Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Dec. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
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 #214 | |
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 | 205-6109 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | SRAX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,315,178 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 351,000 | $ 1,348,000 |
Accounts receivable, net | 1,041,000 | 821,000 |
Contracts receivable | 1,460,000 | 844,000 |
Marketable securities | 28,824,000 | 15,617,000 |
Designated assets for return of capital | 3,799,000 | 3,925,000 |
Prepaid expenses and other current assets | 761,000 | 430,000 |
TOTAL CURRENT ASSETS | 36,236,000 | 22,985,000 |
Notes receivable | 944,000 | 935,000 |
Property and equipment, net | 112,000 | 114,000 |
Intangible assets, net | 1,501,000 | 1,443,000 |
Right of use assets | 227,000 | 257,000 |
Other assets | 43,000 | 36,000 |
Goodwill | 17,906,000 | 17,906,000 |
TOTAL ASSETS | 56,969,000 | 43,676,000 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 6,527,000 | 4,095,000 |
Deferred revenue | 16,722,000 | 12,859,000 |
Other current liabilities | 3,922,000 | 763,000 |
Payroll protection loan | 10,000 | 10,000 |
OID convertible notes payable | 1,181,000 | 1,164,000 |
Series A redeemable preferred stock | 3,799,000 | 3,925,000 |
TOTAL CURRENT LIABILITIES | 32,161,000 | 22,816,000 |
Right of use liability, net of current | 77,000 | 114,000 |
TOTAL LIABILITIES | 32,238,000 | 22,930,000 |
STOCKHOLDERS’ EQUITY | ||
Series A preferred stock, $0.001 par value, 36,462,417 shares authorized, issued and outstanding, as liability classified at March 31, 2022 and December 31, 2021 | ||
Additional paid-in capital | 51,332,000 | 51,075,000 |
Accumulated deficit | (26,627,000) | (30,355,000) |
TOTAL STOCKHOLDERS’ EQUITY | 24,731,000 | 20,746,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 56,969,000 | 43,676,000 |
Common Class A [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common Stock Value | 26,000 | 26,000 |
Common Class B [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common Stock Value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 36,462,417 | 36,462,417 |
Preferred stock, shares issued | 36,462,417 | 36,462,417 |
Preferred stock, shares outstanding | 36,462,417 | 36,462,417 |
Common Class A [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 26,087,153 | 25,995,172 |
Common stock, shares outstanding | 26,087,153 | 25,995,172 |
Common Class B [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 9,000,000 | 9,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Condensed Consolidated Income S
Condensed Consolidated Income Statement (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 7,499,000 | $ 4,917,000 |
Cost and expenses | ||
Cost of revenues | 2,798,000 | 1,377,000 |
Employee related costs | 2,497,000 | 1,550,000 |
Marketing and selling expenses | 1,413,000 | 994,000 |
Platform costs | 76,000 | 20,000 |
Depreciation and amortization | 187,000 | 256,000 |
General and administrative expenses | 1,856,000 | 295,000 |
Total cost and expenses | 8,827,000 | 4,492,000 |
(Loss) income from operations | (1,328,000) | 425,000 |
Other income (expense) | ||
Financing costs | (312,000) | (9,265,000) |
Unrealized gain on marketable securities | 6,366,000 | 3,978,000 |
Realized (loss) gain on marketable securities | (1,053,000) | 516,000 |
Interest income | 9,000 | 15,000 |
Change in fair value of preferred stock | 126,000 | |
Realized loss on designated assets | (116,000) | |
Unrealized gain on designated assets | 89,000 | |
Other income (expense) | (53,000) | 14,000 |
Total other income (expense) | 5,056,000 | (4,742,000) |
Income (loss) before income tax expense | 3,728,000 | (4,317,000) |
Income tax expense | ||
Income (loss) from continuing operations | 3,728,000 | (4,317,000) |
Discontinued operations | ||
Loss before income tax expense | (7,627,000) | |
Noncontrolling interest in discontinued operations | 854,000 | |
Income tax expense | ||
Loss from discontinued operations | (6,773,000) | |
Net income (loss) | $ 3,728,000 | $ (11,090,000) |
Basic income (loss) per share | ||
Continuing operations | $ 0.14 | $ (0.22) |
Discontinued operations | (0.35) | |
Net income (loss) per share, basic | 0.14 | (0.57) |
Diluted income (loss) per share | ||
Continuing operations | 0.13 | (0.22) |
Discontinued operations | (0.35) | |
Net income (loss) per share, diluted | $ 0.13 | $ (0.57) |
Weighted average shares outstanding, basic | 26,032,055 | 19,411,519 |
Weighted average shares outstanding, diluted | 28,193,714 | 19,411,519 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 16,000 | $ 69,551,000 | $ (50,342,000) | $ 19,225,000 | |
Beginning balance, shares at Dec. 31, 2020 | 16,145,778 | ||||
Share based compensation | 253,000 | 253,000 | |||
Net loss | (11,090,000) | (854,000) | (11,944,000) | ||
Shares issued for cash | 284,000 | 284,000 | |||
Shares issued for cash, shares | 53,616 | ||||
Conversion of convertible debt to equity | $ 2,000 | 3,445,000 | 3,447,000 | ||
Conversion of convertible debt to equity, shares | 2,041,551 | ||||
Shares issued for exercise of warrants, net of offering costs | $ 5,000 | 12,215,000 | 12,220,000 | ||
Shares issued for exercise of warrants, net of offering costs, shares | 4,945,320 | ||||
Warrants issued as inducement to exercise warrants | 7,737,000 | 7,737,000 | |||
Establishment of noncontrolling interest of FPVD | (95,000) | (95,000) | |||
Warrants issued by FPVD to SRAX, Inc. debenture holders | 885,000 | 885,000 | |||
Series B convertible preferred stock issued by FPVD | 5,775,000 | 5,775,000 | |||
Beneficial conversion feature of FPVD series B convertible preferred stock | 5,775,000 | 5,775,000 | |||
Ending balance, value at Mar. 31, 2021 | $ 23,000 | 93,485,000 | (61,432,000) | 11,486,000 | 43,562,000 |
Ending balance, shares at Mar. 31, 2021 | 23,186,265 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 26,000 | 51,075,000 | (30,355,000) | 20,746,000 | |
Beginning balance, shares at Dec. 31, 2021 | 25,995,172 | ||||
Share based compensation | 358,000 | 358,000 | |||
Shares issued for exercise of employee options, net of taxes | (101,000) | $ (101,000) | |||
Shares issued for exercise of employee options, net of taxes, shares | 91,981 | 327,667 | |||
Net loss | 3,728,000 | $ 3,728,000 | |||
Ending balance, value at Mar. 31, 2022 | $ 26,000 | $ 51,332,000 | $ (26,627,000) | $ 24,731,000 | |
Ending balance, shares at Mar. 31, 2022 | 26,087,153 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income (loss) | $ 3,728,000 | $ (11,944,000) |
Less: net loss from discontinued operations | (7,627,000) | |
Income (loss) from continuing operations | 3,728,000 | (4,317,000) |
Adjustments to reconcile net income (loss) from continuing operations to net cash used in continuing operations: | ||
Unrealized gain on marketable securities | (6,366,000) | (3,978,000) |
Realized loss (gain) on marketable securities | 1,053,000 | (516,000) |
Unrealized (gain) on designated assets | (89,000) | |
Realized loss on designated assets | 116,000 | |
Interest income | (9,000) | (15,000) |
Fair value of warrants issued by FPVD to SRAX, Inc. debenture holders | 885,000 | |
Change in fair value of preferred stock | (126,000) | |
Stock based compensation | 358,000 | 253,000 |
Amortization of debt discount | 17,000 | 532,000 |
Warrant inducement expense | 7,737,000 | |
Net provision for (recovery of) bad debts | 27,000 | (396,000) |
Depreciation expense | 18,000 | 18,000 |
Amortization of intangible assets | 185,000 | 224,000 |
Amortization of right of use asset | 30,000 | 26,000 |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (247,000) | (477,000) |
Prepaid expenses and other current assets | (331,000) | (629,000) |
Designated assets for the return of capital | (169,000) | |
Accounts payable and accrued expenses | 2,432,000 | (216,000) |
Deferred revenue | (5,924,000) | (3,752,000) |
Other current liabilities | 6,000 | (30,000) |
Right of use liability | (37,000) | |
Net cash used in continuing operations | (5,328,000) | (4,651,000) |
Net cash used in discontinued operations | (1,518,000) | |
Net cash used in operating activities | (5,328,000) | (6,170,000) |
Cash flows from investing activities | ||
Proceeds from sales of marketable securities | 1,277,000 | 2,266,000 |
Proceeds from sale of designated assets | 268,000 | |
Payment for deferred consideration to LD Micro | (1,004,000) | |
Net cash invested in prior subsidiary | (7,000) | |
Purchase of property and equipment | (16,000) | (32,000) |
Acquisition of intangible assets | (243,000) | (154,000) |
Other assets | (2,000) | |
Net cash from continuing operations | 1,279,000 | 1,074,000 |
Net cash from discontinued operations | 924,000 | |
Net cash from investing activities | 1,279,000 | 1,998,000 |
Cash flows from financing activities | ||
Due from affiliate | 464,000 | |
Payments for taxes related to settlement of restricted stock units | (101,000) | |
Proceeds from factoring facilities, net of repayments | 3,153,000 | |
Proceeds from exercise of warrants | 12,220,000 | |
Proceeds from issuance of common stock | 284,000 | |
Net cash from continuing operations | 3,052,000 | 12,968,000 |
Net cash from discontinued operations | 4,261,000 | |
Net cash from financing activities | 3,052,000 | 17,229,000 |
Net (decrease) increase in cash from continuing operations | (997,000) | 9,391,000 |
Net increase in cash from discontinued operations | 3,667,000 | |
Cash, beginning of period | 1,348,000 | 451,000 |
Cash, end of period | 351,000 | 13,509,000 |
Less cash from discontinued operations | 1,000 | |
Cash from continuing operations | 351,000 | 13,508,000 |
Supplemental schedule of cash flow information | ||
Cash paid for interest | ||
Cash paid for taxes | ||
Supplemental schedule of noncash investing and financing activities | ||
Convertible notes converted into shares | 5,487,000 | |
Fair value of marketable securities received for revenue contracts, net | $ 9,787,000 | $ 7,334,000 |
ORGANIZATION AND LIQUIDITY
ORGANIZATION AND LIQUIDITY | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND LIQUIDITY | NOTE 1 – ORGANIZATION AND LIQUIDITY Organization SRAX, Inc. (“SRAX”, “we”, “us”, “our” or the “Company”) is a Delaware corporation formed on August 2, 2011. SRAX is headquartered in Westlake Village, California but operates as a distributed virtual Company. As of March 31, 2022, the unaudited Condensed Consolidated Financial Statements consist of SRAX and its wholly owned subsidiary LD Micro, Inc. (“LD Micro”). SRAX is a technology firm focused on enhancing communications between public companies and their shareholders and investors. The Company currently has one reportable and operating segment, which consists of one reporting unit consisting of two distinct business units: ● The 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, the Company organizes and hosts investor conferences within the micro and small- cap markets, and plans to create several more niche events for the investor community. Each of SRAX’s business units deliver valuable insights that assist the Company’s clients with their investor relations and communications initiatives. On February 4, 2021, the Company acquired FPVD through a reverse acquisition involving BIGtoken, Inc. On December 29, 2021, the Company deconsolidated the Company’s majority owned subsidiary BIG Token, Inc. (“BIGToken”) formerly known as Force Protection Video Equipment Corporation (or “FPVD”). See Note 3 –Discontinued Operations. Liquidity and Capital Resources 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 March 31, 2022, the Company had cash and cash equivalents of $ 351,000 The unaudited Condensed 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 unaudited Condensed 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, the Company performed a comprehensive analysis of current circumstances including: its financial position, 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. The Company expects that its existing cash and cash equivalents, accounts receivable and marketable securities as of March 31, 2022, will not be sufficient to enable it to fund the anticipated level of operations through one year from the date these financial statements are issued. The Company projects the sale of its marketable security holding will represent a substantial portion of the cash required for operations for the foreseeable future. The Company’s sales of marketable securities are primarily through sale transactions that qualify for exemptions pursuant to Rule 144 of the Securities Act of 1933. The conditions required to be met to qualify for the exemptions under Rule 144 are often difficult to predict, making it difficult to predict the timing of the associated cash flows from the sales of these securities. The Company’s holdings of marketable securities are subject to risks and uncertainties such as fluctuations in pricing in the primary market, and legal restrictions that create uncertainty around realization and timing of cash flows. The Company anticipates raising additional capital through the private and public sales of its equity or debt securities and selling its 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 when needed in order to allow the Company to continue its operations, or if available, on terms acceptable to it. If the Company does not raise sufficient capital in a timely manner, among other things, it may be forced to scale back its operations or cease operations altogether. Uncertainty Due to Geopolitical Events Due to Russia’s invasion of Ukraine, which began in February 2022, and the resulting sanctions and other actions against Russia and Belarus, there has been uncertainty and disruption in the global economy. Although the Russian war against Ukraine did not have a material adverse impact on the Company’s revenue or other financial results for the three months ended March 31, 2022, at this time the Company is unable to fully assess the aggregate impact the Russian war against Ukraine will have on its business due to various uncertainties, which include, but are not limited to, the duration of the war, the war’s effect on the economy, its impact to the businesses of the Company’s customers, and actions that may be taken by governmental authorities related to the war. COVID-19 Update 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. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Condensed Consolidated Financial Statements and notes thereto are unaudited. The unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The December 31, 2021 Condensed Consolidated Balance Sheet was derived from financial statements but does not include all disclosures required by GAAP. These interim unaudited Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three-month periods ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, included in the Company’s annual report on Form 10-K filed with the SEC. Principles of Consolidation The unaudited Condensed 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. Use of Estimates The unaudited Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and require management of the Company to make estimates and assumptions in the preparation of these unaudited Condensed 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, among other items, the Company’s revenue recognition, valuation of marketable investment securities, stock-based compensation, income taxes, purchase price for acquisitions, goodwill, other intangible assets, and the valuation of redemption features and 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 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access; ● Level 2 - Valuations based on inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly; and ● Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. 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. 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 item being valued is classified based on the hierarchy category of the lowest significant level input to the fair value measurement. See Note 12 Fair Value of Financial Instruments. 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 $ 250,000 101,000 1,098,000 Marketable Securities Marketable Securities consist of debt and equity securities. The Company accounts for marketable equity securities, including convertible preferred shares at fair value pursuant to ASC 321 Investments – Equity Securities, and marketable debt securities at fair value in accordance with ASC 320 – Investments Debt Securities. Marketable securities were approximately $ 28.8 15.6 Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors, and the Company usually does not require collateral. 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 allowance for doubtful accounts was approximately $ 157,000 130,000 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 FDIC insurance limits. The Company has not experienced any loss on these accounts. As of March 31, 2022, the Company had 2 customers with an accounts receivable balance of approximately 43 11 350,000 For the three months ended March 31, 2022 and 2021, the Company had no customers that account for a significant percentage of total revenues. Goodwill and Intangible assets Intangible assets consist of (i) goodwill, intellectual property, trademarks, trade names and non-compete agreements acquired in business combinations and capitalized software development costs. Other than goodwill and trademarks, intangible assets 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. Impairment of Goodwill, Intangible Assets and Other Long-lived Assets Management evaluates the recoverability of the Company’s definitive lived 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. Management evaluates the recoverability of the Company’s goodwill annually at December 31 or more often as events or circumstances indicate the fair value of a reporting unit is below its carrying value. The Company has determined that it operates as a single reporting unit for the purposes of conducting this goodwill impairment assessment. 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. No Revenue Recognition The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised goods or services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services. The Company determines the amount of revenue to be recognized through the application of the five-step process as follows: 1) identification of contracts with customers; 2) identification of the distinct performance obligations in the contract; 3) determination of the transaction price of the contract; 4) allocation of transaction price among the performance obligations in the contract; and 5) recognition of revenue as performance obligations are satisfied. The Company has elected the following practical expedients allowed in accounting for its revenue recognition: ● not adjusting contract consideration for the effects of significant financing components if the period between transfer or service and customer payment is expected to be less than one year; ● not assessing performance obligations if they are immaterial in the context of the contract; ● excluding sales and similar taxes from the transaction price; and ● not disclosing the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company generates revenue primarily from its Sequire SaaS platform and its LD Micro subsidiary. Specifically, the Sequire SaaS platform related revenue consists of (i) licensing subscriptions to access the platform, (ii) managed services involving data and marketing initiatives and (iii) ancillary data supplementing the use of the platform. LD Micro revenues consist of attendee fees and event sponsorship fees related investor conferences organized and hosted by the Company. Sequire SaaS platform Sequire SaaS platform agreements are typically for a period of 12-months and provide for monthly or annual payments in advance. Many of the Sequire SaaS platform agreements provide customers the ability to pay for the services with the issuance of the customers’ securities including common stock. The amount of consideration for these contracts is based on the estimated fair value of the underlying securities on the contract date. See “Fair Value of Financial Instruments” for details over the calculation of fair value. When Sequire SaaS platform contracts contain multiple performance obligations, transaction consideration is allocated to each individual performance obligation based on a relative Stand-Alone Selling Price (“SSP,”) basis. The Company determines SSP based on the price at which the performance obligation would be sold separately. Subscription revenue is generally non-refundable regardless of the actual use and is recognized ratably over the non-cancellable contract term beginning on the commencement date of each contract, which is the date the Company’s service is first made available to customers. Managed Services and Ancillary Data revenue is 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. LD Micro - Conference Revenue LD Micro agreements cover a specific event and provide for payment in advance or at the time of the event. Conference revenue from attendee fees and sponsorship fees is recognized at the time of the event (i.e., at a point-in-time). Contract Receivables 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 have not been received by the Company. Deferred Revenue Deferred revenue resulting from amounts billed to, or cash received from, customers in advance of the Company satisfying its performance obligation and recognizing the applicable revenue. Preferred stock Preferred stock liability represents amounts payable to holders of the Preferred Stock Series A shares upon the eventual liquidation of assets designated for the sole purpose of paying dividends. Accordingly, the Company classified the Series A Preferred Shares as liability instruments because in-substance, they represent a right to the payment of dividends upon the liquidation of specified assets, are automatically returnable to the Company after the payments are made and feature no rights to further equity or residual interests in the Company. Costs to Obtain or Costs to Fulfill a Contract The Company has no costs that qualify as costs to obtain or costs to fulfill customer contracts. Net Income (Loss) Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all potentially dilutive common shares outstanding during the period. Dilutive shares associated with options and warrants there were in the money were computed using the treasury stock method and dilutive shares associated with convertible debt were computed using the if-converted method, which includes the effect of excluding the convertible debenture interest expense from net income. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,770,885 11,867,520 Basic and diluted earnings per share were calculated as follows: SCHEDULE OF BASIC AND DILUTED NET INCOME PER SHARE Three months ended March 31, 2022 2021 Numerator: Net income (loss) from continuing operations $ 3,728,000 $ (4,317,000 ) Net loss from discontinued operations - (7,627,000 ) Net income (loss) 3,728,000 (11,944,000 ) Less: Net loss attributable to non-controlling interest in discontinued operations - 854,000 Net income (loss) attributable to SRAX, Inc. $ 3,728,000 $ (11,090,000 ) Denominator: Weighted average common shares - basic 26,032,055 19,411,519 Effect of dilutive securities Stock purchase warrants 1,690,655 - Convertible debentures 471,004 - Potentially dilutive common share equivalent 2,161,659 - Weighted average common shares - dilutive 28,193,714 19,411,519 Recent Accounting Pronouncements In June 2022, the FASB issued Accounting Standards Update (“ASU”) ASU 2022-03 Fair Value Measurements Fair Value Measurement Recent Accounting Pronouncements Not Yet Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) The Company’s management reviewed all recently issued 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
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 3 – DISCONTINUED OPERATIONS Background On February 4, 2021, the Company completed a share exchange agreement (“Exchange Agreement”) with FPVD. As part of the Exchange Agreement the Company transferred all of the BIGToken assets and 100 149,562,566,534 5,000,000 100 88.9 Deconsolidation On December 29, 2021, BIGToken (formerly FPVD) completed a merger transaction with BritePool, Inc. (“BritePool”) (the “Merger”) resulting in the Company’s ownership in BIGToken being reduced from 66% to approximately 4.99%. 183,445,351,631 149,562,566,534 242,078 22,162 13,692,304,136 4.99 Subsequent to the transaction, the Company now owns 220,000 13,692,304,136 loss of $ 10.7 SCHEDULE OF DECONSOLIDATION OF BUSINESS Consideration Fair value of Series D Stock and Common Stock $ 31,000 Carrying amount of non-controlling interests of BIGToken 6,045,000 Previous equity adjustments of non-controlling interest (12,510,000 ) (6,434,000 ) Book basis of investment in BIGToken 4,250,000 Loss on disposal of subsidiary $ (10,684,000 ) The Company determined the Series D Stock would be classified as a Level 3 asset 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. The financial results of BIGToken are presented as loss from discontinued operations, net of income taxes on the Company’s unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2021. The historical Condensed Consolidated Statement of Cash Flows has also been revised to reflect the effect of the deconsolidation. The following table presents the financial results of BIGToken: SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS Three Months Ended March 31, 2021 Revenues $ 855,000 Cost and expenses Cost of revenues 273,000 Employee related costs 766,000 Marketing and selling expenses 166,000 Platform costs 86,000 Depreciation and amortization 128,000 General and administrative expenses 1,288,000 Total cost and expenses 2,707,000 Loss from operations (1,852,000 ) Other expense Financing costs (5,775,000 ) Total other expense (5,775,000 ) Loss from discontinued operations before income tax expense (7,627,000 ) Income tax expense - Loss from discontinued operations $ (7,627,000 ) |
SALE AND PURCHASE OF ACCOUNTS R
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2022 | |
Credit Loss [Abstract] | |
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE | NOTE 4 – SALE AND PURCHASE OF ACCOUNTS RECEIVABLE Sales In 2020, the Company entered into certain financing agreements providing for the sale, with full recourse, of certain of its accounts receivable. These transactions were accounted for as financing of accounts receivable and the related accounts receivable were not removed from the Company’s consolidated balance sheet at the time of the transaction; rather, a liability was recorded for the proceeds received. In 2020 subsequent to the transactions, the purchaser converted the payables into approximately $ 788,000 For the year ended December 31, 2021, the Company entered into agreements with a third-party lender whereby it sold the Company’s right to future subscription revenues of $ 625,000 576,000 2,164,000 2,084,000 4 The amount of borrowings outstanding was approximately $ 3,786,000 631,000 Purchase Beginning in the fourth quarter of 2021 and through March 31, 2022, the Company purchased certain accounts receivable from its formerly consolidated subsidiary, BIGtoken providing for BIGtoken to sell, assign, transfer, convey and deliver to the Company all rights, title and interest for its receivable aggregating $ 914,000 857,000 6 352,000 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
MARKETABLE SECURITIES | NOTE 5 – MARKETABLE SECURITIES The Company offers its customers the option to settle the contract price in the customer’s issued and publicly trading securities or securities convertible into publicly traded securities (e.g., convertible debt), which could be in the form of common stock, preferred stock or convertible debentures. The Company initially values the securities received at the fair market value on the date the contract is executed, which value is used for revenue recognition purposes. After receipt of the securities, the securities are accounted for as investments in debt and equity securities. The Company has concluded that all its debt securities should be classified as trading securities based on its intent to sell them in the near term. Debt securities classified as trading securities and the equity securities are measured at each reporting period at fair value with changes reported in earnings. Upon the sale of the securities, the Company recognizes the final realized gain or (loss) in the consolidated statement of operations as a component of net income (loss). The following tables summarize the changes in the Company’s marketable securities during the three months ended March 31, 2022: Three months ended March 31, 2022: SCHEDULE OF MARKETABLE SECURITIES Total Common Stock Convertible Debentures Preferred Stock Warrants Balances January 1, 2022 $ 15,617,000 $ 10,735,000 $ 4,187,000 $ 599,000 $ 96,000 Additions 11,286,000 9,348,000 938,000 1,000,000 - Sales, at cost basis (2,330,000 ) (2,330,000 ) - - - Realized Loss 1,053,000 1,053,000 - - - Designation for dividend distribution (10,790,000 ) (10,577,000 ) (213,000 ) - - Change in fair value 3,198,000 (108,000 ) 3,251,000 151,000 (96,000 ) Balance March 31, 2022 $ 28,824,000 $ 18,698,000 $ 8,376,000 $ 1,750,000 $ - The Company’s sales of securities for the three months ended March 31, 2022, were approximately $ 1.3 2.3 1 The equity securities may be accounted for and 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. 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. For equity investments without readily determinable fair values, when an orderly transaction for the identical or similar investment of the same issuer is identified, the Company uses valuation techniques to evaluate the observed transaction(s) and adjust the fair value of the equity investment. Concentration Risk The Company’s holdings in marketable securities subject the Company to concentrations of market risks. As of March 31, 2022, the Company’s top six marketable security positions had an aggregate fair value of $ 13.1 45 14.9 9.1 39 BIGtoken Investment On February 15, 2022, the Company entered into a simple agreement for future equity (the “SAFE”) with its former BIGToken subsidiary. Pursuant to the SAFE, the Company invested $ 1,000,000 Pursuant to the terms of the SAFE, at any time that BIGtoken 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. |
DESIGNATED ASSETS FOR RETURN OF
DESIGNATED ASSETS FOR RETURN OF CAPITAL | 3 Months Ended |
Mar. 31, 2022 | |
Designated Assets For Return Of Capital | |
DESIGNATED ASSETS FOR RETURN OF CAPITAL | NOTE 6 – 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”) of record on September 20, 2021. The Board of Directors designated certain of the Company’s marketable equity securities (“Designated Assets”) as of September 20, 2021 to be used when liquidated, as a return of capital to the Recipients. See Note 9 - Series A Preferred Stock for more details. The balance of designated assets consists of the following: SCHEDULE OF DESIGNATED ASSETS March 31, 2022 December 31, 2021 Cash $ 587,000 $ 686,000 Marketable equity securities 3,212,000 3,239,000 Total $ 3,799,000 $ 3,925,000 The activity in designated assets is as follows: SCHEDULE OF ACTIVITY IN DESIGNATED ASSETS Total Balance as of December 31, 2021 $ 3,239,000 Sales at cost (384,000 ) Realized loss 116,000 Change in fair value 241,000 Balance as of March 31, 2022 $ 3,212,000 The Company’s sale of the designated marketable securities for the three months ended March 31, 2022, were approximately $ 268,000 384,000 116,000 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 7 – NOTES RECEIVABLE In October 2020, the Company entered into unit redemption agreements with two counterparties providing for the counterparties to repurchase from the Company units of the counterparty’s securities owned by the Company. Pursuant to the redemption agreements, the counterparties repurchased the units for a combined repurchase price of $ 8 7 1 1 107,000 over 3 years |
OID CONVERTIBLE NOTES PAYABLE
OID CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
Oid Convertible Notes Payable | |
OID CONVERTIBLE NOTES PAYABLE | NOTE 8 – OID CONVERTIBLE NOTES PAYABLE In June 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 9,100,000 The Debentures pay interest in cash at the rate of 12.0 December 31, 2021 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 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. 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. Subject to the Company’s compliance with certain 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 the Company (i) sells or reprices any securities (each, a “Redemption Financing”), or (ii) 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 (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, payment default, breaches of covenants, the occurrence of an event of default under certain material contracts of the Company, failure to register the shares underlying the Debentures and Warrants, 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 prohibited from certain activities (unless waived by 67% of the then outstanding Purchasers, and including the lead Purchaser), 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 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 the Company’s failure to file and/or have the registration statement declared effective within the time periods provided. As of March 31, 2022, the Company has continuously met its obligations under the Registration Rights Agreement. Bradley Woods & Co. Ltd. (“Placement Agent”) acted as the placement agent, in connection with the sale of the securities. Pursuant to an engagement agreement, the Company agreed to pay the Placement Agent a cash commission of $ 1,040,000 478,854 3.3625 8 360,000 The Company first allocated the cash proceeds to the loan and the equity classified warrants on a relative fair value basis, secondly, the proceeds were allocated to the beneficial conversion feature. The proceeds allocated to the warrants and the beneficial conversion feature resulted in a debt discount being amortized as additional interest expense using the effective interest method over the term. The table below summarizes the Debenture related activity during the three months ended March 31, 2022: SCHEDULE OF OID CONVERTIBLE DEBENTURES Principal Debt discount Net book value Balances January 1, 2022 $ 1,267,000 $ (103,000 ) $ 1,164,000 Extension Conversion Amortization - 17,000 17,000 Balance March 31, 2022 $ 1,267,000 $ (86,000 ) $ 1,181,000 As of March 31, 2022 and December 31, 2021, the Company has classified the debt as current liability because management intends to redeem the remaining convertible debentures within the following 12 months. |
COMMON AND PREFERRED STOCK
COMMON AND PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
COMMON AND PREFERRED STOCK | NOTE 9 – COMMON AND PREFERRED STOCK Common Stock The Company’s certificate of incorporation provides for two classes of common stock: Class A common stock (authorized 250,000,000 0.001 9,000,000 0.001 In August 2021, the Board of Directors approved a share repurchase program pursuant to which the Company is authorized to repurchase up to $ 10,000,000 During the year ended December 31, 2021, the Company repurchased 155,000 793,000 No 9.2 During the year ended December 31, 2021, the Company sold 53,616 284,000 Preferred Stock The Company is authorized to issue 50,000,000 0.001 36,462,417 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 On September 27, 2021, the Company issued a one-time dividend of 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 The Company’s management has evaluated the Preferred Stock and determined that Preferred Stock is mandatorily redeemable upon the distribution of the net proceeds from the sale of the designated marketable securities. Accordingly, it is classified as a liability recorded at fair value, with changes in fair value being reflected in earnings. |
EQUITY COMPENSATION PLANS AND W
EQUITY COMPENSATION PLANS AND WARRANTS | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY COMPENSATION PLANS AND WARRANTS | NOTE 10 – EQUITY COMPENSATION PLANS AND WARRANTS Equity Compensation Plans As of March 31, 2022, the Company has approximately 228,000 In the three months ended March 31, 2022, the Company issued the below shares and granted the following stock-based awards: On January 2, 2022, Michael Malone, our Chief Financial Officer exercised an option to purchase 100,000 57,016 16,732 26,252 On January 3, 2022, we issued four (4) common stock purchase options to our non-employee directors, pursuant to our amended non-employee director compensation policy. Each option entitled the holder to purchase 29,533 4.35 128,500 1 7 100,000 During the month of January 2022, non-executive employees exercised a total of 227,667 161,938 65,729 On January 6, 2022, we issued non-executive employees, options to purchase 380,000 4.25 5 3 1,153,000 On January 6, 2022, we issued Christopher Miglino, our Chief Executive Officer, an option to purchase 120,000 4.25 7 3 397,000 On January 6, 2022, we issued an employee an option to purchase 100,000 4.25 7 3 331,000 On January 6, 2022, we issued Michael Malone, our Chief Financial Officer, a conditional option to purchase 100,000 4.25 7 3 331,000 On January 6, 2022, we issued an employee an option to purchase an aggregate of 20,000 shares of common stock. The option is a conditional grant, subject to shareholder approval. The option has an exercise price of $ 4.25 per share, a term of five ( 5 ) years, and vest in equal quarterly installments over a three ( 3 ) year period from the grant date. The option had a Black-Scholes value on the grant date of $ 61,000 . The per-share fair value of each stock option with service conditions only granted during the quarter ended March 31, 2022 was determined on the grant date using the Black-Scholes option pricing model with the following assumptions: SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS Grant date 1/3/2022 1/6/2022 1/6/2022 Expected term (in years) 5.0 5.0 4.0 Risk-free interest rate 1.55 % 1.55 % 1.60 % Expected volatility 90.0 % 90.0 % 90.0 % Expected dividend yield - % - % - % The following table details provides a summary of the Company’s stock option activity for the three months ended March 31, 2022: SCHEDULE OF STOCK OPTION ACTIVITY Option Shares Weighted Average Exercise Price Weighted Average Remaining Term (years) Aggregate Intrinsic Value Outstanding December 31, 2021 1,334,287 $ 3.02 2.4 $ 3,096,176 Granted 718,132 $ 4.27 5.7 $ 404,703 Exercised (327,667 ) $ 3.15 $ 549,931 Forfeited (60,000 ) $ 3.42 Outstanding March 31, 2022 1,664,752 $ 3.52 4.2 $ 2,193,289 Exercisable at March 31, 2022 654,281 $ 3.05 2.9 $ 1,174,649 The Company did not issue any stock-based awards in the three months ended March 31, 2021. During the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $ 358,000 253,000 2,572,000 2.75 Warrants During the three months ended March 31, 2022, the Company did not have any activity with warrants. On February 21, 2021 the Company entered into an agreement with the Debenture holders to exercise 4,544,440 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 96 11 5.83 Additionally during the three months ended March 31, 2021, there were an additional 28,566 During the three months ended March 31, 2021, other warrant holders exercised warrants to purchase 399,880 1,200,000 At March 31, 2022, the Company had the following outstanding and exercisable warrants: SUMMARY OF OUTSTANDING AND EXERCISABLE WARRANTS Warrant Shares Weighted Average Exercise Price Maturity Date 2,651,246 $ 3.61 2022 2,440,359 $ 2.73 2023 95,549 $ 4.91 2024 5,187,154 $ 3.22 |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 11 – REVENUE The Company has two business units, one operating segment, one reportable segment and one reporting unit. The Sequire segment includes the licensing of the Company’s proprietary SaaS platform and associated data analysis technologies, consumer and investor targeted marketing solutions to allow users of the Company’s SaaS platform to act on the insights obtained through the Company’s technologies, and LD Micro, which is in the business of hosting events and conference for microcap public companies. The following table summarizes revenue by revenue stream for the three months ended March 31: SCHEDULE OF REVENUE BY REVENUE STREAM 2022 2021 Sequire platform revenue $ 7,499,000 $ 4,508,000 Conference revenue - 45,000 Other revenue - 364,000 Total revenue $ 7,499,000 $ 4,917,000 The following table summarizes revenue recognized in exchange for customer securities and cash for the three months ended March 31: SCHEDULE OF REVENUE RECOGNIZED IN EXCHANGE FOR CUSTOMER SECURITIES AND CASH 2022 2021 Customer securities $ 6,444,000 $ 3,471,000 Cash 1,055,000 1,466,000 Total revenue $ 7,499,000 $ 4,917,000 As of March 31, 2022 and December 31, 2021, contract liabilities representing deferred revenue were approximately $ 16.7 12.9 6.4 3.5 As of March 31, 2022 and December 31, 2021, contracts receivable amounted to $ 1,460,000 844,000 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 12 – FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of certain financial instruments, including cash and cash equivalents and accounts payable and accrued expenses, approximate their respective fair values due to the short-term nature of such instruments. The carrying amount of our debt and notes receivable approximate their fair value. Valuation of Marketable Securities 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. Warrants are initially valued at cost, if acquired for cash, or at intrinsic 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. Investments in restricted securities of public companies cannot be offered for sale to the public until the company complies with certain statutory requirements. 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. 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 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 contract assets represent a forward contractual right to receive securities pursuant to a revenue contract. As of March 31, 2022 and December 31, 2021, the Company determined the value of the securities underlying the contract asset to have a fair value of $ 1,460,000 844,000 The Company had the following financial assets at March 31, 2022 and December 31, 2021: SCHEDULE OF ASSETS MEASURED AT FAIR VALUE Balance as of March 31, 2022 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities $ 28,824,000 $ 6,715,000 $ 9,277,000 $ 12,832,000 Designated assets marketable securities 3,212,000 2,390,000 822,000 - Contract assets 1,460,000 892,000 568,000 - Total Assets $ 33,496,000 $ 9,997,000 $ 10,667,000 $ 12,832,000 Liabilities: Series A Preferred Stock $ 3,799,000 $ - $ 3,799,000 $ - Total liabilities $ 3,799,000 $ - $ 3,799,000 $ - Balance as of December 31, 2021 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities $ 15,617,000 $ 6,134,000 $ 2,448,000 $ 7,035,000 Designated assets marketable securities 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 Liabilities: Series A Preferred Stock $ 3,925,000 $ - $ 3,925,000 $ - Total liabilities $ 3,925,000 $ - $ 3,925,000 $ - 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 the three months ended March 31, 2022, were as follows: SCHEDULE OF FAIR VALUE AT ASSETS Balance at January 1, 2022 Acquisitions Sales and dispositions Transfers into Level 3 Transfers out of Level 3 Realized & unrealized gains (losses) Balance March 31, 2022 Common stock $ 2,154,000 $ 481,000 $ (14,000 ) $ - $ - $ 85,000 $ 2,706,000 Convertible debt 4,186,000 938,000 - - - 3,252,000 8,376,000 Warrants 96,000 - - - - (96,000 ) - Preferred stock 599,000 1,000,000 - - - 151,000 1,750,000 Total Investments $ 7,035,000 $ 2,419,000 $ (14,000 ) $ - $ - $ 3,392,000 $ 12,832,000 The Company had no Level 3 assets or liabilities in the three months ended March 31, 2021. 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 March 31, 2022. 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 32.3 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 14.34 Option pricing model Volatility 52 % - 151 % Risk-free interest rate 1.02 1.55 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS The Company has entered into an agreement providing access to a suite at the Sofi Stadium in Los Angeles from an entity wholly owned by Christopher Miglino, our CEO. The agreement entitles the Company to game tickets, optional tickets for other stadium events, and suite and conference room access during business days. In May of 2022, the Company renewed the agreement for four (4) additional National Football League seasons for an average rate per year of approximately $ 497,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS Common stock issue for Warrants Subsequent to March 31, 2022, the Company issued approximately 196,000 CVR Agreement On June 13, 2022, the Company entered into an agreement with an institutional investor whereby in exchange for the payment of $ 405,000 the investor received (i) the right to receive the net proceeds upon the sale of certain marketable securities held by the Company (“CVR Payments”) with a quoted price equal to $ 674,000 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 $ 650,000 500,000 August 15, 2022 On August 8, 2022, as described below, the Bridge Note was exchanged for a revolving note in the Senior Secured Revolving Credit Facility. Senior Secured Revolving Credit Facility On August 8, 2022, the Company entered into a senior secured revolving credit facility agreement with an institutional investor to initially borrow up to $ 9,450,000 5.5 2,590,358 September 30, 2023 On closing, 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, the outstanding balance of the Revolving Loan will be paid as calculated based on a percentage of the Company’s collections from the sale of certain of its marketable securities. 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, fundamental transactions and certain future sales of the Company’s Common Stock 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. For the Company to enter into the Credit Agreement, we were required to issue 32,000 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 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements and notes thereto are unaudited. The unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The December 31, 2021 Condensed Consolidated Balance Sheet was derived from financial statements but does not include all disclosures required by GAAP. These interim unaudited Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim three-month periods ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or for any future period. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, included in the Company’s annual report on Form 10-K filed with the SEC. |
Principles of Consolidation | Principles of Consolidation The unaudited Condensed 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. |
Use of Estimates | Use of Estimates The unaudited Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and require management of the Company to make estimates and assumptions in the preparation of these unaudited Condensed 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, among other items, the Company’s revenue recognition, valuation of marketable investment securities, stock-based compensation, income taxes, purchase price for acquisitions, goodwill, other intangible assets, and the valuation of redemption features and 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 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access; ● Level 2 - Valuations based on inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly; and ● Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. 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. 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 item being valued is classified based on the hierarchy category of the lowest significant level input to the fair value measurement. See Note 12 Fair Value of Financial Instruments. |
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 $ 250,000 101,000 1,098,000 |
Marketable Securities | Marketable Securities Marketable Securities consist of debt and equity securities. The Company accounts for marketable equity securities, including convertible preferred shares at fair value pursuant to ASC 321 Investments – Equity Securities, and marketable debt securities at fair value in accordance with ASC 320 – Investments Debt Securities. Marketable securities were approximately $ 28.8 15.6 |
Accounts Receivable | Accounts Receivable Credit is extended to customers based on an evaluation of their financial condition and other factors, and the Company usually does not require collateral. 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 allowance for doubtful accounts was approximately $ 157,000 130,000 |
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 FDIC insurance limits. The Company has not experienced any loss on these accounts. As of March 31, 2022, the Company had 2 customers with an accounts receivable balance of approximately 43 11 350,000 For the three months ended March 31, 2022 and 2021, the Company had no customers that account for a significant percentage of total revenues. |
Goodwill and Intangible assets | Goodwill and Intangible assets Intangible assets consist of (i) goodwill, intellectual property, trademarks, trade names and non-compete agreements acquired in business combinations and capitalized software development costs. Other than goodwill and trademarks, intangible assets 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. |
Impairment of Goodwill, Intangible Assets and Other Long-lived Assets | Impairment of Goodwill, Intangible Assets and Other Long-lived Assets Management evaluates the recoverability of the Company’s definitive lived 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. Management evaluates the recoverability of the Company’s goodwill annually at December 31 or more often as events or circumstances indicate the fair value of a reporting unit is below its carrying value. The Company has determined that it operates as a single reporting unit for the purposes of conducting this goodwill impairment assessment. 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. No |
Revenue Recognition | Revenue Recognition The Company recognizes revenues upon the satisfaction of its performance obligation(s) (upon transfer of control of promised goods or services to its customers) in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services. The Company determines the amount of revenue to be recognized through the application of the five-step process as follows: 1) identification of contracts with customers; 2) identification of the distinct performance obligations in the contract; 3) determination of the transaction price of the contract; 4) allocation of transaction price among the performance obligations in the contract; and 5) recognition of revenue as performance obligations are satisfied. The Company has elected the following practical expedients allowed in accounting for its revenue recognition: ● not adjusting contract consideration for the effects of significant financing components if the period between transfer or service and customer payment is expected to be less than one year; ● not assessing performance obligations if they are immaterial in the context of the contract; ● excluding sales and similar taxes from the transaction price; and ● not disclosing the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company generates revenue primarily from its Sequire SaaS platform and its LD Micro subsidiary. Specifically, the Sequire SaaS platform related revenue consists of (i) licensing subscriptions to access the platform, (ii) managed services involving data and marketing initiatives and (iii) ancillary data supplementing the use of the platform. LD Micro revenues consist of attendee fees and event sponsorship fees related investor conferences organized and hosted by the Company. Sequire SaaS platform Sequire SaaS platform agreements are typically for a period of 12-months and provide for monthly or annual payments in advance. Many of the Sequire SaaS platform agreements provide customers the ability to pay for the services with the issuance of the customers’ securities including common stock. The amount of consideration for these contracts is based on the estimated fair value of the underlying securities on the contract date. See “Fair Value of Financial Instruments” for details over the calculation of fair value. When Sequire SaaS platform contracts contain multiple performance obligations, transaction consideration is allocated to each individual performance obligation based on a relative Stand-Alone Selling Price (“SSP,”) basis. The Company determines SSP based on the price at which the performance obligation would be sold separately. Subscription revenue is generally non-refundable regardless of the actual use and is recognized ratably over the non-cancellable contract term beginning on the commencement date of each contract, which is the date the Company’s service is first made available to customers. Managed Services and Ancillary Data revenue is 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. LD Micro - Conference Revenue LD Micro agreements cover a specific event and provide for payment in advance or at the time of the event. Conference revenue from attendee fees and sponsorship fees is recognized at the time of the event (i.e., at a point-in-time). Contract Receivables 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 have not been received by the Company. Deferred Revenue Deferred revenue resulting from amounts billed to, or cash received from, customers in advance of the Company satisfying its performance obligation and recognizing the applicable revenue. Preferred stock Preferred stock liability represents amounts payable to holders of the Preferred Stock Series A shares upon the eventual liquidation of assets designated for the sole purpose of paying dividends. Accordingly, the Company classified the Series A Preferred Shares as liability instruments because in-substance, they represent a right to the payment of dividends upon the liquidation of specified assets, are automatically returnable to the Company after the payments are made and feature no rights to further equity or residual interests in the Company. Costs to Obtain or Costs to Fulfill a Contract The Company has no costs that qualify as costs to obtain or costs to fulfill customer contracts. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all potentially dilutive common shares outstanding during the period. Dilutive shares associated with options and warrants there were in the money were computed using the treasury stock method and dilutive shares associated with convertible debt were computed using the if-converted method, which includes the effect of excluding the convertible debenture interest expense from net income. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,770,885 11,867,520 Basic and diluted earnings per share were calculated as follows: SCHEDULE OF BASIC AND DILUTED NET INCOME PER SHARE Three months ended March 31, 2022 2021 Numerator: Net income (loss) from continuing operations $ 3,728,000 $ (4,317,000 ) Net loss from discontinued operations - (7,627,000 ) Net income (loss) 3,728,000 (11,944,000 ) Less: Net loss attributable to non-controlling interest in discontinued operations - 854,000 Net income (loss) attributable to SRAX, Inc. $ 3,728,000 $ (11,090,000 ) Denominator: Weighted average common shares - basic 26,032,055 19,411,519 Effect of dilutive securities Stock purchase warrants 1,690,655 - Convertible debentures 471,004 - Potentially dilutive common share equivalent 2,161,659 - Weighted average common shares - dilutive 28,193,714 19,411,519 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2022, the FASB issued Accounting Standards Update (“ASU”) ASU 2022-03 Fair Value Measurements Fair Value Measurement Recent Accounting Pronouncements Not Yet Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt-Debt with Conversion and Other Options In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) The Company’s management reviewed all recently issued 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. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF BASIC AND DILUTED NET INCOME PER SHARE | SCHEDULE OF BASIC AND DILUTED NET INCOME PER SHARE Three months ended March 31, 2022 2021 Numerator: Net income (loss) from continuing operations $ 3,728,000 $ (4,317,000 ) Net loss from discontinued operations - (7,627,000 ) Net income (loss) 3,728,000 (11,944,000 ) Less: Net loss attributable to non-controlling interest in discontinued operations - 854,000 Net income (loss) attributable to SRAX, Inc. $ 3,728,000 $ (11,090,000 ) Denominator: Weighted average common shares - basic 26,032,055 19,411,519 Effect of dilutive securities Stock purchase warrants 1,690,655 - Convertible debentures 471,004 - Potentially dilutive common share equivalent 2,161,659 - Weighted average common shares - dilutive 28,193,714 19,411,519 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF DECONSOLIDATION OF BUSINESS | SCHEDULE OF DECONSOLIDATION OF BUSINESS Consideration Fair value of Series D Stock and Common Stock $ 31,000 Carrying amount of non-controlling interests of BIGToken 6,045,000 Previous equity adjustments of non-controlling interest (12,510,000 ) (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 | SCHEDULE OF ASSET AND LIABILITIES INCOME FROM DISCONTINUE OPERATIONS Three Months Ended March 31, 2021 Revenues $ 855,000 Cost and expenses Cost of revenues 273,000 Employee related costs 766,000 Marketing and selling expenses 166,000 Platform costs 86,000 Depreciation and amortization 128,000 General and administrative expenses 1,288,000 Total cost and expenses 2,707,000 Loss from operations (1,852,000 ) Other expense Financing costs (5,775,000 ) Total other expense (5,775,000 ) Loss from discontinued operations before income tax expense (7,627,000 ) Income tax expense - Loss from discontinued operations $ (7,627,000 ) |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
SCHEDULE OF MARKETABLE SECURITIES | SCHEDULE OF MARKETABLE SECURITIES Total Common Stock Convertible Debentures Preferred Stock Warrants Balances January 1, 2022 $ 15,617,000 $ 10,735,000 $ 4,187,000 $ 599,000 $ 96,000 Additions 11,286,000 9,348,000 938,000 1,000,000 - Sales, at cost basis (2,330,000 ) (2,330,000 ) - - - Realized Loss 1,053,000 1,053,000 - - - Designation for dividend distribution (10,790,000 ) (10,577,000 ) (213,000 ) - - Change in fair value 3,198,000 (108,000 ) 3,251,000 151,000 (96,000 ) Balance March 31, 2022 $ 28,824,000 $ 18,698,000 $ 8,376,000 $ 1,750,000 $ - |
DESIGNATED ASSETS FOR RETURN _2
DESIGNATED ASSETS FOR RETURN OF CAPITAL (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Designated Assets For Return Of Capital | |
SCHEDULE OF DESIGNATED ASSETS | The balance of designated assets consists of the following: SCHEDULE OF DESIGNATED ASSETS March 31, 2022 December 31, 2021 Cash $ 587,000 $ 686,000 Marketable equity securities 3,212,000 3,239,000 Total $ 3,799,000 $ 3,925,000 |
SCHEDULE OF ACTIVITY IN DESIGNATED ASSETS | The activity in designated assets is as follows: SCHEDULE OF ACTIVITY IN DESIGNATED ASSETS Total Balance as of December 31, 2021 $ 3,239,000 Sales at cost (384,000 ) Realized loss 116,000 Change in fair value 241,000 Balance as of March 31, 2022 $ 3,212,000 |
OID CONVERTIBLE NOTES PAYABLE (
OID CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Oid Convertible Notes Payable | |
SCHEDULE OF OID CONVERTIBLE DEBENTURES | The table below summarizes the Debenture related activity during the three months ended March 31, 2022: SCHEDULE OF OID CONVERTIBLE DEBENTURES Principal Debt discount Net book value Balances January 1, 2022 $ 1,267,000 $ (103,000 ) $ 1,164,000 Extension Conversion Amortization - 17,000 17,000 Balance March 31, 2022 $ 1,267,000 $ (86,000 ) $ 1,181,000 |
EQUITY COMPENSATION PLANS AND_2
EQUITY COMPENSATION PLANS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS | The per-share fair value of each stock option with service conditions only granted during the quarter ended March 31, 2022 was determined on the grant date using the Black-Scholes option pricing model with the following assumptions: SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS Grant date 1/3/2022 1/6/2022 1/6/2022 Expected term (in years) 5.0 5.0 4.0 Risk-free interest rate 1.55 % 1.55 % 1.60 % Expected volatility 90.0 % 90.0 % 90.0 % Expected dividend yield - % - % - % |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table details provides a summary of the Company’s stock option activity for the three months ended March 31, 2022: SCHEDULE OF STOCK OPTION ACTIVITY Option Shares Weighted Average Exercise Price Weighted Average Remaining Term (years) Aggregate Intrinsic Value Outstanding December 31, 2021 1,334,287 $ 3.02 2.4 $ 3,096,176 Granted 718,132 $ 4.27 5.7 $ 404,703 Exercised (327,667 ) $ 3.15 $ 549,931 Forfeited (60,000 ) $ 3.42 Outstanding March 31, 2022 1,664,752 $ 3.52 4.2 $ 2,193,289 Exercisable at March 31, 2022 654,281 $ 3.05 2.9 $ 1,174,649 |
SUMMARY OF OUTSTANDING AND EXERCISABLE WARRANTS | At March 31, 2022, the Company had the following outstanding and exercisable warrants: SUMMARY OF OUTSTANDING AND EXERCISABLE WARRANTS Warrant Shares Weighted Average Exercise Price Maturity Date 2,651,246 $ 3.61 2022 2,440,359 $ 2.73 2023 95,549 $ 4.91 2024 5,187,154 $ 3.22 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUE BY REVENUE STREAM | The following table summarizes revenue by revenue stream for the three months ended March 31: SCHEDULE OF REVENUE BY REVENUE STREAM 2022 2021 Sequire platform revenue $ 7,499,000 $ 4,508,000 Conference revenue - 45,000 Other revenue - 364,000 Total revenue $ 7,499,000 $ 4,917,000 |
SCHEDULE OF REVENUE RECOGNIZED IN EXCHANGE FOR CUSTOMER SECURITIES AND CASH | The following table summarizes revenue recognized in exchange for customer securities and cash for the three months ended March 31: SCHEDULE OF REVENUE RECOGNIZED IN EXCHANGE FOR CUSTOMER SECURITIES AND CASH 2022 2021 Customer securities $ 6,444,000 $ 3,471,000 Cash 1,055,000 1,466,000 Total revenue $ 7,499,000 $ 4,917,000 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF ASSETS MEASURED AT FAIR VALUE | SCHEDULE OF ASSETS MEASURED AT FAIR VALUE Balance as of March 31, 2022 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities $ 28,824,000 $ 6,715,000 $ 9,277,000 $ 12,832,000 Designated assets marketable securities 3,212,000 2,390,000 822,000 - Contract assets 1,460,000 892,000 568,000 - Total Assets $ 33,496,000 $ 9,997,000 $ 10,667,000 $ 12,832,000 Liabilities: Series A Preferred Stock $ 3,799,000 $ - $ 3,799,000 $ - Total liabilities $ 3,799,000 $ - $ 3,799,000 $ - Balance as of December 31, 2021 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities $ 15,617,000 $ 6,134,000 $ 2,448,000 $ 7,035,000 Designated assets marketable securities 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 Liabilities: Series A Preferred Stock $ 3,925,000 $ - $ 3,925,000 $ - Total liabilities $ 3,925,000 $ - $ 3,925,000 $ - |
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 the three months ended March 31, 2022, were as follows: SCHEDULE OF FAIR VALUE AT ASSETS Balance at January 1, 2022 Acquisitions Sales and dispositions Transfers into Level 3 Transfers out of Level 3 Realized & unrealized gains (losses) Balance March 31, 2022 Common stock $ 2,154,000 $ 481,000 $ (14,000 ) $ - $ - $ 85,000 $ 2,706,000 Convertible debt 4,186,000 938,000 - - - 3,252,000 8,376,000 Warrants 96,000 - - - - (96,000 ) - Preferred stock 599,000 1,000,000 - - - 151,000 1,750,000 Total Investments $ 7,035,000 $ 2,419,000 $ (14,000 ) $ - $ - $ 3,392,000 $ 12,832,000 |
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 32.3 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 14.34 Option pricing model Volatility 52 % - 151 % Risk-free interest rate 1.02 1.55 Dividend yield 0 Time to maturity 0 35 |
ORGANIZATION AND LIQUIDITY (Det
ORGANIZATION AND LIQUIDITY (Details Narrative) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and cash equivalents | $ 351,000 | $ 1,348,000 |
SCHEDULE OF BASIC AND DILUTED N
SCHEDULE OF BASIC AND DILUTED NET INCOME PER SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Net income (loss) from continuing operations | $ 3,728,000 | $ (4,317,000) |
Net loss from discontinued operations | (7,627,000) | |
Net income (loss) | 3,728,000 | (11,944,000) |
Less: Net loss attributable to non-controlling interest in discontinued operations | 854,000 | |
Net income (loss) attributable to SRAX, Inc. | $ 3,728,000 | $ (11,090,000) |
Weighted average common shares - basic | 26,032,055 | 19,411,519 |
Stock purchase warrants | 1,690,655 | |
Convertible debentures | 471,004 | |
Potentially dilutive common share equivalent | 2,161,659 | |
Weighted average common shares - dilutive | 28,193,714 | 19,411,519 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
FDIC amount | $ 250,000 | ||
Excess of federal insurance limit | 101,000 | $ 1,098,000 | |
Marketable securities | 28,824,000 | 15,617,000 | |
Allowance for doubtful accounts | 157,000 | $ 130,000 | |
Due from prior subsidiary | 350,000 | ||
Impairments of goodwill | $ 0 | $ 0 | |
Anti diluted ne income securities | 2,161,659 | ||
Potentially Diluted Basic in Future [Member] | |||
Product Information [Line Items] | |||
Anti diluted ne income securities | 1,770,885 | 11,867,520 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | 2 Customers [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 43% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 11% |
SCHEDULE OF DECONSOLIDATION OF
SCHEDULE OF DECONSOLIDATION OF BUSINESS (Details) | Dec. 29, 2021 USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
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) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Revenues | $ 855,000 |
Cost of revenues | 273,000 |
Employee related costs | 766,000 |
Marketing and selling expenses | 166,000 |
Platform costs | 86,000 |
Depreciation and amortization | 128,000 |
General and administrative expenses | 1,288,000 |
Total cost and expenses | 2,707,000 |
Loss from operations | (1,852,000) |
Financing costs | (5,775,000) |
Total other expense | (5,775,000) |
Loss from discontinued operations before income tax expense | (7,627,000) |
Income tax expense | |
Loss from discontinued operations | $ (7,627,000) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |||||
Dec. 29, 2021 | Sep. 27, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Feb. 04, 2021 | |
Issuance of acquisition shares description | BIGToken (formerly FPVD) completed a merger transaction with BritePool, Inc. (“BritePool”) (the “Merger”) resulting in the Company’s ownership in BIGToken being reduced from 66% to approximately 4.99%. | |||||
Shares issued for cash, shares | 220,000 | |||||
Gain loss on sale of equity investments | $ 10.7 | |||||
Common Stock [Member] | ||||||
Conversion of stock shares converted | 13,692,304,136 | |||||
Issued and outstanding of common stock | 4.99% | |||||
Shares issued for cash, shares | 53,616 | |||||
Force Protection Video Equipment Corp [Member] | Maximum [Member] | ||||||
Equity method investment, ownership percentage | 100% | |||||
Force Protection Video Equipment Corp [Member] | Minimum [Member] | ||||||
Equity method investment, ownership percentage | 88.90% | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock, shares issued | 25,160,504 | 36,462,417 | 36,462,417 | |||
Preferred stock, shares outstanding | 25,160,504 | 36,462,417 | 36,462,417 | |||
Shares issued for cash, shares | 36,462,417 | |||||
Series D Convertible Preferred Stock [Member] | ||||||
Conversion of stock shares converted | 22,162 | |||||
Force Protection Video Equipment Corp [Member] | ||||||
Business acquisition percentage | 100% | |||||
Common stock, shares issued | 149,562,566,534 | |||||
Common stock, shares outstanding | 149,562,566,534 | |||||
Force Protection Video Equipment Corp [Member] | Series A Preferred Stock [Member] | ||||||
Preferred stock, shares issued | 5,000,000 | |||||
Preferred stock, shares outstanding | 5,000,000 | |||||
Brite Pool Inc [Member] | ||||||
Stock issued during period shares acquisitions | 183,445,351,631 | |||||
Exchanged number of shares for common stock | 149,562,566,534 | |||||
Brite Pool Inc [Member] | Series D Convertible Preferred Stock [Member] | ||||||
Exchanged number of shares for common stock | 242,078 |
SALE AND PURCHASE OF ACCOUNTS_2
SALE AND PURCHASE OF ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Borrowings outstanding | $ 3,786,000 | $ 631,000 | |
PIPE Technologies [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Right to future subscription revenues | 625,000 | ||
Subscription revenues | 576,000 | ||
Third Party Lenders Agreement [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Secured debt | 2,164,000 | ||
Proceeds from issuance of secured debt | $ 2,084,000 | ||
OID borrowing percentage | 4% | ||
Receivable Purchase and Sale Agreement [Member] | BIGtoken [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Receivables net current | $ 914,000 | ||
Purchase price | $ 857,000 | ||
Debt instrument redemption price percentage | 6% | ||
Accounts receivable | $ 352,000 | $ 352,000 | |
Debentures [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Converted debt | $ 788,000 |
SCHEDULE OF MARKETABLE SECURITI
SCHEDULE OF MARKETABLE SECURITIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Balances at beginning of year | $ 15,617,000 | |
Additions | 11,286,000 | |
Sales, at cost basis | (2,330,000) | |
Sales, at cost basis | 2,330,000 | |
Realized Loss | 1,053,000 | $ (516,000) |
Realized Loss | (1,053,000) | $ 516,000 |
Designation for dividend distribution | (10,790,000) | |
Change in fair value | 3,198,000 | |
Balances at ending of year | 28,824,000 | |
Convertible Debentures [Member] | ||
Balances at beginning of year | 4,187,000 | |
Additions | 938,000 | |
Sales, at cost basis | ||
Sales, at cost basis | ||
Realized Loss | ||
Realized Loss | ||
Designation for dividend distribution | (213,000) | |
Change in fair value | 3,251,000 | |
Balances at ending of year | 8,376,000 | |
Common Stock [Member] | ||
Balances at beginning of year | 10,735,000 | |
Additions | 9,348,000 | |
Sales, at cost basis | 2,330,000 | |
Sales, at cost basis | (2,330,000) | |
Realized Loss | 1,053,000 | |
Realized Loss | (1,053,000) | |
Designation for dividend distribution | (10,577,000) | |
Change in fair value | (108,000) | |
Balances at ending of year | 18,698,000 | |
Preferred Stock [Member] | ||
Balances at beginning of year | 599,000 | |
Additions | 1,000,000 | |
Sales, at cost basis | ||
Sales, at cost basis | ||
Realized Loss | ||
Realized Loss | ||
Designation for dividend distribution | ||
Change in fair value | 151,000 | |
Balances at ending of year | 1,750,000 | |
Warrant [Member] | ||
Balances at beginning of year | 96,000 | |
Additions | ||
Sales, at cost basis | ||
Sales, at cost basis | ||
Realized Loss | ||
Realized Loss | ||
Designation for dividend distribution | ||
Change in fair value | (96,000) | |
Balances at ending of year |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 15, 2022 | Nov. 30, 2022 | Mar. 31, 2022 | |
Product Information [Line Items] | |||
Proceed from sale and maturity of marketable securities | $ 1,300,000 | ||
Marketable securities | 2,300,000 | ||
Gain on marketable securities | 1,000,000 | ||
Marketable securities | 13,100,000 | ||
Marketable securities | $ 9,100,000 | $ 14,900,000 | |
Big Token Inc [Member] | Safe Agreement [Member] | |||
Product Information [Line Items] | |||
Investments | $ 1,000,000 | ||
Customer Concentration Risk [Member] | Marketable Securities [Member] | Subsequent Event [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 39% | ||
Customer Concentration Risk [Member] | Marketable Securities [Member] | Customer One [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 45% |
SCHEDULE OF DESIGNATED ASSETS (
SCHEDULE OF DESIGNATED ASSETS (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Marketable equity securities | $ 2,300,000 | |
Total | 3,799,000 | $ 3,925,000 |
Designated Assets [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Cash | 587,000 | 686,000 |
Marketable equity securities | 3,212,000 | 3,239,000 |
Total | $ 3,799,000 | $ 3,925,000 |
SCHEDULE OF ACTIVITY IN DESIGNA
SCHEDULE OF ACTIVITY IN DESIGNATED ASSETS (Details) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Change in fair value of designated assets | $ (3,198,000) |
Designated Assets [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Designated assets at beginning balance | 3,239,000 |
Proceeds from sale of other assets | (384,000) |
Realized loss | 116,000 |
Change in fair value of designated assets | 241,000 |
Designated assets at ending balance | $ 3,212,000 |
DESIGNATED ASSETS FOR RETURN _3
DESIGNATED ASSETS FOR RETURN OF CAPITAL (Details Narrative) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Sale of marketable securities | $ 1,300,000 |
Designated Assets [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Sale of marketable securities | 268,000 |
Marketable Securities | 384,000 |
Loss on marketable securities | $ 116,000 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) | 1 Months Ended |
Oct. 31, 2020 USD ($) | |
Receivables [Abstract] | |
Repurchase price | $ 8,000,000 |
Price paid for units | 7,000,000 |
Additional repurchase price | 1,000,000 |
Deferred payments | 1,000,000 |
Implied discount | $ 107,000 |
Notes receivable amortized period | over 3 years |
SCHEDULE OF OID CONVERTIBLE DEB
SCHEDULE OF OID CONVERTIBLE DEBENTURES (Details) | Mar. 31, 2022 USD ($) |
Short-Term Debt [Line Items] | |
Principal | $ 1,267,000 |
Debt discount | (86,000) |
Net book value | 1,181,000 |
Principal | 1,267,000 |
Debt discount | (86,000) |
Net book value | 1,181,000 |
Issuance During the Year [Member] | |
Short-Term Debt [Line Items] | |
Principal | 1,267,000 |
Debt discount | (103,000) |
Net book value | 1,164,000 |
Principal | |
Debt discount | |
Net book value | |
Amortization [Member] | |
Short-Term Debt [Line Items] | |
Principal | |
Debt discount | 17,000 |
Net book value | 17,000 |
Principal | |
Debt discount | 17,000 |
Net book value | $ 17,000 |
OID CONVERTIBLE NOTES PAYABLE_2
OID CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended |
Jun. 30, 2020 | Mar. 31, 2022 | |
Short-Term Debt [Line Items] | ||
Warrants exercise price per share | $ 3.22 | |
Securities Purchase Agreement [Member] | Placement Agent [Member] | ||
Short-Term Debt [Line Items] | ||
Proceeds from warrants percentage | 8% | |
OID Convertible Debentures [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument, face amount | $ 16,101,000 | |
Debt discount | $ 14,169,000 | |
Original issue discount percentage | 12% | |
Warrant to purchase common stock, shares | 6,440,561 | |
Proceeds from warrants exercise | $ 13,000,000 | |
Outstanding loan | 1,169,000 | |
Proceeds from notes payable | $ 9,100,000 | |
Interest rate | 12% | |
Maturity date | Dec. 31, 2021 | |
Debt instrument, convertible, conversion price | $ 2.69 | |
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. | |
Debt instrument, description | Subject to the Company’s compliance with certain 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 the Company (i) sells or reprices any securities (each, a “Redemption Financing”), or (ii) 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 (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 prohibited from certain activities (unless waived by 67% of the then outstanding Purchasers, and including the lead Purchaser), 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 | $ 2.50 | |
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants exercise price per share | $ 3.3625 | |
Class of warrant or right, unissued | 360,000 | |
OID Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Placement Agent [Member] | ||
Short-Term Debt [Line Items] | ||
Warrant to purchase common stock, shares | 478,854 | |
Payments of debt issuance costs | $ 1,040,000 |
COMMON AND PREFERRED STOCK (Det
COMMON AND PREFERRED STOCK (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 29, 2021 | Sep. 27, 2021 | Aug. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 20, 2021 | |
Class of Stock [Line Items] | ||||||
Preferred stock par value | $ 0.001 | |||||
Shares issued for cash, shares | 220,000 | |||||
Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock authorized | 50,000,000 | |||||
Share Buy-Back Program [Member] | ||||||
Class of Stock [Line Items] | ||||||
Number of repurchased shares | 0 | 155,000 | ||||
Number of repurchased value | $ 793,000 | |||||
Remaining authorization for future common shares repurchases | $ 9,200,000 | |||||
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 | |||||
Class A common stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares authorized | 250,000,000 | |||||
Common stock par value | $ 0.001 | |||||
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 | |||||
Series A Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock authorized | 36,462,417 | 36,462,417 | ||||
Dividend description | the Company issued a one-time dividend of 36,462,417 shares of series A preferred stock (“Preferred Stock”) to certain Qualified Recipients (the “Dividend”) which is convertible into shares of common stock on a 1 for 1 basis. | |||||
Shares issued for cash, shares | 36,462,417 | |||||
Preferred stock, shares issued | 25,160,504 | 36,462,417 | 36,462,417 | |||
Preferred stock, shares outstanding | 25,160,504 | 36,462,417 | 36,462,417 | |||
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 |
SCHEDULE OF FAIR VALUE STOCK OP
SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS (Details) | Jan. 06, 2022 | Jan. 03, 2022 |
Share-Based Payment Arrangement, Option [Member] | Measurement Input, Expected Term [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 5 | 5 |
Share-Based Payment Arrangement, Option [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 1.55 | 1.55 |
Share-Based Payment Arrangement, Option [Member] | Measurement Input, Option Volatility [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 90 | 90 |
Share-Based Payment Arrangement, Option [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | ||
Stock Option One [Member] | Measurement Input, Expected Term [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 4 | |
Stock Option One [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 1.60 | |
Stock Option One [Member] | Measurement Input, Option Volatility [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input | 90 | |
Stock Option One [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Equity Securities, FV-NI, Measurement Input |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Option Shares, Outstanding Beginning balance | 1,334,287 | |
Weighted Average Exercise Price, Outstanding Beginning balance | $ 3.02 | |
Weighted Average Remaining Contractual Term (Years), Outstanding Ending balance | 4 years 2 months 12 days | 2 years 4 months 24 days |
Aggregate Intrinsic Value, Outstanding Beginning balance | $ 3,096,176 | |
Option of Shares, Granted | 718,132 | |
Weighted Average Execise Price, Granted | $ 4.27 | |
Weighted Average Remaining Contractual Term (Years), Granted | 5 years 8 months 12 days | |
Aggregate Intrinsic Value, Granted | $ 404,703 | |
Option of Shares, Exercised | (327,667) | |
Weighted Average Execise Price, Exercised | $ 3.15 | |
Aggregate Intrinsic Value, Exercised | $ 549,931 | |
Option of Shares, Forfeited | (60,000) | |
Weighted Average Execise Price, Forfeited | $ 3.42 | |
Options of Shares, Outstanding Ending balance | 1,664,752 | 1,334,287 |
Weighted Average Execise Price, Outstanding Ending balance | $ 3.52 | $ 3.02 |
Aggregate Intrinsic Value, Outstanding Ending balance | $ 2,193,289 | $ 3,096,176 |
Options of Shares, Exercisable Ending balance | 654,281 | |
Weighted Average Execise Price, Exercisable Ending balance | $ 3.05 | |
Weighted Average Remaining Contractual Term (Years), Exercisable Ending balance | 2 years 10 months 24 days | |
Aggregate Intrinsic Value, Exercisable Ending balance | $ 1,174,649 |
SUMMARY OF OUTSTANDING AND EXER
SUMMARY OF OUTSTANDING AND EXERCISABLE WARRANTS (Details) | 3 Months Ended |
Mar. 31, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrant shares | shares | 5,187,154 |
Weighted average exercise price | $ / shares | $ 3.22 |
Warrant One [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | shares | 2,651,246 |
Weighted average exercise price | $ / shares | $ 3.61 |
Maturity date | 2022 |
Warrant Two [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | shares | 2,440,359 |
Weighted average exercise price | $ / shares | $ 2.73 |
Maturity date | 2023 |
Warrant Three [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | shares | 95,549 |
Weighted average exercise price | $ / shares | $ 4.91 |
Maturity date | 2024 |
EQUITY COMPENSATION PLANS AND_3
EQUITY COMPENSATION PLANS AND WARRANTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Jan. 06, 2022 | Jan. 03, 2022 | Jan. 02, 2022 | Dec. 29, 2021 | Feb. 21, 2021 | Jan. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 220,000 | |||||||
Number of shares exercised | 327,667 | |||||||
Stock-based compensation expenses | $ 358,000 | $ 253,000 | ||||||
Unrecognized compensation expenses | $ 2,572,000 | |||||||
Weighted average remaining contractual term (years) | 2 years 9 months | |||||||
Class of warrant or right, exercise price of warrants or rights | $ 3.22 | |||||||
Proceeds from warrant exercises | $ 12,220,000 | |||||||
Common Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 53,616 | |||||||
Number of shares exercised | 91,981 | |||||||
Warrant [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Warrants to purchase common stock, shares | 4,544,440 | |||||||
Proceeds from issuance of warrants | $ 11,022,000 | |||||||
Additional warrants exercised | 28,566 | |||||||
New Warrant [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Warrants to purchase common stock, shares | 4,545,440 | |||||||
Class of warrant or right, exercise price of warrants or rights | $ 7.50 | |||||||
Warrants and rights outstanding, maturity date | Jan. 31, 2022 | |||||||
Share price | $ 0.125 | |||||||
Proceeds from issuance of warrants | $ 568,000 | |||||||
Proceeds from warrant exercises | 11,363,000 | |||||||
Solicitation fees | 909,000 | |||||||
Fair value of warrants | $ 7,737,000 | |||||||
Implied volatility | 96% | |||||||
Risk free equivalent yield | 11% | |||||||
Stock price per share | $ 5.83 | |||||||
Other Warrant Holders [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Warrants to purchase common stock, shares | 399,880 | |||||||
Proceeds from warrant exercises | $ 1,200,000 | |||||||
Equity Compensation Plans [Member] | Chief Executive Officer [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 100,000 | |||||||
Number of shares withheld to cashless exercise | 57,016 | |||||||
Additional shares withheld for tax withholding | 16,732 | |||||||
Common stock issued | 26,252 | |||||||
Stock option exercise price | $ 4.25 | |||||||
Option vesting period | 3 years | |||||||
Option expire period | 7 years | |||||||
Number of option grant date, value | $ 397,000 | |||||||
Aggregate execise amount | 120,000 | |||||||
Equity Compensation Plans [Member] | Nonemployee Directors [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 29,533 | |||||||
Stock option exercise price | $ 4.35 | |||||||
Aggregate execise amount | $ 128,500 | |||||||
Option vesting period | 1 year | |||||||
Option expire period | 7 years | |||||||
Number of option grant date, value | $ 100,000 | |||||||
Equity Compensation Plans [Member] | Non Executive Employees [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares withheld to cashless exercise | 161,938 | |||||||
Number of shares exercised | 227,667 | |||||||
Equity Compensation Plans [Member] | Non Executive Employees [Member] | Common Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 65,729 | |||||||
Equity Compensation Plans [Member] | Employee [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Stock option exercise price | $ 4.25 | |||||||
Option vesting period | 3 years | |||||||
Option expire period | 7 years | |||||||
Number of option grant date, value | $ 331,000 | |||||||
Aggregate execise amount | 100,000 | |||||||
Equity Compensation Plans [Member] | Employee [Member] | Conditional Grant [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Stock option exercise price | $ 4.25 | |||||||
Option vesting period | 3 years | |||||||
Option expire period | 5 years | |||||||
Number of option grant date, value | $ 61,000 | |||||||
Aggregate execise amount | 20,000 | |||||||
Equity Compensation Plans [Member] | Chief Financial Officer [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Stock option exercise price | $ 4.25 | |||||||
Option vesting period | 3 years | |||||||
Option expire period | 7 years | |||||||
Number of option grant date, value | $ 331,000 | |||||||
Aggregate execise amount | 100,000 | |||||||
Class A common stock [Member] | Equity Compensation Plans [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of common stock reserved for issuance | 228,000 | |||||||
Class A common stock [Member] | Equity Compensation Plans [Member] | Non Executive Employees [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Stock option exercise price | $ 4.25 | |||||||
Option vesting period | 3 years | |||||||
Option expire period | 5 years | |||||||
Number of option grant date, value | $ 1,153,000 | |||||||
Aggregate execise amount | 380,000 |
SCHEDULE OF REVENUE BY REVENUE
SCHEDULE OF REVENUE BY REVENUE STREAM (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 7,499,000 | $ 4,917,000 |
Sequire Platform Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 7,499,000 | 4,508,000 |
Conference Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 45,000 | |
Other Revenues [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 364,000 |
SCHEDULE OF REVENUE RECOGNIZED
SCHEDULE OF REVENUE RECOGNIZED IN EXCHANGE FOR CUSTOMER SECURITIES AND CASH (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 7,499,000 | $ 4,917,000 |
Customer Securities [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 6,444,000 | 3,471,000 |
Revenue Cash [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1,055,000 | $ 1,466,000 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities, value | $ 16,700,000 | $ 12,900,000 | |
Deferred revenue recognized | 6,400,000 | $ 3,500,000 | |
Contracts receivable, value | $ 1,460,000 | $ 844,000 |
SCHEDULE OF ASSETS MEASURED AT
SCHEDULE OF ASSETS MEASURED AT FAIR VALUE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 33,496,000 | $ 20,386,000 |
Total liabilities | 3,799,000 | 3,925,000 |
Series A Preferred Stock [Member] | Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 3,799,000 | 3,925,000 |
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 | 9,997,000 | 6,393,000 |
Total liabilities | ||
Fair Value, Recurring [Member] | 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, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,667,000 | 6,114,000 |
Total liabilities | 3,799,000 | 3,925,000 |
Fair Value, Recurring [Member] | 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 | 3,799,000 | 3,925,000 |
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 | 12,832,000 | 7,879,000 |
Total liabilities | ||
Fair Value, Recurring [Member] | 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 | ||
Fair Value, Recurring [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 28,824,000 | 15,617,000 |
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 | 6,715,000 | 6,134,000 |
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 | 9,277,000 | 2,448,000 |
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 | 12,832,000 | 7,035,000 |
Fair Value, Recurring [Member] | Designated assets marketable securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 3,212,000 | 3,925,000 |
Fair Value, Recurring [Member] | Designated assets marketable securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,390,000 | 259,000 |
Fair Value, Recurring [Member] | Designated assets marketable securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 822,000 | 3,666,000 |
Fair Value, Recurring [Member] | Designated assets marketable securities [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 | 1,460,000 | 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 | 892,000 | |
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 | 568,000 | |
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 FAIR VALUE AT ASSET
SCHEDULE OF FAIR VALUE AT ASSETS (Details) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 7,035,000 |
Acquisitions | 2,419,000 |
Sales and dispositions | (14,000) |
Transfers into Level 3 | |
Transfers out of Level 3 | |
Realized & unrealized gains (losses) | 3,392,000 |
Ending Balance | 12,832,000 |
Common Stock [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | 2,154,000 |
Acquisitions | 481,000 |
Sales and dispositions | (14,000) |
Transfers into Level 3 | |
Transfers out of Level 3 | |
Realized & unrealized gains (losses) | 85,000 |
Ending Balance | 2,706,000 |
Convertible Debt Securities [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | 4,186,000 |
Acquisitions | 938,000 |
Sales and dispositions | |
Transfers into Level 3 | |
Transfers out of Level 3 | |
Realized & unrealized gains (losses) | 3,252,000 |
Ending Balance | 8,376,000 |
Warrant [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | 96,000 |
Acquisitions | |
Sales and dispositions | |
Transfers into Level 3 | |
Transfers out of Level 3 | |
Realized & unrealized gains (losses) | (96,000) |
Ending Balance | |
Preferred Stock [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | 599,000 |
Acquisitions | 1,000,000 |
Sales and dispositions | |
Transfers into Level 3 | |
Transfers out of Level 3 | |
Realized & unrealized gains (losses) | 151,000 |
Ending Balance | $ 1,750,000 |
SCHEDULE OF FAIR VALUE ASSETS S
SCHEDULE OF FAIR VALUE ASSETS SIGNIFICANT UNOBSERVABLE INPUTS (Details) - Fair Value, Inputs, Level 3 [Member] | 3 Months Ended |
Mar. 31, 2022 | |
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] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Range | 52 |
Valuation Technique, Option Pricing Model [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Range | 151 |
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 | 1.02 |
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 | 1.55 |
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 | 32.3 |
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 | 14.34 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Contracts receivable, value | $ 1,460,000 | $ 844,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 1 Months Ended |
May 31, 2022 USD ($) | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Related party transaction, amount | $ 497,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||
Aug. 08, 2022 | Jul. 01, 2022 | Jun. 13, 2022 | Dec. 29, 2021 | Nov. 30, 2018 | Oct. 28, 2017 | Jun. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 220,000 | ||||||||
Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 53,616 | ||||||||
Subsequent Event [Member] | Bridge Note [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face amount | $ 650,000 | ||||||||
Debt amount | $ 500,000 | ||||||||
Maturity date | Aug. 15, 2022 | ||||||||
Institutional Investor [Member] | Subsequent Event [Member] | Senior Secured Revolving Credit Facility [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Line of credit facility, current borrowing capacity | $ 9,450,000 | ||||||||
Line of credit facility, maximum borrowing capacity | $ 5,500,000 | ||||||||
Warrant to purchase common stock, shares | 2,590,358 | ||||||||
Expiration date | Sep. 30, 2023 | ||||||||
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 | ||||||||
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, fundamental transactions and certain future sales of the Company’s Common Stock | ||||||||
Number of shares issued | 32,000 | ||||||||
Institutional Investor [Member] | Subsequent Event [Member] | Bridge Note [Member] | Senior Secured Revolving Credit Facility [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face amount | $ 650,000 | ||||||||
Holders [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face 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 | ||||||||
Lender [Member] | Subsequent Event [Member] | Senior Secured Revolving Credit Facility [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | 5,580,000 | ||||||||
Line of credit facility, additional borrowing value | 4,930,000 | ||||||||
Lender [Member] | Subsequent Event [Member] | Senior Secured Revolving Credit Facility [Member] | Maximum [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Line of credit facility, additional borrowing value | $ 3,870,000 | ||||||||
CVR Agreement [Member] | Institutional Investor [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face amount | $ 405,000 | ||||||||
Debt instrument, description | the investor received (i) the right to receive the net proceeds upon the sale of certain marketable securities held by the Company (“CVR Payments”) with a quoted price equal to $674,000 (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 | $ 674,000 | ||||||||
Security Agreements [Member] | Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 166,667 | 530,028 | 1,363,636 | ||||||
Security Agreements [Member] | Common Stock [Member] | Tranche One [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 530,027 | ||||||||
Warrant [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of common stock and warrants shares | 196,000 |