Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 23, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-37916 | ||
Entity Registrant Name | SRAX, INC. | ||
Entity Central Index Key | 0001538217 | ||
Entity Tax Identification Number | 45-2925231 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 2629 Townsgate Road #215 | ||
Entity Address, City or Town | Westlake Village | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 91361 | ||
City Area Code | (323) | ||
Local Phone Number | 694-9800 | ||
Title of 12(b) Security | Class A Common Stock, $0.001 par value | ||
Trading Symbol | SRAX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 121,972,024 | ||
Entity Common Stock, Shares Outstanding | 26,315,178 | ||
Documents Incorporated By Reference | None | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | RBSM LLP | ||
Auditor Location | New York, NY | ||
Auditor Firm ID | 587 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 1,348,000 | $ 450,000 |
Accounts receivable, net | 821,000 | 1,409,000 |
Contracts receivable | 844,000 | |
Marketable securities | 15,617,000 | 8,447,000 |
Designated assets for return of capital | 3,925,000 | |
Prepaid expenses and other current assets | 430,000 | 361,000 |
Current assets of discontinued operations | 1,206,000 | |
Total current assets | 22,985,000 | 11,873,000 |
Notes receivable | 935,000 | 893,000 |
Property and equipment, net | 114,000 | 117,000 |
Intangible assets, net | 1,443,000 | 1,492,000 |
Right of use assets | 257,000 | 366,000 |
Other assets | 36,000 | 2,000 |
Goodwill | 17,906,000 | 17,906,000 |
Long-term assets of discontinued operations | 6,364,000 | |
Total assets | 43,676,000 | 39,013,000 |
Current liabilities | ||
Accounts payable and accrued expenses | 4,095,000 | 2,708,000 |
Deferred revenue | 12,859,000 | 4,842,000 |
Other current liabilities | 763,000 | 3,417,000 |
Payroll protection loan - current portion | 10,000 | 747,000 |
OID notes payable | 1,164,000 | 6,016,000 |
Series A preferred stock, authorized 36,462,417 shares, $0.001 par value, 36,462,417 shares and none issued and outstanding, respectively | 3,925,000 | |
Current liabilities of discontinued operations | 1,305,000 | |
Total current liabilities | 22,816,000 | 19,035,000 |
Right of use liability - long term | 114,000 | 243,000 |
Payroll protection loan - long term | 379,000 | |
Deferred tax liability | 131,000 | |
Total liabilities | 22,930,000 | 19,788,000 |
Commitments and contingencies (Note 19) | ||
Stockholders’ equity | ||
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 25,995,172 and 16,145,778 shares issued and outstanding, respectively | 26,000 | 16,000 |
Additional paid in capital | 51,075,000 | 69,551,000 |
Accumulated deficit | (30,355,000) | (50,342,000) |
Total stockholders’ equity | 20,746,000 | 19,225,000 |
Total liabilities and stockholders’ equity | $ 43,676,000 | $ 39,013,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, shares authorized | 259,000,000 | |
Common stock, shares issued | 25,995,172 | 16,145,778 |
Common stock, shares outstanding | 25,995,172 | 16,145,778 |
Series A Preferred Stock [Member] | ||
Temporary equity, shares authorized | 36,462,417 | 36,462,417 |
Temporary equity, par value | $ 0.001 | $ 0.001 |
Temporary equity, shares outstanding | 36,462,417 | 0 |
Temporary Equity, Shares Outstanding | 36,462,417 | 0 |
Class A common stock [Member] | ||
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 25,995,172 | 16,145,778 |
Common stock, shares outstanding | 25,995,172 | 16,145,778 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 26,707,000 | $ 6,479,000 |
Cost and expenses | ||
Cost of revenue | 6,521,000 | 1,789,000 |
Employee related costs | 7,533,000 | 4,683,000 |
Marketing and selling expenses | 6,330,000 | 1,717,000 |
Platform costs | 214,000 | 960,000 |
Depreciation and amortization | 842,000 | 772,000 |
General and administrative expenses | 5,352,000 | 3,590,000 |
Total cost and expenses | 26,792,000 | 13,511,000 |
Income (loss) from operations | (85,000) | (7,032,000) |
Other income (expense) | ||
Financing costs | (10,295,000) | (12,150,000) |
Realized gain on marketable securities | 804,000 | 684,000 |
Unrealized gain (loss) on marketable securities | (7,904,000) | 261,000 |
Realized loss on designated assets | (84,000) | |
Unrealized loss on designated assets | (2,378,000) | |
Gain on sale of SRAXmd, net | 7,873,000 | |
Interest income | 42,000 | |
Other income | 1,144,000 | |
Change in fair value of preferred stock | 2,462,000 | |
Change in fair value of derivative liabilities | 321,000 | |
Total other expense | (16,209,000) | (3,011,000) |
Loss before provision for income taxes | (16,294,000) | (10,043,000) |
Provision for income tax benefit (expense) | 127,000 | (21,000) |
Loss from continuing operations | (16,167,000) | (10,064,000) |
Discontinued operations | ||
Loss before income tax benefits | (14,376,000) | (4,641,000) |
Loss on disposal of subsidiary | (10,684,000) | |
Income tax benefit | ||
Loss from discontinued operations | (25,060,000) | (4,641,000) |
Net loss | (41,227,000) | (14,705,000) |
Net loss attributable to non-controlling interest in discontinued operations | 6,465,000 | |
Net loss attributable to SRAX, Inc. | $ (34,762,000) | $ (14,705,000) |
Basic and diluted loss per share | ||
Continuing operations | $ (0.69) | $ (0.69) |
Discontinued operations attributable to SRAX, Inc. | (0.79) | (0.32) |
Net loss per share, basic and diluted | $ (1.48) | $ (1.01) |
Weighted average shares outstanding, basic and diluted | 23,550,744 | 14,649,788 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
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 | ||||
Stock based compensation | 1,710,000 | 1,710,000 | |||
Relative fair value of warrants issued with notes payable | 4,331,000 | 4,331,000 | |||
Shares issued for extension agreement | 71,000 | 71,000 | |||
Shares issued for extension agreement, shares | 36,700 | ||||
Shares issued for debt extinguishment | 181,000 | 181,000 | |||
Shares issued for debt extinguishment, shares | 100,000 | ||||
Conversion of convertible debt to equity | 434,000 | 434,000 | |||
Conversion of convertible debt to equity, shares | 411,626 | ||||
Common stock issued for the acquisition of a subsidiary | $ 2,000 | 4,262,000 | 4,264,000 | ||
Common stock issued for the acquisition of a subsidiary, shares | 1,600,000 | ||||
Reclassification of warrants from liability to equity | 4,076,000 | 4,076,000 | |||
Premium on debt extinguishment | 46,000 | 46,000 | |||
Beneficial conversion feature | 6,311,000 | 6,311,000 | |||
Net loss attributable to SRAX, Inc. | (14,705,000) | (14,705,000) | |||
Net loss attributable to non controlling interest in discontinued operations | |||||
Balance at Dec. 31, 2020 | $ 16,000 | 69,551,000 | (50,342,000) | 19,225,000 | |
Balance, shares at Dec. 31, 2020 | 16,145,778 | ||||
Stock based compensation | 1,006,000 | 1,006,000 | |||
Conversion of convertible debt to equity | $ 3,000 | 5,971,000 | 5,974,000 | ||
Conversion of convertible debt to equity, shares | 3,122,167 | ||||
Net loss attributable to SRAX, Inc. | (34,762,000) | (34,762,000) | |||
Shares issued for cash | 284,000 | 284,000 | |||
Shares issued for cash, shares | 53,616 | ||||
Shares issued for exercise of warrants, net of offering costs | $ 7,000 | 15,945,000 | 15,952,000 | ||
Shares issued for exercise of warrants, net of offering costs, shares | 6,828,611 | ||||
Warrants issued as an inducement to exercise warrants | 7,737,000 | 7,737,000 | |||
Acquisition of noncontrolling interest of FVPD | (95,000) | (95,000) | |||
Warrants issued by FVPD for SRAX, Inc. debenture holders | 885,000 | 885,000 | |||
Series B convertible preferred stock issued by FPVD | 5,860,000 | 5,860,000 | |||
Beneficial conversion feature FPVD series B convertible preferred stock | 5,860,000 | 5,860,000 | |||
Dividends on preferred stock | (6,387,000) | (6,387,000) | |||
Disposition of subsidiary | (42,239,000) | 54,749,000 | (6,045,000) | 6,465,000 | |
Repurchase and retirement of shares | (793,000) | (793,000) | |||
Repurchase and retirement of shares, shares | (155,000) | ||||
Net loss attributable to non controlling interest in discontinued operations | (6,465,000) | (6,465,000) | |||
Balance at Dec. 31, 2021 | $ 26,000 | $ 51,075,000 | $ (30,355,000) | $ 20,746,000 | |
Balance, shares at Dec. 31, 2021 | 25,995,172 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (41,227,000) | $ (14,705,000) |
Less: Loss from discontinued operations, net of tax | (25,060,000) | (4,641,000) |
Loss from continuing operations | (16,167,000) | (10,064,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Unrealized loss (gain) on marketable securities | 7,904,000 | (261,000) |
Realized gain on marketable securities | (804,000) | (684,000) |
Unrealized loss on designated assets | 2,378,000 | |
Realized loss on designated assets | 84,000 | |
Gain on sale of SRAXmd | (7,873,000) | |
Interest income | (42,000) | |
Change in fair value of preferred stock | (2,462,000) | |
Change in fair value of derivative liabilities | (321,000) | |
Forgiveness of payroll protection program loan | (1,116,000) | |
Warrants issued by FVPD for SRAX, Inc. debenture holders | 885,000 | |
Loss on extinguishment of debt | 1,103,000 | |
Warrant inducement charge | 7,737,000 | |
Marketable securities received for accounts receivable previously written off | (409,000) | |
Amortization of debt issue costs | 854,000 | 9,128,000 |
Stock based compensation | 1,006,000 | 1,615,000 |
Provision for bad debts | (20,000) | 17,000 |
Depreciation expense | 72,000 | 28,000 |
Amortization of intangibles | 847,000 | 744,000 |
Net change in right of use asset and liability | (20,000) | (19,000) |
Non-cash financing expense | 268,000 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 1,680,000 | (1,439,000) |
Prepaid expenses and other current assets | (820,000) | 400,000 |
Accounts payable and accrued expenses | 3,278,000 | 1,521,000 |
Deferred revenue | (20,669,000) | |
Other current liabilities | 350,000 | (3,049,000) |
Deferred tax liability | (131,000) | |
Net cash used in continuing operations | (15,317,000) | (9,154,000) |
Net cash used in discontinued operations | (8,118,000) | (4,335,000) |
Net cash used in operating activities | (23,435,000) | (13,489,000) |
Cash flows from investing activities | ||
Proceeds from the sale of marketable securities | 8,666,000 | 519,000 |
Proceeds from the sale of designated assets | 686,000 | |
Purchase of marketable securities | (1,450,000) | |
Proceeds from sale of SRAXmd, net | 7,000,000 | |
Acquisition of LD Micro, net of cash acquired | (697,000) | |
Payment for deferred consideration to LD Micro | (3,004,000) | |
Acquisition of property and equipment | (69,000) | |
Acquisition of intangible assets | (798,000) | (633,000) |
Other assets | (33,000) | 32,000 |
Net cash from continuing operations | 3,998,000 | 6,221,000 |
Net cash from (used in) discontinued operations | 841,000 | (175,000) |
Net cash from investing activities | 4,839,000 | 6,046,000 |
Cash flows from financing activities | ||
Proceeds from the issuance of common stock units | 284,000 | |
Proceeds from the exercise of warrants | 15,952,000 | |
Repurchase of shares | (793,000) | |
Proceeds from OID notes payable, less issuance costs | 11,988,000 | |
Redemption of OID notes payable | (6,070,000) | |
Proceeds from issuance of short-term notes payable, less issuance costs | 960,000 | |
Repayment of short-term notes payable | (100,000) | |
Proceeds from payroll protection program | 1,084,000 | |
Proceeds from the issuance of notes payable | 2,130,000 | |
Repayment of notes payable | (2,130,000) | |
Net cash from continuing operations | 15,443,000 | 7,862,000 |
Net cash from discontinued operations | 4,736,000 | |
Net cash from financing activities | 20,179,000 | 7,862,000 |
Net increase in cash from continuing operations | 4,124,000 | 4,929,000 |
Net decrease in cash from discontinued operations | (2,541,000) | (4,510,000) |
Cash, cash equivalents and board designated restricted cash beginning of year | 451,000 | 32,000 |
Cash, cash equivalents and board designated restricted cash end of year | 2,034,000 | 451,000 |
Less: Cash from discontinued operations | 1,000 | |
Cash, cash equivalents and board designated restricted cash from continuing operations | 2,034,000 | 450,000 |
Cash reserved for designated asset for return of capital | (686,000) | |
Cash and cash equivalents | 1,348,000 | 450,000 |
Supplemental schedule of cash flow information | ||
Cash paid for interest | 176,000 | |
Cash paid for taxes | ||
Supplemental schedule of noncash investing and financing activities | ||
Common stock received in lieu of cash for accounts receivable | 27,842,000 | 8,406,000 |
Convertible notes converted into shares | 5,974,000 | 434,000 |
Designation of marketable securities for dividend distribution | 6,387,000 | |
Dividends on preferred stock | 6,387,000 | |
Vesting of common stock award | 94,000 | |
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 | |
Shares issued for the acquisition of a subsidiary | 4,264,000 | |
Common stock issued to settle liability | $ 181,000 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization SRAX, Inc. (“SRAX”, “we”, “us”, “our” or the “Company”) is a Delaware corporation formed on August 2, 2011. We are headquartered in Westlake Village, California but work as a distributed virtual Company. The Consolidated Financial Statements consist of SRAX and its wholly owned subsidiary LD Micro, Inc. (“LD Micro”). We are a technology firm focused on enhancing communications between public companies and their shareholders and investors. We currently have two distinct business units, which we consider to be one reporting unit: ● Our unique SaaS platform, Sequire provides users many features which allow issuers to track their shareholders’ behaviors and trends, then use data-driven insights to engage with shareholders across marketing channels. ● Through LD Micro, we organize and host investor conferences within the micro and small- cap markets, and plan to create several more niche events for the investor community. Each of SRAX’s business units deliver valuable insights that assist our clients with their investor relations and communications initiatives. On December 29, 2021, we deconsolidated our majority owned subsidiary BIG Token, Inc. (“BIGToken”) (formerly known as Force Protection Video Equipment Corporation). After the deconsolidation, we do not beneficially own controlling interest in BIGtoken, and no longer consolidate BIGtoken into our financial results for periods ending after December 31, 2021. The financial results of BIGtoken for the years ended December 31, 2021 and 2020 are presented as income from discontinued operations, net of taxes on the consolidated statements of operations and its assets and liabilities as of December 31, 2021 are presented as assets and liabilities of discontinued operations on the consolidated balance sheets. The historical consolidated statement of cash flows has also been revised to reflect the effect of the deconsolidation. See Note 2 – Discontinued Operations. Unless noted otherwise, discussion in the notes to the consolidated financial statements pertain to continuing operations. Liquidity and Going Concern The Company has incurred significant losses since its inception and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. As of December 31, 2021, the Company had cash and cash equivalents of $ 1,348,000 which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited 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, our accounts receivable and marketable securities as of December 31, 2021, will not be sufficient to enable us to fund our anticipated level of operations through one year from the date these financial statements are issued. 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 assurances 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. The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, and uncertain. The impact of COVID-19 has not been significant to the Company’s results of operations, financial condition, and liquidity and capital resources. Although no material impairment or other effects have been identified to date, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known. The Company will continue to consider the potential impact of the COVID-19 pandemic on its business operations. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control of the subsidiary. Business Segments The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has one operating segment due to business similarities and similar economic characteristics. Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value are recognized in earnings until settlement and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. Use of Estimates The consolidated financial statements have been prepared in conformity with generally accepted accounting principles accepted in the United States of America (“GAAP”) and requires management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company’s revenue recognition, allowance for doubtful accounts and sales credits, valuation of marketable investment securities, stock-based compensation, income taxes, purchase price for acquisition, goodwill, other intangible assets, put rights and valuation of other assets and liabilities. Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability. In determining fair value, the Company uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value. It maximizes observable inputs and minimizes unobservable inputs. Valuation techniques consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels: ● Level 1 ● Level 2 ● Level 3 Fair value is a market-based measure that is based on assumptions of prices and inputs considered from the perspective of a market participant on the measurement date. Therefore, even when market assumptions are not readily available, the fund’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors. The determination of fair value requires prudent judgment. Due to the inherent uncertainty of valuation, estimated values may be materially different from values were a ready market available. Inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the fund’s level is based on the lowest significant level input to the fair value measurement. Valuation Techniques and Inputs Investments in securities and securities sold short that are both freely tradable and listed on major securities exchanges are valued at their last reported sales price as of the valuation date. Many over-the-counter contracts have bid and ask prices that are observable in the marketplace. Bid prices reflect the highest price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants are willing to accept for an asset. An integral part of the Company’s fair value measurement process is the assessment of the type of securities as well as the securities’ liquidity and marketability. The Company initially classifies securities between debt securities, equity securities, warrants, convertible debt, or preferred stock. The Company does not have any debt securities as of December 31, 2021 and 2020. Warrants are initially valued at cost, if acquired for cash, or at intrinsic value. For convertible debt securities the investor generally should evaluate the security in its current “all-in” form as convertible debt and not use the “if converted” value. Convertible debt is valued based on an analysis of the implied call option and a discounted cash flow analysis of the debt component. Equity securities are valued using the quoted prices times the number of shares acquired. The securities are then evaluated based on their marketability (usually based on the restrictions on resale into the securities primary market) and liquidity. The Company considers there to be an active market based on the guidance in ASC 820-10-35-54C. In an active market, transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. An orderly transaction assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities. Whether transactions take place with sufficient frequency and volume to constitute an active market is a matter of judgement and depends on the facts and circumstances of the market for the asset or liability. If the Company determines that the trading market for a security is not an active market the Company evaluates the stock price based on other observable or unobservable inputs. A market with limited activity may still provide relevant pricing information when there is no contrary evidence that the pricing information is not relevant to the fair value of the asset. In certain situations, the Company’s security holdings represent share quantities that materially exceed the average daily trading volume of the securities in their primary market. Thus, the Company considers a discount due to the lack of liquidity. If the Company determines it can liquidate its position within 180 days based on 10% of the securities average daily trading volume, no discount is applied. Rule 144 also has an alternative volume limit for affiliates of up to 10% of the tranche (or class) outstanding for debt securities. We believe this provides a reasonable basis to suggest this 10% of trading volume should have minimal impact on market prices. Securities with a marketability holding period in excess of 180 days is subjected to a discount for marketability. If a security has both a marketability holding period over 180 days and a liquidation period of over 180 days the Company will evaluate the impact of both the marketability and liquidity discounts. The Company utilizes the quoted market price on the date of valuation calculates a discount for marketability and liquidity based on a protective put option pricing model that factors in both the lack of marketability and liquidity. Independent Valuation Expert The Company uses a third party specialist to provide guidance around the assumptions, inputs, pricing models utilized valuation calculations into the various Put Option Pricing Models (POPMs) used in the calculations to determine discounts at contract inceptions date and each of the respective balance sheet dates. If the Company has access to material non-public information regarding an investee, it will consider this information as an input for purposes of valuing the security. In these situations, the Company will consider the impact this information will have on the valuation of the securities on a case-by-case basis. These situations could arise due to the Company being an affiliate of the issuer or an officer or director of the Company is an affiliate of the issuer. These securities are categorized in Level 1 of the fair value hierarchy to the extent these securities are actively traded. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 of the fair value hierarchy. Investments in Restricted Securities of Public Companies Investments in restricted securities of public companies cannot be offered for sale to the public until the company complies with certain statutory requirements. The valuation will not exceed the listed price on any major securities exchange. Investments in restricted securities of public companies are generally categorized in Level 2 of the fair value hierarchy. However, investments in public companies may be categorized in Level 3 of the fair value hierarchy depending on the level of observable liquidity. Specifically, if the Company determines the market activity is not sufficient to conclude the market activity represents an Active Market pursuant to ASC 820 -10 -35 36B. The Company evaluates the trading activity of each listed security to determine if the trading market is an Active Market for purposes of evaluating Fair Value under ASC 820. The Company evaluated the number of trade observations during the year, the percentage of the total trading days the security traded on its listed market during the full year or the portion of the year if the security was initially listed during the year, and at the dollar value of the trading activity for the full year as a percentage of the market capitalization of the security. If the Company determines the listed securities trading market is not an active market it looks at other transactions reported by the listed company including private equity transactions, non-cash equity transactions, the trading price and other factors. The Company determines a fair value of the stock price based on this analysis. This price is the lower of the listed price or the fair value based on the analysis. The Company also considers the marketability and liquidity discounts on the listed security in determining fair value. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates its fair value. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $ 250,000 1,098,000 200,000 Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Allowance for doubtful accounts was approximately $ 130,000 15,000 Concentration of Credit and Significant Customer Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with financial institutions within the United States. The balances maintained at these financial institutions are generally more than the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any loss on these accounts. As of December 31, 2021, the Company had one customer with an accounts receivable balance of approximately 11 As of December 31, 2020, the Company had three customers with accounts receivable balances of approximately 43.41 %, 11.60 %, and 10.53 %. For the year ended December 31, 2021, the Company had no customers that account for a significant percentage of total revenue. For the year ended December 31, 2020, the Company had one customer that accounted for 18.1 Long-lived Assets Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company’s stock price for a sustained period of time; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the years ended December 31, 2021 or 2020, respectively. Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. Intangible assets Intangible assets consist of intellectual property, trademarks, trade names, and non-compete agreements, and internally developed software and are stated at cost less accumulated amortization. Amortization is provided for on the straight-line basis over the estimated useful lives of the assets of five years. Costs incurred to develop computer software for internal use are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a specific software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Post-implementation costs related to the internal use computer software, are expensed as incurred. Internal use software development costs are amortized using the straight-line method over its estimated useful life which ranges up to three years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the years ended December 31, 2021, and 2020 there has been no impairment associated with internal use software. For the years ended December 31, 2021, and 2020, the Company capitalized software development costs of $ 798,000 633,000 During 2016, the Company began capitalizing the costs of developing internal-use computer software, including directly related payroll costs. The Company amortizes costs associated with its internally developed software over periods up to three years, beginning when the software is ready for its intended use. The Company capitalizes costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Right of Use Assets and Lease Obligations The Right of Use Asset and Lease Liability reflect the present value of the Company’s estimated future minimum lease payments over the lease term, which may include options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term. Therefore, the Right of Use Asset and Lease Liability may include an assumption on renewal options that have not yet been exercised by the Company. As the rate implicit in leases are not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test as of December 31, 2021 using market data and discounted cash flow analysis. Based on this analysis, it was determined that the fair value exceeded the carrying value of its reporting units. The Company concluded the fair value of the goodwill exceed the carrying value accordingly there were no indicators of impairment for the years ended December 31, 2021 and 2020. The Company had historically performed its annual goodwill and impairment assessment on December 31 st When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the impairment testing methodology primarily using the income approach (discounted cash flow method). We compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows if the carrying value of a reporting unit exceeds its fair value, then the amount by which it exceeds its fair value will be recognized as an impairment. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. Derivatives The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, Distinguishing Liabilities From Equity Derivatives and Hedging The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend, which will reduce the income available to common stockholders. Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using a Black-Scholes option pricing model, at each measurement date. Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options Revenue Recognition On January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods (ASC 605). The adoption did not have a significant impact to the nature and timing of our revenues, results of operations, cash flows and statement of financial position. Revenue from all sale types is recognized at transaction price, the amount we expect to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives and price protection related to current period product revenue. Our standard obligation to our direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, we estimate variable consideration at the expected value amount which is based on management’s analysis of historical data, channel inventory levels, current economic trends and changes in customer demand for our products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice. We continue to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. We enter into contracts to sell our products and services, and while some of our sales agreements contain standard terms and conditions, there are agreements that contain non-standard terms and conditions and include promises to transfer multiple goods or services. As a result, significant interpretation and judgment is sometimes required to determine the appropriate accounting for these transactions including: (1) whether performance obligations are considered distinct and required to be accounted for separately or combined, including allocation of transaction price; (2) developing an estimate of the stand-alone selling price, or SSP, of each distinct performance obligation; (3) combining contracts that may impact the allocation of the transaction price between product and services; and (4) estimating and accounting for variable consideration, including rights of return, rebates, price protection, expected penalties or other price concessions as a reduction of the transaction price. Revenue from contracts with customers is recognized when the promised goods or services is transferred to the customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company derives its revenue primarily from the licensing of our Sequire Platform and Services associated with our customer’s use of the platform, consisting of data insights, marketing, creative, and paid media advertising Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring ratably over the contract period. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred services. Licensing and Service revenue is generally recognized over time on a ratable basis over the contract term beginning on the date that the service is expected to begin. Service contracts are generally for 12 months in length, billed either monthly or annually and generally in advance. Services revenue are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period because the Company transfers control evenly by providing a stand-ready service. Deferred Revenue Deferred revenue consists of platform and services fees that the Company has received consideration in advance of satisfying performance under the associated contract. The majority of the Company’s deferred revenue balance consists of the unrecognized portion of Service revenue that the Company has received consideration in marketable securities, which is recognized as re |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 2 – DISCONTINUED OPERATIONS On December 29, 2021, The Company’s wholly owned subsidiary BIGToken completed a merger transaction with BritePool, Inc. (“BritePool”) (the “Merger”). As a result of the Merger, BIGToken issued 183,445,351,631 shares of its common stock (“Acquisition Shares”) for all of the issued and outstanding equity shares of BritePool. On December 29, 2021, as a condition for the closing of the Merger, the Company exchanged 149,562,566,584 shares of BIGToken common stock for 242,078 shares of BIGToken’s Series D Convertible Preferred Stock (“Series D Stock”) (the “Exchange”). Simultaneously with the Exchange, the Company converted 22,162 shares of the Series D Stock into 13,692,304,136 shares of BIGToken’s common stock, or approximately 4.99 % of the issued and outstanding shares of BIGToken’s common stock. The Series D Stock is non-redeemable, non-voting with liquidation preference being the same as if the Series D Stock had been converted into shares of FVPD common stock. Each share of the Series D Stock is convertible into 617,828 shares of BIGToken’s common stock, subject to a conversion limitation such that the number of shares of the BIGToken common stock outstanding immediately after giving effect to the issuance of BIGToken common stock to the Company upon conversion of the Series D Stock shall not be more than 4.99 % (“Beneficial Ownership Limitation”). However, the Company upon not less than sixty-one days’ prior notice to BIGToken, may increase or decrease the Beneficial Ownership Limitation amount provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of BIGToken’s common stock outstanding immediately after giving effect to the issuance of the common stock upon conversion of the Series D Stock. As of the Exchange date, the Series D Stock and common stock of BIGtoken had a fair value of approximately $ 31,000 . BIGToken’s issuance of the Acquisition Share and the Exchange caused the Company’s BIGToken common stock holdings to decrease from approximately 66% to approximately 4.99%; Therefore, the Company no longer controlled the operations of BIGToken. Given the Company’s loss of control over the operations of BIGToken, the Company deconsolidated BIGToken, as of December 29, 2021, in accordance with ASC 810 Consolidations . Based on the deconsolidation of BIGToken, the Company recognized a loss of $ 10,684,000 calculated, as follows: SCHEDULE OF DECONSOLIDATION OF BUSINESS Consideration received $ - Fair value of Series D Stock and Common stock 31,000 Carrying amount of non-controlling interest of BIGToken 6,045,000 Previous equity adjustments of non-controlling interest (12,510,000 ) Total consolidations (6,434,000 ) Book basis of investment in BIGToken 4,250,000 Loss on disposal of subsidiary $ (10,684,000 ) As the transaction causing the deconsolidation of BIGToken, was a result of BIGToken issuing additional shares of its common stock for acquisition of BritePool, the Company received no cash or other consideration. In accordance with ASC 820 – Fair Value Measurement, the Company determined the Series D Stock would be classified as level 3 asset consistent with the account policy for determining the fair value of an asset or liability. As there is no observable market for quoted market price for an identical asset. The Company engaged an independent third party valuation expert to estimate the fair value of the Series D Stock. As of the Exchange date, the carrying basis of the non-controlling interest was approximately $ 6,465,000 , which included approximately $ 12,510,000 related to BIGToken’s recording of a $ 5,860,000 Beneficial conversion feature for convertible preferred stock, issuance of convertible preferred stock in the amount of $ 5,860,000 , $ 885,000 for the fair value of warrants issued to the Company’s debenture holders and less other amounts of approximately $ 95,000 . These transactions were recognized in equity outside of the accumulated other comprehensive income (loss) related to ownership interest, which did not result in a loss of control, so they would not be included in the calculation of the gain or loss from deconsolidation because these amounts resulted from transactions among shareholders and are not directly attributable to the non-controlling interest. The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations of BIGToken in the consolidated balance sheet as of December 31, 2020: SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ 1,000 Accounts receivable, net 1,199,000 Prepaid expenses and other current assets 6,000 Property and equipment, net 1,000 Goodwill 5,445,000 Intangible assets, net 917,000 Total assets classified as discontinued operations in the consolidated balance sheet $ 7,569,000 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable and accrued expenses $ 853,000 Other current liabilities 452,000 Total liabilities classified as discontinued operations in the consolidated balance sheet $ 1,305,000 The financial results of BIGToken are presented as income from discontinued operations, net of income taxes on our consolidated income through December 29, 2021, when our deconsolidation occurred. The following table presents the financial results of BIGToken: Year ended December 31, 2021 2020 Revenues $ 3,431,000 $ 2,168,000 Cost of revenue 1,090,000 800,000 Gross profit 2,341,000 1,368,000 Operating expense Employee related costs 2,419,000 3,212,000 Marketing and selling expenses 1,136,000 958,000 Platform costs 1,350,000 707,000 Depreciation and amortization 530,000 531,000 General and administrative expenses 4,152,000 530,000 Total operating expense 9,587,000 5,938,000 Loss from operations of discontinued operations (7,246,000 ) (4,570,000 ) Other expense Financing costs (5,872,000 ) - Realized loss on marketable securities - (71,000 ) Impairment of goodwill (1,258,000 ) - Total other expense (7,130,000 ) (71,000 ) Loss from discontinued operations before provision for income taxes (14,376,000 ) (4,641,000 ) Provision for income taxes - Loss from discontinued operations, net of income taxes $ (14,376,000 ) $ (4,641,000 ) |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 3 – ACQUISITIONS On September 15, 2020 (“Closing Date”), an Agreement and Plan of Merger (the “Agreement”) was 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 1,000,000 1,000,000 1,000,000 1,600,000 7,610,000 SCHEDULE OF CALCULATIONS OF PURCHASE PRICE 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 $ 3,000,000 229,000 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: SUMMARY OF ALLOCATION OF PURCHASE PRICE TO ASSETS ACQUIRED 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 Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION 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 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 consolidated statements of operations for the year ended December 31, 2020 follows: SUMMARY OF AMOUNT OF REVENUE AND EARNINGS OF ACQUIREE SINCE THE ACQUISITION DATE Revenues $ - Net loss $ (51,000 ) The following pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2020. The pro forma results include the amortization associated with the preliminary estimates for the acquired intangible assets. The 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 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. Pro Forma Consolidated Statements of Operations For the Year ended December 31, 2020 SCHEDULE OF PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 6,479,000 $ 937,000 $ - $ 7,416,000 Cost of revenues (1,789,000 ) (98,000 ) - (1,887,000 ) Operating expenses (11,722,000 ) (858,000 ) 171,000 (12,409,000 ) Other expense (3,011,000 ) (1,000 ) - (3,012,000 ) Provision for income taxes (21,000 ) - - (21,000 ) Net loss $ (10,064,000 ) $ (20,000 ) $ 171,000 $ (9,913,000 ) The following summarizes the pro forma adjustments made for the year ended December 31, 2020: SUMMARY OF PRO FORMA ADJUSTMENTS Amortization of intangibles acquired $ 64,000 Employee related costs (235,000 ) Financing costs - Net income (loss) $ (171,000 ) Amortization relates to the acquired noncompete and customer list amounting to $ 2,000 62,000 Employee related cost are contracted cost amounting to $ 235,000 |
SALE AND PURCHASE OF ACCOUNTS R
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE | NOTE 4 – SALE AND PURCHASE 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 75,000 454,000 56,000 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 th In order to secure performance by the Company, the purchaser was granted a security interest in: (i) 239,029 454,000 29,519 75,000 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 4,032 On June 30, 2020, the Purchaser converted the payable of $ 510,000 184,000 788,000 815,000 546,000 95,000 27,000 424,000 27,000 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. In December 2020, the Company entered into an agreement with a third-party lender whereby it sold the Company’s right to future subscription revenues of $ 570,000 for net proceeds of $ 528,000 . Under the terms of the agreement, the Company may borrow funds collateralized by the right to the revenues from Sequire platform contracts. The third party lender receives a discount on the amount sold and remits the net amount to the Company. The Company bears the risk of credit loss on the contracts. These transactions are accounted for as secured borrowing arrangements and not as a sale of financial assets. In December 2021, the Company entered into another agreement through which it sold future subscriptions amounting to $ 625,000 for net proceeds of $ 576,000 . The amount of borrowings outstanding was approximately $ 631,000 as of December 31, 2021 and $ 570,000 at December 31, 2020. As of December 31, 2021, our availability to draw additional funds through this agreement was approximately $ 1,000,000 On October 29, 2021, the Company (“Purchaser”) and BIGtoken (“Seller”) entered into a receivable purchase and sale agreement whereby BIGtoken sell, assign, transfer, convey and deliver to the Company all rights, title and interest for its receivable aggregating $ 352,000 for a purchase price of $ 327,000 , sup representing a 7 % discount. As of December 31, 2021, the outstanding receivable amounts to $ 352,000 . |
CONTRACTS RECEIVABLE
CONTRACTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
CONTRACTS RECEIVABLE | NOTE 5 – CONTRACTS RECEIVABLE Contracts receivable represents amounts for which non-cancellable revenue contracts with customers have been finalized but the payment in the form of securities issued by the customer which could be a common stock, preferred stock or convertible debentures have not been received by the Company. Contracts receivable that will be received during the succeeding 12-month period is recorded as current contracts receivable, and the remaining portion, if any, is recorded as long-term contracts receivable. As of December 31, 2021 and 2020, contracts receivable amounted to $ 844,000 no |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
Cash and Cash Equivalents [Abstract] | |
MARKETABLE SECURITIES | NOTE 6 – 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 which could be a common stock, preferred stock or convertible debentures. The customer’s securities must be trading on a United States securities exchange. 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 and ASC 321 – 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 final gain or (loss) in the consolidated statement of operations as a component of net income (loss). The movement in this account is as follows: SCHEDULE OF MOVEMENT OF MARKETABLE SECURITIES Balance as of December 31, Common Convertible Preferred 2021 Stock Debentures Stock Warrants Balances at beginning of year $ 8,447,000 $ 7,764,000 $ 683,000 $ - $ - Additions 34,914,000 29,281,000 4,602,000 1,031,000 - Sale of marketable securities (8,666,000 ) (8,156,000 ) (510,000 ) - - Designation for dividend distribution (10,790,000 ) (10,577,000 ) (213,000 ) - - Change in fair value (8,288,000 ) (7,577,000 ) (375,000 ) (432,000 ) 96,000 Balances at end of year $ 15,617,000 $ 10,735,000 $ 4,187,000 $ 599,000 $ 96,000 Balance as of December 31, Common Convertible 2020 Stock Debentures Balances at beginning of year $ 83,000 $ 83,000 $ — Additions 8,406,000 7,496,000 910,000 Sale of marketable securities (916,000 ) (916,000 ) — Change in fair value 874,000 1,101,000 (227,000 ) Balances at end of year $ 8,447,000 $ 7,764,000 $ 683,000 The Company’s sales of securities for the year ended December 31, 2021, were approximately $ 8,666,000 , with a book basis of approximately $ 7,862,000 which represented a gain of $ 804,000 , which the Company recorded as other income included in the gains from marketable securities. 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. See discussion of the Company’s valuation policy in Note 1 – Fair Value of Financial Instruments. |
DESIGNATED ASSETS FOR RETURN OF
DESIGNATED ASSETS FOR RETURN OF CAPITAL | 12 Months Ended |
Dec. 31, 2021 | |
Designated Assets For Return Of Capital | |
DESIGNATED ASSETS FOR RETURN OF CAPITAL | NOTE 7 – DESIGNATED ASSETS FOR RETURN OF CAPITAL On August 17, 2021, the Company announced that it will be issuing a one-time dividend consisting of a share of series A preferred stock to shareholders, debenture holders, and certain warrant holders (“Recipients”) as of record on September 20, 2021. The board designated certain of the Company’s marketable securities (“Designated Assets”) to be used when liquidated, as a return of capital to the Recipients. See Note 19 - Series A Preferred Stock for more details. As of December 31, 2021, designated assets consist of the following: SCHEDULE OF DESIGNATED ASSETS Cash $ 686,000 Marketable securities 3,239,000 Balance $ 3,925,000 The movement in designated assets is as follows: SCHEDULE OF MOVEMENT IN DESIGNATED ASSETS Designated assets as of September 20, 2021 $ 6,387,000 Sale of designated assets (770,000 ) Proceeds from sale of designated assets 686,000 Change in fair value of designated assets (2,378,000 ) Balances as of December 31, 2021 $ 3,925,000 The Company’s sale of the designated marketable securities for the year ended December 31, 2021, were approximately $ 686,000 770,000 84,000 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 8 – NOTES RECEIVABLE 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 6,718,000 960,000 7,678,000 0.7677543 On October 30, 2020, a unit redemption agreement was entered into by and between the Company and MD CoInvest, LLC, (“CoInvest”). The Company owns 420,000 282,000 40,000 322,000 0.7677543 The deferred payments of $ 960,000 40,000 3 107,000 3 935,000 893,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 9 – PROPERTY AND EQUIPMENT Property and equipment consist of the following as of December 31: SCHEDULE OF PROPERTY AND EQUIPMENT 2021 2020 Office equipment $ 471,000 $ 402,000 Accumulated depreciation (357,000 ) (285,000 ) Property and equipment, net $ 114,000 $ 117,000 Depreciation expense for the years ended December 31, 2021 and 2020 was $ 72,000 28,000 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 10 – INTANGIBLE ASSETS Intangible assets consist of the following as of December 31: SCHEDULE OF INTANGIBLE ASSETS 2021 2020 Non-compete agreement $ 1,258,000 $ 1,258,000 Intellectual property 756,000 756,000 Acquired Software 756,000 617,000 Internally developed software 2,726,000 2,048,000 Trademark 271,000 271,000 Customer list 186,000 186,000 Domain name 17,000 36,000 Total cost 5,970,000 5,172,000 Accumulated amortization (4,527,000 ) (3,680,000 ) Intangible assets, net $ 1,443,000 $ 1,492,000 Amortization expenses amounted to $ 847,000 and $ 744,000 for the years ended December 31, 2021 and 2020, respectively. Trademark has indefinite life and not subject to amortization. The estimated future amortization expense for the years ended December 31, are as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE 2022 $ 632,000 2023 404,000 2024 136,000 Intangible assets $ 1,172,000 As of December 31, 2021 and 2020, goodwill amounted to $ 17,906,000 7,706,000 no |
RIGHT TO USE ASSET
RIGHT TO USE ASSET | 12 Months Ended |
Dec. 31, 2021 | |
Right To Use Asset | |
RIGHT TO USE ASSET | NOTE 11 – RIGHT TO USE ASSET We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and to obtain substantially all of the economic benefit from the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component as we have elected the practical expedient. Some of our operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance or increases in rental costs related to inflation. Substantially all of our equipment leases and some of our real estate leases have terms of less than one year and, as such, are accounted for as short-term leases as we have elected the practical expedient. 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 December 31, 2021. We have operating leases for office space. Our leases have remaining lease terms of approximately 1.75 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 December 31, 2021, there were no 175,000 192,000 SCHEDULE OF COMPONENT OF LEASE EXPENSE 2021 2020 Operating lease expense $ 163,000 $ 163,000 Short-term lease expense 12,000 29,000 Total lease expense $ 175,000 $ 192,000 The below table summarizes these lease asset and liability accounts presented on our accompanying Consolidated Balance Sheets for the year ended December 31: SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES Operating Leases* Consolidated Balance Sheet Caption 2021 2020 Operating lease right-of-use assets - non-current Right of use asset $ 257,000 $ 366,000 Operating lease liabilities – current Other current liabilities $ 130,000 $ 109,000 Operating lease liabilities - non-current Right to use liability - long term 114,000 243,000 Total operating lease liabilities $ 244,000 $ 352,000 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 consolidated statement of operations. Weighted Average Remaining Lease Term and Applied Discount Rate SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND APPLIED DISCOUNT RATE Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of December 31, 2021 1.75 18 % Future Contractual Lease Payments as of December 31, 2021 The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments for the years ending December 31: SCHEDULE OF FUTURE MINIMUM CONTRACTUAL LEASE PAYMENTS Operating Leases - future payments 2022 163,000 2023 123,000 Total future lease payments, undiscounted 286,000 Less: Implied interest (42,000 ) Present value of operating lease payments 244,000 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 12 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of December 31, are comprised of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2021 2020 Accounts payable, trade $ 1,938,000 $ 1,900,000 Accrued expenses 1,518,000 537,000 Accrued compensation 213,000 232,000 Accrued commissions 303,000 32,000 Accrued interest 123,000 7,000 Accounts payable and accrued expenses $ 4,095,000 $ 2,708,000 |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED REVENUE | NOTE 13 – DEFERRED REVENUE Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion, if any, is recorded as long-term deferred revenue. As of December 31, 2021, deferred revenue was $ 12,859,000 , as compared to $ 4,842,000 as of December 31, 2020. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 14 – OTHER CURRENT LIABILITIES The following table summarizes the composition of other current liabilities presented on our accompanying Consolidated Balance Sheets: SCHEDULE OF OTHER CURRENT LIABILITIES December 31, December 31, Operating lease liabilities - current $ 130,000 $ 109,000 Other current liabilities 633,000 3,308,000 Total other current liabilities $ 763,000 $ 3,417,000 As of December 31, 2021 and 2020, other current liabilities consist of amounts payable on a factoring facility amounting to $ 633,000 and $ 573,000 , respectively (See Note 4 – Sale and Purchases of Accounts Receivable) and deferred payments amounting to $ 2,735,000 related to the acquisition of LD Micro (See Note 3 – Acquisitions) as of December 31, 2020. During the year ended December 31, 2021, the Company made $ 3,004,000 |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN | 12 Months Ended |
Dec. 31, 2021 | |
Paycheck Protection Program Loan | |
PAYCHECK PROTECTION PROGRAM LOAN | NOTE 15 - PAYCHECK PROTECTION PROGRAM LOAN On April 17, 2020, we entered into a promissory note evidencing an unsecured approximately $ 1,084,000 two years 1 On September 15, 2020, $ 42,000 During the year ended December 31, 2021, the PPP loan in the of $ 1,116,000 was forgiven. As of December 31, 2021 and 2020, PPP loans outstanding amounted to $ 10,000 and $ 1,126,000 , respectively. |
SHORT TERM PROMISSORY NOTES
SHORT TERM PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT TERM PROMISSORY NOTES | NOTE 16 – SHORT TERM PROMISSORY NOTES In February 2020, the Company entered into three separate short-term promissory notes with an aggregate principal value of $ 450,000 100,000 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 The interest imputed on the origination date was treated as an original issue discount with the $ 45,000 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 100,000 181,000 On June 30, 2020, the short-term note payable to the Company’s Chief Financial Officer in the amount of approximately $ 136,000 On June 30, 2020, the two remaining Note Holders converted the Notes of approximately $ 350,000 126,000 541,000 560,000 375,000 65,000 19,000 291,000 18,000 As of December 31, 2020, there is no |
TERM LOAN NOTE
TERM LOAN NOTE | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
TERM LOAN NOTE | NOTE 17 – 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 Under the loan: (i) the Company received an initial draw of $ 2,500,000 2,500,000 1,000,000 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 March 1, 2022 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 35,000 2,164,000 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) 500,000 500,000 25 2.50 3.60 October 31, 2022 In accordance with ASC 470 - Debt 83,000 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 As of December 31, 2020, there is no |
OID CONVERTIBLE DEBENTURES
OID CONVERTIBLE DEBENTURES | 12 Months Ended |
Dec. 31, 2021 | |
Oid Convertible Debentures | |
OID CONVERTIBLE DEBENTURES | NOTE 18 – 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 14,169,000 12 6,440,561 13,000,000 1,169,000 510,000 184,000 350,000 125,000 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 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 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) $ 2,500,000 136,000 In connection with Securities Purchase Agreement, the Company will issue to the Placement Agent (as defined below), an aggregate of 478,854 3.3625 360,000 .11 2.417 96 0 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 $ 1,040,000 478,854 8 The Transaction closed on June 30, 2020 (the “Closing Date”), with approximately $ 3,800,000 4,200,000 5,000,000 13,000,000 9,100,000 75,000 The Company evaluated all of the associated financial instruments in accordance with ASC 815 Derivatives and Hedging. In accordance with ASC 470 - Debt During the year ended December 31, 2020, the Company recognized amortization expense of $ 5,639,000 During the year ended December 31, 2020, holders of debenture principal converted $ 1,118,000 411,626 434,000 . During the year ended December 31, 2020, majority of the debenture holders exercise their rights to delay amortization payment by six months in exchange for 5 472,000 During the year ended December 31, 2021, certain Debenture holders converted $ 8,387,000 3,122,167 8,387,000 2,413,000 5,974,000 During the year ended December 31, 2021, the holders of the remaining Debentures notified the Company of their election to defer the inception of amortization payments due under the Debentures until June 30, 2022. As a result of their election, the holders are entitled to a 5 The table below summarizes the transactions during the year end December 31, 2021: SCHEDULE OF OID CONVERTIBLE DEBENTURES Principal Debt discount Net book value Balance at beginning of year $ 9,386,000 $ (3,370,000 ) $ 6,016,000 Extension 268,000 - 268,000 Conversion (8,387,000 ) 2,413,000 (5,974,000 ) Amortization - 854,000 854,000 Total $ 1,267,000 $ (103,000 ) $ 1,164,000 As of December 31, 2021, the Company has classified the debt as current liability because the management intends to redeem the remaining convertible debentures within the following 12 months. The table below summarizes the transactions during the year end December 31, 2020: Principal Debt discount Net book value Issuance during the year $ 16,101,000 $ (12,731,000 ) $ 3,370,000 Extension 472,000 - 472,000 Redemption (6,069,000 ) 3,037,000 (3,032,000 ) Conversion (1,118,000 ) 685,000 (433,000 ) Amortization - 5,639,000 5,639,000 Total $ 9,386,000 $ (3,370,000 ) $ 6,016,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 19 – COMMITMENTS AND CONTINGENCIES Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise due to their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances. It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. Such indemnification agreements may not be subject to maximum loss clauses. Employment agreements We have entered employment agreements with key employees. These agreements may include provisions for base salary, guaranteed and discretionary bonuses and option grants. The agreements may contain severance provisions if the employees are terminated without cause, as defined in the agreements. Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patent or other intellectual property rights. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. Business Interruption The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. The impact of COVID-19 has not been significant to the Company’s results of operations, financial condition, and liquidity and capital resources. Although no material impairment or other effects have been identified to date, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known. The Company will continue to consider the potential impact of the COVID-19 pandemic on its business operations. |
SERIES A PREFERRED STOCK
SERIES A PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Series A Preferred Stock [Member] | |
Class of Stock [Line Items] | |
SERIES A PREFERRED STOCK | NOTE 20 – SERIES A PREFERRED STOCK On August 17, 2021, the Company announced that it will be issuing a one-time dividend consisting of a share of series A preferred stock (“Preferred Stock”) to certain Qualified Recipients (as defined below) on a 1-for-1 as converted to common stock basis (the “Dividend”). On September 20, 2021, the Company filed a certificate of designation (the “COD”) of preferences, rights, and limitations of Series A Non-Voting Preferred Stock (“Series A Preferred Stock”) with the Secretary of State of Delaware. Pursuant to the COD, the Company is authorized to issue up to 36,462,417 As of the Record Date, the following holders of securities were entitled to receive the Dividend (collectively, the “Qualified Recipients): i. each outstanding share of Class A common stock (the “Common Stock”), of which 25,160,504 ii. each share of Common Stock underlying outstanding common stock purchase warrants containing a contractual right to receive the Dividend (“Warrants”) of which, 10,327,645 iii. each original issue discount senior convertible debenture (the “Debentures”) issued on June 30, 2021, containing a contractual right to receive the Dividend on an as converted to Common Stock basis, of which $ 2,486,275 974,268 Accordingly, the Company issued 36,462,417 The Company’s management has evaluated the Preferred Stock in accordance with ASC 480 – Distinguishing Liabilities from Equity. Management has determined that the cancellation clause of the Preferred Stock deemed it to be mandatorily redeemable and should be classified as a liability. The fair value of the Preferred stock as of December 31, 2021 amounted to $ 3,925,000 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 21 – STOCKHOLDERS’ EQUITY Authorized Shares Preferred Stock We are authorized to issue 50,000,000 0.001 200,000 Common Stock We are authorized to issue an aggregate of 259,000,000 250,000,000 0.001 9,000,000 0.001 25,995,172 16,145,778 In January 2020, we sold non-performing receivables in the aggregate amount of $ 529,000 510,000 we agreed to provide a true-up to the purchaser of the receivable of between 10% and 36% depending on the payment date. In the event of nonpayment of the receivables by March 24, 2020 and March 30, 2020, as applicable to the receivables, the purchaser may require us to purchase any outstanding portion of the receivables for 136% of its outstanding balance (“Payment Date”). 239,029 36,700 In August 2021, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase up to $ 10,000,000 10.0 During the year ended December 31, 2021, the Company sold 53,616 284,000 During the year ended December 31, 2021, the Company repurchased 155,000 793,000 |
STOCK OPTIONS, AWARDS AND WARRA
STOCK OPTIONS, AWARDS AND WARRANTS | 12 Months Ended |
Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS, AWARDS AND WARRANTS | NOTE 22 – STOCK OPTIONS, AWARDS AND WARRANTS 2012, 2014 and 2016 Equity Compensation Plans In January 2012, our board of directors and stockholders authorized the 2012 Equity Compensation Plan, which we refer to as the 2012 Plan, covering 600,000 600,000 600,000 ● incentive stock options (ISOs), ● non-qualified options (NSOs), ● awards of our common stock, ● stock appreciation rights (SARs), ● restricted stock units (RSUs), ● performance units, ● performance shares, and ● other stock-based awards. Any option granted under the 2012, 2014 and 2016 Plans must provide for an exercise price of not less than 100 10 110 100,000 10 five years Transactions involving our stock options for the years ended December 31, 2021 and 2020, respectively, are summarized as follows: In April 2020 the Company issued 36,172 1.95 9,043 th April 15, 2027 60,000 seven-year 100 0.24 1.95 In August 2020, 430,000 2.70 859,000 five years In November 2020, 300,000 2.97 649,000 SCHEDULE OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding — December 31, 2019 1,192,519 $ 4.14 2.17 $ — $ — Granted 766,172 2.77 3.00 521,000 2.72 Exercised — — — — — Forfeited (316,367 ) 5.14 — — 3.14 Outstanding — December 31, 2020 1,642,324 3.30 2.81 — — Vested and exercisable — December 31, 2020 844,742 3.54 2.62 333,000 3.54 Unvested and non-exercisable - December 31, 2020 797,582 2.81 3.00 207,000 2.09 Outstanding — December 31, 2020 1,642,324 3.30 2.81 — — Granted 21,627 4.38 6.29 2,000 3.60 Exercised (12,500 ) 2.70 3.63 — 2.00 Forfeited (319,671 ) 4.60 0.65 — 3.49 Outstanding — December 31, 2021 1,331,780 3.02 2.39 1,969,000 2.13 Vested and exercisable — December 31, 2021 870,750 3.05 2.27 1,265,000 2.15 Unvested and non-exercisable - December 31, 2021 461,030 $ 2.96 2.62 $ 703,000 $ 2.10 During the years ended December 31, 2021 and 2020, we recorded compensation expense of $ 1,006,000 and $ 1,615,000 , respectively, related to stock-based compensation. As of December 31, 2021, compensation cost related to the unvested options not yet recognized was approximately $ 811,000 . The weighted average period over which the $ 811,000 will vest is estimated to be 2.83 years. Transactions involving our warrants for the years ended December 31, 2021 and 2020, respectively, are summarized as follows: As part of the Company’s Convertible Debenture offering in June 2020 (as described in Note 17 – OID Convertible Debentures), the Company negotiated the ability to release the BIGToken business, as security for the OID Convertible Debentures, for the purposes of selling BIGToken. As consideration for the release, the Company agreed to require the purchaser of BIGToken to issue warrants in the new entity. The warrants were to represent 13% of the new entities issued and outstanding on a fully diluted basis upon closing. As disclosed in Note 3 – Acquisitions, the Company entered into an agreement to merge BIGToken with FPVD on February 4, 2021, which required the issuance of 25,568,064,462 warrants. Based on a valuation from an independent third-party, the fair-market value of the warrants required to be issued was determined to be $ 885,000 based on implied 3 -year volatility of 92.30 %, a risk-free equivalent yield of 18 % and stock price of $ 0.00006552 On February 21, 2021 the Company entered into an agreement with the certain Debenture holders to exercise 4,545,440 4,545,440 7.50 January 31, 2022 0.125 11,022,000 11,363,000 568,000 909,000 The New Warrants were valued using the Black Scholes option pricing model at a total of $ 7,737,000 one 96 11 5.83 During the quarter ended March 31, 2021, the Company: (i) received cash of approximately $ 4,930,000 , (ii) cancelled 349,197 warrants (as a result of cashless exercises) and (iii) issued an aggregate of 2,283,171 shares of Common Stock, in connection with the exercise of outstanding warrants. In total the Company issued a total of 6,828,611 15,952,000 SCHEDULE OF WARRANT ACTIVITY Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding — December 31, 2019 6,237,430 $ 3.57 2.68 $ — $ — Granted 7,421,054 2.63 1.82 3,929,000 1.38 Exercised — — — — — Forfeited (1,073,201 ) — — — — Outstanding — December 31, 2020 12,585,283 2.98 1.78 4,460,000 1.38 Vested and exercisable — December 31, 2020 12,285,283 2.94 1.74 4,460,000 1.38 Unvested and non-exercisable - December 31, 2020 300,000 4.75 3.37 — — Outstanding — December 31, 2020 12,585,283 2.98 1.78 4,460,000 1.38 Granted 4,582,345 7.48 0.11 — 1.70 Exercised (7,148,501 ) 2.74 0.78 — — Forfeited — — — — — Outstanding — December 31, 2021 10,019,127 5.21 0.47 6,779,000 1.70 Vested and exercisable — December 31, 2021 9,719,127 5.22 0.41 6,779,000 1.70 Unvested and non-exercisable - December 31, 2021 300,000 $ 4.75 2.37 $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 23 – RELATED PARTY TRANSACTIONS The Company has subleased a suite at the Sofi Stadium in Los Angeles from an entity wholly owned by Christopher Miglino, our CEO. The sublease is for a period of one ( 1 382,500 39,000 nd 477,000 The Sublease entitles the Company to game tickets, optional tickets for other stadium events, and suite and conference room access during business days. The Company determined that the sublease agreement does not meet the definition of a lease in accordance with ASC 842, Leases |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 24 – INCOME TAXES Income tax (benefit) expense from continuing operations for the year ended December 31, 2021 consisted of the following: SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE Current Deferred Total Federal $ — $ (132,000 ) $ (132,000 ) State 5,000 — 5,000 Subtotal 5,000 (132,000 ) (127,000 ) Valuation allowance — — — Total $ 5,000 $ (132,000 ) $ (127,000 ) Income tax expense from continuing operations for the year ended December 31, 2020 consisted of the following: Current Deferred Total Federal $ — $ — - State 21,000 — 21,000 Subtotal 21,000 — 21,000 Valuation allowance — — — Total $ 21,000 $ — $ 21,000 A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: SCHEDULE OF EFFECTIVE TAX RATE 2021 2020 Taxes calculated at federal rate 21.0 % 21.0 % Stock based compensation 0.0 % (2.7 )% Permanent differences (1.0 )% (13.4 )% Change in valuation allowance (15.1 )% (2.1 )% Fair market adjustment derivatives 0.0 % 0.5 % Prior year true-ups 0.0 % (3.3 )% Other adjustments (4.1 )% (0.1 )% Provision for income tax benefit (expense) 0.8 % (0.1 )% The tax effects, rounded to thousands, of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, are presented below: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2021 2020 Deferred Tax Assets Net operating loss carryforwards $ 10,003,000 $ 9,040,000 Bad debt expense 33,000 136,000 Fixed assets - 9,000 Accrued interest - - Stock based compensation 525,000 567,000 Interest expense limitation carryover 220,000 629,000 Contribution carryover 5,000 5,000 Lease liability 62,000 97,000 Unrealized gain on marketable securities 2,668,000 120,000 Other accruals 124,000 173,000 Total Deferred Tax Assets 13,640,000 10,776,000 Deferred Tax Liabilities Fixed assets (29,000 ) - Right-of-use asset (66,000 ) (101,000 ) Intangibles (455,000 ) (690,000 ) Interest expense limitation carryover (59,000 ) - Prepaid expenses (15,000 ) (17,000 ) Total Deferred Tax Liabilities (624,000 ) (808,000 ) Net Deferred Tax Assets 13,016,000 9,968,000 Valuation Allowance (13,016,000 ) (9,968,000 ) Net deferred tax / (liabilities) $ — $ — Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carry-forwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. During the years ended December 31, 2021 and 2020, the valuation allowance increased by $ 2,996,000 and $ 2,375,000 , respectively. The increase for both years was attributable to the increase in our net operating loss carryforwards. The total valuation allowance results from the Company’s estimate of its inability to recover its net deferred tax assets. At December 31, 2021, the Company has federal and state net operating loss carry forwards, which are available to offset future taxable income, of approximately $ 34,933,000 and $ 73,733,000 respectively, both of which begin to expire in 2032 and 2032 respectively. These carry forwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an IRC Section 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate. The Company files income tax returns in the United States and various state jurisdictions. Due to the Company’s net operating loss posture all tax years are open and subject to income tax examination by tax authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. As of December 31, 2021 and 2020, there are no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties. The Company is in the process of analyzing their NOL and has not determined if the company has had any change of control issues that could limit the future use of NOL. NOL carryforwards that were generated after 2017 of approximately $ 29.4 million may only be used to offset 80% of taxable income and are carried forward indefinitely . |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 25 – FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of certain financial instruments, including cash and cash equivalents and accounts payable and accrued expenses, approximate their respective fair values due to the short-term nature of such instruments. Additionally, the Company has a deferred note receivable with a notional amount of $ 1,000,000 960,000 40,000 107,000 935,000 893,000 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 and liabilities as of December 31, 2021 and 2020: SCHEDULE OF ASSETS MEASURED AT FAIR VALUE Quoted Prices Significant Balance as of in Active Other Significant December 31 Identical Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: Marketable securities $ 15,617,000 $ 6,134,000 $ 2,448,000 $ 7,035,000 Designated assets 3,925,000 259,000 3,666,000 — Contract assets 844,000 — — 844,000 Total assets $ 20,386,000 $ 6,393,000 $ 6,114,000 $ 7,879,000 Quoted Prices Significant Balance as of in Active Markets for Other Significant Unobservable December 31, Identical Assets Inputs Inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Marketable securities $ 8,447,000 $ 7,764,000 $ 683,000 $ — Total assets $ 8,447,000 $ 7,764,000 $ 683,000 $ — The Contract assets represent a forward contractual right of to receive securities pursuant to a revenue contract. As of December 31, 2021, the Company determined the value of the securities underlying the Contract asset to have a fair value of $ 844,000 SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE Level 1 Level 2 Level 3 Fair Value As of Dec. 31, 2021 Level 1 Level 2 Level 3 Fair Value Liabilities: Series A Preferred Stock $ — $ 3,925,000 - $ 3,925,000 Total liabilities $ — $ 3,925,000 - $ 3,925,000 Level 1 Level 2 Level 3 Fair Value As of December 31, 2020 Level 1 Level 2 Level 3 Fair Value Liabilities: Series A Preferred Stock $ — $ — $ - $ - Total liabilities $ — $ — $ - $ - Changes in level 3 assets measured at fair value The following table presents additional information about Level 3 assets measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of assets classified within the Level 3 category. As a result, the unrealized gains and losses for the assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. Changes in Level 3 assets measured at fair value for the year ended December 31, 2021 were as follows: SCHEDULE OF FAIR VALUE AT ASSETS Assets Beginning Acquisitions Sales and dispositions Transfers into Level 3 Transfers out of Level 3 (a) Realized & Ending Balance Dec 31, 2021 Common stocks - $ 2,665,000 $ - $ 400,000 $ (534,000 ) $ (377,000 ) $ 2,154,000 Convertible Debt - $ 4,267,000 $ - $ 410,000 $ (213,000 ) $ (278,000 ) $ 4,186,000 Warrants - $ - $ - $ - $ - $ 96,000 $ 96,000 Preferred stocks - $ 1,031,000 $ (510,000 ) $ 500,000 $ - $ (422,000 ) $ 599,000 Total Investments - $ 7,963,000 $ (510,000 ) $ 1,310,000 $ (747,000 ) $ (981,000 ) $ 7,035,000 a. Transfers out of Level 3 relate to investments that have been transferred to level 2 and designed assets for return of capital. b. Realized and unrealized gains and losses are included in the gain / (loss) line in the statement of operations. Valuation processes for Level 2 and 3 Fair Value Measurements Fair value measurement of certain of our marketable securities fall within Level 2 and 3 of the fair value hierarchy. The fair value measurements are evaluated by management to ensure that changes are consistent with expectations of management based upon the sensitivity and nature of the inputs. The Company classifies certain assets as Level 3 assets if the estimated fair value was derived from level 3 inputs. The Company utilizes a put option pricing model to arrive at a discount for lack of marketability and liquidity associated with restrictions on sales into the public market. The Company generally classifies restricted securities in public companies as level 2, however in circumstances where the observed level of liquidity is low and the quoted market price is deemed unreliable they may be categorized in Level 3 of the fair value hierarchy. The Company considers marketable securities without sufficient liquidity to sell within 6 months of the date of acquisition and securities that will not be eligible for resale in the public markets through Rule 144 for 1 year from the date acquisition to be valued with Level 2 inputs. The fair value of the Company’s Series A Preferred Stock may change significantly, impacting the Company’s assumptions used to estimate its fair value. The valuation of the Series A Preferred Stock is primarily based on the valuation of its underlying marketable securities. The marketable securities that are underlying the Series A Preferred Stock are classified as Designated Assets on the Company’s balance sheet and include Level 1 and Level 2 marketable securities and cash. The following table lists the significant unobservable inputs used to value assets classified as Level 3 of December 31, 2021. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values. The other Level 3 assets have been valued using unadjusted third-party transactions and, unadjusted historical third-party information, or the unadjusted net asset values of the securities’ issuer. No unobservable inputs internally developed by the Company have been applied to these assets, and therefore are omitted from the following table. SCHEDULE OF FAIR VALUE ASSETS SIGNIFICANT UNOBSERVABLE INPUTS Assets Valuation technique Unobservable inputs Range Common stocks Put option pricing model Discount for lack of marketability 0 54 Convertible preferred stock Put option pricing model Discount for lack of marketability 0 54 Convertible Debt Discounted cash flow Maturity 0 35 Risk adjusted discount factor 26 Option pricing model Volatility 100 Risk-free interest rate 0.78 1.04 Dividend yield 0 Time to maturity 0 35 Sensitivity of Level 3 measurements to changes in significant unobservable inputs The process of estimating the fair value of securities without active markets involves significant estimates and judgement on behalf of management. These estimated fair values may not be realized in a current sale or immediate settlement of the asset or liability. Additionally, there are inherent uncertainties in any fair value measurement techniques, and changes in the underlying assumptions used could significantly affect the fair value measurement amounts. Changes in each of these significant unobservable valuation inputs will impact the fair value measurement of the financial instrument generally as follows: ● An increase or decrease in the volatility of the common stock that underlies our holdings in convertible debt would result in a directionally similar change in the estimated fair value. ● An increase or decrease in the risk-free interest rate or risk adjusted discount factor would result in an inverse change in the estimated fair value of our convertible debt. ● An increase in the dividend yield would increase the estimated value of the convertible debt. ● A change in the maturity may result in either an increase or decrease in estimated fair value of the convertible debt. ● An increase or decrease in the discount for lack of marketability of our common stock holdings and the common stock that underlies our preferred stock would generally result in an inverse change in the estimated fair value. Instruments for which unobservable inputs are significant to their fair value measurement (i.e., Level 3) include securities in which we deem their market to be inactive or unreliable. The Company reviews and updates the fair value hierarchy classifications on a quarterly basis. Changes from one quarter to the next that are related to the observable inputs to a fair value measurement may result in a reclassification from one hierarchy level to another. Valuation technique refinements During the year-ended December 31, 2021, the Company refined its valuation techniques to enhance consideration of unobservable inputs for the valuation of Level 2 and Level 3 marketable securities. If quoted market prices are not available for the specific security, or if the observed quoted market price is deemed unreliable, then fair values are estimated by using pricing models, considering third-party transactions, unadjusted historical third-party information, and the unadjusted net asset values of the issuer. The pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to market information, models also incorporate transaction details, such as maturity and cash flow assumptions. Securities valued in this manner would generally be classified within Level 2 and Level 3 of the valuation hierarchy and primarily include such instruments as convertible debt. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. |
REVENUE DISAGGREGATION
REVENUE DISAGGREGATION | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Disaggregation | |
REVENUE DISAGGREGATION | NOTE 26 – REVENUE DISAGGREGATION The Company has two operating units and one reportable segment. The Sequire segment includes the licensing of the Company’s proprietary SaaS platform and associated data analysis technologies. Additionally, the Sequire segment comprises consumer and investor targeted marketing solutions to allow users of our SaaS platform to act on the insights obtained through our technologies. Lastly, reported under Sequire is our business unit LD Micro, which is in the business of hosting events and conference for microcap public companies. The following table summarizes revenue by business unit: SCHEDULE OF REVENUE BY BUSINESS UNIT 2021 2020 Sequire platform revenue $ 24,514,000 $ 5,976,000 Conference revenue 1,229,000 503,000 Other revenues 964,000 - Total revenues $ 26,707,000 $ 6,479,000 As of December 31, 2021 and 2020, revenue contract liabilities were approximately $ 12,859,000 and $ 4,842,000 , respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 27 – 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: SAFE agreement On February 15, 2022 The Company entered into a simple agreement for future equity (the “SAFE”) with BIGtoken, Inc. (BIGToken), its former subsidiary. Pursuant to the SAFE, SRAX has agreed to invest $ 1,000,000 Pursuant to the terms of the SAFE, at any time that the Company sells its securities (a “Financing”) prior to the termination of the SAFE, the Company may, at its option, convert the SAFE into: (i) the number of shares of non-voting Series D Convertible Preferred Stock (“Series D Preferred Stock”) equal to such (a) SAFE Amount divided by (b) the lowest price per share of equity securities sold in any Financing (prior to the termination of the SAFE) multiplied by eighty percent (80%) (the “Conversion Price”) and (ii) such number of warrants to purchase Series D Preferred Stock (the “Warrants”) equal to the SAFE Amount divided by the Conversion Price. Upon issuance, the Warrants will (i) have a term of five (5) years, (ii) an exercise price equal to the Conversion Price, and (iii) contain price protection provisions for subsequent financings. CVR Agreement On June 13, 2022, the Company entered into an agreement with an institutional investor whereby in exchange for the payment of $ 404,513.40 the investor received (i) the right to receive the net proceeds upon the sale of certain securities of the Company (“CVR Payments”) with a quoted price equal to $ 674,190 Extension of Outstanding Original Issue Discount Senior Secured Convertible Debentures On July 1, 2022, the holders (“Holders”) of $ 1,102,682 (i) extend the maturity date of the Debentures until December 31, 2023 and (ii) extend the first date that monthly redemptions are required to be made by the Company to begin on January 1, 2023 (the “Debenture Extension”). As consideration for the Debenture Extension, the Company increased the principal amount outstanding on the Debentures by five percent (5%). Additionally, the holders of the Debentures have the unilateral right to extend the maturity date and monthly redemption period by an additional six (6) month period at any time prior to January 1, 2023 for an additional five percent (5%) to be added to the outstanding principal of such Debentures. Bridge Note On July 1, 2022, the Company issued an original issue discount bridge note in principal amount of $ 650,000 (“Bridge Note”) to an institutional investor in exchange for $ 500,000 in cash. The bridge note was non-interest bearing and had a maturity date of August 15, 2022 The Company’s obligations pursuant to the bridge note were secured by substantially all of the assets of the Company pursuant to the terms of the Security Agreement. On August 8, 2022, as described below, the Bridge Note was exchanged for a revolving note in the Senior Secured Revolving Credit Facility. RBSM LLP Declining to Stand for Reappointment On June 30, 2022, RBSM LLP (“RBSM”), the independent registered public accounting firm to the Company, informed the Company of its decision not to stand for re-appointment as the independent registered public accounting firm of the Company. RBSM will cease its services as the Company’s independent registered accountants effective with the filing of the Company’s annual report on Form 10-K with the United States Securities and Exchange Commission. The Company’s Audit Committee accepted the resignation of RBSM and has selected a new independent public accounting firm. Revolving Credit Facility On August 8, 2022 (“Effective Date”), the Company entered into a senior secured revolving credit facility agreement (the “Credit Agreement”) with an institutional investor 9,450,000 2,590,358 September 30, 2023 For the Company enter into the Credit Agreement , we were required to issue 33,000 Credit Agreement and Revolving Note On the Effective Date, the Lender advanced $ 5,580,000 4,930,000 650,000 3,870,000 The principal balance of each Revolving Loan will reflect an original issue discount of ten percent (10%); provided that beginning on the date that is twelve (12) months from the Effective Date, such original issue discount will increase to twelve percent (12%) in the event the Prime borrowing rate increases to 6.75%. The Revolving Loans have a maturity date of the earlier of (i) twenty-four (24) months from the Effective Date or (ii) the occurrence of an event of default, as described in the Loan Documents. Commencing on the first day of each month after the Effective Date (each a “Payment Date”), the outstanding balance of the Revolving Loan will be paid as follows: a. With respect to the first, second and third months, 10 b. With respect to the fourth, fifth and sixth months, 15 c. With respect to each successive Payment Date, 20 Additionally, with respect to any Payment Date where the applicable monthly collection from the sale of securities received by the Company from its customers during the prior month exceeds $2,000,000, the Company will make an additional payment equal to 30% of any amounts in excess of $2,000,000. The Revolving Note is initially convertible into shares of Common Stock at a conversion price of $15.00 per share (“Conversion Price”). The Conversion Price is subject to adjustment in the event of stock splits, dividends and fundamental transactions. Moreover, in the event the Company is deemed to have issued or sold shares of its Common Stock while the Revolving Loan is outstanding at a price equal to or less than $5.00 per share, the conversion price will adjust to such lower applicable price. Security Agreements In order to perfect Lender’s security interest, the Credit Parties entered into: (i) Security Agreements, (ii) Guaranty Agreements, (iii) Pledge Agreements and (iv) Security Account Control Agreements and Deposit Account Control Agreements (collectively “Security Agreements”). The Security Agreements provide for a general lien on all of the Credit Parties’ assets, including each party’s respective intellectual property. Extension of Warrants As part of the transactions contemplated by the Loan Documents, the Company additionally agreed to extend the expiration dates of the following outstanding Common Stock purchase warrants held by the Lender or its affiliated entities until September 30, 2023: (a) a warrant to purchase 1,363,636 (b) a warrant to purchase 166,667 (c) a warrant to purchase 530,027 (d) a warrant to purchase 530,028 Fee Agreement As consideration for Lender entering into the Loan Documents, Lender will be entitled to receive, in addition to any payment made under the Credit Agreement, 10% of the net proceeds received by the Company from the sales of securities received during the term of the Revolving Loan. Common stock issue for Options and Warrants Subsequent to December 31, 2021, the Company issued approximately 287,000 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization SRAX, Inc. (“SRAX”, “we”, “us”, “our” or the “Company”) is a Delaware corporation formed on August 2, 2011. We are headquartered in Westlake Village, California but work as a distributed virtual Company. The Consolidated Financial Statements consist of SRAX and its wholly owned subsidiary LD Micro, Inc. (“LD Micro”). We are a technology firm focused on enhancing communications between public companies and their shareholders and investors. We currently have two distinct business units, which we consider to be one reporting unit: ● Our unique SaaS platform, Sequire provides users many features which allow issuers to track their shareholders’ behaviors and trends, then use data-driven insights to engage with shareholders across marketing channels. ● Through LD Micro, we organize and host investor conferences within the micro and small- cap markets, and plan to create several more niche events for the investor community. Each of SRAX’s business units deliver valuable insights that assist our clients with their investor relations and communications initiatives. On December 29, 2021, we deconsolidated our majority owned subsidiary BIG Token, Inc. (“BIGToken”) (formerly known as Force Protection Video Equipment Corporation). After the deconsolidation, we do not beneficially own controlling interest in BIGtoken, and no longer consolidate BIGtoken into our financial results for periods ending after December 31, 2021. The financial results of BIGtoken for the years ended December 31, 2021 and 2020 are presented as income from discontinued operations, net of taxes on the consolidated statements of operations and its assets and liabilities as of December 31, 2021 are presented as assets and liabilities of discontinued operations on the consolidated balance sheets. The historical consolidated statement of cash flows has also been revised to reflect the effect of the deconsolidation. See Note 2 – Discontinued Operations. Unless noted otherwise, discussion in the notes to the consolidated financial statements pertain to continuing operations. |
Liquidity and Going Concern | Liquidity and Going Concern The Company has incurred significant losses since its inception and has not demonstrated an ability to generate cash in excess of its operating expenses for a sustained period of time. As of December 31, 2021, the Company had cash and cash equivalents of $ 1,348,000 which is not sufficient to fund the Company’s planned operations through one year after the date the consolidated financial statements are issued. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that our audited 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, our accounts receivable and marketable securities as of December 31, 2021, will not be sufficient to enable us to fund our anticipated level of operations through one year from the date these financial statements are issued. 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 assurances 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. The continuing COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, and uncertain. The impact of COVID-19 has not been significant to the Company’s results of operations, financial condition, and liquidity and capital resources. Although no material impairment or other effects have been identified to date, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known. The Company will continue to consider the potential impact of the COVID-19 pandemic on its business operations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control of the subsidiary. |
Business Segments | Business Segments The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has one operating segment due to business similarities and similar economic characteristics. |
Business Combinations | Business Combinations For all business combinations (whether partial, full or step acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value are recognized in earnings until settlement and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition. |
Use of Estimates | Use of Estimates The consolidated financial statements have been prepared in conformity with generally accepted accounting principles accepted in the United States of America (“GAAP”) and requires management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company’s revenue recognition, allowance for doubtful accounts and sales credits, valuation of marketable investment securities, stock-based compensation, income taxes, purchase price for acquisition, goodwill, other intangible assets, put rights and valuation of other assets and liabilities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability. In determining fair value, the Company uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value. It maximizes observable inputs and minimizes unobservable inputs. Valuation techniques consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels: ● Level 1 ● Level 2 ● Level 3 Fair value is a market-based measure that is based on assumptions of prices and inputs considered from the perspective of a market participant on the measurement date. Therefore, even when market assumptions are not readily available, the fund’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors. The determination of fair value requires prudent judgment. Due to the inherent uncertainty of valuation, estimated values may be materially different from values were a ready market available. Inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the fund’s level is based on the lowest significant level input to the fair value measurement. Valuation Techniques and Inputs Investments in securities and securities sold short that are both freely tradable and listed on major securities exchanges are valued at their last reported sales price as of the valuation date. Many over-the-counter contracts have bid and ask prices that are observable in the marketplace. Bid prices reflect the highest price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants are willing to accept for an asset. An integral part of the Company’s fair value measurement process is the assessment of the type of securities as well as the securities’ liquidity and marketability. The Company initially classifies securities between debt securities, equity securities, warrants, convertible debt, or preferred stock. The Company does not have any debt securities as of December 31, 2021 and 2020. Warrants are initially valued at cost, if acquired for cash, or at intrinsic value. For convertible debt securities the investor generally should evaluate the security in its current “all-in” form as convertible debt and not use the “if converted” value. Convertible debt is valued based on an analysis of the implied call option and a discounted cash flow analysis of the debt component. Equity securities are valued using the quoted prices times the number of shares acquired. The securities are then evaluated based on their marketability (usually based on the restrictions on resale into the securities primary market) and liquidity. The Company considers there to be an active market based on the guidance in ASC 820-10-35-54C. In an active market, transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. An orderly transaction assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities. Whether transactions take place with sufficient frequency and volume to constitute an active market is a matter of judgement and depends on the facts and circumstances of the market for the asset or liability. If the Company determines that the trading market for a security is not an active market the Company evaluates the stock price based on other observable or unobservable inputs. A market with limited activity may still provide relevant pricing information when there is no contrary evidence that the pricing information is not relevant to the fair value of the asset. In certain situations, the Company’s security holdings represent share quantities that materially exceed the average daily trading volume of the securities in their primary market. Thus, the Company considers a discount due to the lack of liquidity. If the Company determines it can liquidate its position within 180 days based on 10% of the securities average daily trading volume, no discount is applied. Rule 144 also has an alternative volume limit for affiliates of up to 10% of the tranche (or class) outstanding for debt securities. We believe this provides a reasonable basis to suggest this 10% of trading volume should have minimal impact on market prices. Securities with a marketability holding period in excess of 180 days is subjected to a discount for marketability. If a security has both a marketability holding period over 180 days and a liquidation period of over 180 days the Company will evaluate the impact of both the marketability and liquidity discounts. The Company utilizes the quoted market price on the date of valuation calculates a discount for marketability and liquidity based on a protective put option pricing model that factors in both the lack of marketability and liquidity. Independent Valuation Expert The Company uses a third party specialist to provide guidance around the assumptions, inputs, pricing models utilized valuation calculations into the various Put Option Pricing Models (POPMs) used in the calculations to determine discounts at contract inceptions date and each of the respective balance sheet dates. If the Company has access to material non-public information regarding an investee, it will consider this information as an input for purposes of valuing the security. In these situations, the Company will consider the impact this information will have on the valuation of the securities on a case-by-case basis. These situations could arise due to the Company being an affiliate of the issuer or an officer or director of the Company is an affiliate of the issuer. These securities are categorized in Level 1 of the fair value hierarchy to the extent these securities are actively traded. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 of the fair value hierarchy. Investments in Restricted Securities of Public Companies Investments in restricted securities of public companies cannot be offered for sale to the public until the company complies with certain statutory requirements. The valuation will not exceed the listed price on any major securities exchange. Investments in restricted securities of public companies are generally categorized in Level 2 of the fair value hierarchy. However, investments in public companies may be categorized in Level 3 of the fair value hierarchy depending on the level of observable liquidity. Specifically, if the Company determines the market activity is not sufficient to conclude the market activity represents an Active Market pursuant to ASC 820 -10 -35 36B. The Company evaluates the trading activity of each listed security to determine if the trading market is an Active Market for purposes of evaluating Fair Value under ASC 820. The Company evaluated the number of trade observations during the year, the percentage of the total trading days the security traded on its listed market during the full year or the portion of the year if the security was initially listed during the year, and at the dollar value of the trading activity for the full year as a percentage of the market capitalization of the security. If the Company determines the listed securities trading market is not an active market it looks at other transactions reported by the listed company including private equity transactions, non-cash equity transactions, the trading price and other factors. The Company determines a fair value of the stock price based on this analysis. This price is the lower of the listed price or the fair value based on the analysis. The Company also considers the marketability and liquidity discounts on the listed security in determining fair value. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates its fair value. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $ 250,000 1,098,000 200,000 |
Accounts Receivable | Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. Allowance for doubtful accounts was approximately $ 130,000 15,000 |
Concentration of Credit and Significant Customer Risk | Concentration of Credit and Significant Customer Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited with financial institutions within the United States. The balances maintained at these financial institutions are generally more than the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any loss on these accounts. As of December 31, 2021, the Company had one customer with an accounts receivable balance of approximately 11 As of December 31, 2020, the Company had three customers with accounts receivable balances of approximately 43.41 %, 11.60 %, and 10.53 %. For the year ended December 31, 2021, the Company had no customers that account for a significant percentage of total revenue. For the year ended December 31, 2020, the Company had one customer that accounted for 18.1 |
Long-lived Assets | Long-lived Assets Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company’s stock price for a sustained period of time; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairments have been recorded regarding its identifiable intangible assets or other long-lived assets during the years ended December 31, 2021 or 2020, respectively. |
Property and equipment | Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. |
Intangible assets | Intangible assets Intangible assets consist of intellectual property, trademarks, trade names, and non-compete agreements, and internally developed software and are stated at cost less accumulated amortization. Amortization is provided for on the straight-line basis over the estimated useful lives of the assets of five years. Costs incurred to develop computer software for internal use are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a specific software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Post-implementation costs related to the internal use computer software, are expensed as incurred. Internal use software development costs are amortized using the straight-line method over its estimated useful life which ranges up to three years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the years ended December 31, 2021, and 2020 there has been no impairment associated with internal use software. For the years ended December 31, 2021, and 2020, the Company capitalized software development costs of $ 798,000 633,000 During 2016, the Company began capitalizing the costs of developing internal-use computer software, including directly related payroll costs. The Company amortizes costs associated with its internally developed software over periods up to three years, beginning when the software is ready for its intended use. The Company capitalizes costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. |
Right of Use Assets and Lease Obligations | Right of Use Assets and Lease Obligations The Right of Use Asset and Lease Liability reflect the present value of the Company’s estimated future minimum lease payments over the lease term, which may include options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term. Therefore, the Right of Use Asset and Lease Liability may include an assumption on renewal options that have not yet been exercised by the Company. As the rate implicit in leases are not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. |
Goodwill | Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test as of December 31, 2021 using market data and discounted cash flow analysis. Based on this analysis, it was determined that the fair value exceeded the carrying value of its reporting units. The Company concluded the fair value of the goodwill exceed the carrying value accordingly there were no indicators of impairment for the years ended December 31, 2021 and 2020. The Company had historically performed its annual goodwill and impairment assessment on December 31 st When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the impairment testing methodology primarily using the income approach (discounted cash flow method). We compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows if the carrying value of a reporting unit exceeds its fair value, then the amount by which it exceeds its fair value will be recognized as an impairment. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. |
Derivatives | Derivatives The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, Distinguishing Liabilities From Equity Derivatives and Hedging The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend, which will reduce the income available to common stockholders. |
Warrant Liability | Warrant Liability The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations. The fair value of the warrants issued by the Company has been estimated using a Black-Scholes option pricing model, at each measurement date. |
Debt Discounts | Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods (ASC 605). The adoption did not have a significant impact to the nature and timing of our revenues, results of operations, cash flows and statement of financial position. Revenue from all sale types is recognized at transaction price, the amount we expect to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives and price protection related to current period product revenue. Our standard obligation to our direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, we estimate variable consideration at the expected value amount which is based on management’s analysis of historical data, channel inventory levels, current economic trends and changes in customer demand for our products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and through estimating future expenditure based upon historical customary business practice. We continue to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. We enter into contracts to sell our products and services, and while some of our sales agreements contain standard terms and conditions, there are agreements that contain non-standard terms and conditions and include promises to transfer multiple goods or services. As a result, significant interpretation and judgment is sometimes required to determine the appropriate accounting for these transactions including: (1) whether performance obligations are considered distinct and required to be accounted for separately or combined, including allocation of transaction price; (2) developing an estimate of the stand-alone selling price, or SSP, of each distinct performance obligation; (3) combining contracts that may impact the allocation of the transaction price between product and services; and (4) estimating and accounting for variable consideration, including rights of return, rebates, price protection, expected penalties or other price concessions as a reduction of the transaction price. Revenue from contracts with customers is recognized when the promised goods or services is transferred to the customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company derives its revenue primarily from the licensing of our Sequire Platform and Services associated with our customer’s use of the platform, consisting of data insights, marketing, creative, and paid media advertising Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring ratably over the contract period. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred services. Licensing and Service revenue is generally recognized over time on a ratable basis over the contract term beginning on the date that the service is expected to begin. Service contracts are generally for 12 months in length, billed either monthly or annually and generally in advance. Services revenue are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period because the Company transfers control evenly by providing a stand-ready service. Deferred Revenue Deferred revenue consists of platform and services fees that the Company has received consideration in advance of satisfying performance under the associated contract. The majority of the Company’s deferred revenue balance consists of the unrecognized portion of Service revenue that the Company has received consideration in marketable securities, which is recognized as revenue ratably over the contractual service period. ASC Topic 606 is a comprehensive revenue recognition model that requires revenue to be recognized when control of the promised goods or services are transferred to our customers at an amount that reflects the consideration that we expect to receive. Application of ASC Topic 606 requires us to use more judgment and make more estimates than under former guidance. Application of ASC Topic 606 requires a five-step model applicable to all product offering revenue streams as follows: Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. The Company has identified three distinct services promised within its contracts: (1) subscription to the Platform for a fixed monthly fee (Platform revenue), (2) Managed Services (including, data and marketing campaigns for a fixed monthly fee (managed services), and (3) Ancillary data, which consists of various data attributes that supplement the data available within the Sequire platform. The Managed Services to be delivered to the customer are within the discretion of the Company, and there are no minimum or maximum guaranties to be delivered. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. In cases which the Company receives marketable securities as payment the transaction price is determined to be the lower of the fair market value of the securities received or the contract amount. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative Stand-Alone Selling Price (“SSP,”) basis. We determine SSP based on the price at which the performance obligation would be sold separately. During the second quarter of 2020, the Company provided its customers the ability to pay for the Sequire services with the issuance of the customers’ common stock or other securities. For contacts paid with any type of security, Management considers whether there is any marketability of liquidity discounts in determining the fair value of the security on the contract date. The Company’s contract with its customers is for a period of one year or less than one year and the Company is applying the practical expedient, therefore, the transaction price is not adjusted for any significant financing component. The Company evaluates whether there is an existence of a significant financing component in the contract. This is evaluated based on the marketability holding period and liquidity issues than can extend the ability to sale the securities. For any marketability restrictions over 180 days the Company provides a marketability discount. For any liquidity issues that would take the Company in excess of 180 days to liquidate the security the Company applies a liquidity discount. Where there is both a marketability and liquidity issue the Company provides a discount considering both. ASC 606-10-32-23 The fair value of the noncash consideration may vary after contract inception because of the form of the consideration (for example, a change in the price of a share to which an entity is entitled to receive from a customer). Changes in the fair value of noncash consideration after contract inception that are due to the form of the consideration are not included in the transaction price. Recognition of revenue when, or as, we satisfy a performance obligation We recognize revenue at the point in time that the related performance obligation is satisfied by transferring the promised goods or services to our customer. The Company has performed a limited analysis of the performance efforts and has determined that the effort for the managed services is typically front loaded and as a result of performing services for SEC reporting companies’ additional efforts are maintained throughout the year. The Company considers the services to be delivered ratably during any service period and as such is amortizing the contract price on a straight line method over the contract period. Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have risk before the specified good or service have been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. Contract Liabilities Contract liabilities consist of customer advance payments and billings in excess of revenue recognized. We may receive payments from our customers in advance of completing our performance obligations. We record contract liabilities equal to the amount of payments received in excess of revenue recognized, including payments that are refundable if the customer cancels the contract according to the contract terms. Contract liabilities have been historically low historically recorded as current liabilities on our consolidated financial statements when the time to fulfill the performance obligations under terms of our contracts is less than one year. We have no long-term contract liabilities which would represent the amount of payments received in excess of revenue earned, including those that are refundable, when the time to fulfill the performance obligation is greater than one year. Practical Expedients and Exemptions We have elected certain practical expedients and policy elections as permitted under ASC Topic 606 as follows: ● We adopted the practical expedient related to not adjusting the promised amount of consideration for the effects of a significant financing component if the period between transfer of product and customer payment is expected to be less than one year at the time of contract inception; ● We made the accounting policy election to not assess promised goods or services as performance obligations if they are immaterial in the context of the contract with the customer; ● We made the accounting policy election to exclude any sales and similar taxes from the transaction price; and ● We adopted the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Stock-Based Compensation | Stock-Based Compensation We account for our stock-based compensation under ASC 718 “ Compensation – Stock Compensation We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Common stock awards The Company grants common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded in accordance with ASC 718 on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash. Warrants In connection with certain financing, and consulting arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. |
Income Taxes | Income Taxes We utilize ASC 740 “ Income Taxes The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. |
Earnings Per Share | Earnings Per Share We use ASC 260, “ Earnings Per Share There were 11,867,520 common share equivalents at December 31, 2021 and 15,366,426 at December 31, 2020. For the year ended December 31, 2021 and 2020 these potential shares were excluded from the computation of diluted net earnings per share as their effect would have been antidilutive. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2020, the FASB issued ASU 2020-01, which clarifies the interactions between Topics 321, 323 and 815. This ASU clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, the amendments clarify the accounting for certain forward contracts and purchased options accounted for under Topic 815. Our adoption of this ASU did not impact our consolidated financial statements or disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions for a limited period of time to ease the potential burden in accounting treatments related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is elective and is permitted upon issuance of the guidance through December 31, 2022. The adoption had no material impact on the Company’s financial position, results of operations and cash flows. In May 2020, the SEC adopted amendments to the financial disclosure requirements in Regulation S-X including the significance tests in the “significant subsidiary” definition in Rule 1-02(w), Securities Act Rule 405, and Exchange Act Rule 12b-2 to improve their application and to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant. In addition, to address the unique attributes of investment companies and business development companies, the SEC updated the significance tests in Rule 1-02(w), Securities Act Rule 405, and Exchange Act Rule 12b-2 by (i) revising the investment test to compare the registrant’s investments in and advances to the acquired or disposed business to the registrant’s aggregate worldwide market value if available; (ii) revising the income test by adding a revenue component; (iii) expanding the use of pro forma financial information in measuring significance; and (iv) conforming, to the extent applicable, the significance threshold and tests for disposed businesses to those used for acquired businesses. The amendment became effective January 1, 2021. In August 2020, the FASB issued ASU 2020-06, which simplifies the accounting for convertible instruments by removing certain separation models (including the cash conversion model and the beneficial conversion feature model) for convertible instruments. As a result, for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815 or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features are no longer separated from the host contract. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost as long as no other features require bifurcation and recognition as derivatives. This ASU is effective for fiscal years beginning after December 15, 2021. In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables–Nonrefundable Fees and Other Costs, (“ASU 2020-08”). This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of ASU 2020-08 did not have a material impact on its consolidated financial statements since the Company does not have any convertible debt. On November 15, 2019, the FASB delayed the effective date of FASB ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities Credit Losses (Topic 326) — Measurement of Credit Losses on Financial Instruments.” This ASU amends several aspects of the measurement of credit losses on certain financial instruments, including replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (CECL) model and amending certain aspects of accounting for purchased financial assets with deterioration in credit quality since origination. Rule 2a-5 under the 1940 Act was adopted by the SEC in December 2020 and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. As noted above, the if the Company were determined to be an Investment Company we would be required to comply with the rule. We are evaluating the impact of adopting Rule 2a-5 on the consolidated financial statements and intend to comply with the new rule’s requirements should we be required to do so on or before the compliance date in September 2022. The Company’s management reviewed all recently issued accounting standard updates (“ASU’s”) not yet adopted by the Company and does not believe the future adoptions of any such ASU’s may be expected to cause a material impact on the Company’s consolidated financial condition or the results of its operations. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF DECONSOLIDATION OF BUSINESS | SCHEDULE OF DECONSOLIDATION OF BUSINESS Consideration received $ - Fair value of Series D Stock and Common stock 31,000 Carrying amount of non-controlling interest of BIGToken 6,045,000 Previous equity adjustments of non-controlling interest (12,510,000 ) Total consolidations (6,434,000 ) Book basis of investment in BIGToken 4,250,000 Loss on disposal of subsidiary $ (10,684,000 ) |
SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS | The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations of BIGToken in the consolidated balance sheet as of December 31, 2020: SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ 1,000 Accounts receivable, net 1,199,000 Prepaid expenses and other current assets 6,000 Property and equipment, net 1,000 Goodwill 5,445,000 Intangible assets, net 917,000 Total assets classified as discontinued operations in the consolidated balance sheet $ 7,569,000 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable and accrued expenses $ 853,000 Other current liabilities 452,000 Total liabilities classified as discontinued operations in the consolidated balance sheet $ 1,305,000 The financial results of BIGToken are presented as income from discontinued operations, net of income taxes on our consolidated income through December 29, 2021, when our deconsolidation occurred. The following table presents the financial results of BIGToken: Year ended December 31, 2021 2020 Revenues $ 3,431,000 $ 2,168,000 Cost of revenue 1,090,000 800,000 Gross profit 2,341,000 1,368,000 Operating expense Employee related costs 2,419,000 3,212,000 Marketing and selling expenses 1,136,000 958,000 Platform costs 1,350,000 707,000 Depreciation and amortization 530,000 531,000 General and administrative expenses 4,152,000 530,000 Total operating expense 9,587,000 5,938,000 Loss from operations of discontinued operations (7,246,000 ) (4,570,000 ) Other expense Financing costs (5,872,000 ) - Realized loss on marketable securities - (71,000 ) Impairment of goodwill (1,258,000 ) - Total other expense (7,130,000 ) (71,000 ) Loss from discontinued operations before provision for income taxes (14,376,000 ) (4,641,000 ) Provision for income taxes - Loss from discontinued operations, net of income taxes $ (14,376,000 ) $ (4,641,000 ) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF CALCULATIONS OF PURCHASE PRICE | SCHEDULE OF CALCULATIONS OF PURCHASE PRICE 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 LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: SUMMARY OF ALLOCATION OF PURCHASE PRICE TO ASSETS ACQUIRED 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 | Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION 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 AMOUNT 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 consolidated statements of operations for the year ended December 31, 2020 follows: SUMMARY OF AMOUNT OF REVENUE AND EARNINGS OF ACQUIREE SINCE THE ACQUISITION DATE Revenues $ - Net loss $ (51,000 ) |
SCHEDULE OF PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS | Pro Forma Consolidated Statements of Operations For the Year ended December 31, 2020 SCHEDULE OF PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS SRAX, Inc. LD Micro, Inc. Pro Forma Adjustment Pro Forma Combined Revenues $ 6,479,000 $ 937,000 $ - $ 7,416,000 Cost of revenues (1,789,000 ) (98,000 ) - (1,887,000 ) Operating expenses (11,722,000 ) (858,000 ) 171,000 (12,409,000 ) Other expense (3,011,000 ) (1,000 ) - (3,012,000 ) Provision for income taxes (21,000 ) - - (21,000 ) Net loss $ (10,064,000 ) $ (20,000 ) $ 171,000 $ (9,913,000 ) |
SUMMARY OF PRO FORMA ADJUSTMENTS | The following summarizes the pro forma adjustments made for the year ended December 31, 2020: SUMMARY OF PRO FORMA ADJUSTMENTS Amortization of intangibles acquired $ 64,000 Employee related costs (235,000 ) Financing costs - Net income (loss) $ (171,000 ) |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Cash and Cash Equivalents [Abstract] | |
SCHEDULE OF MOVEMENT OF MARKETABLE SECURITIES | The movement in this account is as follows: SCHEDULE OF MOVEMENT OF MARKETABLE SECURITIES Balance as of December 31, Common Convertible Preferred 2021 Stock Debentures Stock Warrants Balances at beginning of year $ 8,447,000 $ 7,764,000 $ 683,000 $ - $ - Additions 34,914,000 29,281,000 4,602,000 1,031,000 - Sale of marketable securities (8,666,000 ) (8,156,000 ) (510,000 ) - - Designation for dividend distribution (10,790,000 ) (10,577,000 ) (213,000 ) - - Change in fair value (8,288,000 ) (7,577,000 ) (375,000 ) (432,000 ) 96,000 Balances at end of year $ 15,617,000 $ 10,735,000 $ 4,187,000 $ 599,000 $ 96,000 Balance as of December 31, Common Convertible 2020 Stock Debentures Balances at beginning of year $ 83,000 $ 83,000 $ — Additions 8,406,000 7,496,000 910,000 Sale of marketable securities (916,000 ) (916,000 ) — Change in fair value 874,000 1,101,000 (227,000 ) Balances at end of year $ 8,447,000 $ 7,764,000 $ 683,000 |
DESIGNATED ASSETS FOR RETURN _2
DESIGNATED ASSETS FOR RETURN OF CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Designated Assets For Return Of Capital | |
SCHEDULE OF DESIGNATED ASSETS | As of December 31, 2021, designated assets consist of the following: SCHEDULE OF DESIGNATED ASSETS Cash $ 686,000 Marketable securities 3,239,000 Balance $ 3,925,000 |
SCHEDULE OF MOVEMENT IN DESIGNATED ASSETS | The movement in designated assets is as follows: SCHEDULE OF MOVEMENT IN DESIGNATED ASSETS Designated assets as of September 20, 2021 $ 6,387,000 Sale of designated assets (770,000 ) Proceeds from sale of designated assets 686,000 Change in fair value of designated assets (2,378,000 ) Balances as of December 31, 2021 $ 3,925,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following as of December 31: SCHEDULE OF PROPERTY AND EQUIPMENT 2021 2020 Office equipment $ 471,000 $ 402,000 Accumulated depreciation (357,000 ) (285,000 ) Property and equipment, net $ 114,000 $ 117,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following as of December 31: SCHEDULE OF INTANGIBLE ASSETS 2021 2020 Non-compete agreement $ 1,258,000 $ 1,258,000 Intellectual property 756,000 756,000 Acquired Software 756,000 617,000 Internally developed software 2,726,000 2,048,000 Trademark 271,000 271,000 Customer list 186,000 186,000 Domain name 17,000 36,000 Total cost 5,970,000 5,172,000 Accumulated amortization (4,527,000 ) (3,680,000 ) Intangible assets, net $ 1,443,000 $ 1,492,000 |
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE | Trademark has indefinite life and not subject to amortization. The estimated future amortization expense for the years ended December 31, are as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE 2022 $ 632,000 2023 404,000 2024 136,000 Intangible assets $ 1,172,000 |
RIGHT TO USE ASSET (Tables)
RIGHT TO USE ASSET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Right To Use Asset | |
SCHEDULE OF COMPONENT OF LEASE EXPENSE | SCHEDULE OF COMPONENT OF LEASE EXPENSE 2021 2020 Operating lease expense $ 163,000 $ 163,000 Short-term lease expense 12,000 29,000 Total lease expense $ 175,000 $ 192,000 |
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES | The below table summarizes these lease asset and liability accounts presented on our accompanying Consolidated Balance Sheets for the year ended December 31: SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES Operating Leases* Consolidated Balance Sheet Caption 2021 2020 Operating lease right-of-use assets - non-current Right of use asset $ 257,000 $ 366,000 Operating lease liabilities – current Other current liabilities $ 130,000 $ 109,000 Operating lease liabilities - non-current Right to use liability - long term 114,000 243,000 Total operating lease liabilities $ 244,000 $ 352,000 |
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND APPLIED DISCOUNT RATE | Weighted Average Remaining Lease Term and Applied Discount Rate SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND APPLIED DISCOUNT RATE Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of December 31, 2021 1.75 18 % |
SCHEDULE OF FUTURE MINIMUM CONTRACTUAL LEASE PAYMENTS | The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments for the years ending December 31: SCHEDULE OF FUTURE MINIMUM CONTRACTUAL LEASE PAYMENTS Operating Leases - future payments 2022 163,000 2023 123,000 Total future lease payments, undiscounted 286,000 Less: Implied interest (42,000 ) Present value of operating lease payments 244,000 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses as of December 31, are comprised of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES 2021 2020 Accounts payable, trade $ 1,938,000 $ 1,900,000 Accrued expenses 1,518,000 537,000 Accrued compensation 213,000 232,000 Accrued commissions 303,000 32,000 Accrued interest 123,000 7,000 Accounts payable and accrued expenses $ 4,095,000 $ 2,708,000 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT LIABILITIES | The following table summarizes the composition of other current liabilities presented on our accompanying Consolidated Balance Sheets: SCHEDULE OF OTHER CURRENT LIABILITIES December 31, December 31, Operating lease liabilities - current $ 130,000 $ 109,000 Other current liabilities 633,000 3,308,000 Total other current liabilities $ 763,000 $ 3,417,000 |
OID CONVERTIBLE DEBENTURES (Tab
OID CONVERTIBLE DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Oid Convertible Debentures | |
SCHEDULE OF OID CONVERTIBLE DEBENTURES | The table below summarizes the transactions during the year end December 31, 2021: SCHEDULE OF OID CONVERTIBLE DEBENTURES Principal Debt discount Net book value Balance at beginning of year $ 9,386,000 $ (3,370,000 ) $ 6,016,000 Extension 268,000 - 268,000 Conversion (8,387,000 ) 2,413,000 (5,974,000 ) Amortization - 854,000 854,000 Total $ 1,267,000 $ (103,000 ) $ 1,164,000 As of December 31, 2021, the Company has classified the debt as current liability because the management intends to redeem the remaining convertible debentures within the following 12 months. The table below summarizes the transactions during the year end December 31, 2020: Principal Debt discount Net book value Issuance during the year $ 16,101,000 $ (12,731,000 ) $ 3,370,000 Extension 472,000 - 472,000 Redemption (6,069,000 ) 3,037,000 (3,032,000 ) Conversion (1,118,000 ) 685,000 (433,000 ) Amortization - 5,639,000 5,639,000 Total $ 9,386,000 $ (3,370,000 ) $ 6,016,000 |
STOCK OPTIONS, AWARDS AND WAR_2
STOCK OPTIONS, AWARDS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | SCHEDULE OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding — December 31, 2019 1,192,519 $ 4.14 2.17 $ — $ — Granted 766,172 2.77 3.00 521,000 2.72 Exercised — — — — — Forfeited (316,367 ) 5.14 — — 3.14 Outstanding — December 31, 2020 1,642,324 3.30 2.81 — — Vested and exercisable — December 31, 2020 844,742 3.54 2.62 333,000 3.54 Unvested and non-exercisable - December 31, 2020 797,582 2.81 3.00 207,000 2.09 Outstanding — December 31, 2020 1,642,324 3.30 2.81 — — Granted 21,627 4.38 6.29 2,000 3.60 Exercised (12,500 ) 2.70 3.63 — 2.00 Forfeited (319,671 ) 4.60 0.65 — 3.49 Outstanding — December 31, 2021 1,331,780 3.02 2.39 1,969,000 2.13 Vested and exercisable — December 31, 2021 870,750 3.05 2.27 1,265,000 2.15 Unvested and non-exercisable - December 31, 2021 461,030 $ 2.96 2.62 $ 703,000 $ 2.10 |
SCHEDULE OF WARRANT ACTIVITY | SCHEDULE OF WARRANT ACTIVITY Number of Shares Weighted Average Strike Price/Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding — December 31, 2019 6,237,430 $ 3.57 2.68 $ — $ — Granted 7,421,054 2.63 1.82 3,929,000 1.38 Exercised — — — — — Forfeited (1,073,201 ) — — — — Outstanding — December 31, 2020 12,585,283 2.98 1.78 4,460,000 1.38 Vested and exercisable — December 31, 2020 12,285,283 2.94 1.74 4,460,000 1.38 Unvested and non-exercisable - December 31, 2020 300,000 4.75 3.37 — — Outstanding — December 31, 2020 12,585,283 2.98 1.78 4,460,000 1.38 Granted 4,582,345 7.48 0.11 — 1.70 Exercised (7,148,501 ) 2.74 0.78 — — Forfeited — — — — — Outstanding — December 31, 2021 10,019,127 5.21 0.47 6,779,000 1.70 Vested and exercisable — December 31, 2021 9,719,127 5.22 0.41 6,779,000 1.70 Unvested and non-exercisable - December 31, 2021 300,000 $ 4.75 2.37 $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE | Income tax (benefit) expense from continuing operations for the year ended December 31, 2021 consisted of the following: SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE Current Deferred Total Federal $ — $ (132,000 ) $ (132,000 ) State 5,000 — 5,000 Subtotal 5,000 (132,000 ) (127,000 ) Valuation allowance — — — Total $ 5,000 $ (132,000 ) $ (127,000 ) Income tax expense from continuing operations for the year ended December 31, 2020 consisted of the following: Current Deferred Total Federal $ — $ — - State 21,000 — 21,000 Subtotal 21,000 — 21,000 Valuation allowance — — — Total $ 21,000 $ — $ 21,000 |
SCHEDULE OF EFFECTIVE TAX RATE | A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: SCHEDULE OF EFFECTIVE TAX RATE 2021 2020 Taxes calculated at federal rate 21.0 % 21.0 % Stock based compensation 0.0 % (2.7 )% Permanent differences (1.0 )% (13.4 )% Change in valuation allowance (15.1 )% (2.1 )% Fair market adjustment derivatives 0.0 % 0.5 % Prior year true-ups 0.0 % (3.3 )% Other adjustments (4.1 )% (0.1 )% Provision for income tax benefit (expense) 0.8 % (0.1 )% |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The tax effects, rounded to thousands, of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, are presented below: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2021 2020 Deferred Tax Assets Net operating loss carryforwards $ 10,003,000 $ 9,040,000 Bad debt expense 33,000 136,000 Fixed assets - 9,000 Accrued interest - - Stock based compensation 525,000 567,000 Interest expense limitation carryover 220,000 629,000 Contribution carryover 5,000 5,000 Lease liability 62,000 97,000 Unrealized gain on marketable securities 2,668,000 120,000 Other accruals 124,000 173,000 Total Deferred Tax Assets 13,640,000 10,776,000 Deferred Tax Liabilities Fixed assets (29,000 ) - Right-of-use asset (66,000 ) (101,000 ) Intangibles (455,000 ) (690,000 ) Interest expense limitation carryover (59,000 ) - Prepaid expenses (15,000 ) (17,000 ) Total Deferred Tax Liabilities (624,000 ) (808,000 ) Net Deferred Tax Assets 13,016,000 9,968,000 Valuation Allowance (13,016,000 ) (9,968,000 ) Net deferred tax / (liabilities) $ — $ — |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF ASSETS MEASURED AT FAIR VALUE | SCHEDULE OF ASSETS MEASURED AT FAIR VALUE Quoted Prices Significant Balance as of in Active Other Significant December 31 Identical Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: Marketable securities $ 15,617,000 $ 6,134,000 $ 2,448,000 $ 7,035,000 Designated assets 3,925,000 259,000 3,666,000 — Contract assets 844,000 — — 844,000 Total assets $ 20,386,000 $ 6,393,000 $ 6,114,000 $ 7,879,000 Quoted Prices Significant Balance as of in Active Markets for Other Significant Unobservable December 31, Identical Assets Inputs Inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Marketable securities $ 8,447,000 $ 7,764,000 $ 683,000 $ — Total assets $ 8,447,000 $ 7,764,000 $ 683,000 $ — |
SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE | SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE Level 1 Level 2 Level 3 Fair Value As of Dec. 31, 2021 Level 1 Level 2 Level 3 Fair Value Liabilities: Series A Preferred Stock $ — $ 3,925,000 - $ 3,925,000 Total liabilities $ — $ 3,925,000 - $ 3,925,000 Level 1 Level 2 Level 3 Fair Value As of December 31, 2020 Level 1 Level 2 Level 3 Fair Value Liabilities: Series A Preferred Stock $ — $ — $ - $ - Total liabilities $ — $ — $ - $ - |
SCHEDULE OF FAIR VALUE AT ASSETS | The following table presents additional information about Level 3 assets measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of assets classified within the Level 3 category. As a result, the unrealized gains and losses for the assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. Changes in Level 3 assets measured at fair value for the year ended December 31, 2021 were as follows: SCHEDULE OF FAIR VALUE AT ASSETS Assets Beginning Acquisitions Sales and dispositions Transfers into Level 3 Transfers out of Level 3 (a) Realized & Ending Balance Dec 31, 2021 Common stocks - $ 2,665,000 $ - $ 400,000 $ (534,000 ) $ (377,000 ) $ 2,154,000 Convertible Debt - $ 4,267,000 $ - $ 410,000 $ (213,000 ) $ (278,000 ) $ 4,186,000 Warrants - $ - $ - $ - $ - $ 96,000 $ 96,000 Preferred stocks - $ 1,031,000 $ (510,000 ) $ 500,000 $ - $ (422,000 ) $ 599,000 Total Investments - $ 7,963,000 $ (510,000 ) $ 1,310,000 $ (747,000 ) $ (981,000 ) $ 7,035,000 a. Transfers out of Level 3 relate to investments that have been transferred to level 2 and designed assets for return of capital. b. Realized and unrealized gains and losses are included in the gain / (loss) line in the statement of operations. |
SCHEDULE OF FAIR VALUE ASSETS SIGNIFICANT UNOBSERVABLE INPUTS | SCHEDULE OF FAIR VALUE ASSETS SIGNIFICANT UNOBSERVABLE INPUTS Assets Valuation technique Unobservable inputs Range Common stocks Put option pricing model Discount for lack of marketability 0 54 Convertible preferred stock Put option pricing model Discount for lack of marketability 0 54 Convertible Debt Discounted cash flow Maturity 0 35 Risk adjusted discount factor 26 Option pricing model Volatility 100 Risk-free interest rate 0.78 1.04 Dividend yield 0 Time to maturity 0 35 |
REVENUE DISAGGREGATION (Tables)
REVENUE DISAGGREGATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Disaggregation | |
SCHEDULE OF REVENUE BY BUSINESS UNIT | SCHEDULE OF REVENUE BY BUSINESS UNIT 2021 2020 Sequire platform revenue $ 24,514,000 $ 5,976,000 Conference revenue 1,229,000 503,000 Other revenues 964,000 - Total revenues $ 26,707,000 $ 6,479,000 |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||
Cash Equivalents, at Carrying Value | $ 1,348,000 | $ 450,000 |
FDIC amount | 250,000 | |
Excess of federal insurance limit | 1,098,000 | 200,000 |
Allowance for doubtful accounts | 130,000 | 15,000 |
Capitalized software development costs | $ 798,000 | $ 633,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,867,520 | 15,366,426 |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 11% | 43.41% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 11.60% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 10.53% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Revenue [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 18.10% |
SCHEDULE OF DECONSOLIDATION OF
SCHEDULE OF DECONSOLIDATION OF BUSINESS (Details) | Dec. 29, 2021 USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Consideration received | |
Fair value of Series D Stock and Common stock | 31,000 |
Carrying amount of non-controlling interest of BIGToken | 6,045,000 |
Previous equity adjustments of non-controlling interest | (12,510,000) |
Total consolidations | (6,434,000) |
Book basis of investment in BIGToken | 4,250,000 |
Loss on disposal of subsidiary | $ (10,684,000) |
SCHEDULE OF ASSET AND LIABILITI
SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash and cash equivalents | $ 1,000 | |
Accounts receivable, net | 1,199,000 | |
Prepaid expenses and other current assets | 6,000 | |
Property and equipment, net | 1,000 | |
Goodwill | 5,445,000 | |
Intangible assets, net | 917,000 | |
Total assets classified as discontinued operations in the consolidated balance sheet | 7,569,000 | |
Accounts payable and accrued expenses | 853,000 | |
Other current liabilities | 452,000 | |
Total liabilities classified as discontinued operations in the consolidated balance sheet | 1,305,000 | |
Revenues | 3,431,000 | 2,168,000 |
Cost of revenue | 1,090,000 | 800,000 |
Gross profit | 2,341,000 | 1,368,000 |
Employee related costs | 2,419,000 | 3,212,000 |
Marketing and selling expenses | 1,136,000 | 958,000 |
Platform costs | 1,350,000 | 707,000 |
Depreciation and amortization | 530,000 | 531,000 |
General and administrative expenses | 4,152,000 | 530,000 |
Total operating expense | 9,587,000 | 5,938,000 |
Loss from operations of discontinued operations | (7,246,000) | (4,570,000) |
Financing costs | (5,872,000) | |
Realized loss on marketable securities | (71,000) | |
Impairment of goodwill | (1,258,000) | |
Total other expense | (7,130,000) | (71,000) |
Loss from discontinued operations before provision for income taxes | (14,376,000) | (4,641,000) |
Provision for income taxes | ||
Loss from discontinued operations, net of income taxes | $ (14,376,000) | $ (4,641,000) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) | Dec. 29, 2021 USD ($) shares |
[custom:IssuanceOfAcquisitionSharesDescription] | BIGToken’s issuance of the Acquisition Share and the Exchange caused the Company’s BIGToken common stock holdings to decrease from approximately 66% to approximately 4.99%; Therefore, the Company no longer controlled the operations of BIGToken. Given the Company’s loss of control over the operations of BIGToken, the Company deconsolidated BIGToken, as of December 29, 2021, in accordance with ASC 810 Consolidations |
Gain (Loss) on Sale of Equity Investments | $ 10,684,000 |
BIG Tokens [Member] | |
Conversion of Stock, Amount Issued | 5,860,000 |
Business Combination, Contingent Consideration, Liability | 6,465,000 |
[custom:BusinessCombinationContingentConsiderationLiabilityRelated-0] | 12,510,000 |
Debt Instrument, Convertible, Beneficial Conversion Feature | 5,860,000 |
Fair Value Adjustment of Warrants | 885,000 |
Other Expenses | $ 95,000 |
Common Stock [Member] | |
Conversion of Stock, Shares Converted | shares | 13,692,304,136 |
[custom:IssuedAndOutstandingOfCommonStock] | 4.99% |
Series D Convertible Preferred Stock [Member] | |
Conversion of Stock, Shares Converted | shares | 22,162 |
Conversion of Stock, Shares Issued | shares | 617,828 |
Beneficial Ownership Percenatge | 4.99% |
Series D Convertible Preferred Stock and Common Stock [Member] | |
Conversion of Stock, Amount Issued | $ 31,000 |
Brite Pool Inc [Member] | |
Stock Issued During Period, Shares, Acquisitions | shares | 183,445,351,631 |
[custom:ExchangedNumberOfSharesforCommonStock] | shares | 149,562,566,584 |
Brite Pool Inc [Member] | Series D Convertible Preferred Stock [Member] | |
[custom:ExchangedNumberOfSharesforCommonStock] | shares | 242,078 |
SCHEDULE OF CALCULATIONS OF PUR
SCHEDULE OF CALCULATIONS OF PURCHASE PRICE (Details) - USD ($) | 12 Months Ended | |||
Jan. 02, 2021 | Sep. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Cash at closing | $ 3,004,000 | |||
LD Micro Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair value of stock at closing | $ 4,264,000 | |||
Cash at closing | $ 1,000,000 | 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 |
SUMMARY OF ALLOCATION OF PURCHA
SUMMARY OF ALLOCATION OF PURCHASE PRICE TO ASSETS ACQUIRED LIABILITIES ASSUMED (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 15, 2020 |
Business Acquisition [Line Items] | |||
Intangibles | $ 468,000 | ||
Goodwill | $ 17,906,000 | $ 17,906,000 | |
LD Micro Inc [Member] | |||
Business Acquisition [Line Items] | |||
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 A
SCHEDULE OF INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION (Details) | Sep. 15, 2020 USD ($) |
Business Acquisition [Line Items] | |
Fair value | $ 468,000 |
Trademark [Member] | |
Business Acquisition [Line Items] | |
Fair value | $ 271,000 |
Life in years, description | Indefinite |
Domain Name [Member] | |
Business Acquisition [Line Items] | |
Fair value | $ 3,000 |
Life in years, description | Indefinite |
Noncompete [Member] | |
Business Acquisition [Line Items] | |
Fair value | $ 8,000 |
Life in years, description | 5 years |
Customer List [Member] | |
Business Acquisition [Line Items] | |
Fair value | $ 186,000 |
Life in years, description | 3 years |
SUMMARY OF AMOUNT OF REVENUE AN
SUMMARY OF AMOUNT OF REVENUE AND EARNINGS OF ACQUIREE SINCE THE ACQUISITION DATE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Revenues | $ 26,707,000 | $ 6,479,000 |
Nety income (loss) | $ (34,762,000) | (14,705,000) |
LD Micro Inc [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | ||
Nety income (loss) | $ (51,000) |
SCHEDULE OF PRO FORMA CONSOLIDA
SCHEDULE OF PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 6,479,000 |
Cost of revenues | (1,789,000) |
Operating expenses | (11,722,000) |
Other expense | (3,011,000) |
Provision for income taxes | (21,000) |
Net loss | (10,064,000) |
Pro Forma Adjustment [Member] | |
Business Acquisition [Line Items] | |
Revenues | 0 |
Cost of revenues | 0 |
Operating expenses | 171,000 |
Other expense | 0 |
Provision for income taxes | 0 |
Net loss | 171,000 |
Pro Forma Combined [Member] | |
Business Acquisition [Line Items] | |
Revenues | 7,416,000 |
Cost of revenues | (1,887,000) |
Operating expenses | (12,409,000) |
Other expense | (3,012,000) |
Provision for income taxes | (21,000) |
Net loss | (9,913,000) |
LD Micro Inc [Member] | |
Business Acquisition [Line Items] | |
Revenues | 937,000 |
Cost of revenues | (98,000) |
Operating expenses | (858,000) |
Other expense | (1,000) |
Provision for income taxes | 0 |
Net loss | $ (20,000) |
SUMMARY OF PRO FORMA ADJUSTMENT
SUMMARY OF PRO FORMA ADJUSTMENTS (Details) | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Net income (loss) | $ 10,064,000 |
Scenario, Adjustment [Member] | |
Amortization of intangibles acquired | 64,000 |
Employee related costs | (235,000) |
Financing costs | |
Net income (loss) | $ (171,000) |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Jul. 01, 2021 | Apr. 01, 2021 | Jan. 02, 2021 | Sep. 15, 2020 | Sep. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||||
Business combination, cash payable by entity | $ 3,004,000 | ||||||
Employee related costs | 235,000 | ||||||
LD Micro Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Acquisition, Date of Acquisition Agreement | Sep. 15, 2020 | ||||||
Business combination, cash payable by entity | $ 1,000,000 | $ 1,000,000 | $ 7,610,000 | ||||
Deferred payments discounted under CCC rated corporate debt | 3,000,000 | ||||||
Amortization of payments | $ 229,000 | ||||||
LD Micro Inc [Member] | Class A common stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued in acquisition | 1,600,000 | ||||||
LD Micro Inc [Member] | Forecast [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, cash payable by entity | $ 1,000,000 | $ 1,000,000 | |||||
Noncompete [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization of payments | 2,000 | ||||||
Customer List [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization of payments | $ 62,000 |
SALE AND PURCHASE OF ACCOUNTS_2
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2021 | Oct. 29, 2021 | Jun. 30, 2020 | Apr. 09, 2020 | Mar. 24, 2020 | Jan. 30, 2020 | Jan. 22, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Accounts receivable | $ 75,000 | $ 454,000 | |||||||
Accounts receivable purchase | $ 56,000 | $ 454,000 | |||||||
Converted debt | $ 1,118,000 | ||||||||
Loss on extinguishment | (1,103,000) | ||||||||
Conversion premium | $ 51,075,000 | 51,075,000 | 69,551,000 | ||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 631,000 | $ 631,000 | 570,000 | ||||||
Proceeds from additional borrowing | 1,000,000 | 472,000 | |||||||
Accounts Payable [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Converted debt | $ 510,000 | ||||||||
Accrued Liabilities [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Converted debt | 184,000 | ||||||||
Debentures [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Converted debt | 788,000 | ||||||||
Fair value of debentures | 815,000 | ||||||||
Loss on extinguishment | 546,000 | ||||||||
Difference between face value and fair value | 95,000 | ||||||||
Conversion premium | 27,000 | ||||||||
Fair value of warrants | $ 424,000 | ||||||||
Common Class A [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Sale of stock number of share | 29,519 | 239,029 | |||||||
Sale of stock, value | $ 75,000 | $ 454,000 | |||||||
Ten Percent [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Description of sale of accounts receivable | 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; | ||||||||
Twenty Percent [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Description of sale of accounts receivable | 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 | ||||||||
Thirty Six Percent [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Description of sale of accounts receivable | thirty-six | ||||||||
Agreements to Sell Accounts Receivable [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
[custom:PercentageOfReceivablesUponExerciseOfPutOption] | 136% | ||||||||
Agreements to Sell Accounts Receivable Ammended [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
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. | ||||||||
Sale of stock number of share | 4,032 | 32,668 | |||||||
PIPE Technologies [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
Right to future subscription revenues | 570,000 | ||||||||
Subscription revenues | $ 528,000 | ||||||||
Accounts Receivable, Related Parties | 625,000 | $ 625,000 | |||||||
Proceeds from accounts receivable | 576,000 | ||||||||
Receivable Purchase and Sale Agreement [Member] | BIGtoken [Member] | |||||||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||||||||
[custom:AccountsReceivables-0] | $ 352,000 | ||||||||
[custom:PurchasePrice-0] | $ 327,000 | ||||||||
Debt Instrument, Redemption Price, Percentage | 7% | ||||||||
[custom:AccountsReceivable-0] | $ 352,000 | $ 352,000 |
CONTRACTS RECEIVABLE (Details N
CONTRACTS RECEIVABLE (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Credit Loss [Abstract] | ||
Contracts receivable | $ 844,000 |
SCHEDULE OF MOVEMENT OF MARKETA
SCHEDULE OF MOVEMENT OF MARKETABLE SECURITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Balances at beginning of year | $ 8,447,000 | $ 83,000 |
Additions | 34,914,000 | 8,406,000 |
Sale of marketable securities | (8,666,000) | (916,000) |
Designation for dividend distribution | (10,790,000) | |
Change in fair value | (8,288,000) | 874,000 |
Balances at end of year | 15,617,000 | 8,447,000 |
Convertible Debentures [Member] | ||
Balances at beginning of year | 683,000 | |
Additions | 4,602,000 | 910,000 |
Sale of marketable securities | (510,000) | |
Designation for dividend distribution | (213,000) | |
Change in fair value | (375,000) | (227,000) |
Balances at end of year | 4,187,000 | 683,000 |
Common Stock [Member] | ||
Balances at beginning of year | 7,764,000 | 83,000 |
Additions | 29,281,000 | 7,496,000 |
Sale of marketable securities | (8,156,000) | (916,000) |
Designation for dividend distribution | (10,577,000) | |
Change in fair value | (7,577,000) | 1,101,000 |
Balances at end of year | 10,735,000 | 7,764,000 |
Preferred Stock [Member] | ||
Balances at beginning of year | ||
Additions | 1,031,000 | |
Sale of marketable securities | ||
Designation for dividend distribution | ||
Change in fair value | (432,000) | |
Balances at end of year | 599,000 | |
Warrant [Member] | ||
Balances at beginning of year | ||
Additions | ||
Sale of marketable securities | ||
Designation for dividend distribution | ||
Change in fair value | 96,000 | |
Balances at end of year | $ 96,000 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Cash and Cash Equivalents [Abstract] | |
[custom:ProceedFromSaleAndMaturityOfMarketableSecurities] | $ 8,666,000 |
Marketable Securities | 7,862,000 |
[custom:GainOnMarketableSecurities] | $ 804,000 |
SCHEDULE OF DESIGNATED ASSETS (
SCHEDULE OF DESIGNATED ASSETS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Marketable securities | $ 7,862,000 | |
Balance | 3,925,000 | |
Designated Assets [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Cash | 686,000 | |
Marketable securities | 3,239,000 | |
Balance | $ 3,925,000 |
SCHEDULE OF MOVEMENT IN DESIGNA
SCHEDULE OF MOVEMENT IN DESIGNATED ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Sales | $ (8,666,000) | $ (916,000) | |
Change in fair value of designated assets | 8,288,000 | $ (874,000) | |
Designated Assets [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Designated assets at beginning balance | $ 6,387,000 | ||
Sales | (770,000) | (770,000) | |
Proceeds from sale of other assets | 686,000 | ||
Change in fair value of designated assets | (2,378,000) | ||
Designated assets at ending balance | $ 3,925,000 | $ 3,925,000 |
DESIGNATED ASSETS FOR RETURN _3
DESIGNATED ASSETS FOR RETURN OF CAPITAL (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Sale of marketable securities | $ 8,666,000 | ||
Marketable Securities | 8,666,000 | $ 916,000 | |
Gain on marketable securities. | 804,000 | ||
Designated Assets [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Sale of marketable securities | 686,000 | ||
Marketable Securities | $ 770,000 | 770,000 | |
Gain on marketable securities. | $ 84,000 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Implied discount | $ 5,639,000 | ||
Note receivable | $ 935,000 | $ 893,000 | |
Rated Corporate Debt [Member] | |||
Deferred payments of notes receivable | 960,000 | ||
Discount on notes receivable | $ 40,000 | ||
Debt instrument term | 3 years | ||
Implied discount | $ 107,000 | ||
Maximum [Member] | Rated Corporate Debt [Member] | |||
Debt instrument term | 3 years | ||
Haylard MDLLC [Member] | |||
Redemption of class A units | 10,000,000 | ||
Price to be paid for all of the units | $ 6,718,000 | ||
Price to be paid upon earlier | 960,000 | ||
Total consideration | $ 7,678,000 | ||
Haylard MDLLC [Member] | Maximum [Member] | |||
Excess amount for each unit | 0.7677543 | ||
MD CoInvest, LLC [Member] | |||
Redemption of class A units | 420,000 | ||
Price to be paid for all of the units | $ 282,000 | ||
Price to be paid upon earlier | 40,000 | ||
Total consideration | $ 322,000 | ||
MD CoInvest, LLC [Member] | Maximum [Member] | |||
Excess amount for each unit | 0.7677543 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | $ (357,000) | $ (285,000) |
Property and equipment, net | 114,000 | 117,000 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Office equipment | $ 471,000 | $ 402,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 72,000 | $ 28,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | $ 5,970,000 | $ 5,172,000 |
Accumulated amortization | (4,527,000) | (3,680,000) |
Intangible assets, net | 1,443,000 | 1,492,000 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 1,258,000 | 1,258,000 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 756,000 | 756,000 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 756,000 | 617,000 |
Internally Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 2,726,000 | 2,048,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 271,000 | 271,000 |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | 186,000 | 186,000 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total cost | $ 17,000 | $ 36,000 |
SCHEDULE OF ESTIMATED FUTURE AM
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE (Details) | Dec. 31, 2021 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 632,000 |
2023 | 404,000 |
2024 | 136,000 |
Intangible assets | $ 1,172,000 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of finite-lived intangible assets | $ 847,000 | $ 744,000 |
Goodwill | 17,906,000 | 17,906,000 |
Goodwill Acquisition | 7,706,000 | |
Impairment loss | $ 0 | $ 0 |
SCHEDULE OF COMPONENT OF LEASE
SCHEDULE OF COMPONENT OF LEASE EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Right To Use Asset | ||
Operating lease expense | $ 163,000 | $ 163,000 |
Short-term lease expense | 12,000 | 29,000 |
Total lease expense | $ 175,000 | $ 192,000 |
SCHEDULE OF OPERATING LEASE ASS
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Right To Use Asset | ||
Operating lease right-of-use assets - non-current | $ 257,000 | $ 366,000 |
Operating lease liabilities - current | 130,000 | 109,000 |
Operating lease liabilities - non-current | 114,000 | 243,000 |
Total operating lease liabilities | $ 244,000 | $ 352,000 |
SCHEDULE OF WEIGHTED AVERAGE RE
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND APPLIED DISCOUNT RATE (Details) | Dec. 31, 2021 |
Right To Use Asset | |
Weighted Average Remaining Lease Term | 1 year 9 months |
Weighted Average Discount Rate | 18% |
SCHEDULE OF FUTURE MINIMUM CONT
SCHEDULE OF FUTURE MINIMUM CONTRACTUAL LEASE PAYMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Right To Use Asset | ||
2022 | $ 163,000 | |
2023 | 123,000 | |
Total future lease payments, undiscounted | 286,000 | |
Less: Implied interest | (42,000) | |
Present value of operating lease payments | $ 244,000 | $ 352,000 |
RIGHT TO USE ASSET (Details Nar
RIGHT TO USE ASSET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Right To Use Asset | ||
Lessee, Operating Lease, Remaining Lease Term | 1 year 9 months | |
Variable lease cost and sublease | $ 0 | |
Cash paid for operating lease | $ 175,000 | $ 192,000 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable, trade | $ 1,938,000 | $ 1,900,000 |
Accrued expenses | 1,518,000 | 537,000 |
Accrued compensation | 213,000 | 232,000 |
Accrued commissions | 303,000 | 32,000 |
Accrued interest | 123,000 | 7,000 |
Accounts payable and accrued expenses | $ 4,095,000 | $ 2,708,000 |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Liability | $ 12,859,000 | $ 4,842,000 |
SCHEDULE OF OTHER CURRENT LIABI
SCHEDULE OF OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Operating lease liabilities - current | $ 130,000 | $ 109,000 |
Other current liabilities | 633,000 | 3,308,000 |
Total other current liabilities | $ 763,000 | $ 3,417,000 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Other Sundry Liabilities, Current | $ 633,000 | $ 3,308,000 |
LD Micro [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Deferred payments related to acquisition | 2,735,000 | |
Deferred contractual payments | 3,004,000 | |
Factoring Facility [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Other Sundry Liabilities, Current | $ 633,000 | $ 573,000 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN (Details Narrative) - USD ($) | 12 Months Ended | |||
Apr. 17, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 15, 2020 | |
Short-Term Debt [Line Items] | ||||
Forgiveness of payroll protection program loan | $ 1,116,000 | |||
LD Micro Inc [Member] | ||||
Short-Term Debt [Line Items] | ||||
Payroll protection loan in connection with acquisition | $ 42,000 | |||
Paycheck Protection Program Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Unsecured loan | $ 1,084,000 | |||
Term loan | 2 years | |||
Interest rate | 1% | |||
Loans Payable | $ 10,000 | $ 1,126,000 |
SHORT TERM PROMISSORY NOTES (De
SHORT TERM PROMISSORY NOTES (Details Narrative) - USD ($) | 12 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 28, 2020 | |
Short-Term Debt [Line Items] | ||||
Loss on extinguishment | $ (1,103,000) | |||
Repayment of short-term note payable | 2,130,000 | |||
Converted debt | 1,118,000 | |||
Conversion premium | $ 51,075,000 | $ 69,551,000 | ||
Accrued Liabilities [Member] | ||||
Short-Term Debt [Line Items] | ||||
Converted debt | $ 184,000 | |||
Debentures [Member] | ||||
Short-Term Debt [Line Items] | ||||
Loss on extinguishment | 546,000 | |||
Convertible debt | 788,000 | |||
Fair value of debenture | 815,000 | |||
Difference between face value and fair value | 95,000 | |||
Fair value of warrants | 424,000 | |||
Conversion premium | 27,000 | |||
Short-Term Promissory Notes [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt instrument, face amount | $ 450,000 | |||
Debt instrument, description | 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 | |||
Number of shares of common stock | 450,000 | |||
Debt instrument, original issue discount | $ 45,000 | |||
Security shares | 100,000 | |||
Loss on extinguishment | $ 181,000 | |||
Difference between face value and fair value | 65,000 | |||
Outstanding loan | $ 0 | |||
Short-Term Promissory Notes [Member] | Accrued Liabilities [Member] | ||||
Short-Term Debt [Line Items] | ||||
Converted debt | 126,000 | |||
Short-Term Promissory Notes [Member] | Accrued Liabilities [Member] | Two Remaining Note Holders [Member] | ||||
Short-Term Debt [Line Items] | ||||
Converted debt | 350,000 | |||
Short-Term Promissory Notes [Member] | Debentures [Member] | ||||
Short-Term Debt [Line Items] | ||||
Loss on extinguishment | 375,000 | |||
Convertible debt | 541,000 | |||
Fair value of debenture | 560,000 | |||
Difference between face value and fair value | 19,000 | |||
Fair value of warrants | 291,000 | |||
Conversion premium | 18,000 | |||
Short-Term Promissory Notes [Member] | Chief Financial Officer [Member] | ||||
Short-Term Debt [Line Items] | ||||
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 ($) | 1 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Feb. 28, 2020 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 21, 2021 | |
Short-Term Debt [Line Items] | ||||||
Debt instrument, unused borrowing capacity, amount | $ 631,000 | $ 570,000 | ||||
Proceeds from notes payable | 2,130,000 | |||||
Debt instrument origination fee | $ 300,000 | |||||
Class of warrant issued | 6,828,611 | |||||
Exercise price of warrant | $ 5.83 | |||||
Proceeds from issuance of warrant | $ 15,952,000 | |||||
Warrant [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
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 | |||||
Warrant [Member] | Maximum [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Exercise price of warrant | $ 2.50 | |||||
Warrant [Member] | Second Drawdown [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Class of warrant issued | 500,000 | |||||
Warrant exercise price percentage | 25% | |||||
Term Loan [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Term loan, maximum borrowing capacity | $ 5,000,000 | |||||
Debt instrument, unused borrowing capacity, amount | 2,500,000 | |||||
Proceeds from notes payable | $ 2,164,000 | 2,500,000 | ||||
Debt instrument, additional borrowing capacity | $ 1,000,000 | |||||
Debt instrument, interest rate | 10% | |||||
Debt instrument, maturity date | Mar. 01, 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 | |||||
Attorneys fees | $ 35,000 | |||||
Repayment of loan principal and interest | $ 2,585,000 | |||||
Outstanding loan | $ 0 |
SCHEDULE OF OID CONVERTIBLE DEB
SCHEDULE OF OID CONVERTIBLE DEBENTURES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Short-Term Debt [Line Items] | ||
Principal | $ 1,267,000 | $ 9,386,000 |
Debt discount | (103,000) | (3,370,000) |
Net book value | 1,164,000 | 6,016,000 |
Issuance Beginning of Year [Member] | ||
Short-Term Debt [Line Items] | ||
Principal | 9,386,000 | 16,101,000 |
Debt discount | (3,370,000) | (12,731,000) |
Net book value | 6,016,000 | 3,370,000 |
Extension [Member] | ||
Short-Term Debt [Line Items] | ||
Principal | 268,000 | 472,000 |
Debt discount | ||
Net book value | 268,000 | 472,000 |
Conversion [Member] | ||
Short-Term Debt [Line Items] | ||
Principal | (8,387,000) | (1,118,000) |
Debt discount | 2,413,000 | 685,000 |
Net book value | (5,974,000) | (433,000) |
Amortization [Member] | ||
Short-Term Debt [Line Items] | ||
Principal | ||
Debt discount | 854,000 | 5,639,000 |
Net book value | $ 854,000 | 5,639,000 |
Redemption [Member] | ||
Short-Term Debt [Line Items] | ||
Principal | (6,069,000) | |
Debt discount | 3,037,000 | |
Net book value | $ (3,032,000) |
OID CONVERTIBLE DEBENTURES (Det
OID CONVERTIBLE DEBENTURES (Details Narrative) | 12 Months Ended | ||||||
Dec. 31, 2021 USD ($) $ / shares shares | Jun. 30, 2020 USD ($) | Jun. 25, 2020 USD ($) $ / shares shares | Feb. 28, 2020 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) shares | Feb. 21, 2021 $ / shares | |
Warrant to purchase common stock, shares | shares | 6,828,611 | 6,828,611 | |||||
Accounts receivable | $ 821,000 | $ 821,000 | $ 1,409,000 | ||||
Accrued interest | 123,000 | 123,000 | 7,000 | ||||
Warrants exercise price per share | $ / shares | $ 5.83 | ||||||
Repayment of short-term note payable | 2,130,000 | ||||||
Proceeds from issuance of debt | 1,000,000 | 472,000 | |||||
Amortization expenses | 5,639,000 | ||||||
Debt conversion, converted instrument, amount | 1,118,000 | ||||||
Additional principal balance | $ 434,000 | ||||||
Additional principal percentage | 5% | ||||||
Current principal balance fee amount | 5% | ||||||
Debenture Holders [Member] | |||||||
Debt face amount | 5,974,000 | $ 5,974,000 | |||||
Debt discount | 2,413,000 | 2,413,000 | |||||
Debt conversion, converted instrument, amount | 8,387,000 | ||||||
Additional principal balance | $ 8,387,000 | $ 8,387,000 | |||||
Class A common stock [Member] | |||||||
Debt conversion, converted instrument, shares issued | shares | 411,626 | ||||||
Class A common stock [Member] | Debenture Holders [Member] | |||||||
Debt conversion, converted instrument, shares issued | shares | 3,122,167 | ||||||
Securities Purchase Agreement [Member] | Placement Agent [Member] | |||||||
Proceeds from warrants percentage | 8% | ||||||
OID Convertible Debentures [Member] | |||||||
Debt face amount | $ 16,101,000 | ||||||
Debt discount | $ 14,169,000 | ||||||
Original issue discount percentage | 12% | ||||||
Warrant to purchase common stock, shares | shares | 6,440,561 | ||||||
Proceeds from warrants exercise | $ 13,000,000 | ||||||
Outstanding loan | 1,169,000 | ||||||
Accounts receivable | 510,000 | ||||||
Accrued interest | 125,000 | ||||||
Short term promissory notes | $ 350,000 | ||||||
Debt Instrument, Maturity Date | Dec. 31, 2021 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 12% | ||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 2.69 | ||||||
Debt Instrument, Description | 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 | ||||||
Warrants exercise price per share | $ / shares | $ 2.50 | ||||||
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 | ||||||
Proceeds from issuance of debt | $ 4,200,000 | ||||||
Proceeds from issuance Initial public offering | 13,000,000 | ||||||
Net proceeds from issuance of Initial public offering | 9,100,000 | ||||||
Legal Fees | 75,000 | ||||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | |||||||
Warrant to purchase common stock, shares | shares | 478,854 | 478,854 | |||||
Warrants exercise price per share | $ / shares | $ 3.3625 | $ 3.3625 | |||||
Class of warrant or right, unissued | shares | 360,000 | 360,000 | |||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Placement Agent [Member] | |||||||
Warrant to purchase common stock, shares | shares | 478,854 | 478,854 | |||||
Payments of Debt Issuance Costs | $ 1,040,000 | ||||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||||||
Warrants and rights outstanding, measurement input | 0.11 | 0.11 | |||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Measurement Input, Expected Term [Member] | |||||||
Warrants and rights outstanding, Term | 2 years 5 months | 2 years 5 months | |||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Measurement Input, Price Volatility [Member] | |||||||
Warrants and rights outstanding, measurement input | 96 | 96 | |||||
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||||
Warrants and rights outstanding, measurement input | 0 | 0 | |||||
OID Convertible Debentures [Member] | Prior To Closing Date [Member] | |||||||
Proceeds from issuance of debt | 3,800,000 | ||||||
OID Convertible Debentures [Member] | After The Closing Date [Member] | |||||||
Proceeds from issuance of debt | $ 5,000,000 | ||||||
OID Convertible Debentures [Member] | Accounts Receivable [Member] | |||||||
Accrued interest | $ 184,000 | ||||||
OID Convertible Debentures [Member] | |||||||
Payment of outstanding debt | $ 2,500,000 | ||||||
Repayment of short-term note payable | $ 136,000 |
SERIES A PREFERRED STOCK (Detai
SERIES A PREFERRED STOCK (Details Narrative) - USD ($) | Sep. 20, 2021 | Aug. 17, 2021 | Dec. 31, 2021 | Mar. 31, 2021 |
Class of Stock [Line Items] | ||||
Preferred stock authorized | 50,000,000 | |||
Warrant to purchase common stock, shares | 2,283,171 | |||
Fair value of preferred stock | $ 3,925,000 | |||
Series A Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Dividend description | the Company announced that it will be issuing a one-time dividend consisting of a share of series A preferred stock (“Preferred Stock”) to certain Qualified Recipients (as defined below) on a 1-for-1 as converted to common stock basis (the “Dividend”). | |||
Preferred stock authorized | 36,462,417 | |||
Preferred stock, shares issued | 25,160,504 | |||
Preferred stock, shares outstanding | 25,160,504 | |||
Warrant to purchase common stock, shares | 10,327,645 | |||
Conversion of convertible securities | $ 2,486,275 | |||
Stock issued during period, shares, conversion of convertible securities | 974,268 | |||
Series A Preferred Stock [Member] | Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock authorized | 36,462,417 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020 | Jan. 30, 2020 | Jan. 22, 2020 | Aug. 31, 2021 | Jan. 31, 2021 | Jan. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||||||||
Preferred stock shares authorized | 50,000,000 | |||||||
Preferred stock par value | $ 0.001 | |||||||
Common stock shares authorized | 259,000,000 | |||||||
Common stock shares issued | 25,995,172 | 16,145,778 | ||||||
Common stock shares outstanding | 25,995,172 | 16,145,778 | ||||||
Receivable description | we agreed to provide a true-up to the purchaser of the receivable of between 10% and 36% depending on the payment date. In the event of nonpayment of the receivables by March 24, 2020 and March 30, 2020, as applicable to the receivables, the purchaser may require us to purchase any outstanding portion of the receivables for 136% of its outstanding balance (“Payment Date”). | |||||||
At the Market Sales Agreement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Sale of stock | 53,616 | |||||||
Sale of stock, consideration received on transaction | $ 284,000 | |||||||
Share Buy-Back Program [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of repurchased shares | 155,000 | |||||||
Number of repurchased value | $ 793,000 | |||||||
Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued for extension agreement | 36,700 | |||||||
Board of Directors [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from issuanceor sale of equity | $ 10,000,000 | |||||||
Nonperforming Financial Instruments [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from sale of non-performing receivables | $ 529,000 | |||||||
Purchase price of receivables | $ 510,000 | |||||||
Series 1 Preferred Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock shares authorized | 200,000 | |||||||
Class A common stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized | 250,000,000 | 250,000,000 | ||||||
Common stock par value | $ 0.001 | $ 0.001 | ||||||
Common stock shares issued | 25,995,172 | 16,145,778 | ||||||
Common stock shares outstanding | 25,995,172 | 16,145,778 | ||||||
Class A common stock [Member] | Board of Directors [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Repurchase of common stock | $ 10,000,000 | |||||||
Class B Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized | 9,000,000 | |||||||
Common stock par value | $ 0.001 | |||||||
Common Class A [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Sale of stock | 29,519 | 239,029 | ||||||
Common Class A [Member] | Nonperforming Financial Instruments [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares pledged for repurchase of receivables | 239,029 | |||||||
Shares issued for extension agreement | 36,700 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Outstanding Beginning balance | 1,642,324 | 1,192,519 |
Weighted Average Strike Price/Share, Outstanding Beginning balance | $ 3.30 | $ 4.14 |
Weighted Average Remaining Contractual Term (Years), Outstanding Beginning balance | 2 years 9 months 21 days | 2 years 2 months 1 day |
Aggregate Intrinsic Value, Outstanding Beginning balance | ||
Weighted Average Grant Date Fair Value, Outstanding Beginning balance | ||
Number of Shares, Granted | 21,627 | 766,172 |
Weighted Average Strike Price/Share, Granted | $ 4.38 | $ 2.77 |
Weighted Average Remaining Contractual Term (Years), Granted | 6 years 3 months 14 days | 3 years |
Aggregate Intrinsic Value, Granted | $ 2,000 | $ 521,000 |
Weighted Average Grant Date Fair Value, Granted | $ 3.60 | $ 2.72 |
Number of Shares, Exercised | (12,500) | |
Weighted Average Strike Price/Share, Exercised | $ 2.70 | |
Aggregate Intrinsic Value, Exercised | ||
Weighted Average Grant Date Fair Value, Exercised | $ 2 | |
Number of Shares, Forfeited | (319,671) | (316,367) |
Weighted Average Strike Price/Share, Forfeited | $ 4.60 | $ 5.14 |
Aggregate Intrinsic Value, Forfeited | ||
Weighted Average Grant Date Fair Value, Forfeited | $ 3.49 | $ 3.14 |
Number of Shares, Outstanding Ending balance | 1,331,780 | 1,642,324 |
Weighted Average Strike Price/Share, Outstanding Ending balance | $ 3.02 | $ 3.30 |
Weighted Average Remaining Contractual Term (Years), Outstanding Ending balance | 2 years 4 months 20 days | 2 years 9 months 21 days |
Aggregate Intrinsic Value, Outstanding Ending balance | $ 1,969,000 | |
Weighted Average Grant Date Fair Value, Outstanding Ending balance | $ 2.13 | |
Number of Shares, Vested and exercisable Ending balance | 870,750 | 844,742 |
Weighted Average Strike Price/Share, Vested and exercisable Ending balance | $ 3.05 | $ 3.54 |
Weighted Average Remaining Contractual Term (Years), Vested and exercisable Ending balance | 2 years 3 months 7 days | 2 years 7 months 13 days |
Aggregate Intrinsic Value, Vested and exercisable Ending balance | $ 1,265,000 | $ 333,000 |
Weighted Average Grant Date Fair Value, Vested and exercisable Ending balance | $ 2.15 | $ 3.54 |
Number of Shares, Unvested and non-exercisable Ending balance | 461,030 | 797,582 |
Weighted Average Strike Price/Share, Unvested and non-exercisable Ending balance | $ 2.96 | $ 2.81 |
Weighted Average Remaining Contractual Term (Years), Unvested and non-exercisable Ending balance | 2 years 7 months 13 days | 3 years |
Aggregate Intrinsic Value, Unvested and non-exercisable Ending balance | $ 703,000 | $ 207,000 |
Weighted Average Grant Date Fair Value, Unvested and non-exercisable Ending balance | $ 2.10 | $ 2.09 |
Weighted Average Remaining Contractual Term (Years), Exercised | 3 years 7 months 17 days | |
Weighted Average Remaining Contractual Term (Years), Forfeited | 7 months 24 days |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Warrants Outstanding Beginning balance | 12,585,283 | 6,237,430 |
Weighted Average Strike Price/Share, Warrants Outstanding Beginning balance | $ 2.98 | $ 3.57 |
Weighted Average Remaining Contractual Term (Years), Warrants Outstanding Beginning balance | 1 year 9 months 10 days | 2 years 8 months 4 days |
Aggregate Intrinsic Value, Warrants Outstanding Beginning balance | $ 4,460,000 | |
Weighted Average Grant Date Fair Value, Warrants Outstanding Beginning balance | $ 1.38 | |
Number of Shares, Warrants Granted | 4,582,345 | 7,421,054 |
Weighted Average Strike Price/Share, Warrants Granted | $ 7.48 | $ 2.63 |
Weighted Average Remaining Contractual Term (Years), Warrants Granted | 1 month 9 days | 1 year 9 months 25 days |
Aggregate Intrinsic Value, Aggregate Intrinsic Value, Warrants Granted | $ 3,929,000 | |
Weighted Average Grant Date Fair Value, Warrants Granted | $ 1.70 | $ 1.38 |
Number of Shares, Warrants Exercised | (7,148,501) | |
Weighted Average Strike Price/Share, Warrants Exercised | $ 2.74 | |
Aggregate Intrinsic Value, Warrants Exercised | ||
Weighted Average Grant Date Fair Value, Warrants Exercised | ||
Number of Shares, Warrants Forfeiture | (1,073,201) | |
Weighted Average Strike Price/Share, Warrants Forfeiture | ||
Aggregate Intrinsic Value, Warrants Forfeitures | ||
Weighted Average Grant Date Fair Value, Warrants Forfeiture | ||
Number of Shares, Warrants Outstanding Ending balance | 10,019,127 | 12,585,283 |
Weighted Average Strike Price/Share, Warrants Outstanding Ending balance | $ 5.21 | $ 2.98 |
Weighted Average Remaining Contractual Term (Years), Warrants Outstanding Ending balance | 5 months 19 days | 1 year 9 months 10 days |
Aggregate Intrinsic Value, Warrants Outstanding Ending balance | $ 6,779,000 | $ 4,460,000 |
Weighted Average Grant Date Fair Value, Warrants Outstanding Ending balance | $ 1.70 | $ 1.38 |
Number of Shares, Warrants Vested and Exercisable | 9,719,127 | 12,285,283 |
Weighted Average Strike Price/Share, Warrants Vested and Exercisable | $ 5.22 | $ 2.94 |
Weighted Average Remaining Contractual Term (Years), Warrants Vested and exercisable Ending balance | 4 months 28 days | 1 year 8 months 26 days |
Aggregate Intrinsic Value, Warrants Vested and Exercisable | $ 6,779,000 | $ 4,460,000 |
Weighted Average Grant Date Fair Value, Warrants Vested and Exercisable | $ 1.70 | $ 1.38 |
Number of Shares, Warrants Unvested and Non-Exercisable | 300,000 | 300,000 |
Weighted Average Strike Price/Share, Warrants Unvested and Non-Exercisable | $ 4.75 | $ 4.75 |
Weighted Average Remaining Contractual Term (Years), Warrants Unvested and non-exercisable Ending balance | 2 years 4 months 13 days | 3 years 4 months 13 days |
Aggregate Intrinsic Value, Warrants Unvested and Non Exercisable | $ 0 | |
Weighted Average Grant Date Fair Value, Warrants Unvested and Non-Exercisable | ||
Weighted Average Remaining Contractual Term (Years), Warrants Exercised | 9 months 10 days |
STOCK OPTIONS, AWARDS AND WAR_3
STOCK OPTIONS, AWARDS AND WARRANTS (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 21, 2021 USD ($) $ / shares shares | Feb. 04, 2021 USD ($) shares | Nov. 30, 2020 USD ($) $ / shares shares | Aug. 31, 2020 USD ($) $ / shares shares | Feb. 28, 2020 USD ($) $ / shares shares | Feb. 23, 2016 USD ($) shares | Apr. 30, 2020 USD ($) $ / shares shares | Mar. 31, 2021 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Nov. 05, 2014 shares | Jan. 31, 2012 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Share-based payment award, fair value of options | $ 60,000 | |||||||||||
Option term | 7 years | |||||||||||
Implied volatility | 96% | 100% | ||||||||||
Risk free equivalent yield | 11% | 0.24% | ||||||||||
Share price | $ / shares | $ 1.95 | |||||||||||
Class of warrant or right, number of securities called by warrants or rights | shares | 2,283,171 | |||||||||||
Warrants exercise price per share | $ / shares | $ 5.83 | |||||||||||
Share-Based Payment Arrangement, Expense | $ 1,006,000 | $ 1,615,000 | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | 811,000 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 811,000 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 2 years 9 months 29 days | |||||||||||
Proceeds from issuance of warrants | $ 4,930,000 | |||||||||||
Proceeds from warrant exercises | $ 15,952,000 | |||||||||||
[custom:NumberOfWarrantsCancelled] | shares | 349,197 | |||||||||||
Shares issued upon exercise of warrants | shares | 6,828,611 | |||||||||||
Warrant [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights | shares | 4,545,440 | 25,568,064,462 | ||||||||||
Warrants exercise price per share | $ / shares | $ 3.60 | |||||||||||
Fair value of warrants | $ 885,000 | |||||||||||
Proceeds from issuance of warrants | $ 11,022,000 | |||||||||||
Proceeds from warrant exercises | $ 83,000 | |||||||||||
Shares issued upon exercise of warrants | shares | 500,000 | |||||||||||
Warrant [Member] | Measurement Input, Expected Term [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Warrants and Rights Outstanding, Term | 3 years | |||||||||||
Warrant [Member] | Measurement Input, Option Volatility [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Warrants and Rights Outstanding, Measurement Input | 92.30 | |||||||||||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Warrants and Rights Outstanding, Measurement Input | 18 | |||||||||||
New Warrant [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Share price | $ / shares | $ 0.125 | |||||||||||
Class of warrant or right, number of securities called by warrants or rights | shares | 4,545,440 | |||||||||||
Warrants exercise price per share | $ / shares | $ 7.50 | |||||||||||
Fair value of warrants | $ 7,737,000 | |||||||||||
Warrants and rights outstanding, maturity date | Jan. 31, 2022 | |||||||||||
Proceeds from issuance of warrants | $ 568,000 | |||||||||||
Proceeds from warrant exercises | 11,363,000 | |||||||||||
Solicitation Fees | $ 909,000 | |||||||||||
Non-Executive Directors [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Number of common shares option to purchase | shares | 36,172 | |||||||||||
Shares issued price per share | $ / shares | $ 1.95 | |||||||||||
Number of option vested | shares | 9,043 | |||||||||||
Option expiration date | Apr. 15, 2027 | |||||||||||
Employees and Members of Management Team [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights | shares | 300,000 | 430,000 | ||||||||||
Warrants exercise price per share | $ / shares | $ 2.97 | $ 2.70 | ||||||||||
Fair value of warrant option grant date | $ 649,000 | $ 859,000 | ||||||||||
Option vesting period | 5 years | |||||||||||
2012 Equity Compensation Plan [Member] | Common Class A [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Number of shares authorized | shares | 600,000 | |||||||||||
2014 Equity Compensation Plan [Member] | Common Class A [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Number of shares reserved for grants | shares | 600,000 | |||||||||||
2016 Equity Compensation Plan [Member] | Common Class A [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Number of shares reserved for grants | shares | 600,000 | |||||||||||
2012, 2014 and 2016 Equity Compensation Plans [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||
Minimum percentage of fair market value | 100% | |||||||||||
Threshold of employee ownership for increase in fair market value and decrease in maximum life | 10% | |||||||||||
Minimum percentage of fair market value for eligible employee | 110% | |||||||||||
Maximum fair market value underlying options exercisable by any option holder during any calendar year | $ 100,000 | |||||||||||
Maximum option life | 10 years | |||||||||||
Maximum option life for 10% holder | 5 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Lease term | 1 year | |
Lease amount | $ 175,000 | $ 192,000 |
Chief Executive Officer [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Lease amount | 382,500 | |
Payments for Rent | 39,000 | |
Related party payments | $ 477,000 |
SCHEDULE OF INCOME TAX (BENEFIT
SCHEDULE OF INCOME TAX (BENEFIT) EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Deferred Federal | (132,000) | |
Federal | (132,000) | |
Current State | 5,000 | 21,000 |
Deferred State | ||
State | 5,000 | 21,000 |
Current Subtotal | 5,000 | 21,000 |
Deferred Subtotal | (132,000) | |
Subtotal | (127,000) | 21,000 |
Current Valuation allowance | ||
Deferred Valuation allowance | ||
Valuation allowance | ||
Current Total | 5,000 | 21,000 |
Deferred Total | (132,000) | |
Total | $ (127,000) | $ 21,000 |
SCHEDULE OF EFFECTIVE TAX RATE
SCHEDULE OF EFFECTIVE TAX RATE (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Taxes calculated at federal rate | 21% | 21% |
Stock based compensation | 0% | (2.70%) |
Permanent differences | (1.00%) | (13.40%) |
Change in valuation allowance | (15.10%) | (2.10%) |
Fair market adjustment derivatives | 0% | 0.50% |
Prior year true-ups | 0% | (3.30%) |
Other adjustments | (4.10%) | (0.10%) |
Provision for income tax benefit (expense) | 0.80% | (0.10%) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets | ||
Net operating loss carryforwards | $ 10,003,000 | $ 9,040,000 |
Bad debt expense | 33,000 | 136,000 |
Fixed assets | 9,000 | |
Accrued interest | ||
Stock based compensation | 525,000 | 567,000 |
Interest expense limitation carryover | 220,000 | 629,000 |
Contribution carryover | 5,000 | 5,000 |
Lease liability | 62,000 | 97,000 |
Unrealized gain on marketable securities | 2,668,000 | 120,000 |
Other accruals | 124,000 | 173,000 |
Total Deferred Tax Assets | 13,640,000 | 10,776,000 |
Deferred Tax Liabilities | ||
Fixed assets | 29,000 | |
Right-of-use asset | 66,000 | 101,000 |
Intangibles | (455,000) | (690,000) |
Interest expense limitation carryover | (59,000) | |
Prepaid expenses | (15,000) | (17,000) |
Total Deferred Tax Liabilities | (624,000) | (808,000) |
Net Deferred Tax Assets | 13,016,000 | 9,968,000 |
Valuation Allowance | (13,016,000) | (9,968,000) |
Net deferred tax / (liabilities) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 2,996,000 | $ 2,375,000 | |
Operating Loss Carryforwards, Limitations on Use | which are available to offset future taxable income, of approximately $ | ||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 34,933,000 | ||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 73,733,000 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0 | $ 0 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | ||
NOL carryforwards, description | The Company is in the process of analyzing their NOL and has not determined if the company has had any change of control issues that could limit the future use of NOL. NOL carryforwards that were generated after 2017 of approximately $ | ||
Operating Loss Carryforwards | $ 29,400,000 |
SCHEDULE OF ASSETS MEASURED AT
SCHEDULE OF ASSETS MEASURED AT FAIR VALUE (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 20,386,000 | $ 8,447,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,393,000 | 7,764,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,114,000 | 683,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 7,879,000 | |
Fair Value, Recurring [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 15,617,000 | 8,447,000 |
Fair Value, Recurring [Member] | Marketable Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,134,000 | 7,764,000 |
Fair Value, Recurring [Member] | Marketable Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,448,000 | 683,000 |
Fair Value, Recurring [Member] | Marketable Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 7,035,000 | |
Fair Value, Recurring [Member] | Designated Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,925,000 | |
Fair Value, Recurring [Member] | Designated Assets [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 259,000 | |
Fair Value, Recurring [Member] | Designated Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,666,000 | |
Fair Value, Recurring [Member] | Designated Assets [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | ||
Fair Value, Recurring [Member] | Contracts Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 844,000 | |
Fair Value, Recurring [Member] | Contracts Receivable [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | ||
Fair Value, Recurring [Member] | Contracts Receivable [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | ||
Fair Value, Recurring [Member] | Contracts Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 844,000 |
SCHEDULE OF LIABILITIES MEASURE
SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | $ 3,925,000 | |
Series A Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 3,925,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | ||
Fair Value, Inputs, Level 1 [Member] | Series A Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 3,925,000 | |
Fair Value, Inputs, Level 2 [Member] | Series A Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 3,925,000 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | ||
Fair Value, Inputs, Level 3 [Member] | Series A Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities |
SCHEDULE OF FAIR VALUE AT ASSET
SCHEDULE OF FAIR VALUE AT ASSETS (Details) | 12 Months Ended | |
Dec. 31, 2021 USD ($) | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | ||
Acquisitions | 7,963,000 | |
Sales and dispositions | (510,000) | |
Transfers intoLevel 3 | 1,310,000 | |
Transfers out of Level 3 | (747,000) | [1] |
Realized & Unrealized Gains (Losses) | (981,000) | [2] |
Ending Balance | 7,035,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 747,000 | [1] |
Common Stock [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | ||
Acquisitions | 2,665,000 | |
Sales and dispositions | ||
Transfers intoLevel 3 | 400,000 | |
Transfers out of Level 3 | (534,000) | [1] |
Realized & Unrealized Gains (Losses) | (377,000) | [2] |
Ending Balance | 2,154,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 534,000 | [1] |
Convertible Debt Securities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | ||
Acquisitions | 4,267,000 | |
Sales and dispositions | ||
Transfers intoLevel 3 | 410,000 | |
Transfers out of Level 3 | (213,000) | [1] |
Realized & Unrealized Gains (Losses) | (278,000) | [2] |
Ending Balance | 4,186,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 213,000 | [1] |
Warrant [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | ||
Acquisitions | ||
Sales and dispositions | ||
Transfers intoLevel 3 | ||
Transfers out of Level 3 | [1] | |
Realized & Unrealized Gains (Losses) | 96,000 | [2] |
Ending Balance | 96,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | [1] | |
Preferred Stock [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | ||
Acquisitions | 1,031,000 | |
Sales and dispositions | (510,000) | |
Transfers intoLevel 3 | 500,000 | |
Transfers out of Level 3 | [1] | |
Realized & Unrealized Gains (Losses) | (422,000) | [2] |
Ending Balance | 599,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | [1] | |
[1]Realized and unrealized gains and losses are included in the gain / (loss) line in the statement of operations.[2]Transfers out of Level 3 relate to investments that have been transferred to level 2 and designed assets for return of capital. |
SCHEDULE OF FAIR VALUE ASSETS S
SCHEDULE OF FAIR VALUE ASSETS SIGNIFICANT UNOBSERVABLE INPUTS (Details) - Fair Value, Inputs, Level 3 [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 30, 2021 | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Maturity [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range, maturity | 0 months | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Maturity [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range, maturity | 35 months | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 100 | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.78 | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 1.04 | |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0 | |
Common Stock [Member] | Put Option Pricing Model [Member] | Measurement Input, Discount for Lack of Marketability [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0 | |
Common Stock [Member] | Put Option Pricing Model [Member] | Measurement Input, Discount for Lack of Marketability [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 54 | |
Convertible Preferred Stock [Member] | Put Option Pricing Model [Member] | Measurement Input, Discount for Lack of Marketability [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0 | |
Convertible Preferred Stock [Member] | Put Option Pricing Model [Member] | Measurement Input, Discount for Lack of Marketability [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 54 | |
Convertible Debt Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Maturity [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range, maturity | 0 months | |
Convertible Debt Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Maturity [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range, maturity | 35 months | |
Convertible Debt Securities [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 26 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Notes Receivable, Fair Value Disclosure | $ 1,000,000 | |
Deferred payment fair value | 960,000 | |
Corporate debt | 40,000 | |
Implied discount | 107,000 | |
Fair value notes receivable | 935,000 | $ 893,000 |
Contracts asset | $ 844,000 |
SCHEDULE OF REVENUE BY BUSINESS
SCHEDULE OF REVENUE BY BUSINESS UNIT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenues | $ 26,707,000 | $ 6,479,000 |
Sequire Platform Revenue [Member] | ||
Total revenues | 24,514,000 | 5,976,000 |
Conference Revenue [Member] | ||
Total revenues | 1,229,000 | 503,000 |
Other Revenues [Member] | ||
Total revenues | $ 964,000 |
REVENUE DISAGGREGATION (Details
REVENUE DISAGGREGATION (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue Disaggregation | ||
Revenue from contract liabilities | $ 12,859,000 | $ 4,842,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 08, 2022 | Jul. 01, 2022 | Jun. 13, 2022 | Feb. 15, 2022 | Nov. 29, 2018 | Oct. 27, 2017 | Jun. 30, 2020 | Dec. 31, 2021 | Sep. 27, 2022 | Jun. 28, 2022 | Mar. 31, 2021 | |
Subsequent Event [Line Items] | |||||||||||
Class of warrant issued | 6,828,611 | ||||||||||
Number of common stock and warrants shares | 2,283,171 | ||||||||||
Common Stock [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued | 53,616 | ||||||||||
Security Agreements [Member] | Common Stock [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued | 166,667 | 530,028 | 1,363,636 | ||||||||
Security Agreements [Member] | Tranche One [Member] | Common Stock [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued | 530,027 | ||||||||||
Subsequent Event [Member] | Warrant [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of common stock and warrants shares | 287,000 | ||||||||||
Subsequent Event [Member] | Bridge Note [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt amount | $ 650,000 | ||||||||||
Principal amount exchange | $ 500,000 | ||||||||||
Debt Instrument, Maturity Date | Aug. 15, 2022 | ||||||||||
Subsequent Event [Member] | Institutional Investor [Member] | Revolving Credit Facility [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loan amount | $ 9,450,000 | ||||||||||
Class of warrant issued | 2,590,358 | ||||||||||
Expiration date | Sep. 30, 2023 | ||||||||||
Additional amount | $ 3,870,000 | ||||||||||
Credit facility, description | The principal balance of each Revolving Loan will reflect an original issue discount of ten percent (10%); provided that beginning on the date that is twelve (12) months from the Effective Date, such original issue discount will increase to twelve percent (12%) in the event the Prime borrowing rate increases to 6.75%. The Revolving Loans have a maturity date of the earlier of (i) twenty-four (24) months from the Effective Date or (ii) the occurrence of an event of default, as described in the Loan Documents. | ||||||||||
Payment description | Additionally, with respect to any Payment Date where the applicable monthly collection from the sale of securities received by the Company from its customers during the prior month exceeds $2,000,000, the Company will make an additional payment equal to 30% of any amounts in excess of $2,000,000. | ||||||||||
Conversion, description | The Revolving Note is initially convertible into shares of Common Stock at a conversion price of $15.00 per share (“Conversion Price”). The Conversion Price is subject to adjustment in the event of stock splits, dividends and fundamental transactions. Moreover, in the event the Company is deemed to have issued or sold shares of its Common Stock while the Revolving Loan is outstanding at a price equal to or less than $5.00 per share, the conversion price will adjust to such lower applicable price. | ||||||||||
Subsequent Event [Member] | Institutional Investor [Member] | Revolving Credit Facility [Member] | Tranche One [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Payment percentage | 10% | ||||||||||
Subsequent Event [Member] | Institutional Investor [Member] | Revolving Credit Facility [Member] | Tranche Two [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Payment percentage | 15% | ||||||||||
Subsequent Event [Member] | Institutional Investor [Member] | Revolving Credit Facility [Member] | Tranche Three [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Payment percentage | 20% | ||||||||||
Subsequent Event [Member] | Holders [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt amount | $ 1,102,682 | ||||||||||
Debt instrument, description | (i) extend the maturity date of the Debentures until December 31, 2023 and (ii) extend the first date that monthly redemptions are required to be made by the Company to begin on January 1, 2023 (the “Debenture Extension”). As consideration for the Debenture Extension, the Company increased the principal amount outstanding on the Debentures by five percent (5%). Additionally, the holders of the Debentures have the unilateral right to extend the maturity date and monthly redemption period by an additional six (6) month period at any time prior to January 1, 2023 for an additional five percent (5%) to be added to the outstanding principal of such Debentures. | ||||||||||
Subsequent Event [Member] | CVR Agreement [Member] | Institutional Investor [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt amount | $ 404,513.40 | ||||||||||
Debt instrument, description | the investor received (i) the right to receive the net proceeds upon the sale of certain securities of the Company (“CVR Payments”) with a quoted price equal to $674,190 (with a guaranteed minimum return of 120% of such Purchase Price and (ii) the right after 90 days but before 120 days to demand payment of 120% of the Purchase Price in cash less amounts previously paid from the CVR Payments. | ||||||||||
Proceeds from sale of securities | $ 674,190 | ||||||||||
Subsequent Event [Member] | Credit Agreement [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Class of warrant issued | 33,000 | ||||||||||
Subsequent Event [Member] | Credit Agreement and Revolving Note [Member] | Institutional Investor [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loan amount | $ 5,580,000 | ||||||||||
Subsequent Event [Member] | Credit Agreement and Revolving Note [Member] | Institutional Investor [Member] | Cash [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loan amount | $ 4,930,000 | ||||||||||
Subsequent Event [Member] | Credit Agreement and Revolving Note [Member] | Institutional Investor [Member] | Bridge Note [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt amount | $ 650,000 | ||||||||||
Subsequent Event [Member] | Big Token Inc [Member] | Safe Agreement [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Investments | $ 1,000,000 |