Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 08, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | SRAX, Inc. | |
Entity Central Index Key | 0001538217 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,026,690 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 2,446,000 | $ 32,000 |
Accounts receivable | 1,260,000 | 805,000 |
Prepaid expenses | 270,000 | 715,000 |
Marketable securities | 4,800,000 | 83,000 |
Other current assets | 63,000 | 306,000 |
Current assets | 8,839,000 | 1,941,000 |
Property and equipment | 134,000 | 191,000 |
Goodwill | 23,351,000 | 15,645,000 |
Intangible assets | 2,399,000 | 1,966,000 |
Right of use assets | 390,000 | 456,000 |
Other assets | 22,000 | 35,000 |
Total Assets | 35,135,000 | 20,234,000 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued liabilities | 2,415,000 | 2,442,000 |
Derivative liabilities | 4,397,000 | |
Other current liabilities | 6,850,000 | 537,000 |
Payroll protection loan - short-term | 548,000 | |
OID convertible debentures - short term | 3,683,000 | |
Current liabilities | 13,496,000 | 7,376,000 |
Right to use liability - long term | 282,000 | 352,000 |
Payroll protection loan, less current portion | 578,000 | |
OID convertible debentures, less current portion | 2,748,000 | |
Deferred tax liability | 131,000 | |
Total liabilities | 17,235,000 | 7,728,000 |
Preferred stock | ||
Additional paid-in capital | 68,416,000 | 48,129,000 |
Accumulated deficit | (50,532,000) | (35,637,000) |
Total stockholders' equity | 17,900,000 | 12,506,000 |
Total liabilities and stockholders' equity | 35,135,000 | 20,234,000 |
Class A Common Stock [Member] | ||
Liabilities and stockholders' equity | ||
Common stock, value | 16,000 | 14,000 |
Class B Common Stock [Member] | ||
Liabilities and stockholders' equity | ||
Common stock, value |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,609,000 | $ 1,001,000 | $ 4,125,000 | $ 2,497,000 |
Cost of revenues | 880,000 | 322,000 | 1,388,000 | 1,075,000 |
Gross profit | 1,729,000 | 679,000 | 2,737,000 | 1,422,000 |
Operating expenses | ||||
Employee related costs | 1,689,000 | 2,162,000 | 5,406,000 | 6,730,000 |
Marketing and selling expenses | 809,000 | 1,115,000 | 1,631,000 | 2,202,000 |
Platform costs | 391,000 | 453,000 | 1,181,000 | 1,159,000 |
Depreciation and amortization | 333,000 | 304,000 | 962,000 | 834,000 |
General and administrative expenses | 984,000 | 1,355,000 | 3,157,000 | 4,069,000 |
Total operating expenses | 4,206,000 | 5,389,000 | 12,337,000 | 14,994,000 |
Loss from operations | (2,477,000) | (4,710,000) | (9,600,000) | (13,572,000) |
Other income (expense): | ||||
Financing costs | (3,302,000) | (108,000) | (5,340,000) | (359,000) |
Gain (loss) on sale of assets | 395,000 | |||
Other income (expense) | 8,000 | 8,000 | 14,000 | |
Loss on repricing of equity warrants | (342,000) | |||
Gain (loss) from marketable securities | (800,000) | (284,000) | ||
Change in fair value of derivative liabilities | 6,227,000 | 321,000 | 1,390,000 | |
Total other income (expense) | (4,094,000) | 6,119,000 | (5,295,000) | 1,098,000 |
Income (loss) before provision for income taxes | (6,571,000) | 1,409,000 | (14,895,000) | (12,474,000) |
Provision for income taxes | ||||
Net income (loss) | $ (6,571,000) | $ 1,409,000 | $ (14,895,000) | $ (12,474,000) |
Net income (loss) per share, basic and diluted | $ (0.45) | $ 0.11 | $ (1.05) | $ (0.96) |
Weighted average shares outstanding - basic and diluted | 14,479,519 | 12,933,585 | 14,186,721 | 12,965,773 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 10,000 | $ 32,870,000 | $ (18,778,000) | $ 14,102,000 |
Balance, shares at Dec. 31, 2018 | 10,109,530 | |||
Share based compensation | 121,000 | 121,000 | ||
Net Income (loss) | (5,784,000) | (5,784,000) | ||
Balance at Mar. 31, 2019 | $ 10,000 | 32,991,000 | (24,562,000) | 8,439,000 |
Balance, shares at Mar. 31, 2019 | 10,109,530 | |||
Balance at Dec. 31, 2018 | $ 10,000 | 32,870,000 | (18,778,000) | 14,102,000 |
Balance, shares at Dec. 31, 2018 | 10,109,530 | |||
Net Income (loss) | (12,474,000) | |||
Balance at Sep. 30, 2019 | $ 14,000 | 47,925,000 | (31,252,000) | 16,687,000 |
Balance, shares at Sep. 30, 2019 | 13,997,452 | |||
Balance at Mar. 31, 2019 | $ 10,000 | 32,991,000 | (24,562,000) | 8,439,000 |
Balance, shares at Mar. 31, 2019 | 10,109,530 | |||
Share based compensation, related employees | 325,000 | 325,000 | ||
Sale of common stock and warrants for cash | $ 2,000 | 6,227,000 | 6,229,000 | |
Sale of common stock and warrants for cash, shares | 1,687,825 | |||
Exercise of warrants | $ 1,000 | 1,145,000 | 1,146,000 | |
Exercise of warrants, shares | 328,667 | |||
Shares issued as collateral, shares | 220,000 | |||
Loss on repricing of equity warrants | 342,000 | 342,000 | ||
Share of common stock in private placement | 1,000,000 | 1,000,000 | ||
Share of common stock in private placement, shares | 200,000 | |||
Net Income (loss) | (8,099,000) | (8,099,000) | ||
Balance at Jun. 30, 2019 | $ 13,000 | 42,030,000 | (32,661,000) | 9,382,000 |
Balance, shares at Jun. 30, 2019 | 12,546,022 | |||
Share based compensation | 329,000 | 329,000 | ||
Common stock and warrants issued for cash | $ 1,000 | 4,967,000 | 4,968,000 | |
Common stock and warrants issued for cash, shares | 1,524,996 | |||
Common stock issued for exercise of warrants | 50,000 | 50,000 | ||
Common stock issued for exercise of warrants, shares | 13,333 | |||
Common stock issued for services | 330,000 | 330,000 | ||
Common stock issued for services, shares | 75,000 | |||
Shares retired - issued as collateral | ||||
Shares retired - issued as collateral, shares | (220,000) | |||
Shares issued for settlement of original issue discount | 219,000 | 219,000 | ||
Shares issued for settlement of original issue discount, shares | 58,101 | |||
Net Income (loss) | 1,409,000 | 1,409,000 | ||
Balance at Sep. 30, 2019 | $ 14,000 | 47,925,000 | (31,252,000) | 16,687,000 |
Balance, shares at Sep. 30, 2019 | 13,997,452 | |||
Balance at Dec. 31, 2019 | $ 14,000 | 48,129,000 | (35,637,000) | 12,506,000 |
Balance, shares at Dec. 31, 2019 | 13,997,452 | |||
Share based compensation | 260,000 | 260,000 | ||
Relative fair value of warrants issued with notes payable | 83,000 | 83,000 | ||
Shares issued for extension agreement | 71,000 | 71,000 | ||
Shares issued for extension agreement, shares | 36,700 | |||
Net Income (loss) | (3,003,000) | (3,003,000) | ||
Balance at Mar. 31, 2020 | $ 14,000 | 48,543,000 | (38,640,000) | 9,917,000 |
Balance, shares at Mar. 31, 2020 | 14,034,152 | |||
Balance at Dec. 31, 2019 | $ 14,000 | 48,129,000 | (35,637,000) | 12,506,000 |
Balance, shares at Dec. 31, 2019 | 13,997,452 | |||
Net Income (loss) | (14,895,000) | |||
Balance at Sep. 30, 2020 | $ 16,000 | 68,416,000 | (50,532,000) | 17,900,000 |
Balance, shares at Sep. 30, 2020 | 16,027,190 | |||
Balance at Mar. 31, 2020 | $ 14,000 | 48,543,000 | (38,640,000) | 9,917,000 |
Balance, shares at Mar. 31, 2020 | 14,034,152 | |||
Share based compensation | 246,000 | 246,000 | ||
Reclassification of warrants from liability to equity | 4,076,000 | 4,076,000 | ||
Shares issued for debt extinguishment | 181,000 | 181,000 | ||
Shares issued for debt extinguishment, shares | 100,000 | |||
Premium on debt extinguishment | 46,000 | 46,000 | ||
Beneficial conversion feature | 3,913,000 | 3,913,000 | ||
Relative fair value of warrants issued with notes | 2,889,000 | 2,889,000 | ||
Net Income (loss) | (5,321,000) | (5,321,000) | ||
Balance at Jun. 30, 2020 | $ 14,000 | 59,894,000 | (43,961,000) | 15,947,000 |
Balance, shares at Jun. 30, 2020 | 14,134,152 | |||
Share based compensation | 269,000 | 269,000 | ||
Conversion of convertible debt to equity | 234,000 | 234,000 | ||
Conversion of convertible debt to equity, shares | 293,038 | |||
Shares issued for the acquisition of LD Micro | $ 2,000 | 4,262,000 | 4,264,000 | |
Shares issued for the acquisition of LD Micro, shares | 1,600,000 | |||
Beneficial conversion feature | 2,398,000 | 2,398,000 | ||
Relative fair value of warrants issued with notes | 1,359,000 | 1,359,000 | ||
Net Income (loss) | (6,571,000) | (6,571,000) | ||
Balance at Sep. 30, 2020 | $ 16,000 | $ 68,416,000 | $ (50,532,000) | $ 17,900,000 |
Balance, shares at Sep. 30, 2020 | 16,027,190 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash Flows from Operating Activities | |||||||
Net loss | $ (6,571,000) | $ (3,003,000) | $ 1,409,000 | $ (5,784,000) | $ (14,895,000) | $ (12,474,000) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Loss on marketable securities | 800,000 | 284,000 | |||||
Loss on extinguishment of debt | 1,103,000 | ||||||
Stock based compensation | 268,000 | 329,000 | 917,000 | 775,000 | |||
Service rendered for stock option exercise price | 50,000 | ||||||
Amortization of debt issue costs | 3,746,000 | ||||||
Amortization of intangibles | 905,000 | 781,000 | |||||
Depreciation expense | 57,000 | 53,000 | |||||
Change in fair value of derivative liabilities | (6,227,000) | (321,000) | (1,390,000) | ||||
Loss on repricing of equity warrants | 342,000 | ||||||
Gain on sale of SRAXmd | (395,000) | ||||||
Loss on common stock issued to settle original issue discount | 69,000 | ||||||
Provision for bad debts | 69,000 | 271,000 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (494,000) | 1,463,000 | |||||
Prepaid expenses | 372,000 | (69,000) | |||||
Other current assets | 243,000 | 86,000 | |||||
Change in right of use asset | 66,000 | ||||||
Accounts payable and accrued expenses | (23,000) | (2,889,000) | |||||
Other current liabilities | (1,893,000) | 772,000 | |||||
Change in right of use liability | (70,000) | ||||||
Net Cash Used in Operating Activities | (9,888,000) | (12,555,000) | |||||
Cash Flows from Investing Activities | |||||||
Proceeds from sale of SRAXmd | 307,000 | ||||||
Purchase of property and equipment | (66,000) | ||||||
Proceeds from the sale of marketable securities | 397,000 | ||||||
Acquisition of LD Micro, net of cash acquired | (697,000) | ||||||
Development of software | (870,000) | (892,000) | |||||
Other assets | 13,000 | (79,000) | |||||
Net Cash Used in Investing Activities | (1,157,000) | (730,000) | |||||
Cash Flows from Financing Activities | |||||||
Proceeds from issuance of OID convertible debentures, less issuance cost | 11,885,000 | ||||||
Proceeds from the issuance of short-term notes payable, less issuance cost | 960,000 | ||||||
Repayment of short-term notes payable | (100,000) | ||||||
Proceeds from payroll protection program loan | 1,084,000 | ||||||
Proceeds from the issuance of notes payable | 2,130,000 | ||||||
Repayment of notes payable | (2,500,000) | ||||||
Proceeds from the issuance of common stock units | 12,197,000 | ||||||
Proceeds from issuance of common stock for warrants exercised | 1,146,000 | ||||||
Net Cash Provided by Financing Activities | 13,459,000 | 13,343,000 | |||||
Net increase in Cash | 2,414,000 | 58,000 | |||||
Cash, Beginning of Period | $ 32,000 | $ 2,785,000 | 32,000 | 2,785,000 | 2,785,000 | ||
Cash, End of Period | $ 2,446,000 | $ 2,843,000 | 2,446,000 | 2,843,000 | $ 32,000 | ||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | 176,000 | 140,000 | |||||
Cash paid for income taxes | |||||||
Noncash investing and financing activities: | |||||||
Record right-of-use asset | (532,000) | ||||||
Record lease obligation | 532,000 | ||||||
Vesting of prepaid common stock award | 94,000 | ||||||
Shares issued to settle liability | 181,000 | 219,000 | |||||
Relative fair value of warrants issued with term loan | 83,000 | ||||||
Derivative liabilities transferred to equity | 4,076,000 | ||||||
Shares of common stock issued for extension agreement | 71,000 | ||||||
Fair value of BCF for debt financings | 6,311,000 | ||||||
Fair value of warrants issued for debt financings | 4,248,000 | ||||||
Premium on debt financings | 46,000 | ||||||
Original issue discount recorded on OID convertible debentures | 1,931,000 | ||||||
Fair value of marketable securities received for revenue contracts | 5,398,000 | ||||||
Notes payables converted into convertible notes payable | 234,000 | ||||||
Shares of common stock issued for the acquisition of LD Micro | $ 4,264,000 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1 – Organization and Basis Of Presentation Organization SRAX, Inc. (“SRAX”, “we”, “us”, “our” or the “Company”) is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired 100% of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009 which began business in May of 2010, in exchange for 2,465,753 shares of our Class A common stock. The former members of Social Reality, LLC owned 100% of our Class A common stock after the acquisition. We are a data technology company offering services to issuers of publicly traded securities through our SaaS platform Sequire, Our Bigtoken brand, which is anticipated to be moved into its own public company, we market to consumers. Sequire, is centered around our proprietary SaaS platform from which our customers are provided with data and insights into their publicly traded securities and marketing solutions to act on the insights obtained through our technologies. Our consumer marketing focused brand, BIGToken is based on a consumer facing platform that provides consumers a platform to monetize and control their data in the digital landscape. Through this platform we’re able to provide marketers access to data and insights identifying their core consumers and such consumers’ characteristics across various channels in order to discover new and measurable opportunities, maximize profits associated with advertising campaigns and (ii) gaining insight into the activities of their customers. We derive our revenues from the: ● Sale and licensing of our proprietary SaaS platform; ● Data analysis, insights and marketing solutions for SaaS platform subscribers ● Organize and host investor conferences and events ● Sales of proprietary consumer data; and ● Sales of digital advertising campaigns. We are headquartered in Westlake, California but work as a distributed virtual Company. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and notes thereto are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The December 31, 2019 condensed balance sheet data was derived from financial statements but does not include all disclosures required by GAAP. These interim unaudited condensed financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three and nine -month periods ended September 30, 2020 and 2019. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020 or for any future period. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2019, included in the Company’s annual report on Form 10-K filed with the SEC on May 1, 2020. Liquidity and Going Concern The Company has incurred significant losses since its inception and has not demonstrated an ability to generate sufficient revenues from the sales of its goods and services to achieve profitable operations. In addition, the Company’s operations and specifically, the continued operation of BIGToken will require significant additional financing. As of September 30, 2020 the Company had cash and cash equivalents of $2,446,000 which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued, and accordingly, these factors create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flow and cash usage forecasts, and obligations and debts. Although management has a long history of successful capital raises, the analysis used to determine the Company’s ability as a going concern does not include cash sources outside the Company’s direct control that management expects to be available within the next 12 months. We expect that our existing cash and cash equivalents as of September 30, 2020, will not be sufficient to enable us to fund our anticipated level of operations through 2021. We anticipate raising additional capital through the private and public sales of our equity or debt securities and selling our marketable securities or a combination thereof. Although management believes that such capital sources will be available, there can be no assurance that financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient capital in a timely manner, among other things, we may be forced to scale back our operations or cease operations altogether. During the nine months ended September 30, 2020, the Company was able to raise net cash proceeds (net of debt repayments, commissions, and fees) of approximately $13,000,000. The Company’s capital-raising efforts are ongoing and the Company has undertaken the following to raise capital and reduce its cash burn rate: (i) received a PPP Loan from the Small Business Administration for funding under the Payroll Protection Program, in the amount of $1,084.000 (ii) entered into an “At the Market” sales agreement for the sale of up to $3,125,000 of our equity securities, (iii) sold OID convertible debentures for proceeds of $11,885,000. Additionally, the Company sold its remaining position in TI Health (f/k/a SRAXmd) for a total of $8,000,000 of which $7,000,000 was received on October 30, 2020. Substantially, all of these proceeds were used to redeem a portion of our outstanding OID convertible debentures. The ultimate impact of the COVID-19 pandemic on the Company’s operations continues to be unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but may have a material impact on our business, financial condition and results of operations. The significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact. Management continues to monitor the business environment for any significant changes that could impact the Company’s operations. The Company has taken proactive steps to manage costs and discretionary spending, such as remote working and reducing facility related expenses. Net Loss per Share We use ASC 260, “ Earnings Per Share Recent Accounting Pronouncements The Company reviewed all recently issued pronouncement in 2020, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial condition or the results of its operations. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 2 – ACQUISITIONS On September 15, 2020 (“Closing Date”), an Agreement and Plan of Merger (the “Agreement”) is entered into by and among SRAX, Inc. a Delaware corporation (“Parent”), Townsgate Merger Sub 1, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Parent (“Merger Sub 1”), LD Micro, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Parent (“Merger Sub 2”), LD Micro, Inc., a California corporation (the “Acquiree”, “LD Micro”), and Christopher Lahiji, the sole stockholder of the Acquiree (the “Stockholder”). Merger Sub 1 and Merger Sub 2 are sometimes collectively referred to as “Merger Sub.” The parties intend that Merger Sub 1 will be merged with and into the Acquiree (the “First Merger”), with the Acquiree surviving the First Merger, and then the Acquiree will be merged with and into Merger Sub 2 (the “Second Merger,” and together with the First Merger, the “Merger”), with Merger Sub 2 surviving the Second Merger. As consideration, the Company will pay cash payable as follows: (i) $1,000,000 at the Closing, (ii) $1,000,000 on January 1, 2021, (iii) $1,000,000 on April 1, 2021, and (iv) $1,000,000 on July 1, 2021 and subject to adjustment or off-set. Additionally, the Company issued 1,600,000 shares of its Class A common stock. The total consideration to be paid by the Company is $7,610,000, as adjusted, as follows: Calculation of the purchase price: Fair value of stock at closing $ 4,264,000 Cash at closing 1,000,000 Deferred payments 2,771,000 Less cash received (303,000 ) Transaction expenses 10,000 Working capital adjustment (132,000 ) Purchase price $ 7,610,000 The transaction was accounted for using the acquisition method. Accordingly, goodwill has been measured as the excess of the total consideration over the amounts assigned to the identifiable assets acquired and liabilities assumed. The deferred payments of $3,000,000 were discounted using the yield on a CCC rated corporate debt for 3-month, 6-month and 9-month maturities, respectively. The implied discount is approximately $229,000, which will be amortized over the term on the payments. The purchase price includes working capital adjustments that are based on our preliminary estimates and assumptions that are subject to change. The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: Accounts receivable, net $ 30,000 Intangibles 468,000 Goodwill 7,706,000 Accounts payable and accrued liabilities (324,000 ) Payroll protection loan (42,000 ) Other current liabilities (97,000 ) Deferred tax liability (131,000 ) Net assets acquired $ 7,610,000 Intangibles assets consisted of the following: Fair Value Life in Years Trademark $ 271,000 Indefinite Domain name 3,000 Indefinite Noncompete 8,000 5 years Customer list 186,000 3 years $ 468,000 The estimated fair values for the trademark and domain name were determined by using the relief-from-royalty method. The estimated fair value for the customer list and noncompete were determined using the excess earnings and differential method of comparing having an asset in-place versus not having the asset in place, respectively. The Company has estimated the preliminary purchase price allocations based on historical inputs and data as of September 15, 2020. The preliminary allocation of the purchase price is based on the best information available and is pending, amongst other things: (i) the finalization of the valuation of the fair values and useful lives of tangible assets acquired; (ii) the finalization of the valuations and and intangible assets acquired; (iii) finalization of the valuation of accounts payable and accrued expenses; and (iv) finalization of the fair value of non-cash consideration. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The amounts of revenue and earnings of the Acquiree since the acquisition date included in the unaudited condensed consolidated statements of operations for the three months ended September 30, 2020 follows: Revenues $- Net income (loss) (51,000 ) The following unaudited pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2019. The unaudited pro forma results include the amortization associated with the preliminary estimates for the acquired intangible assets. The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies, or the effect of the incremental costs incurred in integrating the two companies. Accordingly, these unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations. Unaudited Pro Forma Condensed Consolidated Statements of Operations For the Nine Months ended September 30, 2020 SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 4,125,000 $ 937,000 $ - $ 5,062,000 Cost of revenues (1,388,000 ) (98,000 ) - (1,486,000 ) Operating expenses (12,337,000 ) (858,000 ) (367,000 ) (13,562,000 ) Other expense (5,295,000 ) (1,000 ) - (5,296,000 ) Net loss $ (14,895,000 ) $ (20,000 ) $ (367,000 ) $ (15,282,000 ) Unaudited Pro Forma Condensed Consolidated Statements of Operations For the Nine Months ended September 30, 2019 SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 2,497,000 $ 1,142,000 $ - $ 3,639,000 Cost of revenues (1,075,000 ) (188,000 ) - (1,263,000 ) Operating expenses (14,994,000 ) (1,037,000 ) (596,000 ) (16,627,000 ) Other income 1,098,000 8,000 - 1,106,000 Net loss $ (12,474,000 ) $ (75,000 ) $ (596,000 ) $ (13,145,000 ) F-10 The following summarizes the pro forma adjustments made for the nine months ended September 30: 2020 2019 Amortization of intangibles acquired $ 48,000 48,000 Employee related costs 319,000 319,000 Financing costs - 229,000 Net income (loss) $ 367,000 $ 596,000 Amortization relates to the acquired noncompete and customer list amounting to $1,000 and $47,000 for the nine months ended September 30, 2020 and 2019, respectively. Employee related cost are contracted cost amounting to $319,000 for the nine months ended September 30, 2020 and 2019, respectively. Financing cost relates to amortization of the discount related to the $3,000,000 deferred payments. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Marketable Securities | NOTE 3 – Marketable securities During the second quarter of 2020, the Company began offering customers of its Sequire segment who purchase services on the Company’s proprietary SaaS platform the option to pay the contract price in securities issued by the Customer. The customers securities must be trading on a United States securities exchange and the Company must be a fully reporting entity pursuant to SEC Regulation S-X. In accordance with ASC 606 - Revenue Recognition, the Company will value the shares received at the fair market value of the date the contract is executed. The shares received will be accounted for in accordance with ASC 320 – Investments – Debt and Equity Securities, as such the shares will be classified as available-for-sale securities and will be measured at each reporting period at fair value with the unrealized gain or (loss) as a component of other income (expense). Upon the sale of the shares, the Company will record the gain or (loss) in the statement of operations as a component of net income (loss). The movement in this account is as follows: September 30, 2020 December 31, 2019 Balances at beginning of year $ 83,000 - Securities received for revenue contracts 5,398,000 83,000 Sale of marketable securities (21,000 ) - Unrealized loss on mark-to-market (660,000 ) - Balances as of date $ 4,800,000 $ 83,000 The Company’s sales of securities during nine months ended September 30, 2020 were approximately $397,000, with a book basis of approximately $21,000 which represented a gain of $376,000, which we recorded as other income included in the gains from marketable securities. The Company recorded as a component of other income (expense) the realized and unrealized gain (loss) on marketable securities as follows: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Unrealized loss (800,000 ) - (660,000 ) - Realized gain - - 376,000 - Loss from marketable securities (800,000 ) - (284,000 ) - The Company accounts for its investments in equity securities in accordance with ASC 321-10 Investments - Equity Securities. The equity securities may be classified into two categories and accounted for as follows: ● Equity securities with a readily determinable fair value are reported at fair value, with unrealized gains and losses included in earnings. Any dividends received are recorded in interest income, the fair value of equity investments with fair values is primarily obtained from third-party pricing services. ● Equity securities without a readily determinable fair value are reported at their cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer and their impact on fair value. Any dividends received are recorded in interest income. For equity investments without readily determinable fair values, when an orderly transaction for the identical or similar investment of the same issuer is identified, we use the valuation techniques permitted under ASC 820 Fair Value Measurement to evaluate the observed transaction(s) and adjust the fair value of the equity investment |
Sale of Accounts Receivable
Sale of Accounts Receivable | 9 Months Ended |
Sep. 30, 2020 | |
Credit Loss [Abstract] | |
Sale of Accounts Receivable | NOTE 4 – Sale of Accounts Receivable On January 22, 2020 and January 30, 2020, the Company entered into financing agreements, with a single unrelated purchaser to sell, with full recourse, certain accounts receivable with a face value of $454,000 and $75,000, respectively, for a purchase price of $454,000 and $56,000, respectively. Transactions under these agreements were accounted for as financing of accounts receivable and the related accounts receivable was not removed from our consolidated balance sheet at the time of the sales transactions, a liability was recorded for the proceeds received. The terms of the agreements are as follows: Pursuant to the initial purchase agreement, commencing on March 24, 2020, the purchaser may, at its sole discretion, exercise a put option, to cause the Company to purchase from purchaser, any of the outstanding January 22, 2020 receivables which were not collected by the purchaser. Effective April 9, 2020, the put option was extended until June 23, 2020. The purchase price payable by Company to the Purchaser for the receivables upon exercise of the Put Option shall be equal to one hundred and thirty six percent (136%) of the then remaining outstanding balance of the applicable receivables. Upon the occurrence of a payment made on the applicable receivables, the Company is required to pay a true up amount as follows: a. ten percent (10%) of the portion of the receivables which are paid on or before the 30th day following the effective date of the agreement; b. twenty percent (20%) of the portion of the receivables which are paid after the 30 th th c. thirty six percent (36%) of the portion of the receivables which are paid after the 60 th In order to secure performance by the Company, the purchaser was granted a security interest in: (i) 239,029 shares of the Company’s Class A common stock in connection with the sale of the $454,000 receivable and (ii) 29,519 shares of the Company’s Class A common stock in connection with the sale of the $75,000 receivable. The shares have been issued and are being held by the Company’s transfer agent. Since the shares are not outstanding, the Company has treated them as shares reserved for collateral. Since the purchaser of the receivables has recourse, the Company accounted for the purchase price as a liability. Upon the purchaser’s election of the put option or the true up, as applicable the Company will treat the put option price or the true up amounts as interest. On April 9, 2020 the Company entered into an agreement to amend the January 22 and 30 accounts receivable agreements. The purchaser agreed to amend the put option date as described above to June 23, 2020 and June 30, 2020 for the sale of receivables originating on January 22, 2020 and January 30, 2020, respectively. As consideration for the extension the Company agreed to issue the purchaser 32,668 and 4,032 shares of Class A common stock for the receivable sale originating on January 22 , On June 30, 2020, the Purchaser converted the payable of $510,000 and accrued interest of $184,000 (“Old Debt”) into approximately $788,000 of the OID Convertible Notes payable (“Debentures”) (See Note 7 - OID Convertible Debentures). The conversion was treated as an extinguishment of debt as prescribed by ASC 470-50 – Debt Modification and Extinguishment. At the date of issuance, the Debenture had a fair market value of approximately $815,000. The transaction created a loss on extinguishment of approximately $546,000, which consisted of (i) the difference of value between the Old Debt and the fair value of the new debt of approximately $95,000, (ii) the difference between the face value of the debenture and the fair value of the Debenture of approximately $27,000 and (iii) $424,000 for fair value of warrants issued with the Debenture. Also, since the Debenture was convertible into the Company’s common stock, a $27,000 premium associated with the conversion feature was recorded as additional paid in capital. Since the purchaser of the receivables has recourse, the Company accounted for the purchase price as a liability. Upon the purchaser’s election of the put option or the true up, as applicable the Company will treat the put option price or the true up amounts as interest. |
Short Term Promissory Notes
Short Term Promissory Notes | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short Term Promissory Notes | NOTE 5 – Short Term Promissory Notes In February 2020, the Company entered into three separate short-term promissory notes with an aggregate principal value of $450,000 (the “Notes”), of which $100,000 was borrowed from the Company’s Chief Financial Officer. The notes are due and payable on May 12, 2020 (“Maturity Date”). The notes will accrue interest as follows: (i) on the origination date, ten percent (10%) of the principal amount was added to each note, (ii) on March 12, 2020, an additional ten percent (10%) of the principal amount was added to each note, and (iii) on April 12, 2020, an additional sixteen percent (16%) of the principal amount was added to each notes. The note holders were granted security interests (in amounts equal to the face value of their investments on a dollar for share basis) in an aggregate of 450,000 shares of the Company’s Class A common stock (“Security Shares”). The shares have been issued and are being held by the Company’s transfer agent. Since the shares are not outstanding, the Company has treated them as shares reserved for collateral. The interest imputed on the origination date was treated as an original issue discount with the $45,000 amortized over the term of the Notes. On each of the interest date, the Company accrued and expensed the related interest. On the Maturity Date, one of the Note’s was amended to (i) extend the maturity date to December 31, 2020 and (ii) to release 100,000 shares of the Security Shares. The modification was treated as an extinguishment of debt as prescribed by ASC 470-50 – Debt Modification and Extinguishment. Based on the amended terms the fair value of the amended note approximated the book value of the old Note. The fair value of the Security Shares was approximately $181,000, which was expensed as a loss on the extinguishment. On June 30, 2020, the short-term note payable to the Company’s Chief Financial Officer in the amount of approximately $136,000 was repaid from the proceeds of the OID Convertible Notes Payable. On June 30, 2020, the two remaining Note Holders converted the Notes of approximately $350,000 and accrued interest of approximately $126,000 (“Old Debt”) into approximately $541,000 of the OID Convertible Debentures (See Note 7 - OID Convertible Debentures). The conversion was treated as an extinguishment of debt as prescribed by ASC 470-50 – Debt Modification and Extinguishment. At the date of issuance, the Debentures had a fair market value of approximately $560,000. The transaction created a loss on extinguishment of approximately $375,000, which consisted of (i) the difference of value between the Old Debt and the fair value of the Debentures of approximately $65,000, (ii) the difference between the face value of the debenture and the fair value of the Debenture of approximately $19,000 and (iii) $291,000 for fair value of warrants issued with the Debenture. Also, since the Debenture was convertible into the Company’s common stock, a $18,000 premium associated with the conversion feature was recorded as additional paid in capital. |
Term Loan Note
Term Loan Note | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Term Loan Note | NOTE 6 – Term Loan Note On February 28, 2020, the Company entered into a term loan and security agreement with a BRF Finance Co. LLC as lender. Pursuant to the loan agreement, the Company can borrow up to $5,000,000, subject to the conditions described below. Under the loan: (i) the Company received an initial draw of $2,500,000 on February 28, 2020 and (ii) the Company is eligible to receive an additional $2,500,000 loan within (30) days of the Company entering into an at the market sales agreement with the lender and the filing of an at the market offering on Form S-3 with the SEC registering the shares to be sold pursuant to the at the market sales agreement. The Company agreed to file the ATM by May 1, 2020. Additionally, the Company will be required to increase the dollar amount authorized under the at the market sales agreement each time additional capacity of at least $1,000,000 is available under our shelf registration statement. The loan is secured by substantially all of the assets of the Company pursuant to the loan agreement and the intellectual property security agreement entered into in connection with the transaction. The loan bears interest at ten percent (10%) per annum and has a maturity date of March 1, 2022. Beginning on August 1, 2020, and continuing on the first day of each month thereafter until the maturity date, the Company will make monthly payments of principal and interest on an eighteen (18) month straight line amortization schedule, based on the principal outstanding on July 31, 2020. Additionally, the Company will have the option of a one (1) time payment-in-kind payment for a monthly required payment of principal and interest, which will defer such payments and result in a recalculation of the amortization schedule. In the event that the Company is late on any payments under the Loan, a late charge of three percent (3%) of the amount of the payment due will be assessed. At origination the Company paid lender: (i) an origination fee of $300,000, (ii) $35,000 in attorneys’ fees reimbursement, and (iii) certain other costs and expenses associated with the completion of the loan, including but not limited to escrow fees and recording fees. Accordingly, the Company received net proceeds of approximately $2,164,000 as of May 1, 2020. The Loan may be prepaid in whole or in part at any time at the discretion of the Company. The loan also provides for mandatory prepayments of all of the net cash received upon (i) a sale of the company’ assets, (ii) raising additional capital through the issuance of equity or debt securities, or (iii) sales under the at the market sales agreement described above. As part of the loan the Company agreed to issue to Lender: (i) 500,000 Common Stock purchase warrants on the date of the origination date and (ii) 500,000 Common Stock purchase warrants on the date of the second drawdown. The warrants have an exercise price equal to a 25% premium of the closing price of the Common Stock on their respective date of issue (provided that the exercise price of the warrants cannot be less than $2.50 per share, subject to adjustment contained therein). The initial warrant has an exercise price of $3.60. The warrants will expire on October 31, 2022. The warrants allow for cashless exercise in the event that they are not subject to a registration statement on the six (6) month anniversary of their respective issuances. The warrants do not contain any price protection or non-standard anti-dilution provisions. In accordance with ASC 470 - Debt The Company evaluated the loan and warrant agreements in accordance with ASC 815 Derivatives and Hedging. On June 30, 2020, the principal and interest of approximately $2,585,000 was paid from the proceeds from the OID Convertible Debentures. As of September 30, 2020, there is none outstanding loan balance on this account. |
OID Convertible Debentures
OID Convertible Debentures | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
OID Convertible Debentures | NOTE 7 – OID Convertible Debentures On June 25, 2020, the Company entered into a definitive securities purchase agreement (the “Securities Purchase Agreement or Transaction”) with certain accredited and institutional investors (the “Purchasers”) for the purchase and sale of an aggregate of: (i) $16,101,000 in principal amount of Original Issue Discount Senior Secured Convertible Debenture (the “Debentures”) for $14,169,000 (representing a 12% original issue discount) (“Purchase Price”) and (ii) warrants to purchase up to 6,440,561 shares of the Company’s Class A common stock (the “Warrants”) in a private placement (the “Offering”). The Purchase Price consists of (a) $13,000,000 in cash and (b) the cancellation of $1,169,000 in outstanding debt, consisting of the accounts receivable loans of $510,000 with accrued interest of $184,000, and the short-term promissory notes of $350,000 with accrued interest of $125,000. The Debentures, which mature on December 31, 2021, pay interest in cash at the rate of 12.0% per annum commencing on June 30, 2021, with such interest payable quarterly, beginning on October 1, 2021. Commencing after the six month anniversary of the issuance of the Debentures, the Company will be required to make amortization payments (“Amortization Payments”) with each Purchaser having the right to delay such Amortization Payments by a six month period up to three separate times (each, an “Extension”) in exchange for five percent in principal being added to the balance of such applicable Debenture on each such Extension. Accordingly, upon a Purchaser exercising three Extensions, such Purchaser’s Debenture will mature and be due and payable on June 30, 2023. Beginning on the date that the first Amortization Payment is due, and on a monthly basis thereafter, the Company will be required to pay one hundred fifteen percent of the value of one-twelfth of the outstanding principal plus any additional accrued interest due. In the event a Purchaser converts a portion of its Debenture into shares of the Company’s Common Stock, such amount will be deducted from the next applicable Amortization Payment. In the event such conversion exceeds the next applicable Amortization Payment, such excess amount will be deducted, in reverse order, from future Amortization Payments. The Company’s obligations under the Debentures are secured by substantially all of the assets of the Company pursuant to a security agreement (the “Security Agreement”). The Debentures are convertible at the option of the holder into shares of the Company’s common stock at an initial conversion price of $2.69 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations. The Debentures do not have any price protection or price reset provisions with respect to future issuances of securities. Subject to the Company’s compliance with certain equity conditions, upon ten trading days’ notice to the Purchasers, the Company has the right to redeem the Debentures in cash at 115% of their outstanding principal, plus accrued interest. Additionally, in the event that (i) the Company sells or reprices any securities (each, a “Redemption Financing”), or (ii) the Company disposes of assets (except those sold or transferred in the ordinary course of business) (each, an “Asset Sale”), then the Purchasers shall have the right to cause the Company (a) in the event of a Redemption Financing at a price per Common Stock equivalent of $2.50 or less per share, the Purchasers may mandate that 100% of the proceeds be used to redeem the Debentures (b) in the event of a Redemption Financing at a price per Common Stock equivalent of greater than $2.50 per share, the Purchasers may mandate that up to 50% of the proceeds be used to redeem the Debentures, and (c) in the event of an Asset Sale, the Purchasers may mandate that up to 100% of the proceeds be used to redeem the Debentures. The Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal or interest thereunder, breaches of covenants, agreements, representations or warranties thereunder, the occurrence of an event of default under certain material contracts of the Company, failure to register the shares underlying the Debentures in Warrants (as described below), changes in control of the Company, delisting of its securities from its trading market, and the entering or filing of certain monetary judgments against the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Purchaser’s election, immediately due and payable in cash. The Company is also subject to certain negative covenants (unless waived by 67% of the then outstanding Purchasers, and including the lead Purchaser) under the Debentures, including but not limited to, the creation of certain debt obligations, liens on Company assets, amending its charter documents, repayment or repurchase of securities or certain debt of the Company, or the payment of dividends. The Warrants are initially exercisable at 2.50 per share and, are subject to cashless exercise after six months if the shares underlying the Warrants are not subject to an effective resale registration statement. The Warrants are also subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations. The Warrants do not have any price protection or price reset provisions with respect to future issuances of securities. Pursuant to the terms of the Debentures and Warrants, a Purchaser will not have the right to convert any portion of the Debentures or exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99% (at the Purchaser’s option) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or exercise, as such percentage ownership is determined in accordance with the terms of the Debentures and the Warrants; provided that at the election of a holder and notice to us such percentage ownership limitation may be increased to 9.99%; provided that any increase will not be effective until the 61st day after such notice is delivered from the holder to the Company. The Company also agreed to use proceeds from the Offering to pay (i) $2,500,000 in outstanding principal plus accrued interest pursuant to the Company’s Term Loan and Security Agreement entered into on February 28, 2020 with BRF Finance Co., LLC (the “Term Loan”) and (ii) $136,000 in outstanding short-term promissory notes and accrued interest (collectively, the “Debt Repayments”). In connection with Securities Purchase Agreement, the Company will issue to the Placement Agent (as defined below), an aggregate of 478,854 Common Stock purchase warrants (“PA Warrants”). The PA Warrants are substantially similar to the Warrants, except that the PA Warrants have an exercise price of $3.3625 per share. The fair value of the PA Warrants at issuance was estimated to be $360,000 based on a risk-free interest rate of .11%, an expected term of 2.417 years, an expected volatility of 96% and a 0% dividend yield. Pursuant to a registration rights agreement (“Registration Rights Agreement”), the Company has agreed to file a registration statement registering the resale of the shares of the common stock underlying the Debentures and the Warrants within forty-five days from the date of the Registration Rights Agreement. The Company also agrees to have the registration statement declared effective within 90 days from the date of the Registration Rights Agreement and keep the registration statement continuously effective until the earlier of (i) the date after which all of the securities to be registered thereunder have been sold, or (ii) the date on which all the securities to be registered thereunder may be sold without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 under the Securities Act. The Company is also obligated to pay the Investors, as partial liquidated damages, a fee of 2.0% of each Purchaser’s subscription amount per month in cash upon the occurrence of certain events, including our failure to file and(or) have the registration statement declared effective within the time periods provided. Bradley Woods & Co. Ltd. (“Placement Agent”) acted as the placement agent, in connection with the sale of the securities pursuant to the Securities Purchase Agreement. Pursuant to an engagement agreement entered into by and between the Company and the Placement Agent, the Company agreed to pay the Placement Agent a cash commission of $1,040,000. Pursuant to the discussion above, the Company also issued an aggregate of 478,854 PA Warrants to the Placement Agent. The Company has agreed to include the shares of our common stock underlying the PA Warrants to be included in the registration statement to be filed. Additionally, upon the exercise of Warrants issued in the Offering, the Placement Agent will be entitled to eight percent (8%) of the cash proceeds received from such exercises. The Transaction closed on June 30, 2020 (the “Closing Date”), with approximately $3,800,000 cash proceeds received prior to Closing date, $4,200,000 received on the closing date and $5,000,000 received after the closing date. The gross proceeds received from the Offering were approximately $13,000,000 and net proceeds of approximately $9,100,000 after deducting the Placement Agent fees, the Debt Repayments and other offering expenses. Also, the Company reimbursed the lead Purchaser $75,000 for legal fees, which was deducted from the required subscription amount to be paid. The Company evaluated all of the associated financial instruments in accordance with ASC 815 Derivatives and Hedging. In accordance with ASC 470 - Debt Principal balance $ 15,313,000 Debt discount - OID (1,237,000 ) Debt discount - BCF (4,403,000 ) Debt discount warrants (2,467,000 ) Debt discount fees (1,133,000 ) Net book value 6,431,000 Less OID convertible debentures, short term 3,683,000 OID convertible debentures, long term $ 2,748,000 During the three and nine months ended September 30, 2020, the Company recognized amortization expense of $3,302,000. During the three months ended September 30, 2020, holders of debenture principal converted $788,000 debenture into 293,038 shares of the Company’s class A common stock. As a result of these conversions and issuance of common stock, the Company wrote-off debt discount and increased additional paid in capital by $234,000 . |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Paycheck Protection Program Loan | NOTE 8 - PAYCHECK PROTECTION PROGRAM LOAN On April 17, 2020, we entered into a promissory note evidencing an unsecured approximately $1,084,000 loan under the Paycheck Protection Program (PPP). The loan is being made through Cross River Bank. The term of the loan is two years with an interest rate of 1%, which shall be deferred for the first six months of the term of the loan. The promissory note evidencing the loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company. On September 15, 2020, $42,000 of the payroll protection loan of LD Micro was assumed in connection with the acquisition. This amount is expected to be forgiven, otherwise the Company will be reimbursed by Sellers of LD Micro. This is classified under current assets. As of September 30, 2020, the short-term and long-term balances were $548,000 and $578,000. |
Right to Use Asset
Right to Use Asset | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Right to Use Asset | NOTE 9 – Right To Use Asset We adopted ASU No. 2016-02, Leases Operating leases are included in the right-of-use lease assets, other current liabilities and long-term lease liabilities on the Consolidated Balance Sheet. Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present values of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, our incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. Operating lease payments are recognized on a straight-line basis over the lease term. We had no financing leases as of September 30, 2020. We have operating leases for office space. Our leases have remaining lease terms of 3 years. We consider renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised. As of September 30, 2020, there were no material variable lease costs or sublease income. Cash paid for operating leases are classified in operating expenses and were $45,000 and $154,000 in the three and nine months ended September 30, 2020 and $74,000 and $227,000 in the three and nine months ended September 30, 2019, which is classified in operating activities. The following tables summarize the lease expense for the three and nine months ended September 30: Three Months Ended September 30, 2020 2019 Operating lease expense $ 41,000 $ 41,000 Short-term lease expense 4,000 33,000 Total lease expense $ 45,000 $ 74,000 Nine Months Ended September 30, 2020 2019 Operating lease expense $ 122,000 $ 122,000 Short-term lease expense 32,000 105,000 Total lease expense $ 154,000 $ 227,000 The below table summarizes these lease asset and liability accounts presented on our accompanying Condensed Consolidated Balance Sheets: Operating Leases* Consolidated Balance Sheet Caption Balance as of Operating lease right-of-use assets - non-current Right of use asset $ 390,000 Operating lease liabilities - current Other current liabilities $ 94,000 Operating lease liabilities - non-current Right to use liability - long term $ 282,000 Total operating lease liabilities $ 376,000 Components of Lease Expense We recognize lease expense on a straight-line basis over the term of our operating leases, as reported within “selling, general and administrative” expense on the accompanying condensed consolidated statement of operations. |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | NOTE 10 – Other Current Liabilities The following table summarizes the composition of other current liabilities presented on our accompanying Condensed Consolidated Balance Sheets: September 30, December 31, Contract liabilities $ 3,673,000 $ - Contract liabilities assumed from LD Micro 97,000 - BIGToken point liability 263,000 446,000 Operating lease liabilities - current 94,000 91,000 Other current liabilities 2,723,000 - Total lease expense $ 6,850,000 $ 537,000 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 11 – Stockholders’ Equity Authorized Shares Preferred Stock We are authorized to issue 50,000,000 of preferred stock, par value $0.001, of which 200,000 shares were designated as Series 1 Preferred Stock. Our board of directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our board of directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our board of directors can fix limitations and restrictions, if any, upon the payment of dividends on both classes of our common stock to be effective while any shares of preferred stock are outstanding. Common Stock We are authorized to issue an aggregate of 259,000,000 shares of common stock. Our certificate of incorporation provides that we will have two classes of common stock: Class A common stock (authorized 250,000,000 shares, par value $0.001), which has one vote per share, and Class B common stock (authorized 9,000,000 shares, par value $0.001), which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock are identical. As of September 30, 2020, the Company had 16,027,190 shares issued and outstanding. As of December 31, 2019, the Company had 13,997,452 shares issued and outstanding. Common Stock Warrants In conjunction with a Term Loan Note, the Company granted the borrower warrants to purchase up to 500,000 shares of Common Stock at an exercise price of $3.60 per warrant share. There were no warrants exercised during the three or nine months ended September 30, 2020. During the three and nine months ended September 30, 2020, the Company issued 500,000 and 7,419,415 common stock purchase warrants (see Note 6 – Term Loan Note and Note 7 – OID Convertible Debentures) Stock Based Compensation During the nine months ended September 30, 2020, the Company issued 9,043 common stock options to each of our independent directors for their services. The options have a strike price of $1.95 and vest one year from their issue date or April 16, 2021. The options have a term of seven years from their issue date. During the nine months ended September 30, 2020, 42,675 common stock options were terminated, and a total of 430,000 common stock options were issued to its employees. The options have a strike price of $2.70 and vest five years from their issue date or August 18, 2025. The options have a term of five years from their issue date. Stock based compensation expense for the three and nine months ended September 30, 2020, for all granted equity instruments, was $268,000 and $917,000, respectively and $329,000 and $775,000 for the three and nine months ended September 30, 2019, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | NOTE 12 – Fair Value of Financial Instruments The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash and accounts payable and accrued expenses, approximate their respective fair values due to the short-term nature of such instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company had the following financial assets of September 30, 2020 and December 31, 2019: Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable September 30, Identical Assets Inputs Inputs 2020 (Level 1) (Level 2) (Level 3) Marketable securities 4,800,000 4,800,000 — — Total assets $ 4,800,000 $4,800,000 $ — $ — Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2019 (Level 1) (Level 2) (Level 3) Marketable securities 22,000 22,000 — — Total assets $ 22,000 $22,000 $ — $ — |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 13 – Segment Reporting The Company reorganized its operating units into two reporting segments, Sequire and BIGToken. As part of the reorganization, the Company was required to allocate the goodwill between the two reporting segments. Of the $15,645,000 of aggregate goodwill, $10,200,000 and $5,445,000 was allocated to Sequire and BIGToken, respectively. The goodwill was allocated to the two reporting units based on the relative fair value of each reporting unit. The relative fair values of Sequire and BIGToken were determined using the discounted cash flow method, which is a form of the income approach. The discounted cash flow method (“DCF”) utilized discrete financial forecasts and other financial assumptions developed by management. The determination of fair value requires significant management judgment including estimating future sales, cost of sales, changes in working capital, investments in property and equipment and the selection of an appropriate discount rate. Additionally, we corroborate the conclusions of our discounted cash flow analyses by examining the trading multiples of similar publicly traded companies that operate within our industry vertical and compared the implied trading multiples of our DCF analysis with our publicly traded company group as a test for reasonableness. The Company has three operating units and two reportable segments: (i) Investor data analysis technologies (Sequire) and (ii) Consumer based marketing services and data technologies (BIGToken ). Our Chief Operating Decision Maker (CODM) does not evaluate operating segments using asset or liability information. The following table presents revenues and gross profits by reportable segment. For the Three Months Ended September 30, SEQUIRE BIGToken Corporate and Other Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Investor / Shareholder Media Services $ 1,749,000 $ - $ - $ - $ - $ - $ 1,749,000 $ - Platform Subscription 207,000 31,000 - - - - 207,000 31,000 Conference revenues - - - - - - - - Consumer Media / Data - - 604,000 915,000 - - 604,000 915,000 Other - - - - 49,000 55,000 49,000 55,000 Total Revenue 1,956,000 31,000 604,000 915,000 49,000 55,000 2,609,000 1,001,000 Cost of Revenue 650,000 - 230,000 335,000 - (13,000 ) 880,000 322,000 Gross profit $ 1,306,000 $ 31,000 $ 376,000 $ 580,000 $ 49,000 $ 68,000 $ 1,729,000 $ 679,000 For the Nine Months Ended September 30, SEQUIRE BIGToken Corporate and Other Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Investor / Shareholder Media Services $ 2,432,000 $ - $ - $ - $ - $ - $ 2,432,000 $ - Platform Subscription 376,000 41,000 - - - - 376,000 41,000 Conference revenues - - - - - - - - Consumer Media / Data - - 1,174,000 2,291,000 - - 1,174,000 2,291,000 Other - - - - 143,000 165,000 143,000 165,000 Total Revenue 2,808,000 41,000 1,174,000 2,291,000 143,000 165,000 4,125,000 2,497,000 Cost of Revenue 896,000 - 491,000 1,013,000 1,000 62,000 1,388,000 1,075,000 Gross profit $ 1,912,000 $ 41,000 $ 683,000 $ 1,278,000 $ 142,000 $ 103,000 $ 2,737,000 $ 1,422,000 Revenue Disaggregation The following table breaks out the revenue types for Sequire and BIGToken Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Investor / Shareholder Media Services $ 1,749,000 $ - $ 2,432,000 $ - Platform Subscription 207,000 31,000 376,000 41,000 Conference revenues - - - - Consumer Media / Data - - - - Sequire revenues 1,956,000 31,000 2,808,000 41,000 Investor / Shareholder Media Services - - - - Platform Subscription - - - - Conference revenues - - - - Consumer Media / Data 604,000 915,000 1,174,000 2,291,000 BIGToken & Media vertical revenues 604,000 915,000 1,174,000 2,291,000 Other revenues 49,000 55,000 143,000 165,000 Total revenues $ 2,609,000 $ 1,001,000 $ 4,125,000 $ 2,497,000 As of September 30, 2020 and December 31, 2019, revenue contract liabilities were approximately $3,770,000 and $0, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – Subsequent Events The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined the following reportable events: On October 30, 2020, a unit redemption agreement was entered into by and between the Company and Haylard MD, LLC (“Haylard”). The Company owns 10,000,000 Class A Units of Haylard. The Company desires to sell and transfer to Haylard, and Haylard desires to redeem and purchase from the Company. The price to be paid for all of the Units shall be $6,718,000 at closing and $960,000 upon the earlier of (a) the third anniversary of the closing and (b) a Sale of Haylard, for a total consideration of $7,678,000, provided that if Haylard consummates a Sale of Haylard within one hundred and eighty (180) calendar days after the closing, and the amount to be paid in respect of a Class A Unit in connection with such transaction after taking into account all fees, costs, expenses, escrows, indemnities, purchase price adjustments, repayments of indebtedness and other holdbacks as reasonably determined and calculated in good faith by Haylard is greater than $0.7677543, then Haylard shall pay to the Company an amount equal to such excess for each Unit redeemed and purchased hereunder by wire transfer of immediately available funds to the account specified by the Company. On October 30, 2020, a unit redemption agreement was entered into by and between the Company and MD CoInvest, LLC, (“CoInvest”). The Company owns 420,000 Units of CoInvest. The Company desires to sell and transfer to CoInvest, and CoInvest desires to redeem and purchase from the Company. The price to be paid for all of the Units shall be $282,000 at closing and $40,000 upon the earlier of (a) the third anniversary of the closing and (b) a Sale of CoInvest, for a total consideration of $322,000, provided that if CoInvest consummates a Sale of CoInvest within one hundred and eighty (180) calendar days after the closing, and the amount to be paid in respect of a Class A Unit in connection with such transaction after taking into account all fees, costs, expenses, escrows, indemnities, purchase price adjustments, repayments of indebtedness and other holdbacks as reasonably determined and calculated in good faith by CoInvest is greater than $0.7677543, then CoInvest shall pay to the Company an amount equal to such excess for each Unit redeemed and purchased hereunder by wire transfer of immediately available funds to the account specified by the Company. Substantially all of the proceeds (approximately $7,000,000) received for the sale of the above-mentioned unit redemptions were used to redeem outstanding OID convertible debentures. On September 30, 2020, the Company entered into a share exchange agreement (“Share Exchange”) with Force Video Protection Equipment Corp. (“FPVD”) and the majority shares holders of FPVD. The Company would receive approximately 88.9% of the issued and outstanding shares of FPVD common stock in exchange for 100% of the issued and outstanding common stock of the Company’s wholly owned subsidiary BIGToken, Inc. The closing of the Share Exchange is contingent on the completion of certain events that have not occurred as of the release of these condensed consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of Calculation of Purchase Price | The total consideration to be paid by the Company is $7,610,000, as adjusted, as follows: Calculation of the purchase price: Fair value of stock at closing $ 4,264,000 Cash at closing 1,000,000 Deferred payments 2,771,000 Less cash received (303,000 ) Transaction expenses 10,000 Working capital adjustment (132,000 ) Purchase price $ 7,610,000 |
Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: Accounts receivable, net $ 30,000 Intangibles 468,000 Goodwill 7,706,000 Accounts payable and accrued liabilities (324,000 ) Payroll protection loan (42,000 ) Other current liabilities (97,000 ) Deferred tax liability (131,000 ) Net assets acquired $ 7,610,000 |
Schedule of Intangible Assets Acquired as Part of Business Combination | Intangibles assets consisted of the following: Fair Value Life in Years Trademark $ 271,000 Indefinite Domain name 3,000 Indefinite Noncompete 8,000 5 years Customer list 186,000 3 years $ 468,000 |
Summary of Amounts of Revenue and Earnings of Acquiree Since The Acquisition Date | The amounts of revenue and earnings of the Acquiree since the acquisition date included in the unaudited condensed consolidated statements of operations for the three months ended September 30, 2020 follows: Revenues $- Net income (loss) (51,000 ) |
Schedule of Unaudited Pro Forma Condensed Consolidated Statements of Operations | Unaudited Pro Forma Condensed Consolidated Statements of Operations For the Nine Months ended September 30, 2020 SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 4,125,000 $ 937,000 $ - $ 5,062,000 Cost of revenues (1,388,000 ) (98,000 ) - (1,486,000 ) Operating expenses (12,337,000 ) (858,000 ) (367,000 ) (13,562,000 ) Other expense (5,295,000 ) (1,000 ) - (5,296,000 ) Net loss $ (14,895,000 ) $ (20,000 ) $ (367,000 ) $ (15,282,000 ) Unaudited Pro Forma Condensed Consolidated Statements of Operations For the Nine Months ended September 30, 2019 SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 2,497,000 $ 1,142,000 $ - $ 3,639,000 Cost of revenues (1,075,000 ) (188,000 ) - (1,263,000 ) Operating expenses (14,994,000 ) (1,037,000 ) (596,000 ) (16,627,000 ) Other income 1,098,000 8,000 - 1,106,000 Net loss $ (12,474,000 ) $ (75,000 ) $ (596,000 ) $ (13,145,000 ) |
Summary of Pro Forma Adjustments | The following summarizes the pro forma adjustments made for the nine months ended September 30: 2020 2019 Amortization of intangibles acquired $ 48,000 48,000 Employee related costs 319,000 319,000 Financing costs - 229,000 Net income (loss) $ 367,000 $ 596,000 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Movement of Marketable Securities | The movement in this account is as follows: September 30, 2020 December 31, 2019 Balances at beginning of year $ 83,000 - Securities received for revenue contracts 5,398,000 83,000 Sale of marketable securities (21,000 ) - Unrealized loss on mark-to-market (660,000 ) - Balances as of date $ 4,800,000 $ 83,000 |
Schedule of Component of Other Income (Expense) Realized and Unrealized gain (Loss) on Marketable Securities | The Company recorded as a component of other income (expense) the realized and unrealized gain (loss) on marketable securities as follows: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Unrealized loss (800,000 ) - (660,000 ) - Realized gain - - 376,000 - Loss from marketable securities (800,000 ) - (284,000 ) - |
OID Convertible Debentures (Tab
OID Convertible Debentures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of OID Convertible Debentures | The following table presents the balance of the OID Convertible Debentures at the contractual face amount net of discounts: Principal balance $ 15,313,000 Debt discount - OID (1,237,000 ) Debt discount - BCF (4,403,000 ) Debt discount warrants (2,467,000 ) Debt discount fees (1,133,000 ) Net book value 6,431,000 Less OID convertible debentures, short term 3,683,000 OID convertible debentures, long term $ 2,748,000 |
Right to Use Asset (Tables)
Right to Use Asset (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Component of Lease Expense | The following tables summarize the lease expense for the three and nine months ended September 30: Three Months Ended September 30, 2020 2019 Operating lease expense $ 41,000 $ 41,000 Short-term lease expense 4,000 33,000 Total lease expense $ 45,000 $ 74,000 Nine Months Ended September 30, 2020 2019 Operating lease expense $ 122,000 $ 122,000 Short-term lease expense 32,000 105,000 Total lease expense $ 154,000 $ 227,000 |
Schedule of Operating Lease Assets and Liabilities | The below table summarizes these lease asset and liability accounts presented on our accompanying Condensed Consolidated Balance Sheets: Operating Leases* Consolidated Balance Sheet Caption Balance as of Operating lease right-of-use assets - non-current Right of use asset $ 390,000 Operating lease liabilities - current Other current liabilities $ 94,000 Operating lease liabilities - non-current Right to use liability - long term $ 282,000 Total operating lease liabilities $ 376,000 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The following table summarizes the composition of other current liabilities presented on our accompanying Condensed Consolidated Balance Sheets: September 30, December 31, Contract liabilities $ 3,673,000 $ - Contract liabilities assumed from LD Micro 97,000 - BIGToken point liability 263,000 446,000 Operating lease liabilities - current 94,000 91,000 Other current liabilities 2,723,000 - Total lease expense $ 6,850,000 $ 537,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value On Recurring Basis | The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company had the following financial assets of September 30, 2020 and December 31, 2019: Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable September 30, Identical Assets Inputs Inputs 2020 (Level 1) (Level 2) (Level 3) Marketable securities 4,800,000 4,800,000 — — Total assets $ 4,800,000 $4,800,000 $ — $ — Quoted Prices in Significant Other Significant Balance as of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2019 (Level 1) (Level 2) (Level 3) Marketable securities 22,000 22,000 — — Total assets $ 22,000 $22,000 $ — $ — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Gross Profit by Reportable Segment | The following table presents revenues and gross profits by reportable segment. For the Three Months Ended September 30, SEQUIRE BIGToken Corporate and Other Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Investor / Shareholder Media Services $ 1,749,000 $ - $ - $ - $ - $ - $ 1,749,000 $ - Platform Subscription 207,000 31,000 - - - - 207,000 31,000 Conference revenues - - - - - - - - Consumer Media / Data - - 604,000 915,000 - - 604,000 915,000 Other - - - - 49,000 55,000 49,000 55,000 Total Revenue 1,956,000 31,000 604,000 915,000 49,000 55,000 2,609,000 1,001,000 Cost of Revenue 650,000 - 230,000 335,000 - (13,000 ) 880,000 322,000 Gross profit $ 1,306,000 $ 31,000 $ 376,000 $ 580,000 $ 49,000 $ 68,000 $ 1,729,000 $ 679,000 For the Nine Months Ended September 30, SEQUIRE BIGToken Corporate and Other Consolidated 2020 2019 2020 2019 2020 2019 2020 2019 Investor / Shareholder Media Services $ 2,432,000 $ - $ - $ - $ - $ - $ 2,432,000 $ - Platform Subscription 376,000 41,000 - - - - 376,000 41,000 Conference revenues - - - - - - - - Consumer Media / Data - - 1,174,000 2,291,000 - - 1,174,000 2,291,000 Other - - - - 143,000 165,000 143,000 165,000 Total Revenue 2,808,000 41,000 1,174,000 2,291,000 143,000 165,000 4,125,000 2,497,000 Cost of Revenue 896,000 - 491,000 1,013,000 1,000 62,000 1,388,000 1,075,000 Gross profit $ 1,912,000 $ 41,000 $ 683,000 $ 1,278,000 $ 142,000 $ 103,000 $ 2,737,000 $ 1,422,000 |
Schedule of Revenue Disaggregation | The following table breaks out the revenue types for Sequire and BIGToken Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Investor / Shareholder Media Services $ 1,749,000 $ - $ 2,432,000 $ - Platform Subscription 207,000 31,000 376,000 41,000 Conference revenues - - - - Consumer Media / Data - - - - Sequire revenues 1,956,000 31,000 2,808,000 41,000 Investor / Shareholder Media Services - - - - Platform Subscription - - - - Conference revenues - - - - Consumer Media / Data 604,000 915,000 1,174,000 2,291,000 BIGToken & Media vertical revenues 604,000 915,000 1,174,000 2,291,000 Other revenues 49,000 55,000 143,000 165,000 Total revenues $ 2,609,000 $ 1,001,000 $ 4,125,000 $ 2,497,000 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) - USD ($) | Oct. 30, 2020 | Jan. 01, 2012 | Sep. 30, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | $ 2,446,000 | $ 32,000 | ||
Proceeds from debt | 13,000,000 | |||
TI Health [Member] | ||||
Proceeds from debt | 8,000,000 | |||
TI Health [Member] | Subsequent Event [Member] | ||||
Proceeds from debt | $ 7,000,000 | |||
Convertible Debentures [Member] | ||||
Proceeds from debt | 11,885,000 | |||
Payroll Protection Program [Member] | ||||
Proceeds from debt | 1,084,000 | |||
Sales Agreement [Member] | ||||
Proceeds from debt | $ 3,125,000 | |||
Social Reality, LLC [Member] | Class A Common Stock [Member] | ||||
Ownership percentage | 100.00% | |||
Shares issued in business acquisition | 2,465,753 | |||
Social Reality, LLC [Member] | Class A Common Stock [Member] | Former Members [Member] | ||||
Ownership percentage | 100.00% |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Jul. 01, 2021 | Apr. 01, 2021 | Jan. 01, 2021 | Sep. 15, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Deferred payments discounted under CCC rated corporate debt | $ 3,000,000 | |||||
Amortization of the payments | 1,000 | $ 47,000 | ||||
Employee related costs | 319,000 | $ 319,000 | ||||
LD Micro, Inc. [Member] | ||||||
Business acquisition, closing date of acquisition agreement | Sep. 15, 2020 | |||||
Business combination, cash payable by entity | $ 1,000,000 | $ 7,610,000 | ||||
Deferred payments discounted under CCC rated corporate debt | 3,000,000 | |||||
Amortization of the payments | $ 229,000 | |||||
LD Micro, Inc. [Member] | Class A Common Stock [Member] | ||||||
Number of shares issued in acquisition | 1,600,000 | |||||
LD Micro, Inc. [Member] | Forecast [Member] | ||||||
Business combination, cash payable by entity | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
Acquisitions - Summary of Calcu
Acquisitions - Summary of Calculation of Purchase Price (Details) - LD Micro, Inc. [Member] - USD ($) | Sep. 15, 2020 | Sep. 30, 2020 |
Fair value of stock at closing | $ 4,264,000 | |
Cash at closing | 1,000,000 | $ 7,610,000 |
Deferred payments | 2,771,000 | |
Less cash received | (303,000) | |
Transaction expenses | 10,000 | |
Working capital adjustment | (132,000) | |
Purchase price | $ 7,610,000 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed (Details) - USD ($) | Sep. 30, 2020 | Sep. 15, 2020 | Dec. 31, 2019 |
Goodwill | $ 23,351,000 | $ 15,645,000 | |
LD Micro, Inc. [Member] | |||
Accounts receivable, net | $ 30,000 | ||
Intangibles | 468,000 | ||
Goodwill | 7,706,000 | ||
Accounts payable and accrued liabilities | (324,000) | ||
Payroll protection loan | (42,000) | ||
Other current liabilities | (97,000) | ||
Deferred tax liability | (131,000) | ||
Net assets acquired | $ 7,610,000 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquired as Part of Business Combination (Details) - LD Micro, Inc. [Member] | Sep. 15, 2020USD ($) |
Fair value | $ 468,000 |
Noncompete Agreements [Member] | |
Fair value | $ 8,000 |
Life in Years | 5 years |
Customer Lists [Member] | |
Fair value | $ 186,000 |
Life in Years | 3 years |
Trademarks [Member] | |
Fair value | $ 271,000 |
Life in years, description | Indefinite |
Domain Name [Member] | |
Fair value | $ 3,000 |
Life in years, description | Indefinite |
Acquisitions - Summary of Amoun
Acquisitions - Summary of Amounts of Revenue and Earnings of Acquiree Since The Acquisition Date (Details) - USD ($) | Sep. 15, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Revenues | $ 2,609,000 | $ 1,001,000 | $ 4,125,000 | $ 2,497,000 | |||||
Net income (loss) | $ (6,571,000) | $ (5,321,000) | $ (3,003,000) | $ 1,409,000 | $ (8,099,000) | $ (5,784,000) | $ (14,895,000) | $ (12,474,000) | |
LD Micro, Inc. [Member] | |||||||||
Revenues | |||||||||
Net income (loss) | $ (51,000) |
Acquisitions - Schedule of Unau
Acquisitions - Schedule of Unaudited Pro Forma Condensed Consolidated Statements of Operations (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 4,125,000 | $ 2,497,000 |
Cost of revenues | (1,388,000) | (1,075,000) |
Operating expenses | (12,337,000) | (14,994,000) |
Other expense | (5,295,000) | 1,098,000 |
Net loss | (14,895,000) | (12,474,000) |
Pro Forma Adjustment [Member] | ||
Revenues | ||
Cost of revenues | ||
Operating expenses | (367,000) | (596,000) |
Other expense | ||
Net loss | (367,000) | (596,000) |
Pro Forma Combined [Member] | ||
Revenues | 5,062,000 | 3,639,000 |
Cost of revenues | (1,486,000) | (1,263,000) |
Operating expenses | (13,562,000) | (16,627,000) |
Other expense | (5,296,000) | 1,106,000 |
Net loss | (15,282,000) | (13,145,000) |
LD Micro, Inc. [Member] | ||
Revenues | 937,000 | 1,142,000 |
Cost of revenues | (98,000) | (188,000) |
Operating expenses | (858,000) | (1,037,000) |
Other expense | (1,000) | 8,000 |
Net loss | $ (20,000) | $ (75,000) |
Acquisitions - Summary of Pro F
Acquisitions - Summary of Pro Forma Adjustments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net income (loss) | $ (14,895,000) | $ (12,474,000) |
Pro Forma Adjustment [Member] | ||
Amortization of intangibles acquired | 48,000 | 48,000 |
Employee related costs | 319,000 | 319,000 |
Financing costs | 229,000 | |
Net income (loss) | $ (367,000) | $ (596,000) |
Marketable Securities (Details
Marketable Securities (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |||
Proceeds from sale of marketable securities | $ 397,000 | ||
Gain on marketable securities | 21,000 | ||
Marketable securities | $ 376,000 |
Marketable Securities - Schedul
Marketable Securities - Schedule of Movement of Marketable Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |||||
Balances at beginning of year | $ 83,000 | ||||
Securities received for revenue contracts | 5,398,000 | 83,000 | |||
Sale of marketable securities | 397,000 | ||||
Unrealized loss on mark-to-market | $ (800,000) | (660,000) | |||
Balances as of date | $ 4,800,000 | $ 4,800,000 | $ 83,000 |
Marketable Securities - Sched_2
Marketable Securities - Schedule of Component of Other Income (Expense) Realized and Unrealized Gain (Loss) on Marketable Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |||||
Unrealized loss | $ (800,000) | $ (660,000) | |||
Realized gain | 376,000 | ||||
Loss from marketable securities | $ (800,000) | $ (284,000) |
Sale of Accounts Receivable (De
Sale of Accounts Receivable (Details Narrative) - USD ($) | Jun. 30, 2020 | Mar. 24, 2020 | Jan. 30, 2020 | Jan. 22, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Accounts receivable | $ 75,000 | $ 454,000 | |||||
Accounts receivable, purchase | 56,000 | $ 454,000 | |||||
Description of sale of accounts receivable | Upon the occurrence of a payment made on the applicable receivables, the Company is required to pay a true up amount as follows: a) ten percent (10%) of the portion of the receivables which are paid on or before the 30th day following the effective date of the agreement; b) twenty percent (20%) of the portion of the receivables which are paid after the 30th day but on or before the 60th day following the effective date of the agreement; and d) thirty six percent (36%) of the portion of the receivables which are paid after the 60th day following the effective date of the agreement. | ||||||
Converted debt | $ 788,000 | ||||||
Loss on extinguishment | $ (1,103,000) | ||||||
Difference between face value and fair value | $ 95,000 | ||||||
Payable [Member] | |||||||
Converted debt | $ 510,000 | ||||||
Accrued Interest [Member] | |||||||
Converted debt | 184,000 | ||||||
Debentures [Member] | |||||||
Convertible debt | 788,000 | ||||||
Fair value of debenture | 815,000 | ||||||
Loss on extinguishment | (546,000) | ||||||
Difference between face value and fair value | 27,000 | ||||||
Fair value of warrant issued | 424,000 | ||||||
Conversion premium | $ 27,000 | ||||||
Class A Common Stock [Member] | |||||||
Sale of stock, number of shares issued in transaction | 29,519 | 239,029 | |||||
Agreements to Sell Accounts Receivable [Member] | |||||||
Percentage of receivables upon exercise of put option | 136.00% | ||||||
Agreements to Sell Accounts Receivable Ammended [Member] | |||||||
Description of sale of accounts receivable | On April 9, 2020 the Company entered into an agreement to amend the January 22 and 30 accounts receivable agreements. The purchaser agreed to amend the put option date as described above to June 23, 2020 and June 30, 2020 for the sale of receivables originating on January 22, 2020 and January 30, 2020, respectively. As consideration for the extension the Company agreed to issue the purchaser 32,668 and 4,032 shares of Class A common stock for the receivable sale originating on January 22, 2020 and January 30, 2020, respectively. | ||||||
Agreements to Sell Accounts Receivable Ammended [Member] | Class A Common Stock [Member] | |||||||
Sale of stock, number of shares issued in transaction | 4,032 | 32,668 |
Short Term Promissory Notes (De
Short Term Promissory Notes (Details Narrative) - USD ($) | Jun. 30, 2020 | Feb. 28, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 30, 2020 |
Fair value of the security shares | $ 181,000 | $ 219,000 | ||||
Repayment of short-term note payable | 2,500,000 | |||||
Converted debt | $ 788,000 | |||||
Loss on extinguishment | $ (1,103,000) | |||||
Difference between face value and fair value | $ 95,000 | |||||
Accrued Interest [Member] | ||||||
Converted debt | $ 184,000 | |||||
Debentures [Member] | ||||||
Convertible debt | 788,000 | |||||
Fair value of debenture | 815,000 | |||||
Loss on extinguishment | (546,000) | |||||
Difference between face value and fair value | 27,000 | |||||
Fair value of warrant issued | 424,000 | |||||
Conversion premium | $ 27,000 | |||||
Short-Term Promissory Notes [Member] | ||||||
Debt instrument, face amount | $ 450,000 | |||||
Debt instrument, maturity date | May 12, 2020 | |||||
Debt instrument, description | The notes are due and payable on May 12, 2020. The notes will accrue interest as follows: (i) on the origination date, ten percent (10%) of the principal amount was added to each note, (ii) on March 12, 2020, an additional ten percent (10%) of the principal amount was added to each note, and (iii) on April 12, 2020, an additional sixteen percent (16%) of the principal amount was added to each note. | |||||
Debt conversion, converted instrument, shares issued | 450,000 | |||||
Debt instrument, original issue discount | $ 45,000 | $ 45,000 | ||||
Security shares | 100,000 | 100,000 | ||||
Fair value of the security shares | $ 181,000 | |||||
Difference between face value and fair value | $ 65,000 | 65,000 | ||||
Short-Term Promissory Notes [Member] | Accrued Interest [Member] | ||||||
Converted debt | 126,000 | |||||
Short-Term Promissory Notes [Member] | Debentures [Member] | ||||||
Convertible debt | 541,000 | |||||
Fair value of debenture | 560,000 | 560,000 | ||||
Loss on extinguishment | 375,000 | |||||
Difference between face value and fair value | 19,000 | 19,000 | ||||
Fair value of warrant issued | 291,000 | |||||
Conversion premium | $ 18,000 | 18,000 | ||||
Short-Term Promissory Notes [Member] | Chief Financial Officer [Member] | ||||||
Debt instrument, face amount | $ 100,000 | |||||
Repayment of short-term note payable | $ 136,000 |
Term Loan Note (Details Narrati
Term Loan Note (Details Narrative) - USD ($) | May 01, 2020 | Feb. 28, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Proceeds from notes payable | $ 2,130,000 | ||||
Exercise price of warrant | $ 3.60 | ||||
Proceeds from issuance of warrant | $ 1,146,000 | ||||
Warrants [Member] | |||||
Class of warrant issued | 500,000 | ||||
Exercise price of warrant | $ 3.60 | ||||
Warrant expire date | Oct. 31, 2022 | ||||
Proceeds from issuance of warrant | $ 83,000 | ||||
Warrants [Member] | Maximum [Member] | |||||
Exercise price of warrant | $ 2.50 | ||||
Warrants [Member] | Second Drawdown [Member] | |||||
Class of warrant issued | 500,000 | ||||
Term loan [Member] | |||||
Term loan, maximum borrowing capacity | $ 5,000,000 | ||||
Proceeds from notes payable | $ 2,164,000 | 2,500,000 | |||
Debt instrument, unused borrowing capacity, amount | 2,500,000 | ||||
Debt instrument, additional borrowing capacity | $ 1,000,000 | ||||
Debt instrument, interest rate | 10.00% | ||||
Debt instrument, maturity date | Mar. 1, 2022 | ||||
Debt instrument, payment term description | The Company will make monthly payments of principal and interest on an eighteen (18) month straight line amortization schedule, based on the principal outstanding on July 31, 2020. Additionally, the Company will have the option of a one (1) time payment-in-kind payment for a monthly required payment of principal and interest, which will defer such payments and result in a recalculation of the amortization schedule. In the event that the Company is late on any payments under the Loan, a late charge of three percent (3%) of the amount of the payment due will be assessed. | ||||
Debt instrument origination fee | $ 300,000 | ||||
Attorneys fees | $ 35,000 | ||||
Repayment of loan priciple and interest | $ 2,585,000 | ||||
Outstanding loan |
OID Convertible Debentures (Det
OID Convertible Debentures (Details Narrative) | Jun. 25, 2020USD ($)$ / sharesshares | Feb. 28, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Accounts receivable | $ 1,260,000 | $ 1,260,000 | $ 805,000 | |||
Warrant exercise price | $ / shares | $ 3.60 | $ 3.60 | ||||
Repayment of short-term note payable | $ 2,500,000 | |||||
Warrant issued | shares | 500,000 | 500,000 | ||||
Proceeds from issuance of debt | $ 13,000,000 | |||||
Amortization expenses | $ 3,302,000 | 3,302,000 | ||||
Debenture principal converted into common stock | 788,000 | |||||
Increase in additional paid in capital | $ 234,000 | 234,000 | ||||
Class A Common Stock [Member] | ||||||
Debt instrument, no. of shares issued upon conversion | shares | 293,038 | |||||
OID Convertible Debentures [Members] | ||||||
Debt principle amount | $ 16,101,000 | |||||
Debt discount | $ 14,169,000 | |||||
Original issue discount percentage | 12.00% | |||||
Warrant to purchase common stock | shares | 6,440,561 | |||||
Purchase price | $ 13,000,000 | |||||
Outstanding loan | 1,169,000 | |||||
Accounts receivable | 510,000 | |||||
Short term promissory notes | 350,000 | |||||
Accrued interest | $ 125,000 | |||||
Debt instrument, interest rate | 12.00% | |||||
Initial conversion price | $ / shares | $ 2.69 | |||||
Warrant exercise price | $ / shares | $ 2.50 | |||||
OID Convertible Debentures [Members] | ||||||
Debt principle amount | $ 15,313,000 | 15,313,000 | ||||
Debt discount | $ 1,237,000 | 1,237,000 | ||||
Debt instrument, maturity date | Dec. 31, 2021 | |||||
Debt instrument discription | Subject to the Company's compliance with certain equity conditions, upon ten trading days' notice to the Purchasers, the Company has the right to redeem the Debentures in cash at 115% of their outstanding principal, plus accrued interest. Additionally, in the event that (i) the Company sells or reprices any securities (each, a "Redemption Financing"), or (ii) the Company disposes of assets (except those sold or transferred in the ordinary course of business) (each, an "Asset Sale"), then the Purchasers shall have the right to cause the Company (a) in the event of a Redemption Financing at a price per Common Stock equivalent of $2.50 or less per share, the Purchasers may mandate that 100% of the proceeds be used to redeem the Debentures (b) in the event of a Redemption Financing at a price per Common Stock equivalent of greater than $2.50 per share, the Purchasers may mandate that up to 50% of the proceeds be used to redeem the Debentures, and (c) in the event of an Asset Sale, the Purchasers may mandate that up to 100% of the proceeds be used to redeem the Debentures. | |||||
Debt instrument, restrictive covenants | The Company is also subject to certain negative covenants (unless waived by 67% of the then outstanding Purchasers, and including the lead Purchaser) under the Debentures, including but not limited to, the creation of certain debt obligations, liens on Company assets, amending its charter documents, repayment or repurchase of securities or certain debt of the Company, or the payment of dividends. | |||||
Warrant or right, reason for issuance, description | Pursuant to the terms of the Debentures and Warrants, a Purchaser will not have the right to convert any portion of the Debentures or exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99% (at the Purchaser's option) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or exercise, as such percentage ownership is determined in accordance with the terms of the Debentures and the Warrants; provided that at the election of a holder and notice to us such percentage ownership limitation may be increased to 9.99%; provided that any increase will not be effective until the 61st day after such notice is delivered from the holder to the Company. | |||||
Payment of outstanding debt | $ 2,500,000 | |||||
Repayment of short-term note payable | $ 136,000 | |||||
Proceeds from issuance of debt | 4,200,000 | |||||
Proceeds from offering gross | 13,000,000 | |||||
Proceeds from offering, net | $ 9,100,000 | |||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | ||||||
Warrant to purchase common stock | shares | 478,854 | 478,854 | ||||
Warrant exercise price | $ / shares | $ 3.3625 | $ 3.3625 | ||||
Estimated warrant issuance | shares | 360,000 | 360,000 | ||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | Bradley Woods & Co. Ltd [Member] | ||||||
Commission | $ 1,040,000 | |||||
Warrant issued | shares | 478,854 | 478,854 | ||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | Risk Free Interest Rate [Member] | ||||||
Fair value of warrant liability, measurement input, percentage | .11 | .11 | ||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | Expected Term [Member] | ||||||
Fair value assumption, warrant expected term | 2 years 50 months 1 day | 2 years 50 months 1 day | ||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | Expected Volatility [Member] | ||||||
Fair value of warrant liability, measurement input, percentage | 96 | 96 | ||||
OID Convertible Debentures [Members] | Securities Purchase Agreement [Member] | Expected Dividend Yield [Member] | ||||||
Fair value of warrant liability, measurement input, percentage | 0 | 0 | ||||
OID Convertible Debentures [Members] | Prior to Closing date [Members] | ||||||
Proceeds from issuance of debt | $ 3,800,000 | |||||
OID Convertible Debentures [Members] | After the Closing date [Members] | ||||||
Proceeds from issuance of debt | $ 5,000,000 | |||||
OID Convertible Debentures [Members] | Accounts Receivable [Members] | ||||||
Accrued interest | $ 184,000 |
OID Convertible Debentures - Sc
OID Convertible Debentures - Schedule of OID Convertible Debentures (Details) - OID Convertible Debentures [Members] | Sep. 30, 2020USD ($) |
Principal balance | $ 15,313,000 |
Debt discount - OID | (1,237,000) |
Debt discount - BCF | (4,403,000) |
Debt discount warrants | (2,467,000) |
Debt discount fees | (1,133,000) |
Net book value | 6,431,000 |
Less OID convertible debentures, short term | 3,683,000 |
OID convertible debentures, long term | $ 2,748,000 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Details Narrative) - USD ($) | Apr. 17, 2020 | Sep. 30, 2020 | Sep. 15, 2020 |
LD Micro, Inc. [Member] | |||
Payroll protection loan in connection with acquisition | $ 42,000 | ||
Paycheck Protection Program Loan [Member] | |||
Unsecured loan | $ 1,084,000 | ||
Term loan | 2 years | ||
Interest rate | 1.00% | ||
Short term loan | $ 548,000 | ||
Long term loan | $ 578,000 |
Right to Use Asset (Details Nar
Right to Use Asset (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Remaining lease term | 3 years | 3 years | ||
Variable lease costs | ||||
Sublease income | ||||
Lease expense | $ 45,000 | $ 74,000 | $ 154,000 | $ 227,000 |
Right to Use Asset - Schedule o
Right to Use Asset - Schedule of Component of Lease Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease expense | $ 41,000 | $ 41,000 | $ 122,000 | $ 122,000 |
Short-term lease expense | 4,000 | 33,000 | 32,000 | 105,000 |
Total lease expense | $ 45,000 | $ 74,000 | $ 154,000 | $ 227,000 |
Right to Use Asset - Schedule_2
Right to Use Asset - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets - non-current | $ 390,000 | $ 456,000 |
Operating lease liabilities - current | 94,000 | 91,000 |
Operating lease liabilities - non-current | 282,000 | $ 352,000 |
Total operating lease liabilities | $ 376,000 |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Contract liabilities | $ 3,673,000 | |
Contract liabilities assumed from LD Micro | 97,000 | |
BIGToken point liability | 263,000 | 446,000 |
Operating lease liabilities - current | 94,000 | 91,000 |
Other current liabilities | 2,723,000 | |
Total lease expense | $ 6,850,000 | $ 537,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Preferred stock shares authorized | 50,000,000 | 50,000,000 | |||
Preferred stock par value | $ 0.001 | $ 0.001 | |||
Common stock shares authorized | 259,000,000 | 259,000,000 | |||
Common stock shares issued | 16,027,190 | 16,027,190 | 13,997,452 | ||
Common stock shares outstanding | 16,027,190 | 16,027,190 | 13,997,452 | ||
Warrants to purchase common stock shares | 500,000 | 500,000 | |||
Warrants exercise price per share | $ 3.60 | $ 3.60 | |||
Number of stock issued for purchase warrants | 500,000 | 7,419,415 | |||
Stock based compensation expenses | $ 268,000 | $ 329,000 | $ 917,000 | $ 775,000 | |
Independent Directors [Member] | |||||
Number of stock options issued | 9,043 | ||||
Stock issued price per share | $ 1.95 | $ 1.95 | |||
Options vesting period | 1 year | ||||
Options term | 7 years | ||||
Employees [Member] | |||||
Number of stock options issued | 430,000 | ||||
Stock issued price per share | $ 2.70 | $ 2.70 | |||
Options vesting period | 5 years | ||||
Options term | 5 years | ||||
Number of stock options terminated | 42,675 | ||||
Series 1 Preferred Stock [Member] | |||||
Preferred stock shares authorized | 200,000 | 200,000 | |||
Class A Common Stock [Member] | |||||
Common stock shares authorized | 250,000,000 | 250,000,000 | |||
Common stock par value | $ 0.001 | $ 0.001 | |||
Class B Common Stock [Member] | |||||
Common stock shares authorized | 9,000,000 | 9,000,000 | |||
Common stock par value | $ 0.001 | $ 0.001 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value On Recurring Basis (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Total assets | $ 4,800,000 | $ 22,000 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level1) [Member] | ||
Total assets | 4,800,000 | 22,000 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total assets | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level3) [Member] | ||
Total assets | ||
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | ||
Total assets | 4,800,000 | 22,000 |
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level1) [Member] | ||
Total assets | 4,800,000 | 22,000 |
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total assets | ||
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | Significant Unobservable Inputs (Level3) [Member] | ||
Total assets |
Segment Reporting - (Details Na
Segment Reporting - (Details Narrative) | 9 Months Ended | |
Sep. 30, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Number of operating segments | segment | 2 | |
Goodwill | $ 23,351,000 | $ 15,645,000 |
Revenue contract liabilities | 3,770,000 | $ 0 |
SEQUIRE [Member] | ||
Goodwill | 10,200,000 | |
BIGToken [Member] | ||
Goodwill | $ 5,445,000 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenue and Gross Profit by Reportable Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total Revenue | $ 2,609,000 | $ 1,001,000 | $ 4,125,000 | $ 2,497,000 |
Cost of Revenue | 880,000 | 322,000 | 1,388,000 | 1,075,000 |
Gross profit | 1,729,000 | 679,000 | 2,737,000 | 1,422,000 |
Investor / Shareholder Media Services [Member] | ||||
Total Revenue | 1,749,000 | 2,432,000 | ||
Platform Subscription [Member] | ||||
Total Revenue | 207,000 | 31,000 | 376,000 | 41,000 |
Conference Revenues [Member] | ||||
Total Revenue | ||||
Consumer Media / Data [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
Other [Member] | ||||
Total Revenue | 49,000 | 55,000 | 143,000 | 165,000 |
SEQUIRE [Member] | ||||
Total Revenue | 1,956,000 | 31,000 | 2,808,000 | 41,000 |
Cost of Revenue | 650,000 | 896,000 | ||
Gross profit | 1,306,000 | 31,000 | 1,912,000 | 41,000 |
SEQUIRE [Member] | Investor / Shareholder Media Services [Member] | ||||
Total Revenue | 1,749,000 | 2,432,000 | ||
SEQUIRE [Member] | Platform Subscription [Member] | ||||
Total Revenue | 207,000 | 31,000 | 376,000 | 41,000 |
SEQUIRE [Member] | Conference Revenues [Member] | ||||
Total Revenue | ||||
SEQUIRE [Member] | Consumer Media / Data [Member] | ||||
Total Revenue | ||||
SEQUIRE [Member] | Other [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
Cost of Revenue | 230,000 | 335,000 | 491,000 | 1,013,000 |
Gross profit | 376,000 | 580,000 | 683,000 | 1,278,000 |
BIGToken [Member] | Investor / Shareholder Media Services [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Platform Subscription [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Conference Revenues [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Consumer Media / Data [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
BIGToken [Member] | Other [Member] | ||||
Total Revenue | ||||
Corporate and Other [Member] | ||||
Total Revenue | 49,000 | 55,000 | 143,000 | 165,000 |
Cost of Revenue | (13,000) | 1,000 | 62,000 | |
Gross profit | 49,000 | 68,000 | 142,000 | 103,000 |
Corporate and Other [Member] | Investor / Shareholder Media Services [Member] | ||||
Total Revenue | ||||
Corporate and Other [Member] | Platform Subscription [Member] | ||||
Total Revenue | ||||
Corporate and Other [Member] | Conference Revenues [Member] | ||||
Total Revenue | ||||
Corporate and Other [Member] | Consumer Media / Data [Member] | ||||
Total Revenue | ||||
Corporate and Other [Member] | Other [Member] | ||||
Total Revenue | $ 49,000 | $ 55,000 | $ 143,000 | $ 165,000 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Revenue Disaggregation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total Revenue | $ 2,609,000 | $ 1,001,000 | $ 4,125,000 | $ 2,497,000 |
Investor / Shareholder Media Services [Member] | ||||
Total Revenue | 1,749,000 | 2,432,000 | ||
Platform Subscription [Member] | ||||
Total Revenue | 207,000 | 31,000 | 376,000 | 41,000 |
Conference Revenues [Member] | ||||
Total Revenue | ||||
Consumer Media / Data [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
Other [Member] | ||||
Total Revenue | 49,000 | 55,000 | 143,000 | 165,000 |
SEQUIRE [Member] | ||||
Total Revenue | 1,956,000 | 31,000 | 2,808,000 | 41,000 |
SEQUIRE [Member] | Investor / Shareholder Media Services [Member] | ||||
Total Revenue | 1,749,000 | 2,432,000 | ||
SEQUIRE [Member] | Platform Subscription [Member] | ||||
Total Revenue | 207,000 | 31,000 | 376,000 | 41,000 |
SEQUIRE [Member] | Conference Revenues [Member] | ||||
Total Revenue | ||||
SEQUIRE [Member] | Consumer Media / Data [Member] | ||||
Total Revenue | ||||
SEQUIRE [Member] | Other [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
BIGToken [Member] | Investor / Shareholder Media Services [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Platform Subscription [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Conference Revenues [Member] | ||||
Total Revenue | ||||
BIGToken [Member] | Consumer Media / Data [Member] | ||||
Total Revenue | 604,000 | 915,000 | 1,174,000 | 2,291,000 |
BIGToken [Member] | Other [Member] | ||||
Total Revenue |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 30, 2020 | Sep. 30, 2020 |
Force Video Protection Equipment Corp. [Member] | Share Exchange Agreement [Member] | ||
Equity ownership percentage | 88.90% | |
Subsequent Event [Member] | MD Colnvest, LLC [Member] | ||
Number of units owned by entity | 420,000 | |
Redemption amount payable at closing | $ 282,000 | |
Redemptions of units payable upon earlier, amount | 40,000 | |
Proceeds from sale of units | $ 322,000 | |
Units price | $ 0.7677543 | |
Subsequent Event [Member] | TI Health [Member] | ||
Proceeds from sale of units | $ 7,000,000 | |
Subsequent Event [Member] | Class A Units [Member] | Haylard MD, LLC [Member] | ||
Number of units owned by entity | 10,000,000 | |
Redemption amount payable at closing | $ 6,718,000 | |
Redemptions of units payable upon earlier, amount | 960,000 | |
Proceeds from sale of units | $ 7,678,000 | |
Units price | $ 0.7677543 |