SharpSpring (SHSP) 10-Q 16 Aug 21 2021 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 13, 2021
Cover [Abstract]
Entity Registrant Name	SharpSpring, Inc.
Entity Central Index Key	0001506439
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		12,886,660
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	001-36280
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	05-0502529
Entity Address Address Line 1	5001 Celebration Pointe Avenue
Entity Address Address Line 2	Suite 410
Entity Address City Or Town	Gainesville
Entity Address State Or Province	FL
Entity Address Postal Zip Code	32608
City Area Code	888
Local Phone Number	428-9605
Security 12b Title	Common Stock, $0.001 par value per share
Trading Symbol	SHSP
Security Exchange Name	NASDAQ

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 25,157,240	$ 28,267,792
Accounts receivable, net of allowance for doubtful accounts of $74,126 and $56,134 at June 30, 2021 and December 31, 2020, respectively	300,149	323,130
Unbilled receivables	1,265,527	1,248,060
Income taxes receivable	143,498	54,449
Other current assets	1,293,952	1,433,543
Total current assets	28,160,366	31,326,974
Property and equipment, net	1,861,067	2,188,948
Goodwill	10,230,917	10,250,088
Intangibles, net	3,672,753	4,015,851
Right-of-use assets	7,934,913	8,352,028
Other long-term assets	584,435	611,857
Total assets	52,444,451	56,745,746
Liabilities and Shareholders' Equity
Accounts payable	964,933	1,074,594
Accrued expenses and other current liabilities	2,242,981	1,259,836
Line of credit	1,900,000	1,900,000
Deferred revenue	862,767	845,265
Income taxes payable	23,755	81,221
Lease liability, current portion	748,499	724,627
Notes payable, current portion	0	2,630,962
Total current liabilities	6,742,935	8,516,505
Lease liability, net of current portion	7,358,118	7,771,898
Notes payable, net of current portion	0	768,538
Total liabilities	14,101,053	17,056,941
Shareholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at June 30, 2021 and December 31, 2020	0	0
Common stock, $0.001 par value, 50,000,000 shares authorized, 12,902,030 issued and 12,882,030 outstanding as of June 30, 2021; 12,818,797 issued and 12,798,797 outstanding as of December 31, 2020	12,902	12,819
Additional paid in capital	77,141,573	75,544,966
Accumulated other comprehensive loss	(219,736)	(215,269)
Accumulated deficit	(38,507,341)	(35,569,711)
Treasury stock	(84,000)	(84,000)
Total shareholders' equity	38,343,398	39,688,805
Total liabilities and shareholders' equity	$ 52,444,451	$ 56,745,746

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Assets
Allowance for doubtful accounts receivble	$ 74,126	$ 56,134
Shareholders' equity
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	12,882,030	12,798,797
Common stock, shares issued	12,902,030	12,818,797

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
Revenue	$ 8,106,243	$ 7,270,905	$ 16,095,473	$ 14,323,634
Cost of services	1,984,662	1,873,029	3,874,675	4,240,671
Gross profit	6,121,581	5,397,876	12,220,798	10,082,963
Operating expenses:
Sales and marketing	3,915,096	2,395,100	7,706,478	5,429,222
Research and development	2,111,540	1,484,890	4,227,280	3,063,029
General and administrative	3,522,971	2,244,560	6,294,610	4,658,401
Intangible asset amortization	171,549	183,746	343,098	336,547
Total operating expenses	9,721,156	6,308,296	18,571,466	13,487,199
Operating loss	(3,599,575)	(910,420)	(6,350,668)	(3,404,236)
Other income (expense), net	(21,354)	(2,777)	(14,519)	(59,556)
Gain on extinguishment of debt	3,271,101	0	3,438,077	0
Loss before income taxes	(349,828)	(913,197)	(2,927,110)	(3,463,792)
Provision (benefit) for income taxes	3,947	57,187	10,520	(1,505,331)
Net loss	$ (353,775)	$ (970,384)	$ (2,937,630)	$ (1,958,461)
Net loss per share, basic and diluted	$ (0.03)	$ (0.08)	$ (0.23)	$ (0.17)
Shares used in computing net loss per share, basic and diluted	12,852,131	11,529,324	12,833,148	11,525,258
Other comprehensive loss:
Foreign currency translation adjustment, net	$ 5,493	$ 3,258	$ (4,467)	$ (5,569)
Comprehensive loss	$ (348,282)	$ (967,126)	$ (2,942,097)	$ (1,964,030)

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($)	Total	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance, shares at Dec. 31, 2019		11,537,163	20,000
Balance, amount at Dec. 31, 2019	$ 28,813,347	$ 11,537	$ (84,000)	$ 58,851,285	$ (224,793)	$ (29,740,682)
Stock based compensation	663,078	$ 0	0	663,078	0	0
Issuance of common stock for cash, shares		4,660
Issuance of common stock for cash, amount	23,462	$ 5	0	23,457	0	0
Issuance of common stock for services, shares		7,504
Issuance of common stock for services, amount	77,972	$ 8	0	77,965	0	0
Issuance of common stock under stock plans, net of shares withheld for employee taxes, shares		5,393
Issuance of common stock under stock plans, net of shares withheld for employee taxes, amount	(28,402)	$ 5	0	(28,407)	0	0
Foreign currency translation adjustment	(5,569)	0	0	0	(5,569)	0
Net loss	(1,958,461)	$ 0	$ 0	0	0	(1,958,461)
Balance, shares at Jun. 30, 2020		11,554,720	20,000
Balance, amount at Jun. 30, 2020	27,585,428	$ 11,555	$ (84,000)	59,587,378	(230,362)	(31,699,143)
Balance, shares at Mar. 31, 2020		11,545,957	20,000
Balance, amount at Mar. 31, 2020	28,171,715	$ 11,546	$ (84,000)	59,206,549	(233,620)	(30,728,759)
Stock based compensation	323,722	$ 0	0	323,722	0	0
Issuance of common stock for cash, shares		3,155
Issuance of common stock for cash, amount	12,289	$ 3	0	12,285	0	0
Issuance of common stock for services, shares		4,824
Issuance of common stock for services, amount	46,696	$ 5	0	46,692	0	0
Issuance of common stock under stock plans, net of shares withheld for employee taxes, shares		784
Issuance of common stock under stock plans, net of shares withheld for employee taxes, amount	(1,869)	$ 1	0	(1,870)	0	0
Net loss	(970,384)	0	0	0	0	(970,384)
Foreign currency translation adjustment, net	3,258	$ 0	$ 0	0	3,258	0
Balance, shares at Jun. 30, 2020		11,554,720	20,000
Balance, amount at Jun. 30, 2020	27,585,428	$ 11,555	$ (84,000)	59,587,378	(230,362)	(31,699,143)
Balance, shares at Dec. 31, 2020		12,818,797	20,000
Balance, amount at Dec. 31, 2020	39,688,805	$ 12,819	$ (84,000)	75,544,966	(215,269)	(35,569,711)
Stock based compensation	895,088	$ 0	0	895,088	0	0
Issuance of common stock for cash, shares		66,023
Issuance of common stock for cash, amount	502,037	$ 66	0	501,971	0	0
Issuance of common stock for services, shares		12,099
Issuance of common stock for services, amount	235,817	$ 12	0	235,805	0	0
Issuance of common stock under stock plans, net of shares withheld for employee taxes, shares		5,111
Issuance of common stock under stock plans, net of shares withheld for employee taxes, amount	(36,252)	$ 5	0	(36,257)	0	0
Foreign currency translation adjustment	(4,467)	0	0	0	(4,467)	0
Net loss	(2,937,630)	$ 0	$ 0	0	0	(2,937,630)
Balance, shares at Jun. 30, 2021		12,902,030	20,000
Balance, amount at Jun. 30, 2021	38,343,398	$ 12,902	$ (84,000)	77,141,573	(219,736)	(38,507,341)
Balance, shares at Mar. 31, 2021		12,854,252	20,000
Balance, amount at Mar. 31, 2021	37,805,644	$ 12,854	$ (84,000)	76,255,585	(225,229)	(38,153,566)
Stock based compensation	544,365	$ 0	0	544,365	0	0
Issuance of common stock for cash, shares		43,967
Issuance of common stock for cash, amount	321,950	$ 44	0	321,906	0	0
Issuance of common stock for services, shares		1,836
Issuance of common stock for services, amount	30,955	$ 2	0	30,953	0	0
Issuance of common stock under stock plans, net of shares withheld for employee taxes, shares		1,975
Issuance of common stock under stock plans, net of shares withheld for employee taxes, amount	(11,234)	$ 2	0	(11,236)	0	0
Foreign currency translation adjustment	5,493	0	0	0	5,493	0
Net loss	(353,775)	$ 0	$ 0	0	0	(353,775)
Balance, shares at Jun. 30, 2021		12,902,030	20,000
Balance, amount at Jun. 30, 2021	$ 38,343,398	$ 12,902	$ (84,000)	$ 77,141,573	$ (219,736)	$ (38,507,341)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Net loss	$ (2,937,630)	$ (1,958,461)
Adjustments to reconcile loss from operations:
Depreciation and amortization	1,041,311	774,140
Gain on extinguishment of debt	(3,438,077)	0
Amortization of costs to acquire contracts	407,282	404,767
Non-cash stock compensation	1,138,405	741,051
Deferred income taxes	0	(5,504)
Loss on disposal of property and equipment	3,299	0
Unrealized foreign currency (gain) loss	(45,204)	109,928
Changes in assets and liabilities:
Accounts receivable	20,362	(106,260)
Unbilled receivables	(27,704)	(133,315)
Right-of-use assets	417,115	(3,475,390)
Other assets	(239,733)	(279,099)
Income taxes, net	(144,864)	33,639
Accounts payable	(108,933)	(120,934)
Lease liabilities	(389,909)	3,511,291
Accrued expenses and other current liabilities	975,631	(288,041)
Deferred revenue	20,294	(201,893)
Net cash used in operating activities	(3,308,355)	(994,081)
Cash flows from investing activities
Purchases of property and equipment	(169,328)	(352,900)
Capitalization of software development costs	(204,302)	(424,124)
Net cash used in investing activities	(373,630)	(777,024)
Cash flows used in financing activities:
Proceeds from line of credit	0	1,900,000
Proceeds from note payable	0	3,399,500
Proceeds from exercise of stock options, net	502,037	23,462
Payments for taxes related to net share settlement of equity awards	(36,252)	(28,402)
Net cash provided by financing activities	465,785	5,294,560
Effect of exchange rate on cash	105,648	(118,509)
Change in cash and cash equivalents	(3,110,552)	3,404,946
Cash and cash equivalents, beginning of period	28,267,792	11,881,949
Cash and cash equivalents, end of period	25,157,240	15,286,895
Cash paid (received) during the period for
Interest, net	48,028	(19,255)
Income taxes	155,294	(1,533,467)
Non-cash activities
Right-of-use asset obtained for lease liability	$ 0	$ 3,758,014

Organization, Basis of Presenta

Organization, Basis of Presentation, and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2021
Organization, Basis of Presentation, and Summary of Significant Accounting Policies
Note 1. Organization, Basis of Presentation, and Summary of Significant Accounting Policies	Note 1: Organization, Basis of Presentation, and Summary of Significant Accounting Policies Organization and Proposed Merger SharpSpring, Inc. (the “Company”, “we”, “our”, or “us”) provides a cloud-based marketing automation solution and a display retargeting platform through its SharpSpring Marketing Automation and SharpSpring Ads (formerly known as Perfect Audience) products. Our flagship Marketing Automation platform is designed to increase the rates at which businesses generate leads and convert leads to sales opportunities by improving the way businesses communicate with customers and prospects. Our SharpSpring Ads platform empowers marketers to create, manage, and optimize their ad campaigns across thousands of websites. The Company’s products are marketed directly by us and through a small group of reseller partners to customers around the world. On June 21, 2021, the Company entered into an Agreement and Plan of Merger, as it may be amended from time to time in accordance with its terms (the “Merger Agreement”) with Constant Contact, Inc., a Delaware corporation (“Constant Contact”) and Groove Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Constant Contact (“MergerSub”), providing for the merger of MergerSub with and into the Company (the “Merger”) and for the Company to become a wholly-owned subsidiary of Constant Contact. COVID – 19 On January 30, 2020, the World Health Organization declared the coronavirus “COVID-19” outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of COVID-19 included restrictions on travel, quarantines, or “stay‑at‑home” restrictions in certain areas and forced closures for certain types of public places and businesses. COVID‑19, and the recently identified variants of COVID-19, and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets globally, including the geographical areas in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be, the Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of the business/operations and are unable at this time to predict the continued impact that COVID-19 will have on its business, financial position, and operating results in future periods due to numerous uncertainties. Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim periods, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of Company management, the Company has prepared the accompanying unaudited consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2020, and these consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The Company’s consolidated financial statements include the accounts of SharpSpring, Inc. and its subsidiaries (the “Company”). The Company’s consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2021. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 30, 2021. Concentration of Credit Risk and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. At June 30, 2021, and December 31, 2020, the Company had cash balances at financial institutions that exceed federally insured limits. The Company maintains its cash balances with accredited financial institutions. The Company does not believe it is subject to unusual credit risk beyond normal credit risk associated with commercial banking relationships. Our accounts receivable exposes the Company to credit risk in the event of nonpayment by customers. As of June 30, 2021, two customers had an open accounts receivable balance above 10% of our net accounts receivable balance, which represented 24.1% of the Company’s net accounts receivable balance. As of December 31, 2020, the Company had one customer representing 12.4% of net accounts receivable balance. There were no customers that accounted for more than 10% of Company’s total revenue for any financial period presented. Significant Accounting Policies There were no material changes to the Company’s significant accounting policies disclosed in “Note 2 – Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 30, 2021. Operating Segments The Company operates as one reportable segment with two operating segments. Our operating segments consist of our SharpSpring Marketing Automation segment and SharpSpring Ads Retargeting segment in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017- 04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes The new accounting guidance also simplifies the accounting for income taxes by (i) requiring an entity to recognize franchise tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (ii) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, (iii) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, (iv) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date, and (v) making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. This standard is effective for fiscal and interim periods beginning after December 15, 2020. We believe the adoption of this standard has not and will not have a material impact on our consolidated financial statements. There are no other new accounting pronouncements that are expected to have a material impact on the Company and all subsidiaries thereof. All intercompany balances and transactions have been eliminated upon consolidation.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2021
Revenue Recognition
Note 2. Revenue Recognition	Note 2: Revenue Recognition Unbilled Receivables In cases where customers pay for services in arrears, the Company accrues for revenue in advance of billings as long as the criteria for revenue recognition are met, thus creating a contract asset (unbilled receivable). As of March 31, 2021, and 2020, the Company had unbilled receivables of $1.26 million and $1.09 million, respectively. Substantially all of these services were billed during the three months ended June 30, 2021, and 2020, respectively. Unbilled receivable balances net remained unchanged during the three months ended June 30, 2021. During the three months ended June 30, 2020, unbilled receivables increased by $0.04 million. Unbilled receivable balances as of December 31, 2020, and 2019 were $1.25 million and $1.00 million, respectively. Unbilled receivable balances increased by $0.02 million and increased by $0.13 million during the six months ended June 30, 2021, and 2020, respectively. As of June 30, 2021, and 2020, the Company had unbilled receivables of $1.27 million and $1.13 million, respectively. These unbilled balances were the result of services provided in period, but not yet billed to the customer. Capitalized Cost of Obtaining a Contract The Company capitalizes sales commission costs which are incremental to obtaining a contract. The Company expenses costs that are related to obtaining a contract but are not incremental such as other sales and marketing costs and other costs that would be incurred regardless of if the contract was obtained. Capitalized costs are amortized using straight-line amortization over a three-year estimated weighted average life of the customer. As of June 30, 2021, the net carrying value of the capitalized cost of obtaining a contract was $1.18 million, of which $0.63 million is included in other current assets and $0.55 million is included in other long-term assets. As of December 31, 2020, the net carrying value of the capitalized cost of obtaining a contract was $1.27 million, of which $0.69 million is included in other current assets and $0.58 million is included in other long-term assets. For the three months ended June 30, 2021, and 2020, the Company amortized approximately $0.20 million for each period, in costs directly attributable to obtaining contracts. For the six months ended June 30, 2021, and 2020, the Company amortized approximately $0.41 million and $0.40 million, respectively, in costs directly attributable to obtaining contracts. Deferred Revenue Deferred revenue consists of payments received in advance of the Company providing the services. Most of our deferred revenue balances (contract liabilities) arise from payments from customers in advance of service on a periodic basis (such as monthly, quarterly, annually, or bi-annually), while the portion of our deferred revenue balances associated with SharpSpring Ads arises from prepaid deposits for future usage of the platform. Deferred revenue from our SharpSpring Marketing Automation customers is earned over the service period identified in each contract. Deferred revenue from our SharpSpring Ads retargeting customers is earned as the service is used. Additionally, the Company has deferred revenue related to implementation fees for its SharpSpring Marketing Automation solution that are paid in advance, which is recognized over the service period. These implementation services are typically performed over a 60-day period. As of March 31, 2021, and 2020, the Company had deferred revenue balances of $0.95 million and $0.77 million, respectively. Deferred revenue decreased by $0.09 million and decreased by $0.11 million during the three months ended June 30, 2021, and 2020, respectively. Deferred revenue balances were $0.85 million and $0.86 million as of December 31, 2020, and 2019, respectively. Deferred revenue increased by $0.01 million and decreased by $0.2 million during the six months ended June 30, 2021, and 2020, respectively. The Company had deferred revenue contract liability balances of $0.86 million and $0.66 million as of June 30, 2021, and June 30, 2020, respectively. Disaggregation of Revenue Disaggregated revenue for the three and six months ended June 30, 2021, and 2020, are as follows: Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenue by Product: Marketing Automation Revenue $ 7,495,296 $ 6,566,976 $ 14,878,176 $ 12,926,333 Retargeting Revenue 581,490 667,910 1,155,064 1,286,717 Mail + Product Revenue 29,457 36,019 62,233 110,584 Total Revenue $ 8,106,243 $ 7,270,905 $ 16,095,473 $ 14,323,634 Revenue by Type: Recurring Revenue $ 7,283,298 $ 6,319,119 $ 14,434,024 $ 12,449,561 Retargeting Revenue 581,490 667,911 1,155,064 1,286,717 Upfront Fees 241,455 283,875 506,385 587,356 Total Revenue $ 8,106,243 $ 7,270,905 $ 16,095,473 $ 14,323,634

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2021
Property and Equipment
Note 3. Property & Equipment	Note 3: Property & Equipment Property and equipment as of June 30, 2021, and December 31, 2020, is as follows: June 30, December 31, 2021 2020 Property and equipment, gross: Leasehold improvements $ 366,735 $ 313,119 Furniture and fixtures 913,370 913,370 Capitalized software development costs 2,352,235 2,147,934 Computer equipment and other software 1,191,049 1,083,432 Total 4,823,389 4,457,855 Less: Accumulated depreciation (2,962,322 ) (2,268,907 ) Property and equipment, net: $ 1,861,067 $ 2,188,948 Depreciation expense related to property and equipment was $0.43 million and $0.23 million for the three months ended June 30, 2021, and 2020, respectively. Depreciation expense related to property and equipment was $0.70 million and $0.44 million for the six months ended June 30, 2021, and 2020, respectively.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2021
Goodwill and Other Intangible Assets
Note 4. Goodwill and Other Intangible Assets	Note 4: Goodwill and Other Intangible Assets Goodwill and acquired intangible assets are initially recorded at fair value and are reviewed at least annually for indicators of impairment or more frequently if there are indicators of impairment. The Company’s intangibles are tested for recoverability whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. Impairment losses are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. During the six months ended June 30, 2021, the Company reclassified our trade name asset for Perfect Audience from an indefinite lived asset to a definite lived asset with a useful life of 3 years as part of our phase out of the Perfect Audience name. Judgment is used when applying these impairment rules to determine the timing of the impairment test, the undiscounted cash flows used to assess impairments, and the fair value of an asset group. Goodwill and other Intangible Assets as of June 30, 2021, and December 31, 2020, are as follows: As of June 30, 2021 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 501,000 $ (183,500 ) $ 317,500 Technology 3,109,000 (1,653,703 ) 1,455,297 Customer relationships 1,320,000 (941,000 ) 379,000 Vendor relationships 1,813,000 (292,044 ) 1,520,956 Unamortized intangible assets: 6,743,000 (3,070,247 ) 3,672,753 Goodwill 10,230,917 Total goodwill and intangible assets $ 13,903,670 As of December 31, 2020 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 501,000 $ (120,000 ) $ 381,000 Technology 3,109,000 (1,513,751 ) 1,595,249 Customer relationships 1,320,000 (892,004 ) 427,996 Vendor relationships 1,813,000 (201,394 ) 1,611,606 Unamortized intangible assets: 6,743,000 (2,727,149 ) 4,015,851 Goodwill 10,250,088 Total goodwill and intangible assets $ 14,265,939 Estimated amortization expense for the remainder of 2021 and subsequent years is as follows: Remainder of 2021 $ 343,100 2022 634,200 2023 586,200 2024 420,200 2025 390,200 Thereafter 1,298,853 Total $ 3,672,753 Amortization expense for three months ended June 30, 2021, and 2020, was $0.17 million and $0.18 million, respectively. Amortization expense for the six months ended June 30, 2021, and 2020, was $0.34 million and $0.34 million, respectively.

Debt

Debt	6 Months Ended
	Jun. 30, 2021
Debt
Note 5. Debt	Note 5: Debt Credit Facility In March 2016, the Company entered into a $2.5 million revolving loan agreement (the “Credit Facility”) with Western Alliance Bank. The facility originally matured on March 21, 2018 and was amended to mature on June 19, 2022. There are no mandatory amortization provisions, and the Credit Facility is payable in full at maturity. As of June 30, 2021, the Credit Facility is collateralized by a lien on substantially all of the existing and future assets of the Company and secured by a pledge of 100% of the capital stock of SharpSpring Technologies, Inc. and a 65% pledge of the Company’s foreign subsidiaries’ stock. The Credit Facility subjects the Company to a number of restrictive covenants, including financial and non-financial covenants customarily found in loan agreements for similar transactions. The Credit Facility also restricts our ability to pay cash dividends on our common stock. As of June 30, 2021, the credit facility carried an interest rate of 5.0%, there was $1.9 million outstanding under the Credit Facility, and no events of default have occurred. The interest expense relating to the Credit Facility for three months ended June 30, 2021, and 2020 was approximately $0.02 million and $0.03 million, respectively. The interest expense relating to the Credit Facility for six ended June 30, 2021, and 2020 was approximately $0.05 million and $0.03 million respectively SBA Paycheck Protection Program Loan In April 2020, SharpSpring entered into two loan agreements with United States Small Business Administration (“SBA”) under the Paycheck Protection Program for a total loan amount of $3.40 million (the “SBA Loans”). The SBA Loans have a maturity date of 2 years from the initial disbursement and carry an interest rate of 1% per year. The application for the SBA Loans requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operation of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support the ongoing operations in a manner that is not significantly detrimental to the business. The receipt of the funds from the SBA Loans and the forgiveness of the SBA Loans is dependent on the Company having initially qualified for the SBA Loans and qualifying for the forgiveness of such loans based on funds being used for certain expenditures such as payroll costs and rent, as required by the terms of the SBA Loans. The SBA Loans were eligible for forgiveness as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) approved by the U.S. Congress on March 27, 2020, if certain requirements were met. The Company applied for forgiveness with the SBA in December 2020, in which on March 11, 2021, the SBA forgave the principal balance and associated accumulated interest of one of the two SBA Loans in full. As a result, the Company recognized $0.17 million to other income in our consolidated statement of operations and comprehensive loss in the six months ending June 30, 2021. On June 11, 2021, the SBA forgave the principal balance and associated accumulated interest of the second SBA Loans in full. As a result, the Company recognized $3.27 million to other income in our consolidated statement of operations and comprehensive loss in the three and six months ending June 30, 2021. Interest expense related to the SBA Loans for the three months ended June 30, 2021, and 2020 was approximately $0.01 million and $0.01 million, respectively. Interest expense related to the SBA Loans for the six months ended June 30, 2021, and 2020 was approximately $0.02 million and $0.01 million , respectively. Presently, the SBA and other government communications have indicated that all loans in excess of $2.0 million will be subject to audit and that those audits could take up to seven years to complete. If the SBA determines that the SBA Loan was not properly obtained and/or expenditures supporting forgiveness were not appropriate, the Company would be required to repay some or all of the SBA Loan and record additional expense which could have a material adverse effect on our business, financial condition and results of operations in a future period.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2021
Income Taxes
Note 6. Income Taxes	Note 6: Income Taxes SharpSpring income taxes are computed in accordance with ASC Topic 740, Income Taxes On March 27, 2020, the CARES Act was enacted into the law. The CARES Act contained many income tax relief provisions including allowing for a 5-year carryback of federal net operating losses generated in tax years beginning in 2018, 2019, or 2020. As required under U.S. GAAP, the effects of tax law changes are recognized in the period of enactment. Accordingly, we recorded an incremental income tax benefit in the amount of $1.6 million associated with the CARES Act related to the carryback of the Company’s 2018 federal net operating loss in the first quarter of 2020. During the three months ended June 30, 2021, and 2020, the Company recorded income tax expense of approximately $4,000 and $57,000, respectively. During the six months ended June 30, 2021, and 2020, the Company recorded income tax expense of approximately $0.01 million and income tax benefit of $1.51 million, respectively. The blended effective tax rate for the six months ending June 30, 2021, and 2020 was -0.4% and 43.5%, respectively. The June 30, 2021, effective blended tax rate varies from our statutory U.S. tax rate due to the tax impact of the valuation allowances on losses and income generated in certain other jurisdictions at various tax rates. The June 30, 2020, effective blended tax rate varies from our statutory U.S. tax rate due to the tax impact of the CARES Act, valuation allowances on losses and income generated in certain other jurisdictions at various tax rates. Valuation Allowance In making our assessment of deferred tax asset recoverability, we considered our historical financial results, our projected future financial results, the planned reversal of existing deferred tax liabilities, and the impact of any tax planning actions. Based on our analysis we noted both positive and negative factors relative to our ability to support realization of certain deferred tax assets. However, based on the weighting of all the evidence, including the near-term effect on our income projections of investments we are making in our team, product and systems infrastructure, we concluded that it was more likely than not that the majority of our deferred tax assets related to temporary differences and net operating losses may not be recovered. The establishment of a valuation allowance has no effect on our ability to use the underlying deferred tax assets to reduce cash tax payments in the future to the extent that we generate taxable income prior to expiration. At June 30, 2021 and December 31, 2020, we have established a valuation allowance of $10.1 million and $8.9 million, respectively, against certain deferred tax assets given the uncertainty of recoverability of these amounts.

StockBased Compensation

StockBased Compensation	6 Months Ended
	Jun. 30, 2021
StockBased Compensation
Note 7. Stock-Based Compensation	Note 7: Stock-Based Compensation From time to time, the Company grants stock options and restricted stock unit awards to officers and employees of the Company. Additionally, the Company grants stock options and awards to directors as compensation for their service to the Company. In November 2010, the Company adopted the 2010 Stock Incentive Plan (the “2010 Plan”) which was restated in its entirety in August 2018. As amended, up to 2,600,000 shares of common stock were available for issuance under the Plan. The Plan provided for the issuance of stock options and other stock-based awards. As of June 30, 2021, no shares remain available for future issuance under the 2010 Plan. In April 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”), which was amended in July 2020 and June 2021. As amended no more than 1,275,000 shares of common stock, plus the number of shares of common stock underlying any award granted under the 2010 Plan that expires, terminates, is canceled, or is forfeited shall be available for grant under the 2019 Plan. The Plan provides for the issuance of stock options and other stock-based awards. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards. Stock Options Stock option awards under the 2010 Plan and 2019 Plan (the “Plans”) have a 10-year maximum contractual term and, subject to the provisions regarding Ten Percent Shareholders, must be issued at an exercise price of not less than 100% of the fair market value of the common stock at the date of grant. The Plans are administered by the Board of Directors, which has the authority to determine to whom options may be granted, the period of exercise, and what other restrictions, if any, should apply. Vesting for awards granted to date under the Plans is principally over four years from the date of the grant, with 25% of the award vesting after one year and monthly vesting thereafter. Option awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions: Six Months Ended June 30, 2021 2020 Volatility 58% 52%-56% Risk Free Interest Rate 0.75% - 1.14% 0.37% - 1.66% Expected term 6.25 years 6.25 years The weighted average grant date fair value of stock options granted during the six months ended June 30, 2021, and 2020, was $9.13 and $5.12, respectively. For grants prior to January 1, 2015, the volatility assumption was based on historical volatility of similar sized companies due to lack of historical data of the Company’s stock price. For all grants subsequent to January 1, 2015, the volatility assumption reflects the Company’s historic stock volatility for the period of February 1, 2014, forward, which is the date the Company’s stock began actively trading. The risk-free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110. Stock option awards are expensed on a straight-line basis over the requisite service period. During the three months ended June 30, 2021, and 2020, the Company recognized an expense of $0.35 million and $0.26 million, respectively, associated with stock option awards. During the six months ended June 30, 2021, and 2020, the Company recognized an expense of $0.60 million and $0.47 million, respectively, associated with stock option awards. At June 30, 2021, future stock compensation expense associated with stock options (net of estimated forfeitures) not yet recognized was $3.47 million and will be recognized over a weighted average remaining vesting period of 3.14 years. The following summarizes stock option activity for the six months ended June 30, 2021: Weighted Weighted Aggregate Number of Average Average Remaining Intrinsic Options Exercise Price Contractual Life Value Outstanding at December 31, 2020 1,383,057 $ 7.60 7.1 $ 12,000,790 Granted 346,610 16.71 Exercised (66,023 ) 7.59 Expired (187 ) 8.76 Forfeited (179,848 ) 10.03 Outstanding at June 30, 2021 1,483,609 $ 9.44 7.1 $ 11,266,117 Exercisable at June 30, 2021 864,140 $ 6.55 5.8 $ 8,935,098 The total intrinsic value of stock options exercised during the three months ended June 30, 2021, and 2020, were $0.35 million and $0.02 million, respectively. The total intrinsic value of stock options exercised during the six months ended June 30, 2021, and 2020, were $0.55 million and $0.02 million, respectively. Restricted Stock Units Restricted Stock Units (“RSUs”) having a value equal to the fair market value of an identical number of shares of Common Stock, which may, but need not, provide that such restricted award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for a period determined by the Board of Directors. The Plans are administered by the Board of Directors, which has the authority to determine to whom RSUs may be granted, the period of exercise, and what other restrictions, if any, should apply. Vesting for awards granted to date under the Plans is generally over three years from the date of the grant, with 33% of the award vesting after one year and quarterly vesting thereafter. During the six months ended June 30, 2021, and 2020, the Company granted 125,000 and 35,875 Restricted Stock Units (RSUs), respectively. RSUs are expensed using a graded vested schedule which are recorded on a straight-line basis over the requisite vesting period as if the award were, in substance, a single award. During the three months ended June 30, 2021, and 2020, the Company recognized expense of approximately $0.17 million and $0.07 million, respectively, associated with RSUs. During the six months ended June 30, 2021, and 2020, the Company recognized expense of approximately $0.26 million and $0.19 million, respectively, associated with RSUs. At June 30, 2021, future stock compensation expense associated with stock units (net of estimated forfeitures) not yet recognized was approximately $2.42 million and will be recognized over a weighted average remaining vesting period of 2.87 years. The following summarizes RSU activity for the six months ended June 30, 2021: Weighted Average Grant Date Number of Fair Value Units Per Share Unvested at December 31, 2020 61,120 $ 15.06 Granted 134,705 17.22 Vested (7,115 ) 12.39 Unvested at June 30, 2021 188,710 $ 16.70 Restricted Stock Awards Restricted stock awards (“RSAs”) are valued based on the closing price of our common stock on the date of grant, and compensation cost is recorded immediately if there is no vesting period. For awards granted that contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized on a straight-line basis over the requisite vesting period as if the award were, in substance, a single award. During the three months ended June 30, 2021, and 2020, the Company recognized expense of approximately $0.06 million and $0.05 million, respectively, associated with Stock Awards. During the six months ended June 30, 2021, and 2020, the Company recognized expense of approximately $0.11 million and $0.09 million, respectively, associated with Stock Awards. As of June 30, 2021, future stock compensation expense associated with these awards (net of estimated forfeitures) not yet recognized was approximately $0.04 million and will be recognized over a weighted average remaining vesting period of .75 year. During the six months ended June 30, 2021, and 2020, the Company issued 3,620 and 23,839 shares, respectively. Of such shares issued during the six months ended June 30, 2021, and 2020, 3,620 and 7,504 shares were respectively issued to non-employee directors as compensation for their service on the board and immediately vested. The following table summarizes RSA activity for the six month period ended June 30, 2021: Weighted Average Grant Date Number of Fair Value Shares Per Share Unvested at December 31, 2020 11,578 $ 9.57 Granted 3,620 18.74 Vested (9,410 ) 13.10 Unvested at June 30, 2021 5,788 $ 9.57 Additionally, during the first quarter 2021, the Company entered into an agreement with Marietta Davis to issue 8,479 shares of common stock in recognition of Ms. Davis’s previous service to the Company as a member of the Board of Directors. Ms. Davis served as a member of the Board of Directors of the Company from 2017 until her resignation as of August 17, 2020. The Company recorded an expense of approximately $0.17 million associated with this issuance. These shares were not issued from the 2019 Equity Incentive Plan.

Net Loss Per Share

Net Loss Per Share	6 Months Ended
	Jun. 30, 2021
Net Loss Per Share
Note 8. Net Loss Per Share	Note 8: Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common stock outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents for the period, including stock options and RSUs. Basic and diluted net loss per share were the same for each period presented as the inclusion of all potential common stock outstanding would have been anti-dilutive. Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net loss $ (353,775 ) $ (970,384 ) $ (2,937,630 ) $ (1,958,461 ) Basic and diluted weighted average common shares outstanding 12,852,131 11,529,324 12,833,148 11,525,258 Basic and diluted net loss per share $ (0.03 ) $ (0.08 ) $ (0.23 ) $ (0.17 ) Additionally, since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share. The Company’s outstanding stock options and unvested RSUs were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table contains all potentially dilutive common stock equivalents: Three and Six Months Ended June 30, 2021 2020 Stock options 1,483,609 1,690,728 Restricted stock units (RSUs) 188,710 78,706 Total 1,672,319 1,769,434

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2021
Commitments and contingencies (Note 9)
Note 9. Commitments and Contingencies	Note 9: Commitments and Contingencies Legal Proceedings From time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company is currently party to various litigation, however we are unable to estimate the likelihood or potential loss at this time, as such we have not recorded any estimated losses in our Consolidated Statements of Operations and Comprehensive loss. Descriptions of any material litigations are provided below. Subsequent to the announcement of the Merger Agreement between the Company, Constant Contact, and MergerSub, various lawsuits were filed in connection with the Merger. On July 21, 2021, a complaint was filed against the Company and certain of its directors and a former director in the United States Southern District Court of New York, captioned Kaczmar v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-06227. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-9 promulgated thereunder (“Rule 14a-9”), as well as an alleged breach of fiduciary duty. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants breached their fiduciary duty, and attorneys’ and experts’ fees. On August 3, 2021, the Company was served with a summons requiring an answer or reply motion within 21 days. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On July 30, 2021, a complaint was filed against the Company and its directors in the United States Southern District Court of New York, captioned Ahmed v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-06494. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 2, 2021, a complaint was filed against the Company and certain of its directors and a former director in the United States Eastern District Court of New York, captioned Lavery v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-04312. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 4, 2021, a complaint was filed against the Company and certain of its directors and a former director in the United States Southern District Court of New York, captioned Lessard v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-06602. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 12, 2021, a complaint was filed against the Company and certain of its directors in the United States District Court of Delaware, captioned Reinhardt v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-01171-UNA. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 12, 2021, a complaint was filed against the Company and certain of its directors in the United States Southern District Court of New York, captioned Wilhelm v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-06804-UA. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 12, 2021, a complaint was filed against the Company and certain of its directors in the United States Eastern District Court of Pennsylvania, captioned Page v. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-03606-GAM. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. On August 13, 2021, a complaint was filed against the Company and certain of its directors in the United States Southern District Court of New York, captioned Handiazv. SharpSpring, Inc. et al, Civil Action No. 1:21-CV-06816. The action generally alleges failure to adequately disclose material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. The plaintiff seeks, among other things, equitable relief to enjoin consummation of the Merger, rescission of the Merger and/or rescissory damages, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, and attorneys’ and experts’ fees and expenses. The Company and the individual defendants all believe that the claims asserted against each of them are without merit and intend to vigorously defend against this lawsuit. Commitments The Company rents our facilities with leases ranging from month-to-month to several years in duration. Most of our service contracts are on a month-to-month basis, however, some contracts and agreements extend out to longer periods. Future minimum lease payments, and payments due under non-cancelable service contracts are as follows as of June 30, 2021: Operating Leases Non-Cancellable Contracts Remainder of 2021 $ 660,799 $ 210,000 2022 1,329,525 472,500 2023 1,369,159 542,500 2024 1,377,086 - 2025 1,416,720 - Thereafter 4,109,161 - Total undiscounted cash flows $ 10,262,450 $ 1,225,000 Less imputed interest remaining (2,155,833 ) Present value of lease liability $ 8,106,617 Sales and Franchise Taxes State, local and foreign jurisdictions have differing rules and regulations governing sales, franchise, use, value added and other taxes. These rules and regulations are subject to varying interpretations that may change over time. In particular, the applicability of such taxes to SaaS products in various jurisdictions is unclear. Further, these jurisdictions’ rules regarding tax nexus vary significantly and are complex. As such, we could face possible tax assessments and audits. A successful assertion, by any of these taxing authorities, that we should be collecting additional sales, use, value added or other taxes in jurisdictions where we have not historically done so and do not accrue for such taxes could result in tax liabilities and related penalties for past sales, discourage customers from purchasing our products or otherwise harm our business and operating results. We continue to evaluate the impact of various tax types which may require future sales, franchise, or other tax payments. The Company evaluated the potential contingent liability with respect to sales tax nexus in accordance with ASC 450 “ Contingencies Defined Contribution Retirement Plan We offer our U.S. employees the ability to participate in a 401(k) plan. Eligible U.S. employees may contribute up to 100% of their eligible compensation, subject to limitations established by the Internal Revenue Code. Historically, the Company contributed a matching contribution equal to 100% of each participant’s contribution up to the first 3% of their annual eligible compensation. The Company temporarily paused matching contributions from May 1, 2020, through March 21, 2021. The Company incurred expense associated with the matching contribution of approximately $0.08 million and $0.03 million for the three months ended June 30, 2021, and 2020, respectively. The Company incurred expense associated with the matching contribution of approximately $0.09 million and $0.12 million for the six months ended June 30, 2021, and 2020, respectively. Employment Agreements The Company has employment agreements with several members of its leadership team and executive officers. Merger Related Expenses On June 21, 2021, the Company entered into an Agreement and Plan of Merger, (“Merger Agreement”), with Constant Contact, Inc., a Delaware corporation, (“Constant Contact”), and Groove Merger Sub, Inc (“MergerSub”), a Delaware corporation and a direct wholly-owned subsidiary of Constant Contact (“the Merger”). Pursuant to the terms of the Merger Agreement, MergerSub will merge with and into SharpSpring and SharpSpring will continue as the surviving corporation and become a wholly-owned subsidiary of Constant Contact. The Merger, subject to final shareholder approval and other closing conditions, will be proposed at a Special Stockholders Meeting to be held on August 25, 2021. Additional details regarding the proposed merger can be found within the Definitive Proxy Statement filed with the SEC on July 30, 2021. SharpSpring does not have any additional contracts with Constant Contact, except those related to Merger Agreement.. In connection with the Merger Agreement, SharpSpring expects to incur certain transaction-related expenses. These costs related to the transaction are expected to total between $9.50 million and $10.0 million, of which approximately $0.27 million has been incurred and expensed in the three and six months end June 30, 2021. Between $9.23 million and $9.73 million of total costs related to the proposed merger may not be payable unless and until the Merger is consummated. In addition, in some circumstances, upon termination of the Merger Agreement, the Company will be required to pay a termination fee of $7.00 million.

Organization, Basis of Presen_2

Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2021
Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Policies)
Organization and Proposed Merger	SharpSpring, Inc. (the “Company”, “we”, “our”, or “us”) provides a cloud-based marketing automation solution and a display retargeting platform through its SharpSpring Marketing Automation and SharpSpring Ads (formerly known as Perfect Audience) products. Our flagship Marketing Automation platform is designed to increase the rates at which businesses generate leads and convert leads to sales opportunities by improving the way businesses communicate with customers and prospects. Our SharpSpring Ads platform empowers marketers to create, manage, and optimize their ad campaigns across thousands of websites. The Company’s products are marketed directly by us and through a small group of reseller partners to customers around the world. On June 21, 2021, the Company entered into an Agreement and Plan of Merger, as it may be amended from time to time in accordance with its terms (the “Merger Agreement”) with Constant Contact, Inc., a Delaware corporation (“Constant Contact”) and Groove Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Constant Contact (“MergerSub”), providing for the merger of MergerSub with and into the Company (the “Merger”) and for the Company to become a wholly-owned subsidiary of Constant Contact. COVID – 19 On January 30, 2020, the World Health Organization declared the coronavirus “COVID-19” outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of COVID-19 included restrictions on travel, quarantines, or “stay‑at‑home” restrictions in certain areas and forced closures for certain types of public places and businesses. COVID‑19, and the recently identified variants of COVID-19, and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets globally, including the geographical areas in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be, the Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of the business/operations and are unable at this time to predict the continued impact that COVID-19 will have on its business, financial position, and operating results in future periods due to numerous uncertainties.
Basis of Presentation and Consolidation	The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim periods, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of Company management, the Company has prepared the accompanying unaudited consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2020, and these consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The Company’s consolidated financial statements include the accounts of SharpSpring, Inc. and its subsidiaries (the “Company”). The Company’s consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2021. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 30, 2021.
Concentration of Credit Risks and Significant Customers	Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. At June 30, 2021, and December 31, 2020, the Company had cash balances at financial institutions that exceed federally insured limits. The Company maintains its cash balances with accredited financial institutions. The Company does not believe it is subject to unusual credit risk beyond normal credit risk associated with commercial banking relationships. Our accounts receivable exposes the Company to credit risk in the event of nonpayment by customers. As of June 30, 2021, two customers had an open accounts receivable balance above 10% of our net accounts receivable balance, which represented 24.1% of the Company’s net accounts receivable balance. As of December 31, 2020, the Company had one customer representing 12.4% of net accounts receivable balance. There were no customers that accounted for more than 10% of Company’s total revenue for any financial period presented.
Significant Accounting Policies	There were no material changes to the Company’s significant accounting policies disclosed in “Note 2 – Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 30, 2021.
Operating Segments	The Company operates as one reportable segment with two operating segments. Our operating segments consist of our SharpSpring Marketing Automation segment and SharpSpring Ads Retargeting segment in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting
Recently Issued Accounting Standards	In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017- 04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes The new accounting guidance also simplifies the accounting for income taxes by (i) requiring an entity to recognize franchise tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (ii) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, (iii) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, (iv) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date, and (v) making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. This standard is effective for fiscal and interim periods beginning after December 15, 2020. We believe the adoption of this standard has not and will not have a material impact on our consolidated financial statements. There are no other new accounting pronouncements that are expected to have a material impact on the Company and all subsidiaries thereof. All intercompany balances and transactions have been eliminated upon consolidation.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2021
Revenue Recognition (Tables)
Schedule of Disaggregation of Revenue	Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenue by Product: Marketing Automation Revenue $ 7,495,296 $ 6,566,976 $ 14,878,176 $ 12,926,333 Retargeting Revenue 581,490 667,910 1,155,064 1,286,717 Mail + Product Revenue 29,457 36,019 62,233 110,584 Total Revenue $ 8,106,243 $ 7,270,905 $ 16,095,473 $ 14,323,634 Revenue by Type: Recurring Revenue $ 7,283,298 $ 6,319,119 $ 14,434,024 $ 12,449,561 Retargeting Revenue 581,490 667,911 1,155,064 1,286,717 Upfront Fees 241,455 283,875 506,385 587,356 Total Revenue $ 8,106,243 $ 7,270,905 $ 16,095,473 $ 14,323,634

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2021
Property and Equipment
Schedule of property and equipment	June 30, December 31, 2021 2020 Property and equipment, gross: Leasehold improvements $ 366,735 $ 313,119 Furniture and fixtures 913,370 913,370 Capitalized software development costs 2,352,235 2,147,934 Computer equipment and other software 1,191,049 1,083,432 Total 4,823,389 4,457,855 Less: Accumulated depreciation (2,962,322 ) (2,268,907 ) Property and equipment, net: $ 1,861,067 $ 2,188,948

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2021
Goodwill and Other Intangible Assets
Schedule of intangible assets	As of June 30, 2021 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 501,000 $ (183,500 ) $ 317,500 Technology 3,109,000 (1,653,703 ) 1,455,297 Customer relationships 1,320,000 (941,000 ) 379,000 Vendor relationships 1,813,000 (292,044 ) 1,520,956 Unamortized intangible assets: 6,743,000 (3,070,247 ) 3,672,753 Goodwill 10,230,917 Total goodwill and intangible assets $ 13,903,670 As of December 31, 2020 Gross Net Carrying Accumulated Carrying Amount Amortization Value Amortized intangible assets: Trade names $ 501,000 $ (120,000 ) $ 381,000 Technology 3,109,000 (1,513,751 ) 1,595,249 Customer relationships 1,320,000 (892,004 ) 427,996 Vendor relationships 1,813,000 (201,394 ) 1,611,606 Unamortized intangible assets: 6,743,000 (2,727,149 ) 4,015,851 Goodwill 10,250,088 Total goodwill and intangible assets $ 14,265,939
Schedule of estimated amortization expense	Remainder of 2021 $ 343,100 2022 634,200 2023 586,200 2024 420,200 2025 390,200 Thereafter 1,298,853 Total $ 3,672,753

StockBased Compensation (Tables

StockBased Compensation (Tables)	6 Months Ended
	Jun. 30, 2021
StockBased Compensation
Schedule of fair value assumptions used in valuing stock options	Six Months Ended June 30, 2021 2020 Volatility 58% 52%-56% Risk Free Interest Rate 0.75% - 1.14% 0.37% - 1.66% Expected term 6.25 years 6.25 years
Schedule of stock option activity	Weighted Weighted Aggregate Number of Average Average Remaining Intrinsic Options Exercise Price Contractual Life Value Outstanding at December 31, 2020 1,383,057 $ 7.60 7.1 $ 12,000,790 Granted 346,610 16.71 Exercised (66,023 ) 7.59 Expired (187 ) 8.76 Forfeited (179,848 ) 10.03 Outstanding at June 30, 2021 1,483,609 $ 9.44 7.1 $ 11,266,117 Exercisable at June 30, 2021 864,140 $ 6.55 5.8 $ 8,935,098
Schedule of restricted stock unit activity	Weighted Average Grant Date Number of Fair Value Units Per Share Unvested at December 31, 2020 61,120 $ 15.06 Granted 134,705 17.22 Vested (7,115 ) 12.39 Unvested at June 30, 2021 188,710 $ 16.70
Schedule of restricted stock award activity	Weighted Average Grant Date Number of Fair Value Shares Per Share Unvested at December 31, 2020 11,578 $ 9.57 Granted 3,620 18.74 Vested (9,410 ) 13.10 Unvested at June 30, 2021 5,788 $ 9.57

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2021
Net Loss Per Share
Schedule of computation of net loss per share	Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net loss $ (353,775 ) $ (970,384 ) $ (2,937,630 ) $ (1,958,461 ) Basic and diluted weighted average common shares outstanding 12,852,131 11,529,324 12,833,148 11,525,258 Basic and diluted net loss per share $ (0.03 ) $ (0.08 ) $ (0.23 ) $ (0.17 )
Schedule of potentially dilutive common stock equivalents	Three and Six Months Ended June 30, 2021 2020 Stock options 1,483,609 1,690,728 Restricted stock units (RSUs) 188,710 78,706 Total 1,672,319 1,769,434

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2021
Commitments and contingencies (Note 9)
Schedule of Future minimum lease payments	Operating Leases Non-Cancellable Contracts Remainder of 2021 $ 660,799 $ 210,000 2022 1,329,525 472,500 2023 1,369,159 542,500 2024 1,377,086 - 2025 1,416,720 - Thereafter 4,109,161 - Total undiscounted cash flows $ 10,262,450 $ 1,225,000 Less imputed interest remaining (2,155,833 ) Present value of lease liability $ 8,106,617

Organization Basis of Presentat

Organization Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Two Customer [Member]
Concentration of credit risk of accounts receivable	24.10%
One Customer [Member]
Concentration of credit risk of accounts receivable		12.40%

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue	$ 8,106,243	$ 7,270,905	$ 16,095,473	$ 14,323,634
Revenue by Type [Member]
Revenue	8,106,243	7,270,905	16,095,473	14,323,634
Marketing Automation Revenue [Member]
Revenue	7,495,296	6,566,976	14,878,176	12,926,333
Retargeting Revenue [Member]
Revenue	581,490	667,910	1,155,064	1,286,717
Retargeting Revenue [Member] | Revenue by Type [Member]
Revenue	581,490	667,911	1,155,064	1,286,717
Mail + Product Revenue [Member]
Revenue	29,457	36,019	62,233	110,584
Revenue by Product [Member]
Revenue	8,106,243	7,270,905	16,095,473	14,323,634
Recurring Revenue [Member]
Revenue	7,283,298	6,319,119	14,434,024	12,449,561
Upfront Fees [Member]
Revenue	$ 241,455	$ 283,875	$ 506,385	$ 587,356

Revenue Recognition (Details Na

Revenue Recognition (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Unbilled receivables	$ 1,265,527		$ 1,265,527			$ 1,248,060
Unbilled receivables increased			(27,704)	$ (133,315)
Amortization of costs to acquire contracts			407,282	404,767
Deferred revenue	862,767		862,767			845,265
Deferred Revenue [Member]
Deferred revenue					$ 950,000	850,000	$ 770,000	$ 860,000
Change in deferred revenue	90,000	$ 110,000	10,000	200,000
Deferred revenue contract liability	860,000	660,000	860,000	660,000
Capitalized Contract Cost [Member]
Other assets	630,000		630,000			690,000
Amortization of costs to acquire contracts	200,000	200,000	400,000	410,000
Net carrying value	1,180,000		$ 1,180,000			1,270,000
Estimated weighted average life			3 years
Long-term assets	550,000		$ 550,000			580,000
Unbilled receivables [Member]
Unbilled receivables	$ 1,270,000	1,130,000	1,270,000	1,130,000	$ 1,260,000	$ 1,250,000	$ 1,090,000	$ 1,000,000
Unbilled receivables increased		$ 40,000	$ 20,000	$ 130,000

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Property and equipment, gross	$ 4,823,389	$ 4,457,855
Less: accumulated depreciation and amortization	(2,962,322)	(2,268,907)
Property and equipment, net	1,861,067	2,188,948
Leasehold Improvements [Member]
Property and equipment, gross	366,735	313,119
Furniture and Fixtures [Member]
Property and equipment, gross	913,370	913,370
Capitalized software development costs [Member]
Property and equipment, gross	2,352,235	2,147,934
Computer Equipment and Software [Member]
Property and equipment, gross	$ 1,191,049	$ 1,083,432

Property and Equipment (Detai_2

Property and Equipment (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Property and Equipment
Depreciation expense	$ 430	$ 230	$ 700	$ 440

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Intangible assets, gross	$ 6,743,000	$ 6,743,000
Accumulated amortization	(3,070,247)	(2,727,149)
Intangible assets, net	3,672,753	4,015,851
Goodwill	10,230,917	10,250,088
Total goodwill and intangible assets	13,903,670	14,265,939
Trade Name [Member]
Intangible assets, gross	501,000	501,000
Accumulated amortization	(183,500)	(120,000)
Intangible assets, net	317,500	381,000
Technology [Member]
Intangible assets, gross	3,109,000	3,109,000
Accumulated amortization	(1,653,703)	(1,513,751)
Intangible assets, net	1,455,297	1,595,249
Customer Relationships
Intangible assets, gross	1,320,000	1,320,000
Accumulated amortization	(941,000)	(892,004)
Intangible assets, net	379,000	427,996
Vendor Relationships [Member]
Intangible assets, gross	1,813,000	1,813,000
Accumulated amortization	(292,044)	(201,394)
Intangible assets, net	$ 1,520,956	$ 1,611,606

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets (Details 1) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Goodwill and Other Intangible Assets
Remainder of 2021	$ 343,100
2022	634,200
2023	586,200
2024	420,200
2025	390,200
Thereafter	1,298,853
Total	$ 3,672,753	$ 4,015,851

Goodwill and Other Intangible_5

Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Goodwill and Other Intangible Assets
Amortization expense	$ 17	$ 18	$ 34	$ 34
Finite-lived intangible assets useful lives			3 years

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	Mar. 11, 2021	Apr. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Mar. 31, 2016
Line of credit outstanding			$ 1,900,000		$ 1,900,000		$ 1,900,000
Other income			(21,354)	$ (2,777)	(14,519)	$ (59,556)
SBA Loan [Member]
Other income	$ 17,000
Total loan			327,000		327,000
Interest expense			100	2,000	1,000	1,000
Sba loan audit			$ 2,000		$ 2,000
Proceeds from loan		$ 34,000
Loan Interest rate		1.00%
Maturity period		2 years			7 years
Revolving Loan Agreement [Member]
Loan interest rate			5.00%		5.00%
Line of credit								$ 250,000
Interest expense relating to Credit Facility			$ 2,000	$ 3,000	$ 5,000	$ 3,000
Line of credit outstanding			$ 1,900,000		$ 1,900,000
Percentage of secured pledge of capital stock			100.00%		100.00%
Percentage of pledge of foreign subsidiaries stock			65.00%		65.00%

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended			6 Months Ended
	Mar. 27, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Income tax expense (benefit)		$ 40,000,000		$ 570,000,000	$ 100	$ 15,100
Valuation allowance		$ 10,100,000			$ 10,100,000		$ 8,900,000
Effective tax rate					(0.40%)	43.50%
CARES Act [Member]
Income tax expense (benefit)			$ 160,000
Operating loss carry forward, maximum term	5 years

StockBased Compensation (Detail

StockBased Compensation (Details)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Volatility	58.00%
Expected term	6 years 3 months	6 years 3 months
Minimum [Member]
Volatility		52.00%
Risk-free interest rate	0.75%	0.37%
Maximum [Member]
Volatility		56.00%
Risk-free interest rate	1.14%	1.66%

StockBased Compensation (Deta_2

StockBased Compensation (Details 1)	6 Months Ended
	Jun. 30, 2021USD ($)$ / sharesshares
StockBased Compensation
Number of options outstanding, beginning | shares	1,383,057
Number of options granted | shares	346,610
Number of options exercised | shares	(66,023)
Number of options expired | shares	(187)
Number of options forfeited | shares	(179,848)
Number of options outstanding, ending | shares	1,483,609
Number of options exercisable | shares	864,140
Weighted average exercise price outstanding, beginning | $ / shares	$ 7.60
Weighted average exercise price granted | $ / shares	16.71
Weighted average exercise price exercised | $ / shares	7.59
Weighted average exercise price expired | $ / shares	8.76
Weighted average exercise price forfeited | $ / shares	10.03
Weighted average exercise price outstanding, ending | $ / shares	9.44
Weighted average exercise price exercisable | $ / shares	$ 6.55
Weighted average remaining contractual life outstanding, beginning	7 years 1 month 6 days
Weighted average remaining contractual life outstanding, ending	7 years 1 month 6 days
Weighted average remaining contractual life exercisable	5 years 9 months 18 days
Aggregate intrinsic value, beginning | $	$ 12,000,790
Aggregate intrinsic value, ending | $	11,266,117
Aggregate intrinsic value, exercisable | $	$ 8,935,098

StockBased Compensation (Deta_3

StockBased Compensation (Details 2) - Restricted Stock Units Awards [Member]	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Number of unvested units, beginning | shares	61,120
Number of unvested units granted | shares	134,705
Number of unvested units vested | shares	(7,115)
Number of unvested units, ending | shares	188,710
Weighted average grant date fair value, beginning | $ / shares	$ 15.06
Weighted average grant date fair value granted | $ / shares	17.22
Weighted average grant date fair value vested | $ / shares	12.39
Weighted average grant date fair value, ending | $ / shares	$ 16.70

StockBased Compensation (Deta_4

StockBased Compensation (Details 3) - Stock Options [Member]	3 Months Ended
	Mar. 31, 2021$ / sharesshares
Number of unvested units, beginning | shares	11,578
Number of unvested units granted | shares	3,620
Number of unvested units vested | shares	(9,410)
Number of unvested units, ending | shares	5,788
Weighted average grant date fair value, beginning | $ / shares	$ 9.57
Weighted average grant date fair value granted | $ / shares	18.74
Weighted average grant date fair value vested | $ / shares	13.10
Weighted average grant date fair value, ending | $ / shares	$ 9.57

StockBased Compensation (Deta_5

StockBased Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Aug. 17, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Apr. 30, 2019	Nov. 30, 2010
Weighted average remaining vesting period				3 years 1 month 20 days
Restricted Stock Units				125,000	35,875
Stock options awars, maximum contractual term				5 years 9 months 18 days
Expenses		$ 270,000		$ 270,000
Maximum [Member]
Expenses				$ 10,000,000
Restricted Stock Units (RSUs) [Member]
Vesting award percentage				33.00%
Stock based compensation		170,000	$ 70,000	$ 260,000	$ 190,000
Unrecognized stock expense				$ 2,420,000
Common stock shares issued				125,000	35,875
Weighted average remaining vesting period				2 years 10 months 13 days
Stock Option [Member]
Stock based compensation				$ 350,000	$ 260,000
Total intrinsic value of stock options exercised		350,000	20,000	550,000	20,000
Marietta Davis [Member]
Expenses				170,000
Common stock shares issued	8,479
Restricted Stock Units Awards [Member]
Stock based compensation		$ 60,000	$ 50,000	60,000	$ 50,000
Unrecognized stock expense				$ 40,000
Common stock shares issued		3,620	23,839	3,620	7,504
Weighted average remaining vesting period				75 years
Recognized expense associated with stock awards				$ 110,000	$ 90,000
Stock Awards [Member]
Weighted average remaining vesting period				3 years 1 month 21 days
Stock based compensation		$ 350,000	$ 260,000	$ 600,000	$ 470,000
Unrecognized stock expense				$ 3,470,000
2010 and 2019 Stock Incentive Plan [Member]
Weighted average remaining vesting period				4 years
Stock options awars, maximum contractual term				10 years
Common stock shares reserved for future issuance		0		0			2,600,000
Limit of exercise price				100.00%
Vesting award percentage				25.00%
Weighted average grant date fair value of stock options granted				$ 9.13	$ 5.12
2019 Plan [Member] | Maximum [Member]
Common stock to be granted, shares						1,275,000

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net Loss Per Share
Net loss	$ (353,775)	$ (970,384)	$ (2,937,630)	$ (1,958,461)
Basic and diluted weighted average common shares outstanding	12,852,131	11,529,324	12,833,148	11,525,258
Basic and diluted net loss per share	$ (0.03)	$ (0.08)	$ (0.23)	$ (0.17)

Net Loss Per Share (Details 1)

Net Loss Per Share (Details 1) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive securities	1,672,319	1,769,434	1,672,319	1,769,434
Restricted Stock Units (RSUs) [Member]
Antidilutive securities	188,710	78,706	188,710	78,706
Stock Option [Member]
Antidilutive securities	1,483,609	1,690,728	1,483,609	1,690,728

Commitments and Contingencies_2

Commitments and Contingencies (Details)	Jun. 30, 2021USD ($)
Operating Leases [Member]
Remainder of 2021	$ 660,799
2022	1,329,525
2023	1,369,159
2024	1,377,086
2025	1,416,720
Thereafter	4,109,161
Total undiscounted cash flows	10,262,450
Less imputed interest remaining	(2,155,833)
Present value of lease liability	8,106,617
Non Cancellable Contracts [Member]
Remainder of 2021	210,000
2022	472,500
2023	542,500
2024	0
2025	0
Thereafter	0
Total undiscounted cash flows	$ 1,225,000

Commitments and Contingencies_3

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Expense associated with matching contribution	$ 80,000	$ 30,000	$ 90,000	$ 120,000
Transaction-related expenses	270,000		$ 270,000
Defined contribution retirement plan, description			We offer our U.S. employees the ability to participate in a 401(k) plan. Eligible U.S. employees may contribute up to 100% of their eligible compensation, subject to limitations established by the Internal Revenue Code. Historically, the Company contributed a matching contribution equal to 100% of each participant’s
Termination fee			$ 7,000,000
Sales tax contingent liability	360,000		360,000		$ 280,000
Minimum [Member]
Transaction-related expenses			9,500,000
Sales tax contingent liability	200,000		200,000
Total costs related to proposed merger			9,230,000
Maximum [Member]
Transaction-related expenses			10,000,000
Sales tax contingent liability	$ 630,000		630,000
Total costs related to proposed merger			$ 9,730,000