,387,070 | $ 3,387,070 | ||
ADEX [Member] | ||||
Factor Financing (Details) [Line Items] | ||||
Factor agreement, description | the factoring agreement, Spectrum’s ADEX subsidiary may borrow up to the lesser of $5,000,000 or an amount equal to the sum of all undisputed purchased receivables multiplied by the advance percentage, less any funds in reserve. ADEX will pay to Bay View Funding a factoring fee upon purchase of receivables by Bay View Funding equal to 0.75% of the gross face value of the purchased receivable for the first 30 day period from the date said purchased receivable is first purchased by Bay View Funding, and a factoring fee of 0.35% per 15 days thereafter until the date said purchased receivable is paid in full or otherwise repurchased by ADEX or otherwise written off by Bay View Funding within the write off period. ADEX will also pay a finance fee to Bay View Funding on the outstanding advances under the agreement at a floating rate per annum equal to the Prime Rate plus 3%. The finance rate will increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate, but at no time will the finance fee be less than 7.75%. |
Derivative Liabilities (Details
Derivative Liabilities (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jun. 15, 2021 | Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability | $ 7,496,482 | $ 15,528,339 |
Derivative comprised | 6,929,000 | 14,050,806 |
Share purchase warrants | $ 567,482 | |
Convertible debenture | $ 1,477,533 |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details) - Schedule of changes in the fair value of the Company's Level 3 financial liabilities | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of changes in the fair value of the Company's Level 3 financial liabilities [Abstract] | |
Balance at the beginning of the period | |
Initial value of derivatives after reverse merger | 7,496,482 |
Change in fair value of embedded conversion option | (166,188) |
Initial value of derivatives upon issuance | 1,808,000 |
Effect of debt extinguishment | 5,129,000 |
Conversion of derivative liability | (3,932,335) |
Fair value of option derivative at issuance | 3,448,864 |
Discounts on new derivative in excess of note face value | 2,375,000 |
Fair value of warrant exercises | (630,484) |
Balance at the end of the period | $ 15,528,339 |
Derivative Liabilities (Detai_3
Derivative Liabilities (Details) - Schedule of fair value measurement | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected volatility | 110.00% |
Risk-free interest rate | 0.06% |
Expected life (in years) | 3 months |
Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected volatility | 257.00% |
Risk-free interest rate | 0.97% |
Expected life (in years) | 2 years 11 months 12 days |
Common Stock (Details)
Common Stock (Details) - USD ($) | Dec. 15, 2021 | Nov. 08, 2021 | Nov. 04, 2021 | Oct. 06, 2021 | Aug. 12, 2021 | Jul. 15, 2021 | Jun. 16, 2021 | Dec. 16, 2021 | Nov. 24, 2021 | Oct. 25, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 23, 2021 | Sep. 22, 2021 | Jun. 29, 2021 | Jun. 24, 2021 | Jun. 17, 2021 | Dec. 31, 2021 | Dec. 28, 2021 | Jun. 15, 2021 | Dec. 31, 2020 | Feb. 17, 2019 |
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Shares of common stock (in Shares) | 25,474,625 | |||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,338,620 | 69,281 | ||||||||||||||||||||
Conversion of principal amount | $ 2,292,971 | $ 321,487 | $ 4,000,000 | |||||||||||||||||||
Fair value | $ 486,400 | |||||||||||||||||||||
Gain on settlement of warrants | $ 133,045 | $ 5,072 | ||||||||||||||||||||
Aggregate principal amount | $ 250,000 | |||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares authorized (in Shares) | 1,000,000,000 | |||||||||||||||||||||
Common stock price (in Dollars per share) | $ 0.00001 | |||||||||||||||||||||
Cobra Equities SPV, LLC [Member] | Common Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,261,818 | 1,181,818 | 1,761,527 | 1,363,636 | 688,069 | 1,086,917 | 1,345,455 | 1,272,727 | ||||||||||||||
Conversion of principal amount | $ 33,500 | $ 32,500 | $ 12,442 | $ 90,000 | $ 116,000 | $ 35,500 | ||||||||||||||||
Accrued interest | 1,200 | $ 37,500 | 1,320 | 2,300 | 1,500 | $ 35,000 | ||||||||||||||||
Fair value | 311,038 | 583,227 | 353,864 | 171,880 | 306,510 | 390,182 | 458,182 | |||||||||||||||
Loss on debt conversion | $ 276,338 | $ 550,727 | $ 316,364 | $ 80,560 | $ 188,211 | $ 353,182 | $ 423,182 | |||||||||||||||
Efrat Investments, LLC [Member] | Common Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 660,000 | |||||||||||||||||||||
Conversion of principal amount | $ 33,000 | |||||||||||||||||||||
Fair value | 223,740 | |||||||||||||||||||||
Accured interest | 8,307 | |||||||||||||||||||||
Derivative value | 330,000 | |||||||||||||||||||||
Gain of debt conversion | $ 160,567 | |||||||||||||||||||||
Keith Hayter [Member] | Common Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,833,333 | 1,500,000 | ||||||||||||||||||||
Conversion of principal amount | $ 110,000 | $ 90,000 | ||||||||||||||||||||
Fair value | 861,667 | 521,250 | ||||||||||||||||||||
Loss on debt conversion | $ 751,667 | $ 431,250 | ||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,025,641 | 985,651 | ||||||||||||||||||||
Fair value | $ 206,410 | $ 209,016 | ||||||||||||||||||||
Conversion of shares (in Shares) | 100,000 | 96,101 | ||||||||||||||||||||
Stated value per share (in Dollars per share) | $ 1 | $ 1 | ||||||||||||||||||||
Series D Preferred Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 2,045,454 | |||||||||||||||||||||
Fair value | $ 464,543 | |||||||||||||||||||||
Conversion of shares (in Shares) | 45 | |||||||||||||||||||||
Stated value per share (in Dollars per share) | $ 10,000 | |||||||||||||||||||||
Cobra Equities SPV, LLC [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Accured interest | $ 16,030 | |||||||||||||||||||||
Cobra Equities SPV, LLC [Member] | Common Stock [Member] | ||||||||||||||||||||||
Common Stock (Details) [Line Items] | ||||||||||||||||||||||
Common stock, shares issued (in Shares) | 1,254,545 | |||||||||||||||||||||
Conversion of principal amount | $ 33,000 | |||||||||||||||||||||
Accrued interest | 1,500 | |||||||||||||||||||||
Fair value | 880,587 | 721,363 | ||||||||||||||||||||
Loss on debt conversion | 832,145 | $ 686,863 | ||||||||||||||||||||
Accrued interest | $ 36,000 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) | Aug. 12, 2021 | Jun. 24, 2021 | Oct. 29, 2018 | Dec. 31, 2021 | Dec. 20, 2021 | Dec. 16, 2021 | Oct. 20, 2021 | Sep. 23, 2021 | Jun. 15, 2021 | Jun. 14, 2021 | Jan. 27, 2021 | Dec. 31, 2020 | Jun. 18, 2020 | Apr. 08, 2020 | Apr. 16, 2018 | Nov. 15, 2017 |
Preferred Stock (Textual) | ||||||||||||||||
Conversion price | $ 0.0275 | $ 0.01 | ||||||||||||||
Common stock shares issued (in Shares) | 46,151,188 | 1,886 | ||||||||||||||
Stated value per share | $ 3,500 | |||||||||||||||
Series B preferred stock voting, description | Voting - The holders of shares of Series B preferred stock shall be voted together with the shares of common stock such that the aggregate voting power of the Series B preferred stock is equal to 51% of the total voting power of the Company. | |||||||||||||||
Deemed dividend (in Dollars) | $ 5,852,000 | |||||||||||||||
Common stock, par value | $ 0.00001 | $ 0.00 | ||||||||||||||
Percentage of conversion | 51.00% | |||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||
Preferred Stock (Textual) | ||||||||||||||||
Fair value (in Dollars) | $ 1,024,000 | |||||||||||||||
Preferred stock, shares authorized (in Shares) | 8,000,000 | 8,000,000 | 20,000,000 | |||||||||||||
Preferred stock shares designated (in Shares) | 8,000,000 | |||||||||||||||
Preferred stock conversion, description | On October 29, 2018, Spectrum made the first amendment to the Certificate of Designation of its Series A convertible preferred stock. This amendment updated the conversion price to be equal to the greater of 75% of the lowest VWAP during the ten trading day period immediately preceding the date a conversion notice is delivered or $120.00, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. | |||||||||||||||
Conversion price | $ 0.0975 | $ 0.2 | $ 3 | |||||||||||||
Conversion rights, description | The number of shares of common stock into which each share of the Series A preferred stock shares may be converted shall be determined by dividing the sum of the stated value of the Series A preferred stock shares ($1.00 per share) being converted and any accrued and unpaid dividends by the conversion price in effect at the time of the conversion. The Series A preferred stock shares may be converted at a fixed conversion price of $0.0975, subject to adjustment for any subdivision or combination of the Company’s outstanding shares of common stock. The conversion price has a floor of $0.01 per share. | |||||||||||||||
Common stock shares issued (in Shares) | 1,025,641 | |||||||||||||||
Conversion shares (in Shares) | 100,000 | 96,101 | ||||||||||||||
Stated value per share | $ 1 | $ 1 | ||||||||||||||
Fair value (in Dollars) | $ 206,410 | $ 209,016 | $ 619,229 | |||||||||||||
Preferred stock, stated value | $ 0.00001 | $ 0.00001 | ||||||||||||||
Series B preferred stock [Member] | ||||||||||||||||
Preferred Stock (Textual) | ||||||||||||||||
Fair value (in Dollars) | 0 | |||||||||||||||
Preferred stock, shares authorized (in Shares) | 1,000 | 1,000 | ||||||||||||||
Preferred stock shares designated (in Shares) | 1,000 | |||||||||||||||
Stated value per share | $ 3,500 | $ 3,500 | ||||||||||||||
Preferred stock, stated value | $ 3,500 | $ 3,500 | ||||||||||||||
Series D preferred stock [Member] | ||||||||||||||||
Preferred Stock (Textual) | ||||||||||||||||
Fair value (in Dollars) | $ 1,271,000 | |||||||||||||||
Preferred stock, shares authorized (in Shares) | 1,590 | 1,590 | ||||||||||||||
Preferred stock shares designated (in Shares) | 140 | 1,590 | ||||||||||||||
Common stock shares issued (in Shares) | 2,045,454 | |||||||||||||||
Fair value (in Dollars) | $ 6,658,457 | $ 464,543 | ||||||||||||||
Stated value per share | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||
Preferred stock, stated value | $ 10,000 | $ 10,000 | ||||||||||||||
Conversion of shares (in Shares) | 45 | |||||||||||||||
Dominion Capital [Member] | ||||||||||||||||
Preferred Stock (Textual) | ||||||||||||||||
Common stock shares issued (in Shares) | 985,651 | |||||||||||||||
Series E preferred stock [Member] | ||||||||||||||||
Preferred Stock (Textual) | ||||||||||||||||
Fair value (in Dollars) | $ 6,313,817 | |||||||||||||||
Preferred stock, shares authorized (in Shares) | 650 | 650 | ||||||||||||||
Preferred stock shares designated (in Shares) | 650 | |||||||||||||||
Stated value per share | $ 10,000 | $ 10,000 | ||||||||||||||
Preferred stock, stated value | $ 10,000 | $ 10,000 | ||||||||||||||
Amount for each shares (in Dollars) | $ 10,000 |
Share Purchase Warrants and S_3
Share Purchase Warrants and Stock Options (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jun. 15, 2021 | Dec. 31, 2021 | |
Share Purchase Warrants (Textual) | ||
Share purchase warrants | $ 567,402 | |
Fair value warrants | $ 1,477,533 | |
Share purchase warrants | 2 years 10 months 24 days | |
Weighted-average remaining life | 4 years 6 months | |
Unvested stock options | $ 2,069,363 |
Share Purchase Warrants and S_4
Share Purchase Warrants and Stock Options (Details) - Schedule of share purchase warrants | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Schedule of share purchase warrants [Abstract] | |
Number of warrants, Beginning Balance | shares | |
Weighted average exercise price, Beginning Balance | $ / shares | |
Intrinsic value, Beginning Balance | $ | |
Number of warrants, Assumed in merger transaction | shares | 1,852,882 |
Weighted average exercise price, Assumed in merger transaction | $ / shares | $ 0.73 |
Number of warrants, Granted | shares | 6,000,000 |
Weighted average exercise price, Granted | $ / shares | $ 0.48 |
Number of warrants, Exercised | shares | (1,850,000) |
Weighted average exercise price, Exercised | $ / shares | $ 0.11 |
Number of warrants, Expired | shares | (382) |
Weighted average exercise price, Expired | $ / shares | $ 324 |
Number of warrants, Ending Balance | shares | 6,002,500 |
Weighted average exercise price, Ending Balance | $ / shares | $ 0.5 |
Intrinsic value, Ending Balance | $ | |
Number of warrants, Exercisable | shares | 6,002,500 |
Weighted average exercise price, Exercisable | $ / shares | $ 0.5 |
Share Purchase Warrants and S_5
Share Purchase Warrants and Stock Options (Details) - Schedule of share purchase warrants outstanding | 12 Months Ended |
Dec. 31, 2021shares | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 6,002,500 |
Warrant Expiry Date One [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 2,500 |
Exercise Price | 30 |
Issuance date | 11/21/2019 |
Expiry date | 11/21/2022 |
Remaining life | 10 months 20 days |
Warrant Expiry Date Two [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 5,400,000 |
Exercise Price | 0.5 |
Issuance date | 11/3/2021 |
Expiry date | 11/3/2024 |
Remaining life | 2 years 10 months 2 days |
Warrant Expiry Date Three [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 200,000 |
Exercise Price | 0.25 |
Issuance date | 12/14/2021 |
Expiry date | 12/14/2024 |
Remaining life | 2 years 11 months 15 days |
Warrant Expiry Date Four [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants | 400,000 |
Exercise Price | 0.25 |
Issuance date | 12/14/2021 |
Expiry date | 12/14/2024 |
Remaining life | 2 years 11 months 15 days |
Share Purchase Warrants and S_6
Share Purchase Warrants and Stock Options (Details) - Schedule of activity of stock options | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Schedule of activity of stock options [Abstract] | |
Number of stock options, Beginning Balance | |
Weighted average exercise price, Beginning Balance (in Dollars per share) | $ / shares | |
Intrinsic value, Beginning Balance (in Dollars) | $ | |
Number of stock options, Assumed in merger transaction | 966,330 |
Weighted average exercise price, Assumed in merger transaction (in Dollars per share) | $ / shares | $ 0.62 |
Number of stock options, Issued | 9,929,987 |
Weighted average exercise price, Issued (in Dollars per share) | $ / shares | $ 0.26 |
Number of stock options, Exercised | |
Weighted average exercise price, Exercised | |
Number of stock options, Cancelled/expired | (52,078) |
Weighted average exercise price, Cancelled/expired (in Dollars per share) | $ / shares | $ 1.09 |
Number of stock options, Ending Balance | 10,844,239 |
Weighted average exercise price, Ending Balance (in Dollars per share) | $ / shares | $ 0.29 |
Intrinsic value, Ending Balance (in Dollars) | $ | |
Number of stock options, Exercisable | 6,345,879 |
Weighted average exercise price, Exercisable (in Dollars per share) | $ / shares | $ 0.3 |
Intrinsic value, Exercisable (in Dollars) | $ |
Share Purchase Warrants and S_7
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 10,844,239 |
Stock Options Two [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 323,763 |
Exercise price | $ / shares | $ 0.58 |
Issuance Date | Feb. 23, 2021 |
Expiry date | Feb. 23, 2026 |
Remaining Life | 4 years 1 month 24 days |
Stock Options Three [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 482,393 |
Exercise price | $ / shares | $ 0.58 |
Issuance Date | Feb. 23, 2021 |
Expiry date | Feb. 23, 2026 |
Remaining Life | 4 years 1 month 24 days |
Stock Options Four [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 77,587 |
Exercise price | $ / shares | $ 0.58 |
Issuance Date | Feb. 23, 2021 |
Expiry date | Feb. 23, 2026 |
Remaining Life | 4 years 1 month 24 days |
Stock Options Five [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 77,587 |
Exercise price | $ / shares | $ 0.58 |
Issuance Date | Feb. 23, 2021 |
Expiry date | Feb. 23, 2026 |
Remaining Life | 4 years 1 month 24 days |
Stock Options Six [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 3,318,584 |
Exercise price | $ / shares | $ 0.25 |
Issuance Date | Jun. 16, 2021 |
Expiry date | Jun. 16, 2026 |
Remaining Life | 4 years 5 months 15 days |
Stock Options Seven [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 100,603 |
Exercise price | $ / shares | $ 0.25 |
Issuance Date | Aug. 11, 2021 |
Expiry date | Aug. 11, 2026 |
Remaining Life | 4 years 7 months 9 days |
Stock Options Eight [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 6,278,468 |
Exercise price | $ / shares | $ 0.25 |
Issuance Date | Aug. 18, 2021 |
Expiry date | Aug. 18, 2026 |
Remaining Life | 4 years 7 months 17 days |
Stock Options Nine [Member] | |
Share Purchase Warrants and Stock Options (Details) - Schedule of stock options outstanding [Line Items] | |
Number of stock options | 185,254 |
Exercise price | $ / shares | $ 0.54 |
Issuance Date | Nov. 3, 2021 |
Expiry date | Nov. 3, 2026 |
Remaining Life | 4 years 10 months 2 days |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases (Textual) | ||
Operating lease expense | $ 161,577 | $ 100,544 |
Short-term lease costs | 34,400 | |
Measurement of operating lease liabilities | 155,259 | $ 93,792 |
Right of use operating lease liabilities | 119,031 | |
Operating lease liabilities cash paid | $ 77,450 | |
Weighted average discount rate | 19.00% | |
Weighted average remaining term | 1 year 6 months |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating leases related to assets and liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of operating leases related to assets and liabilities [Abstract] | ||
Operating lease assets | $ 227,132 | $ 239,489 |
Current operating lease liabilities | 142,925 | 86,510 |
Lonmg term operating lease liabilities | 126,044 | 196,594 |
Total operating lease liabilities | $ 268,969 | $ 283,104 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of operating lease liabilities | Dec. 31, 2021USD ($) |
Schedule of operating lease liabilities [Abstract] | |
2022 | $ 207,767 |
2023 | 96,839 |
Total lease payments | 304,606 |
Less: imputed interest | (35,637) |
Total | $ 268,969 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease term, description | The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 14, Leases, for amounts expensed during the years ended December 31, 2021 and 2020). |
Claim of legal proceeding | $ 100,000 |
Segment Disclosures (Details)
Segment Disclosures (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 1 |
Segment reporting, description | The Company operates the High Wire reporting segment in one geographical area (the United States) and the ADEX/AWS PR/SVC/Tropical/HWN operating segment in three geographical areas (the United States, Puerto Rico, and Canada). |
Segment Disclosures (Details) -
Segment Disclosures (Details) - Schedule of information by operating segment | 12 Months Ended |
Dec. 31, 2021USD ($) | |
High Wire [Member] | |
Segment Reporting Information [Line Items] | |
Net sales | |
Operating loss | (2,184,740) |
Interest expense | 293,359 |
Depreciation and amortization | |
Total assets | 506,835 |
Technology [Member] | |
Segment Reporting Information [Line Items] | |
Net sales | 27,206,689 |
Operating loss | (1,489,689) |
Interest expense | 244,920 |
Depreciation and amortization | 506,364 |
Total assets | 43,314,747 |
Construction [Member] | |
Segment Reporting Information [Line Items] | |
Net sales | 27,206,689 |
Operating loss | (3,674,429) |
Interest expense | 538,279 |
Depreciation and amortization | 506,364 |
Total assets | $ 43,821,582 |
Segment Disclosures (Details)_2
Segment Disclosures (Details) - Schedule of geographic information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 27,206,689 | $ 9,909,157 |
Long-lived Assets | 34,832,755 | |
Puerto Rico and Canada [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,226,594 | |
Long-lived Assets | 11,082 | |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 25,980,095 | |
Long-lived Assets | $ 34,821,673 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Foreign pre tax income | $ 256,549 | |
Domestic pre tax loss | 13,934,179 | |
Operating loss carryforwards | $ 27,447,714 | $ 0 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of pre-tax loss - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of pre-tax loss [Abstract] | ||
Domestic | $ (13,934,179) | $ (710,003) |
Foreign | 256,549 | |
Pre-tax Loss | $ (13,677,630) | $ (710,003) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of provision for income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of provision for income taxes [Abstract] | ||
Federal | ||
State | ||
Foreign | ||
Total current | ||
Federal | ||
State | ||
Total deferred | ||
Total provision for income taxes |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of effective income tax rate | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of effective income tax rate [Abstract] | ||
Federal tax benefit at statutory rate | (21.00%) | |
Permanent differences | 20.00% | |
State tax benefit, net of Federal benefits | ||
Other | ||
Effect of foreign income taxed in rates other than the U.S. Federal statutory rate | ||
Net change in valuation allowance | 1.00% | |
Provision |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of deferred tax assets and liabilities [Abstract] | ||
Net operating loss carryforwards | $ 27,447,714 | |
Depreciation | 3,634 | |
Total assets | 27,451,348 | |
Total liabilities | ||
Less: Valuation allowance | (27,451,348) | |
Net deferred tax liabilities |
Discontinued Operations (Detail
Discontinued Operations (Details) - JTM [Member] | Feb. 15, 2022 | Dec. 31, 2021 |
Discontinued Operations (Details) [Line Items] | ||
Owned percentage | 50.00% | |
Subsequent Event [Member] | ||
Discontinued Operations (Details) [Line Items] | ||
Owned percentage | 50.00% |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of balance sheet of the Company’s discontinued operations - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 809,917 | $ 251,771 |
Accounts receivable | 1,067,995 | 1,229,761 |
Contract assets | 147,568 | |
Prepaid expenses and deposits | 57,915 | 63,368 |
Current assets of discontinued operations | 2,083,395 | 1,544,900 |
Noncurrent assets: | ||
Property and equipment, net of accumulated depreciation of $73,733 and $51,237, respectively | 52,618 | 75,115 |
Goodwill | 875,201 | |
Intangible assets, net of accumulated amortization of $96,882 | 203,055 | |
Noncurrent assets of discontinued operations | 52,618 | 1,153,371 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 402,142 | 659,937 |
Contract liabilities | 4,700 | 30,000 |
Loans payable | 12,362 | 52,051 |
Current liabilities of discontinued operations | 419,204 | 741,988 |
Noncurrent liabilities: | ||
Loans payable, net of current portion | 33,496 | 250,800 |
Noncurrent liabilities of discontinued operations | $ 33,496 | $ 250,800 |
Discontinued Operations (Deta_3
Discontinued Operations (Details) - Schedule of balance sheet of the Company’s discontinued operations (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of balance sheet of the Company’s discontinued operations [Abstract] | ||
Accumulated depreciation | $ 73,733 | $ 51,237 |
Net of accumulated amortization | $ 96,882 |
Discontinued Operations (Deta_4
Discontinued Operations (Details) - Schedule of statement of operations for the Company’s discontinued operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of statement of operations for the Company’s discontinued operations [Abstract] | ||
Revenue | $ 9,509,419 | $ 5,847,787 |
Operating expenses: | ||
Cost of revenues | 7,043,944 | 4,943,433 |
Depreciation and amortization | 49,597 | 75,318 |
Salaries and wages | 366,654 | 302,685 |
General and administrative | 567,346 | 493,092 |
Goodwill impairment | 875,201 | |
Intangible asset impairment | 175,954 | |
Total operating expenses | 9,078,696 | 5,814,528 |
Loss from operations | 430,723 | 33,259 |
Other (expenses) income: | ||
Interest expense | (6,168) | (250) |
PPP loan forgiveness | 250,800 | |
Other income | 829 | |
Total other expense | 244,632 | 579 |
Pre-tax loss from operations | 675,355 | 33,838 |
Provision for income taxes | ||
Net income from discontinued operations, net of tax | $ 675,355 | $ 33,838 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 04, 2022 | Feb. 07, 2022 | Jan. 11, 2022 | Mar. 16, 2022 | Feb. 22, 2022 | Feb. 15, 2022 | Dec. 16, 2021 | Sep. 30, 2021 | Jun. 29, 2021 | Jul. 15, 2022 | Apr. 01, 2022 | Mar. 20, 2022 | Mar. 01, 2022 | Dec. 31, 2021 | Jun. 14, 2021 | Apr. 16, 2018 |
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Conversion price (in Shares) | 1,338,620 | 69,281 | ||||||||||||||
Preference stock per value (in Dollars per share) | $ 3,500 | |||||||||||||||
Current amortization of principal and interest | $ 150,000 | |||||||||||||||
Series D Preferred Stock [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Conversion price (in Shares) | 2,045,454 | |||||||||||||||
Preference stock per value (in Dollars per share) | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Loan amount | $ 2,000,000 | |||||||||||||||
Reduced amount | $ 0 | |||||||||||||||
Convertible promissory note | $ 2,500,000 | |||||||||||||||
Cobra Equities SPV, LLC [Member] | Subsequent Event [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Issued shares (in Shares) | 1,515,152 | 1,261,818 | 1,679,322 | 1,160,000 | ||||||||||||
Conversion of principal amount | $ 150,000 | $ 33,600 | $ 45,000 | $ 31,900 | ||||||||||||
Accrued interest | $ 1,100 | $ 1,181 | ||||||||||||||
SCS, LLC [Member] | Subsequent Event [Member] | Series D Preferred Stock [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Issued shares (in Shares) | 1,136,364 | |||||||||||||||
Conversion price (in Shares) | 25 | |||||||||||||||
Preference stock per value (in Dollars per share) | $ 10,000 | |||||||||||||||
JTM [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Ownership percentage | 50.00% | |||||||||||||||
JTM [Member] | Subsequent Event [Member] | ||||||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||||||
Ownership percentage | 50.00% | |||||||||||||||
Interest amount | $ 525,000 | |||||||||||||||
Initial payment amount | 200,000 | |||||||||||||||
Monthly payments | $ 25,000 |