Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2020 | |
Document And Entity Information | |
Entity Registrant Name | Verb Technology Company, Inc. |
Entity Central Index Key | 0001566610 |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | |||
Cash | $ 1,615,000 | $ 983,000 | $ 634,000 |
Accounts receivable, net of allowance of $280,000 and $230,000 and $0, respectively | 1,212,000 | 1,271,000 | 1,000 |
Inventory, net of allowance of $0 and $2,000, $2,000 respectively | 74,000 | 103,000 | |
Prepaid expenses | 249,000 | 236,000 | 83,000 |
Total current assets | 3,150,000 | 2,593,000 | 718,000 |
Right-of-use assets, net of accumulated amortization of $484,000 and $349,000, $349,000 respectively | 3,140,000 | 3,275,000 | |
Deferred offering costs | 162,000 | ||
Property and equipment, net of accumulated depreciation of $202,000 and $164,000 and $97,000, respectively | 803,000 | 720,000 | 11,000 |
Intangible assets, net of accumulated amortization of $1,300,000 and $975,000, $975,000, respectively | 5,040,000 | 5,365,000 | |
Goodwill | 16,337,000 | 16,337,000 | |
Other assets | 115,000 | 69,000 | 7,000 |
Total assets | 28,585,000 | 28,359,000 | 898,000 |
Current liabilities: | |||
Accounts payable and accrued expenses | 4,569,000 | 4,338,000 | 1,148,000 |
Accrued officers' salary | 207,000 | 207,000 | 188,000 |
Accrued interest - related parties | 107,000 | 82,000 | 46,000 |
Advance on future receipts, net of discount of $137,000 and $274,000, $274,000 respectively | 457,000 | 732,000 | |
Notes payable - related party | 937,000 | 112,000 | 112,000 |
Convertible notes payable, net of discount of $0 and $1,082,000, respectively | 818,000 | ||
Operating lease liability, current | 505,000 | 391,000 | |
Deferred incentive compensation, current | 521,000 | ||
Deferred revenue and customer deposits | 261,000 | 306,000 | |
Derivative liability | 6,907,000 | 5,048,000 | 2,576,000 |
Total current liabilities | 14,471,000 | 11,216,000 | 4,888,000 |
Long Term liabilities: | |||
Note payable - related party, non-current | 240,000 | 1,065,000 | 1,065,000 |
Deferred incentive compensation to officers | 521,000 | 1,042,000 | |
Operating lease liability, non-current | 3,432,000 | 3,591,000 | |
Total liabilities | 18,664,000 | 16,914,000 | 5,953,000 |
Commitments and contingencies | |||
Stockholders' equity (deficit) | |||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 3,246, 4,396 and 0 issued and outstanding as of March 31, 2020, December 31, 2019 and 2018 | |||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 24,496,197 and 12,055,491 shares issued and outstanding as of March 31, 2020, December 31, 2019 and 2018 | 3,000 | 2,000 | 1,000 |
Additional paid-in capital | 68,449,000 | 68,028,000 | 35,611,000 |
Accumulated deficit | (58,531,000) | (56,585,000) | (40,667,000) |
Total stockholders' equity (deficit) | 9,921,000 | 11,445,000 | (5,055,000) |
Total liabilities and stockholders' equity (deficit) | $ 28,585,000 | $ 28,359,000 | $ 898,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts receivable allowance | $ 280,000 | $ 230,000 | $ 0 |
Inventory allowance | 0 | 2,000 | |
Net of amortization, Right-of-use assets | 484,000 | 349,000 | |
Property and equipment, net of accumulated depreciation | 202,000 | 164,000 | 97,000 |
Intangible assets, net of amortization | 1,300,000 | ||
Accrued interest, related parties | 82,000 | 41,000 | |
Net of discount in future receipts | $ 137,000 | 274,000 | |
Convertible notes payable, discount | $ 0 | $ 1,082,000 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 28,962,589 | 24,496,197 | 12,055,491 |
Common stock, shares outstanding | 28,962,589 | 24,496,197 | 12,055,491 |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 6,000 | 6,000 | 6,000 |
Preferred stock, shares issued | 3,246 | 4,396 | 0 |
Preferred stock, shares outstanding | 3,246 | 4,396 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | ||||
Revenue, net | $ 2,354,000 | $ 9,000 | $ 9,100,000 | $ 32,000 |
Cost of revenue | ||||
Cost of revenue | 1,063,000 | 30,000 | 4,870,000 | 52,000 |
Gross margin | 1,291,000 | (21,000) | 4,230,000 | (20,000) |
Operating expenses: | ||||
Research and development | 1,274,000 | 564,000 | 4,312,000 | 980,000 |
Depreciation and amortization | 363,000 | 4,000 | 1,042,000 | 20,000 |
General and administrative | 3,514,000 | 2,185,000 | 14,710,000 | 6,772,000 |
Total operating expenses | 5,151,000 | 2,753,000 | 20,064,000 | 7,772,000 |
Loss from operations | (3,860,000) | (2,774,000) | (15,834,000) | (7,792,000) |
Other income (expense), net | ||||
Other expense, net | (6,000) | (11,000) | (5,000) | |
Financing costs | (84,000) | (1,625,000) | (798,000) | |
Interest expense - amortization of debt discount | (137,000) | (1,054,000) | (1,658,000) | (1,468,000) |
Change in fair value of derivative liability | 2,092,000 | 944,000 | 1,862,000 | (1,167,000) |
Interest expense | (35,000) | (40,000) | (186,000) | (362,000) |
Debt extinguishment, net | 1,536,000 | (534,000) | ||
Total other expense, net | 1,914,000 | (234,000) | (82,000) | (4,334,000) |
Loss before income tax provision | (1,946,000) | (3,008,000) | (15,916,000) | (12,126,000) |
Income tax provision | (3,951,000) | 2,000 | 1,000 | |
Net loss | (1,946,000) | (3,008,000) | $ (15,918,000) | $ (12,127,000) |
Deemed dividends to Series A stockholders | (3,951,000) | |||
Net loss attributed to common stockholders | $ (5,897,000) | $ (3,008,000) | ||
Loss per share - basic and diluted | $ (0.23) | $ (0.25) | $ (0.79) | $ (1.23) |
Weighted average number of common shares outstanding - basic and diluted | 25,992,426 | 12,239,044 | 20,186,249 | 9,870,890 |
Digital [Member] | ||||
Revenue | ||||
Revenue, net | $ 1,457,000 | $ 728,000 | $ 4,240,000 | $ 32,000 |
Cost of revenue | ||||
Cost of revenue | 230,000 | 676,000 | 660,000 | 52,000 |
Welcome Kits & Fulfillment [Member] | ||||
Revenue | ||||
Revenue, net | 169,000 | 9,000 | 3,913,000 | |
Cost of revenue | ||||
Cost of revenue | 157,000 | 30,000 | 3,273,000 | |
Shipping [Member] | ||||
Revenue | ||||
Revenue, net | 947,000 | |||
Cost of revenue | ||||
Cost of revenue | $ 937,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,000 | $ 22,749,000 | $ (28,540,000) | $ (5,790,000) | |
Balance, shares at Dec. 31, 2017 | 7,941,235 | ||||
Common stock issued upon exercise of warrants | 22,000 | 22,000 | |||
Common stock issued upon exercise of warrants, shares | 1,074,921 | ||||
Common stock issued upon exercise of options | 34,000 | $ 34,000 | |||
Common stock issued upon exercise of options, shares | 32,508 | 32,508 | |||
Proceeds from sale of common stock | 2,979,000 | $ 2,979,000 | |||
Proceeds from sale of common stock, shares | 1,163,938 | ||||
Fair value of warrants issued for debt extension | 1,188,000 | 1,188,000 | |||
Fair value of common stock issued for services | 1,546,000 | 1,545,000 | |||
Fair value of common stock issued for services, shares | 319,346 | ||||
Fair value of common stock issued upon conversion of debt | 3,066,000 | 3,066,000 | |||
Fair value of common stock issued upon conversion of debt, shares | 1,243,189 | ||||
Fair value of common stock upon issuance of convertible debt | 595,000 | 595,000 | |||
Fair value of common stock upon issuance of convertible debt, shares | 96,667 | ||||
Fair value of common stock issued upon conversion of accrued expenses | 582,000 | 582,000 | |||
Fair value of common stock issued upon conversion of accrued expenses, shares | 27,148 | ||||
Common stock issued upon exercise of put option | 1,000,000 | 1,000,000 | |||
Common stock issued upon exercise of put option, shares | 203,207 | ||||
Fair value of vested stock options | 1,870,000 | 1,870,000 | |||
Fair value of vested stock options, shares | |||||
Sale of common stock from private placement | 2,979,000 | 2,979,000 | |||
Sale of common stock from private placement, shares | 1,163,938 | ||||
Stock repurchase | (20,000) | (20,000) | |||
Stock repurchase, shares | (46,668) | ||||
Net loss | (12,127,000) | (12,127,000) | |||
Balance at Dec. 31, 2018 | $ 1,000 | 35,611,000 | (40,667,000) | (5,055,000) | |
Balance, shares at Dec. 31, 2018 | 12,055,491 | ||||
Common stock issued upon exercise of warrants | |||||
Common stock issued upon exercise of warrants, shares | 148,714 | ||||
Fair value of common stock issued for services | 388,000 | 388,000 | |||
Fair value of common stock issued for services, shares | 39,998 | ||||
Fair value of common stock upon issuance of convertible debt | 128,000 | 128,000 | |||
Fair value of common stock upon issuance of convertible debt, shares | 16,667 | ||||
Fair value of vested stock options | 463,000 | 463,000 | |||
Fair value of vested stock options, shares | |||||
Beneficial holder round up | |||||
Beneficial holder round up, shares | 83,581 | ||||
Net loss | (3,008,000) | (3,008,000) | |||
Balance at Mar. 31, 2019 | $ 1,000 | 36,590,000 | (43,675,000) | (7,084,000) | |
Balance, shares at Mar. 31, 2019 | 12,344,451 | ||||
Balance at Dec. 31, 2018 | $ 1,000 | 35,611,000 | (40,667,000) | (5,055,000) | |
Balance, shares at Dec. 31, 2018 | 12,055,491 | ||||
Common stock issued upon exercise of warrants | 45,000 | $ 45,000 | |||
Common stock issued upon exercise of warrants, shares | 189,237 | ||||
Common stock issued upon exercise of options, shares | |||||
Proceeds from sale of common stock | $ 1,195,000 | ||||
Proceeds from sale of common stock, shares | 598,286 | ||||
Fair value of common stock issued for services | 1,778,000 | $ 1,778,000 | |||
Fair value of common stock issued for services, shares | 1,015,981 | ||||
Sale of common stock from private placement | $ 1,195,000 | ||||
Sale of common stock from private placement, shares | 598,286 | ||||
Fair value of warrants issued to Series A Preferred stockholders | (2,400,000) | $ (2,400,000) | |||
Sale of common stock from Public Offering | $ 1,000 | 18,362,000 | 18,363,000 | ||
Sale of common stock from Public Offering, shares | 6,549,596 | ||||
Fair value of common stock issued for acquisition | 7,820,000 | 7,820,000 | |||
Fair value of common stock issued for acquisition, shares | 3,327,791 | ||||
Fair value of common stock issued to settle accounts payable | 10,000 | 10,000 | |||
Fair value of common stock issued to settle accounts payable, shares | 4,142 | ||||
Fair value of common stock and warrants issued to settle notes payable | 1,410,000 | 1,410,000 | |||
Fair value of common stock and warrants issued to settle notes payable, shares | 598,286 | ||||
Conversion of convertible debt | 410,000 | 410,000 | |||
Conversion of convertible debt, shares | 182,333 | ||||
Common stock upon issuance of convertible debt | 182,000 | 182,000 | |||
Common stock upon issuance of convertible debt, shares | 25,272 | ||||
Issuance of fractional shares due to reverse split | |||||
Issuance of fractional shares due to reverse split, shares | 139,036 | ||||
Issuance of Series A convertible preferred stock for cash | 4,688,000 | 4,688,000 | |||
Issuance of Series A convertible preferred stock for cash, shares | 5,030 | ||||
Conversion of series A preferred shares | |||||
Conversion of series A preferred shares, shares | (634) | 409,032 | |||
Fair value of warrants issued with the Series A convertible preferred stock | (4,688,000) | (4,688,000) | |||
Fair value of vested stock options and warrants | 2,400,000 | 2,400,000 | |||
Net loss | (15,918,000) | (15,918,000) | |||
Balance at Dec. 31, 2019 | $ 2,000 | 68,028,000 | (56,585,000) | 11,445,000 | |
Balance, shares at Dec. 31, 2019 | 4,396 | 24,496,197 | |||
Balance at Mar. 31, 2019 | $ 1,000 | 36,590,000 | (43,675,000) | (7,084,000) | |
Balance, shares at Mar. 31, 2019 | 12,344,451 | ||||
Balance at Dec. 31, 2019 | $ 2,000 | 68,028,000 | (56,585,000) | $ 11,445,000 | |
Balance, shares at Dec. 31, 2019 | 4,396 | 24,496,197 | |||
Common stock issued upon exercise of options, shares | |||||
Proceeds from sale of common stock | $ 1,000 | 3,429,000 | $ 3,430,000 | ||
Proceeds from sale of common stock, shares | 3,392,833 | ||||
Fair value of common stock issued for services | 321,000 | 321,000 | |||
Fair value of common stock issued for services, shares | 320,601 | ||||
Fair value of vested stock options | 381,000 | 381,000 | |||
Fair value of vested stock options, shares | |||||
Sale of common stock from private placement | $ 1,000 | 3,429,000 | 3,430,000 | ||
Sale of common stock from private placement, shares | 3,392,833 | ||||
Fair value of warrants issued to Series A Preferred stockholders | (3,951,000) | (3,951,000) | |||
Fair value of vested restricted stock awards | 241,000 | 241,000 | |||
Fair value of vested restricted stock awards, shares | 11,025 | ||||
Conversion of convertible debt | |||||
Conversion of convertible debt, shares | (1,150) | 741,933 | |||
Fair value of vested stock options and warrants | 3,951,000 | 3,951,000 | |||
Net loss | (1,946,000) | (1,946,000) | |||
Balance at Mar. 31, 2020 | $ 3,000 | $ 68,449,000 | $ (58,531,000) | $ 9,921,000 | |
Balance, shares at Mar. 31, 2020 | 3,246 | 28,962,589 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities: | ||||
Net loss | $ (1,946,000) | $ (3,008,000) | $ (15,918,000) | $ (12,127,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Fair value of common shares issued for services and vested stock options | 943,000 | 851,000 | 4,178,000 | 3,415,000 |
Financing costs | 84,000 | 1,625,000 | 798,000 | |
Amortization of debt discount | 137,000 | 1,054,000 | 1,658,000 | 1,468,000 |
Change in fair value of derivative liability | (2,092,000) | (944,000) | (1,862,000) | 1,167,000 |
Debt extinguishment costs, net | (1,536,000) | 534,000 | ||
Depreciation and amortization | 363,000 | 4,000 | 1,042,000 | 20,000 |
Amortization of right-of-use assets | 135,000 | 349,000 | ||
Allowance for Inventory reserve | (2,000) | (14,000) | ||
Allowance for doubtful account | 50,000 | 199,000 | ||
Effect of changes in assets and liabilities: | ||||
Accounts receivable | 9,000 | (6,000) | (380,000) | (1,000) |
Prepaid expenses | (12,000) | (129,000) | (11,000) | (42,000) |
Inventory | 30,000 | 127,000 | ||
Other assets | (45,000) | (44,000) | (41,000) | 2,000 |
Accounts payable, accrued expenses, and accrued interest | 255,000 | 1,047,000 | 2,123,000 | 609,000 |
Operating lease liability | (47,000) | (220,000) | ||
Deferred revenue and Customer deposits | (44,000) | 2,000 | (428,000) | |
Deferred incentive compensation | 1,042,000 | |||
Deferred revenue | (51,000) | |||
Net cash used in operating activities | (2,266,000) | (1,089,000) | (8,118,000) | (4,157,000) |
Investing Activities: | ||||
Acquisition of subsidiary | (15,000,000) | |||
Cash acquired from acquisition of subsidiary | 557,000 | |||
Purchases of property and equipment | (121,000) | (146,000) | ||
Net cash used by investing activities | (121,000) | (14,589,000) | ||
Financing Activities: | ||||
Proceeds from sale of common stock | 3,430,000 | 18,525,000 | 2,979,000 | |
Proceeds from sale of preferred stock | 4,688,000 | |||
Proceeds from notes payable | 350,000 | 1,300,000 | ||
Advances on future receipts | 728,000 | |||
Proceeds from convertible note payable | 432,000 | 432,000 | 1,772,000 | |
Proceeds from exercise of put option | 1,000,000 | |||
Proceeds from option exercise | 34,000 | |||
Proceeds from warrant exercise | 45,000 | 22,000 | ||
Proceeds from related party note payable | 58,000 | |||
Payment of convertible notes payable | (2,025,000) | (845,000) | ||
Payment of notes payable | (411,000) | (630,000) | ||
Payment of related party notes payable | 58,000 | (58,000) | ||
Payment of advances of future receipts | (411,000) | (7,000) | ||
Deferred offering costs | (326,000) | (162,000) | ||
Repurchase common stock | (20,000) | |||
Net cash provided by financing activities | 3,019,000 | 514,000 | 23,056,000 | 4,780,000 |
Net change in cash | 632,000 | (575,000) | 349,000 | 623,000 |
Cash - beginning of period | 983,000 | 634,000 | 634,000 | 11,000 |
Cash - end of period | 1,615,000 | 59,000 | 983,000 | 634,000 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 10,000 | 32,000 | 146,000 | 402,000 |
Cash paid for income taxes | 2,000 | 1,000 | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Fair value of common stock issued upon acquisition of subsidiary | 7,820,000 | |||
Conversion of note payable and accrued interest to common stock | 1,410,000 | 3,066,000 | ||
Common stock issued to settle accrued officer's salary | 582,000 | |||
Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features | 388,000 | 6,561,000 | 1,694,000 | |
Fair value of derivative liability from issuance of warrants to Series A stockholders considered as a deemed dividend | 3,951,000 | |||
Fair value of common shares, warrants and beneficial conversion feature of issued convertible note | $ 128,000 | 592,000 | ||
Offset of deferred offering costs to proceeds received | 162,000 | |||
Common stock issued to settle accounts payable | 10,000 | |||
Assets acquired from the acquisition of Verb Direct, LLC | 3,364,000 | |||
Liabilities assumed from the acquisition of Verb Direct, LLC | $ 3,221,000 |
Description of Business
Description of Business | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Description of Business | 1. DESCRIPTION OF BUSINESS Organization References in this document to the “Company,” “Verb,” “we,” “us,” or “our” are intended to mean Verb Technology Company, Inc., individually, or as the context requires, collectively with its subsidiary on a consolidated basis. Cutaia Media Group, LLC (“CMG”) was organized as a limited liability company under the laws of the State of Nevada on December 12, 2012. On May 19, 2014, CMG merged into bBooth, Inc. and bBooth, Inc., thereafter, changed its name to bBooth (USA), Inc., effective as of October 16, 2014. The operations of CMG and bBooth (USA), Inc., became known as, and are referred to in this Annual Report as, “bBoothUSA.” On October 16, 2014, bBoothUSA was acquired by Global System Designs, Inc. (“GSD”), pursuant to a Share Exchange Agreement entered into with GSD (the “Share Exchange Agreement”). GSD was incorporated in the State of Nevada on November 27, 2012. The acquisition was accounted for as a reverse merger transaction. In connection with the closing of the transactions contemplated by the Share Exchange Agreement, GSD’s management was replaced by bBoothUSA’s management, and GSD changed its name to bBooth, Inc. Effective April 21, 2017, we changed our corporate name from bBooth, Inc. to nFüsz, Inc. The name change was effected through a parent/subsidiary short-form merger of nFüsz, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. Effective February 1, 2019, we changed our corporate name from nFüsz, Inc. to Verb Technology Company, Inc. The name change was effected through a parent/subsidiary short-form merger of Verb Technology Company, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. On February 1, 2019, we implemented a 1-for-15 reverse stock split (the “Reverse Stock Split”) of our common stock, $0.0001 par value per share (the “Common Stock”). The Reverse Stock Split became effective upon commencement of trading of our Common Stock on February 4, 2019. As a result of the Reverse Stock Split, every fifteen (15) shares of our pre-Reverse Stock Split Common Stock were combined and reclassified into one share of our Common Stock. The number of shares of Common Stock subject to outstanding options, warrants, and convertible securities were also reduced by a factor of fifteen as of February 1, 2019. All historical share and per-share amounts reflected throughout our consolidated financial statements and other financial information in this Annual Report have been adjusted to reflect the Reverse Stock Split. The par value per share of our Common Stock was not affected by the Reverse Stock Split. Nature of Business We are a Software-as-a-Service (“SaaS”) applications platform developer. Our platform is comprised of a suite of sales enablement business software products marketed on a subscription basis. Our applications, available in both mobile and desktop versions, are offered as a fully integrated suite, as well as on a standalone basis, and include verbCRM, our Customer Relationship Management application, verbLEARN, our Learning Management System application, and verbLIVE, our Live Broadcast Video Webinar application. We also provided certain non-digital services to some of our enterprise clients such as printing and fulfillment services. We designed and printed welcome kits and starter kits for their marketing needs and provided fulfillment services, which consisted of managing the preparation, handling and shipping of our client’s custom-branded merchandise they use for marketing purposes at conferences and other events, and product sample packs that verbCRM users order through the app for automated delivery and tracking to their customers and prospects. | 1. DESCRIPTION OF BUSINESS Organization Cutaia Media Group, LLC (“CMG”) was organized as a limited liability company under the laws of the State of Nevada on December 12, 2012. On May 19, 2014, CMG merged into bBooth, Inc. and bBooth, Inc., thereafter, changed its name to bBooth (USA), Inc., effective as of October 16, 2014. The operations of CMG and bBooth (USA), Inc., became known as, and are referred to in this Annual Report as, “bBoothUSA.” On October 16, 2014, bBoothUSA was acquired by Global System Designs, Inc. (“GSD”), pursuant to a Share Exchange Agreement entered into with GSD (the “Share Exchange Agreement”). GSD was incorporated in the State of Nevada on November 27, 2012. The acquisition was accounted for as a reverse merger transaction. In connection with the closing of the transactions contemplated by the Share Exchange Agreement, GSD’s management was replaced by bBoothUSA’s management, and GSD changed its name to bBooth, Inc. Effective April 21, 2017, we changed our corporate name from bBooth, Inc. to nFüsz, Inc. The name change was effected through a parent/subsidiary short-form merger of nFüsz, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. Effective February 1, 2019, we changed our corporate name from nFüsz, Inc. to Verb Technology Company, Inc. The name change was effected through a parent/subsidiary short-form merger of Verb Technology Company, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. On February 1, 2019, we implemented a 1-for-15 reverse stock split (the “Reverse Stock Split”) of our common stock, $0.0001 par value per share (the “Common Stock”). The Reverse Stock Split became effective upon commencement of trading of our Common Stock on February 4, 2019. As a result of the Reverse Stock Split, every fifteen (15) shares of our pre-Reverse Stock Split Common Stock were combined and reclassified into one share of our Common Stock. The number of shares of Common Stock subject to outstanding options, warrants, and convertible securities were also reduced by a factor of fifteen as of February 1, 2019. All historical share and per-share amounts reflected throughout our consolidated financial statements and other financial information in this Annual Report have been adjusted to reflect the Reverse Stock Split. The par value per share of our Common Stock was not affected by the Reverse Stock Split. On April 12, 2019, we acquired Sound Concepts Inc. (“Sound Concepts”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) entered into on November 8, 2018, by and among Sound Concepts, NF Merger Sub, Inc., a Utah corporation (“Merger Sub 1”), NF Acquisition Company, LLC, a Utah limited liability company (“Merger Sub 2”), the shareholders of Sound Concepts (the “Shareholders”), the Shareholders’ representative, and us. Pursuant to the Merger Agreement, we acquired Sound Concepts through a two-step merger, consisting of merging Merger Sub 1 with and into Sound Concepts, with Sound Concepts surviving the “first step” of the merger as our wholly-owned subsidiary (and the separate corporate existence of Merger Sub 1 ceased) and, immediately thereafter, merging Sound Concepts with and into Merger Sub 2, with Merger Sub 2 surviving the “second step” of the merger, such that, upon the conclusion of the “second step” of the merger, the separate corporate existence of Sound Concepts ceased and Merger Sub 2 continued its limited liability company existence under Utah law as the surviving entity and as our wholly-owned subsidiary under the name “Verb Direct, LLC.” (“Verb Direct”). On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the closing, each share of Sound Concepts’ capital stock issued and outstanding immediately prior to the effective time (the “Sound Concepts Capital Stock”), was cancelled and converted into the right to receive a proportionate share of (i) a cash payment by us of an aggregate of $15,000,000 (the “Acquisition Cash Payment”), and (ii) 3,327,791 restricted shares of our Common Stock. The Acquisition Cash Payment was paid using a portion of the net proceeds we received as a result of our public offering that closed on April 9, 2019. The fair market value of the 3,327,791 restricted shares on April 12, 2019 was $7,820,000. Nature of Business We are a Software-as-a-Service (“SaaS”) applications platform developer. Our platform is comprised of a suite of sales enablement business software products marketed on a subscription basis. Our applications, available in both mobile and desktop versions, are offered as a fully integrated suite, as well as on a standalone basis, and include verbCRM, our Customer Relationship Management application; verbLEARN, our Learning Management System application, and verbLIVE, our Live Broadcast Video Webinar application. We also provided certain non-digital services to some of our enterprise clients such as printing and fulfillment services. We designed and printed welcome kits and starter kits for their marketing needs and provided fulfillment services, which consisted of managing the preparation, handling and shipping of our client’s custom-branded merchandise they use for marketing purposes at conferences and other events, and product sample packs that verbCRM users order through the app for automated delivery and tracking to their customers and prospects. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the year ended December 31, 2019, the Company incurred a net loss of $15,918,000 and used cash in operations of $8,118,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on May 14, 2020. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc. and Verb Direct, LLC, its wholly owned subsidiary. Intercompany transactions have been eliminated in the consolidation. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the three months ended March 31, 2020, the Company incurred a net loss of $1,946,000 and used cash in operations of $2,266,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2019 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. As of March 31, 2020, we had cash on hand of $1,615,000 and subsequently received $1,014,000 from a private placement offering that closed in March 2020 and $1,218,000 from the Paycheck Protection Program. We believe we have sufficient cash to sustain operations through September 2020. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, purchase price allocations, impairment of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. As of March 31, 2020, we have one major customer that accounted for 11% of our accounts receivable individually and in aggregate. Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Customers setup or installation fees for the creation and development of websites and phone application are recognized as revenue over the estimated subscription period. Design assets of the websites and phone application are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. In addition, certain revenue is recorded based upon stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as number of customer usage. A description of our principal revenue generating activities is as follows: Digital Sales – We offer cloud-based business software on a subscription basis. Subscriptions are paid in advance of the services or billed 30 days in arrears of the subscription period. The revenue is recognized over the subscription period. Welcome kits – We offer design and printing services to create corporate starter kits that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the welcome kits. Fulfillment – We offer print on demand and fulfilment services of various custom products our clients use for marketing purposes. The revenue is recognized upon completion and shipment of the products. Shipping – We charge our customers the costs related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the welcome kits or fulfillment products are shipped. Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers. Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. Based on Management’s assessment, there were no indicators of impairment at March 31, 2020 or December 31, 2019. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. Share Based Payments The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with the Financial Accounting Standards Board’s (“FASB”) ASC 718, Compensation – Stock Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of March 31, 2020, and 2019, the Company had total outstanding options of 4,417,108 and 2,457,974, respectively, and warrants of 13,651,050 and 778,446, respectively, and outstanding restricted stock awards of 1,475,329 and 0, which were excluded from the computation of net loss per share because they are anti-dilutive. Goodwill and other Intangibles In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill and other Intangible assets at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be done annually. Recoverability of goodwill is determined by comparing the fair value of Company’s reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in December 2020. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 825 for disclosures about fair value of its financial instruments and ASC 820 to measure the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. Segments The Company has various revenue channels. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to (i) their similar customer base and (ii) the Company having a single sales team, marketing department, customer service department, operations department, finance department, and accounting department to support all revenue channels. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying condensed consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc. (formerly nFüsz, Inc. and, before that, bBooth, Inc.). Intercompany accounts have been eliminated in the consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, purchase price allocations, impairment of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Consolidated Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Customers setup or installation fees for the creation and development of websites and phone application are recognized as revenue over the estimated subscription period. Design assets of the websites and phone application are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. In addition, certain revenue is recorded based upon stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as number of customer usage. A description of our principal revenue generating activities is as follows: Digital Sales – We offer cloud-based business software on a subscription basis. Subscriptions are paid in advance of the services or billed 30 days in arrears of the subscription period. The revenue is recognized over the subscription period. Welcome kits – We offer design and printing services to create corporate starter kits that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the welcome kits. Fulfillment – We offer print on demand and fulfilment services of various custom products our clients use for marketing purposes. The revenue is recognized upon completion and shipment of the products. Shipping – We charge our customers the costs related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the welcome kits or fulfillment products are shipped. Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of revenue upon sale of products to our customers. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for year ended December 31, 2019 and 2018: Year Ended Year Ended December 31, 2019 December 31, 2018 Verb’s largest customers are presented below as a percentage of Verb’s aggregate: Revenues 1 major customer accounted for 13% of revenues None Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate: Purchases None None Accounts payable 1 major supplier accounted for 14% of accounts payable individually and in aggregate None Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets. Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (“ASC”) 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases (“ASC 842”), which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. See Note 5, Right-of-Use Assets and Operating Lease Liabilities Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. No impairment of long-lived assets was required for the years ended December 31, 2019 and 2018. Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board’s (“FASB”) ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carry-forwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2019, and 2018, the Company has not established a liability for uncertain tax positions. Deferred Offering Costs Deferred offering costs consist principally of legal, accounting, and underwriters’ fees incurred related to the contemplated underwritten public offering of the Company’s Common Stock. These deferred offering costs were charged against the gross proceeds received in March 2019. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. Share Based Payment The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with the Financial Accounting Standards Board’s (“FASB”) ASC 718, Compensation – Stock Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. From prior periods until December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees . In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). The guidance was issued to simplify the accounting for share-based transactions by expanding the scope of ASU 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. We adopted ASU 2018-07 on January 1, 2019. The adoption of the standard did not have a material impact on our financial statements for the twelve months ended December 31, 2019 or the previously reported financial statements. The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2019 and 2018 are as follows: Year Ended Year Ended December 31, 2019 December 31, 2018 Expected life in years 1.0, 2.0 and 5.0 5.0 Stock price volatility 180%-413.83 % 184.45% -190.22 % Risk free interest rate 1.51%-2.75 % 2.25% - 3.00 % Expected dividends 0 % 0 % Forfeiture rate 22.48 % 18 % The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not customarily paid dividends in the past and does not expect to pay dividends in the future. Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company’s cloud-based, Verb interactive video CRM SaaS platform. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2019, and 2018, the Company had total outstanding options of 4,233,722 and 2,478,974, respectively, and warrants of 10,930,991 and 940,412, respectively, and outstanding restricted stock awards of 1,486,354 and 0, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. Acquisitions and Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trade-marks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be done annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in fiscal 2020. Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in fiscal 2020. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. Segments The Company has various revenue channels. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to (i) their similar customer base and (ii) the Company having a single sales team, marketing department, customer service department, operations department, finance department, and accounting department to support all revenue channels. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Acquisition of Verb Direct
Acquisition of Verb Direct | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | ||
Acquisition of Verb Direct | 3. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed its acquisition of Verb Direct on the terms set forth in the Merger Agreement, at the effective time of the merger, each share of Sound Concepts Capital Stock issued and outstanding immediately prior to the effective time, was cancelled in exchange for cash payment by Verb of an aggregate of $15,000,000, and the issuance of an aggregate of 3,327,791 restricted shares of Verb’s Common Stock with a fair value of $7,820,000 at the closing date of the transaction. The acquisition was intended to augment and diversify Verb’s internet and SaaS business. Key factors that contributed to the recorded goodwill and intangible assets in the aggregate of $22,677,000 were the opportunity to consolidate and complement existing operations of Verb, certain software and customer list, and the opportunity to generate future synergies within the internet and SaaS business. The following table summarizes the assets acquired, liabilities assumed and purchase price allocation: Assets Acquired: Other current assets $ 2,004,000 Property and equipment 58,000 Other assets 1,302,000 $ 3,364,000 Liabilities Assumed: Current liabilities (2,153,000 ) Long-term liabilities (1,068,000 ) (3,221,000 ) Intangible assets 6,340,000 Goodwill 16,337,000 Purchase Price $ 22,820,000 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. Goodwill is not amortized but will be tested for impairment on an annual basis. The intangible assets, which consist of developed technology of $4,700,000 are being amortized over 5-years, customer relationships of $1,200,000 are being amortized on an accelerated basis over its estimated useful life of 5 years and domain names of $440,000 are determined to have infinite lives but will be tested for impairment on an annual basis. During the period ended March 31, 2020, the Company recorded amortization expense of $325,000. As of March 31, 2020, the remaining unamortized balance of the intangible assets was $5,040,000. The following comparative unaudited statements of operations present the Company’s results of operations after giving effect to the purchase of Verb Direct based on the historical financial statements of the Company and Verb Direct. The unaudited pro forma statements of operations for the periods ended March 31, 2020 and 2019 give effect to the transaction to the merger as if it had occurred on January 1, 2019. Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (unaudited) (Proforma, Digital $ 1,457,000 $ 1,059,000 Welcome kits and fulfilment 728,000 2,265,000 Shipping 169,000 677,000 Total Revenue 2,354,000 4,001,000 Cost of revenue 1,063,000 2,248,000 Gross margin 1,291,000 1,753,000 Operating expenses 5,151,000 4,782,000 Other income (expense), net 1,914,000 (251,000 ) Net loss (1,946,000 ) (3,280,000 ) Deemed dividends to Series A stockholders (3,951,000 ) - Net loss attributed to common stockholders $ (5,897,000 ) $ (3,280,000 ) Loss per share $ (0.23 ) $ (0.21 ) Weighted average number of common shares outstanding - basic and diluted 25,992,426 15,566,835 | 3. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed its previously announced acquisition of Verb Direct through a two-step merger, consisting of merging Merger Sub 1 with and into Sound Concepts, with Sound Concepts surviving the “first step” of the merger as a wholly-owned subsidiary of Verb (and the separate corporate existence of Merger Sub 1 then having ceased) and, immediately thereafter, merging Sound Concepts (as of the closing of the first step, then known as Verb Direct, Inc.) with and into Merger Sub 2, with Merger Sub 2 surviving the “second step” of the merger, such that, upon the conclusion of the “second step” of the merger, the separate corporate existence of Verb Direct, Inc. (formerly Sound Concepts) then having ceased and Merger Sub 2 continued its limited liability company existence under Utah law as the surviving entity and as a wholly-owned subsidiary of Verb, then known as Verb Direct. On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the merger, each share of Sound Concepts Capital Stock issued and outstanding immediately prior to the effective time, was cancelled in exchange for cash payment by Verb of an aggregate of $15,000,000, and the issuance of an aggregate of 3,327,791 restricted shares of Verb’s Common Stock. The Acquisition Cash Payment was paid using a portion of the net proceeds Verb received as a result of the public offering of the units. Pursuant to the requirements of current accounting guidance, Verb valued the acquisition shares at $7,820,000, the fair value of the shares at the closing date of the transaction. The acquisition was intended to augment and diversify Verb’s internet and SaaS business. Key factors that contributed to the recorded goodwill and intangible assets in the aggregate of $22,677,000 were the opportunity to consolidate and complement existing operations of Verb, certain software and customer list, and the opportunity to generate future synergies within the internet and SaaS business. The allocation of the purchase price was completed on December 31, 2019 through the assistance of a valuation specialist. The following table summarizes the assets acquired, liabilities assumed and purchase price allocation: Assets Acquired: Other current assets $ 2,004,000 Property and equipment 58,000 Other assets 1,302,000 $ 3,364,000 Liabilities Assumed: Current liabilities (2,153,000 ) Long-term liabilities (1,068,000 ) (3,221,000 ) Intangible assets 6,340,000 Goodwill 16,337,000 Purchase Price $ 22,820,000 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. Goodwill is not amortized but will be tested for impairment on an annual basis. The intangible assets, which consist mostly of developed technology of $4,700,000 are being amortized over 5-years, customer relationships of $1,200,000 are being amortized on an accelerated basis over its estimated useful life of 5 years and domain names of $440,000 are determined to have infinite lives but will be tested for impairment on an annual basis. During the year ended December 31, 2019, the Company recorded amortization expense of $975,000. As of December 31, 2019, the remaining unamortized balance of the intangible assets was $5,365,000. The following table summarizes the amortization expense to be recorded in future periods for intangible assets that are subject to amortization: Year ending Amortization 2020 $ 1,255,000 2021 1,195,000 2022 1,135,000 2023 1,075,000 2024 and thereafter 265,000 Total amortization $ 4,925,000 The following unaudited pro forma statements of operations present the Company’s pro forma results of operations after giving effect to the purchase of Verb Direct based on the historical financial statements of the Company and Verb Direct. The unaudited pro forma statements of operations for the year ended December 31, 2019 and 2018 give effect to the transaction to the merger as if it had occurred on January 1, 2018. Year Ended December 31, Year Ended (Proforma, unaudited) (Proforma, unaudited) Digital $ 5,290,000 $ 3,734,000 Welcome kits and fulfilment 6,178,000 7,258,000 Shipping 1,624,000 1,774,000 Total Revenue 13,092,000 12,766,000 Cost of revenue 7,088,000 7,173,000 Gross margin 6,004,000 5,593,000 Operating expenses 22,048,000 14,295,000 Other expense, net (99,000 ) (4,326,000 ) Loss before income tax provision (16,143,000 ) (13,028,000 ) Income tax provision 2,000 1,000 Net loss $ (16,145,000 ) $ (13,029,000 ) Loss per share $ (0.76 ) $ (0.99 ) Weighted average number of common shares outstanding - basic and diluted 21,116,207 13,198,681 Results of operation of Verb Direct subsequent to the acquisition are as follows: Period April 1, 2019 through December 31, 2019 Revenue $ 9,041,000 Cost of revenue 4,766,000 Operating expenses 6,308,000 Other income expense (11,000 ) Net loss $ (2,044,000 ) These amounts were included in the accompany Consolidated Statement of Operations. |
Property and Equipment
Property and Equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of March 31, 2020 and December 31, 2019. March 31, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 39,000 39,000 Leasehold improvement 862,000 741,000 Total property and equipment 1,005,000 884,000 Accumulated depreciation (202,000 ) (164,000 ) Total property and equipment, net $ 803,000 $ 720,000 Depreciation expense amounted to $38,000 and $4,000 for three months ended March 31, 2020 and 2019, respectively. | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of December 31, 2019 and 2018. December 31, 2019 December 31, 2018 Computers $ 29,000 $ 28,000 Furniture and fixture 75,000 56,000 Machinery and equipment 39,000 24,000 Leasehold improvement 741,000 - Total property and equipment 884,000 108,000 Accumulated depreciation (164,000 ) (97,000 ) Total property and equipment, net $ 720,000 $ 11,000 Depreciation expense amounted to $67,000 and $20,000 for the year ended December 31, 2019 and 2018, respectively. |
Right-of-use Assets and Operati
Right-of-use Assets and Operating Lease Liabilities | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Right-of-use Assets and Operating Lease Liabilities | 5. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES The Company has entered into several leases that are accounted for as operating leases in accordance with ASC 842. The Company currently has four office and warehouse leases in American Fork, Utah related to the operation of Verb Direct with an aggregate lease payment of $31,000 per month. Each lease expires in December 2023. The lessor of the office and warehouse area is JMCC Properties, which is an entity owned and controlled by the former shareholders and certain current officers of the Company’s subsidiary, Verb Direct. In addition, the Company leases its corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 under a lease with a term of 94 months. The average monthly base rent for the first 12 months of the Lease is approximately $7,000 after rent abatement. For the next 82 months of the Lease, the average monthly base rent will be approximately $39,000. As part of the agreement, the landlord provided leasehold incentive of $572,000 for the construction of the leasehold improvements. Pursuant to ASC 842, the lease incentive of $572,000 was recorded as a part of leasehold improvements and a reduction to the right of use assets. The Lease commenced in August 2019. As March 31, 2020 and December 31, 2019, the Company had recorded right of use assets of $3,140,000 and $3,275,000, respectively, net of amortization. As March 31, 2020 and December 31, 2019, the Company had recorded lease liabilities of $3,937,000 and $3,982,000, respectively, related to these leases. Period Ended March 31, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 175,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ — Weighted average remaining lease term – operating leases (in years) 5.11 Average discount rate – operating leases 4.0 % March 31, 2020 Operating leases Right-of-use assets, net of amortization of $484,000 $ 3,140,000 Short-term operating lease liabilities $ 505,000 Long-term operating lease liabilities 3,432,000 Total operating lease liabilities $ 3,937,000 | 5. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES Effective January 1, 2019, the Company adopted the guidance of ASC 842, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. Upon acquisition of Verb Direct, the Company assumed four office and warehouse leases in American Fork, Utah related to the operation of Verb Direct with an aggregate lease payment of $31,000 per month. Each lease expires in December 2023. In addition, the Company assumed an office equipment lease with a lease payment of $5,000 per month that will expire in September 2021. As a result, the Company recorded operating lease right-of-use assets of and lease liabilities for operating lease of $1,451,000 and $1,457,000, respectively. The lessor of the office and warehouse area is JMCC Properties, which is an entity owned and controlled by the former shareholders and certain current officers of Verb Direct. In February 2019, the Company entered into a lease agreement with respect to the Company’s corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 with a term of 94 months. The average monthly base rent for the first 12 months of the Lease is approximately $7,000 after rent abatement. For the next 82 months of the Lease, the average monthly base rent will be approximately $39,000. As part of the agreement, the landlord provided leasehold incentive of $572,000 for the construction of the leasehold improvements. Pursuant to ASC 842, the lease incentive of $572,000 was recorded as a part of leasehold improvements and a reduction to the right of use assets. The Lease commenced in August 2019 and as a result, the Company recorded operating lease right-of-use assets of $2,173,000 and lease liabilities for operating lease of $2,745,000. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets of and lease liabilities for operating lease in the aggregate of $3,624,000 and $4,202,000, respectively. There was no cumulative-effect adjustment to retained earnings. Year Ended December 31, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 366,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ — Weighted average remaining lease term – operating leases (in years) 5.25 Average discount rate – operating leases 4.0 % December 31, 2019 Operating leases Right-of-use assets, net of amortization of $349,000 $ 3,275,000 Short-term operating lease liabilities $ 391,000 Long-term operating lease liabilities 3,591,000 Total operating lease liabilities $ 3,982,000 Year ending Operating Leases 2020 597,000 2021 776,000 2022 751,000 2023 773,000 2024 and thereafter 1,661,000 Total lease payments 4,558,000 Less: Imputed interest/present value discount (576,000 ) Present value of lease liabilities $ 3,982,000 |
Advance of Future Receipts
Advance of Future Receipts | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Advance of Future Receipts | 6. ADVANCE OF FUTURE RECEIPTS The Company has the following advances on future receipts as of March 31, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Balance at Note 1 December 24, 2019 June 30, 2020 10 % $ 506,000 $ 297,000 $ 503,000 Note 2 December 24, 2019 June 30, 2020 10 % 506,000 297,000 503,000 Total $ 1,012,000 594,000 1,006,000 Debt discount (137,000 ) (274,000 ) Net $ 457,000 $ 732,000 On December 24, 2019, the Company received two secured advances from an unaffiliated third party totaling $728,000 for the purchase of future receipts/revenues of $1,012,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company may pay off either note for $446,000 if paid within 30 days of funding; for $465,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. These advances are secured by the Company’s tangible and intangible assets. As of December 31, 2019, the balance outstanding was $1,006,000 and the unamortized balance of the debt discount was $274,000. During the period ended March 31, 2020, the Company repaid $411,000 and amortized the debt discount of $137,000. As of March 31, 2020, the outstanding balance of advances amounted to $594,000 and unamortized debt discount of $137,000. |
Advance on Future Receipts and
Advance on Future Receipts and Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Advance on Future Receipts and Notes Payable | 6. ADVANCE ON FUTURE RECEIPTS AND NOTES PAYABLE a. ADVANCE ON FUTURE RECEIPTS The Company has the following advances on future receipts as of December 31, 2019: Note Issuance Date Maturity Date Interest Original Balance at Balance at Note 1 December 24, 2019 June 30, 2020 10 % $ 506,000 $ 503,000 $ - Note 2 December 24, 2019 June 30, 2020 10 % 506,000 503,000 - Total $ 1,012,000 1,006,000 Debt discount (274,000 ) - Net $ 732,000 $ - On December 24, 2019, the Company received two secured advances from an unaffiliated third party totaling $728,000 for the purchase of $1,012,000 in future receipts. These advances are secured by the Company’s tangible and intangible assets. Pursuant to the terms of the agreement, the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company may pay off either note for $446,000 if paid within 30 days of funding; for $465,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. The Company recorded a debt discount upon issuance totaling $284,000 to account the difference between the aggregate net receipts received and the aggregate face amount of the amounts payable. During the year ended December 31, 2019 the Company paid $7,000 in principal payments pursuant to the terms of the notes and amortized $10,000 of the debt discount. b. NOTES PAYABLE During the year ended December 31, 2019, the Company issued notes payable in the aggregate principal amount of $1,340,000 to various non-related entities or individuals, in exchange for net proceeds of $1,300,000, representing an original discount of $40,000. The notes were unsecured and bear interest on the principal amount at an average rate of 5.0% per annum. The notes were due on demand at any time starting April 10, 2019. As a result of the issuance of the notes, the Company incurred aggregate costs of $40,000 related to the notes’ original issue discount. The Company recorded these costs as a note discount and was being amortized to interest over the term of the notes. The Company settled these notes payable and accrued interest through a combination of cash payments in the aggregate of $630,000 and the issuance of 598,286 shares of Common Stock with a fair value of $1,195,000 and warrants to purchase up to 108,196 shares of Common Stock with a fair value of $215,000. As a result, we recorded a loss on debt extinguishment of $691,000 to account for the difference between the face value of the notes payable settled plus accrued interest and the fair value of the shares of Common Stock and warrants issued with a total value of $1,410,000. These shares of Common Stock were valued based on the market value of the Company’s Common Stock price at the issuance date or the date the Company entered into the agreement related to the issuance. The fair value of the warrants was determined using a Black Scholes Option pricing model. The notes were all paid or settled as of December 31, 2019. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Notes Payable - Related Parties | 7. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties notes payable as of March 31, 2020 and December 31, 2019: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 825,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Total notes payable – related parties 1,177,000 1,177,000 Non-current (240,000 ) (1,065,000 ) Current $ 937,000 $ 112,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. Total interest expense for notes payable to related parties was $35,000 for three months ended March 31, 2020 and 2019, respectively. The Company paid $10,000 and $32,000 in interest for the three months ended March 31, 2020 and 2019, respectively. | 7. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties outstanding notes payable as of December 31, 2019 and 2018: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 825,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Note 4 (D) March 22, 2019 April 30, 2019 5.0 % 58,000 - - Total notes payable – related parties 1,177,000 1,177,000 Non-current (1,065,000 ) (1,065,000 ) Current $ 112,000 $ 112,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. (D) On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company’s Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2019. Total interest expense for notes payable to related parties was $141,000 and $211,000 for the year ended December 31, 2019 and 2018, respectively. The Company paid $101,000 and $269,000 in interest related to these notes for the year ended December 31, 2019 and 2018, respectively. |
Deferred Incentive Compensation
Deferred Incentive Compensation to Officers | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | ||
Deferred Incentive Compensation to Officers | 8. DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 430,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 324,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 125,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 163,000 163,000 Total 1,042,000 1,042,000 Non-current (521,000 ) (1,042,000 ) Current $ 521,000 $ - (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and 125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $162,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. | 8. DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 430,000 $ - Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 324,000 - Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 125,000 - Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 163,000 - Total 1,042,000 - Non-current (1,042,000 ) - Current $ - $ - (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and 125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and 163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 9. CONVERTIBLE NOTES PAYABLE The Company has the following outstanding convertible notes payable as of December 31, 2019 and 2018: Note Note Date Maturity Date Interest Rate Original Balance at Balance at Note payable (A) October 19, 2018 April 19, 2019 10 % $ 1,500,000 $ - $ 1,500,000 Note payable (B) October 30, 2018 April 29, 2019 5 % $ 400,000 - 400,000 Note payable (C) February 1, 2019 August 2, 2019 10 % $ 500,000 - - Total convertible notes payable - 1,900,000 Debt discount - (1,082,000 ) Total notes payable, net of debt discount $ - $ 818,000 (A) On October 19, 2018, the Company issued an unsecured convertible note to Bellridge Capital, LP (“Bellridge”), an unaffiliated third-party, in the aggregate principal amount of $1,500,000 in exchange for net proceeds of $1,242,000, representing an original issue discount of $150,000, and paid legal and financing expenses of $109,000. In addition, the Company issued 96,667 shares of its Common Stock with a fair value of $595,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in April 2019. The note was also convertible into shares of the Company’s Common Stock only on or after the occurrence of an uncured “Event of Default.” Primarily, the Company would be in default if it did not repay the principal amount of the note, as required. The other events of default are standard for the type of transaction represented by the related securities purchase agreement and the note. In the event of a default, the conversion price in effect on any date on which some or all of the principal of the note is to be converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provided its notice of conversion. Upon an Event of Default, the Company would owe Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that might also be due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that equaled 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price is unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $1,273,000 at the date of issuance. As a result of the issuance of the note, the Company incurred aggregate costs of $2,126,000 related to the note’s original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $1,500,000 and the remaining $626,000 as financing costs in October 2018. The note discount was being amortized over the six-month term of the note. In April 2019, the Company paid the balance of $1,500,000. As a result of the payment, the Company amortized the remaining debt discount of $144,000 to interest expense. The Company also remeasured the fair value of the derivative liability as of the payment date and recognized a change in fair market value in the derivative liability totaling $670,000. The revalued derivative liability of $1,396,000 was then extinguished with the payment of the note, resulting in a gain on debt extinguishment of the derivative liability of $1,396,000. There was no outstanding balance of the note as of December 31, 2019. (B) On October 30, 2018, the Company issued two unsecured convertible notes to one current investor and one otherwise unaffiliated third-party in the aggregate principal amount of $400,000. The notes bore interest at a rate of 5% per annum and matured on April 29, 2019. Upon the Company’s consummation of its underwritten public offering of the Company’s units, all, and not less than all, of (i) the outstanding principal amount and (ii) the accrued interest thereunder were to be converted into shares of the Company’s Common Stock. The per-share conversion price equaled seventy-five percent (75%) of the effective offering price of the Common Stock in the Company’s underwritten public offering. The Company determined that, because the conversion price was unknown, that the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the notes created a derivative with a fair value of $302,000 at the date of issuance and was accounted as a debt discount and was being amortized over the term of the notes payable. As of December 31, 2018, the balance of the notes outstanding was $400,000 and the balance of unamortized debt discount was $199,000. On April 5, 2019, the Company converted the outstanding principal amount and accrued interest of $410,000 into 182,333 shares of Common Stock. As a result of the conversion, the Company amortized the remaining debt discount of $48,000 to interest expense. The Company also remeasured the fair value of the derivative liability as of the conversion date and recognized a change in fair market value in the derivative liability totaling $21,000. The revalued derivative liability of $187,000 was then extinguished with the payment of the note, resulting in a gain debt on extinguishment of the derivative liability of $187,000. There was no outstanding balance of the note as of December 31, 2019. (C) On February 1, 2019, the Company issued an unsecured convertible note to Bellridge, an unaffiliated third-party, in the aggregate principal amount of $500,000 in exchange for net proceeds of $432,000, representing an original issue discount of $25,000, and paid legal and financing expenses of $43,000. In addition, the Company issued 16,667 shares of its Common Stock with a fair value of $128,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in August 2019. The note was also convertible into shares of the Company’s Common Stock only on or after the occurrence of an uncured “Event of Default.” Primarily, the Company would have been in default if it did not repay the principal amount of the note, as required. The other events of default were standard for the type of transaction represented by the related securities purchase agreement and the note. The conversion price in effect on any date on which some or all of the principal of the note would have been converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provides its notice of conversion. Upon an Event of Default, the Company would have owed Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that would have been due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that is at least equal to 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price was unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $388,000 at the date of issuance. As a result of the issuance of the note, the Company incurred aggregate costs of $584,000 related to the note’s original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $500,000 and the remaining $84,000 as financing costs. The note discount was being amortized over the six-month term of the note. On April 2, 2019, the Company increased the outstanding principal amount of the note by $25,000 to an aggregate of $525,000 and issued 8,606 shares of Common Stock with a fair value of $55,000. The Company accounted for the increase in principal and the fair value of the shares of Common Stock in the aggregate of $80,000 as part of its financing costs. In April 2019, the Company paid off the outstanding principal balance of $525,000. As a result of the payment, the Company amortized the remaining debt discount of $366,000 to interest expense. The Company also remeasured the fair value of the derivative liability as of the payment date and recognized a change in fair market value in the derivative liability totaling $260,000. The revalued derivative liability of $644,000 was then extinguished with the payment of the note, resulting in a gain on debt extinguishment of the derivative liability of $644,000. There was no outstanding balance of the note as of December 31, 2019. |
Convertible Series A Preferred
Convertible Series A Preferred Stock and Warrant Offering | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Convertible Series Preferred Stock And Warrant Offering | ||
Convertible Series a Preferred Stock and Warrant Offering | 9. CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING On August 14, 2019, we entered into the SPA with the Preferred Purchasers, pursuant to which we agreed to issue and sell to the Preferred Purchasers up to an aggregate of 6,000 shares of Series A Preferred Stock (which, at the initial conversion price, are convertible into an aggregate of up to approximately 3.87 million shares of Common Stock) and the August Warrants to purchase up to an equivalent number of shares of Common Stock. We closed the offering on August 14, 2019, and issued 5,030 shares of Series A Preferred Stock and granted the August Warrants to purchase up to 3,245,162 shares of Common Stock in connection therewith. We received proceeds of $4,688,000, net of direct costs of $342,000. The SPA grants the Preferred Purchasers a right to participate, up to a certain amount, in subsequent financings for a period of 24 months. The SPA also prohibits us from entering into any agreement to issue, or announcing the issuance or proposed issuance, of any shares of Common Stock or Common Stock equivalents for a period of 90 days after the date that the registration statement, registering the shares issuable upon conversion of the Series A Preferred Stock and exercise of the August Warrants, is declared effective. We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to “at-the-market” transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to “at-the-market” transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder’s option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. During the period ended March 31, 2020, 1,150 shares of Preferred Stock were converted into 741,933 shares of Common Stock. As of March 31, 2020, 3,246 shares Series A Preferred stock are outstanding. | 10. CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING On August 14, 2019, we entered into the SPA with the Preferred Purchasers, pursuant to which we agreed to issue and sell to the Preferred Purchasers up to an aggregate of 6,000 shares of Series A Preferred Stock (which, at the initial conversion price, are convertible into an aggregate of up to approximately 3.87 million shares of Common Stock) and the August Warrants to purchase up to an equivalent number of shares of Common Stock. We closed the offering on August 14, 2019, and issued 5,030 shares of Series A Preferred Stock and granted the August Warrants to purchase up to 3,245,162 shares of Common Stock in connection therewith. We received proceeds of $4,688,000, net of direct costs of $342,000. The offering was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering. The SPA grants the Preferred Purchasers a right to participate, up to a certain amount, in subsequent financings for a period of 24 months. The SPA also prohibits us from entering into any agreement to issue, or announcing the issuance or proposed issuance, of any shares of Common Stock or Common Stock equivalents for a period of 90 days after the date that the registration statement, registering the shares issuable upon conversion of the Series A Preferred Stock and exercise of the August Warrants, is declared effective. We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to “at-the-market” transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to “at-the-market” transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants). On September 16, 2019, we filed a registration statement on Form S-3 with the SEC to register the shares of Common Stock underlying the Series A Preferred Stock and the August Warrants. The registration statement was declared effective on September 19, 2019. We have agreed to keep such registration statement continuously effective for a period of 24 months. Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder’s option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. The holders of the Series A Preferred Stock have no voting rights. However, we cannot, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the rights, preferences, or restrictions given to the Series A Preferred Stock or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption, or distribution of assets upon a liquidation senior to, or otherwise pari passu with, the Series A Preferred Stock, (c) amend our Articles of Incorporation, or other charter documents in any manner that materially and adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. The holders of Series A Preferred Stock cannot convert the Series A Preferred Stock if, after giving effect to the conversion, the number of shares of our Common Stock beneficially held by the holder (together with such holder’s affiliates) would be in excess of 4.99% (or, upon election by a holder prior to the issuance of any shares, 9.99% of the number of shares of Common Stock issued and outstanding immediately after giving effect to the issuance of any shares of Common Stock issuance upon conversion of the Series A Preferred Stock held by the holder). The conversion price of the Series A Preferred Stock is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. We are also prevented from issuing shares of Common Stock upon conversion of the Series A Preferred Stock or exercise of the August Warrants, which, when aggregated with any shares of Common Stock issued on or after the issuance date and prior to such conversion date or exercise date, as applicable (i) in connection with any conversion of the Series A Preferred Stock issued pursuant to the SPA, (ii) in connection with the exercise of any August Warrants issued pursuant to the SPA, and (iii) in connection with the exercise of any warrants issued to any registered broker-dealer as a fee in connection with the issuance of the securities pursuant to the SPA, would exceed 4,459,725 shares of Common Stock (the “19.99% Cap”). This prohibition will terminate upon the approval by our stockholders of a release from such 19.99% Cap. The August Warrants have an initial exercise price of $1.88 per share, subject to customary adjustments, are exercisable six months after the date of issuance, and will expire five years from the date of issuance. The exercise price is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. In addition, the August Warrants also included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the August Warrants are accounted as derivative liability with a fair value upon issuance of $6,173,000, of which, $4,688,000 was recorded as a reduction to additional paid in capital while the remaining fair value of $1,485,000 was accounted for as a financing cost during the year ended December 31, 2019. During the year ended December 31, 2019, 634 shares of Preferred Stock were converted into 409,032 shares of Common Stock. As of December 31, 2019, 4,396 shares Series A Preferred stock are outstanding. |
Derivative Liability
Derivative Liability | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Liability | 10. DERIVATIVE LIABILITY Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. The Company granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the warrants are classified as liabilities and are bifurcated from the debt host and accounted for as a derivative liability in accordance with ASC 815 and will be re-measured at the end of every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: March 31, 2020 Upon Issuance December 31, 2019 Stock Price $ 1.26 $ 1.70 $ 1.55 Exercise Price $ 1.66 $ 1.55 $ 1.88 Expected Life 3.27 5.0 3.53 Volatility 211 % 212 % 216 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 2.22 % 2.47 % 1.64 % Fair Value $ 6,907,000 $ 3,951,000 $ 5,048,000 The expected life of the warrants was based on the remaining contractual term. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. The risk-free interest rate was based on rates established by the Federal Reserve Bank. As of December 31, 2019, the Company had recorded a derivative liability of $5,048,000. During the period ended March 31, 2020, the Company recorded derivative liability of $3,951,000 as a result of the issuance of warrants to Series A Preferred stockholders (see Note 11). The Company also recorded a change in fair value of ($2,092,000) to account for the changes in the fair value of these derivative liabilities during the period ended March 31, 2020. At March 31, 2020, the fair value of the derivative liability amounted to $6,907,000. The details of derivative liability transactions as of and for the periods ended March 31, 2020 and 2019 are as follows: March 31, 2020 March 31, 2019 Beginning Balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and warrants 3,951,000 388,000 Change in fair value (2,092,000 ) (944,000 ) Ending Balance $ 6,907,000 $ 2,020,000 | 11. DERIVATIVE LIABILITY Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. The Company has issued certain convertible notes whose conversion prices contains reset provisions based on a discounted future market price. However, since the number of shares to be issued is not explicitly limited, the Company is unable to conclude that enough authorized and unissued shares are available to settle the conversion option. In addition, the Company also granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the conversion feature of the notes and warrants are classified as liabilities and are bifurcated from the debt host and accounted for as a derivative liability in accordance with ASC 815 and will be re-measured at the end of every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: December 31, 2019 Upon Issuance December 31, 2018 Stock Price $ 1.55 $ 4.78 $ 4.80 Exercise Price $ 1.88 $ 3.76 $ 2.70 Expected Life 3.53 2.75 1.78 Volatility 216 % 192 % 184 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 1.64 % 1.99 % 2.46 % Fair Value $ 5,048,000 $ 6,561,000 $ 2,576,000 The expected life of the conversion feature of the notes and warrants was based on the remaining contractual term of the notes and warrants. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. The risk-free interest rate was based on rates established by the Federal Reserve Bank. As of December 31, 2018, the Company had recorded a derivative liability of $2,576,000. During the year ended December 31, 2019, the Company recorded derivative liability of $388,000 as a result of the issuance of a convertible note and $6,173,000 as a result of the issuance of the August Warrants issued as part of the Company’s Series A Preferred Stock offering, or an aggregate of $6,561,000. The Company also recorded a change in fair value of ($1,862,000) to account for the changes in the fair value of these derivative liabilities for the year ended December 31, 2019. In addition, the Company also recorded a gain on debt extinguishment of $2,227,000 to account for the extinguishment of derivative liabilities associated with the settlement of convertible debt during the year ended December 31, 2019. At December 31, 2019, the fair value of the derivative liability amounted to $5,048,000. The details of derivative liability transactions for the year ended December 31, 2019 are as follows: December 31, 2019 December 31, 2018 Beginning balance $ 2,576,000 $ 1,251,000 Fair value upon issuance of notes payable and warrants 6,561,000 1,877,000 Change in fair value (1,862,000 ) 1,167,000 Extinguishment (2,227,000 ) (1,719,000 ) Ending balance $ 5,048,000 $ 2,576,000 |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity Transactions | 11. EQUITY TRANSACTIONS The Company’s Common Stock activity for the three months ended March 31, 2020 is as follows: Common Stock Shares Issued as Part of the Company’s Private Placement On February 5, 2020, the Company initiated a private placement, which is for the sale and issuance of up to five million shares of its Common Stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company’s Common Stock on that day, and is memorialized by a subscription agreement. As a result of this private placement, from February 25 through March 31, 2020, a total of 4,237,833 shares of Common Stock were subscribed. Total subscribed shares of 3,392,833 shares of Common Stock were issued with net cash proceeds of $3,430,000 after direct costs received as of March 31, 2020. The remaining subscribed shares of 845,000 shares of Common Stock were issued in April and May 2020 upon receipt of cash proceeds of $1,014,000. The Company’s private placement is exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the SEC. The Company’s private placement was managed by the Company; however, in connection with the closings, the Company paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of the closings), (ii) as a non-accountable expense allowance, an aggregate of $100,000 (or 2% of the gross proceeds of the closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of the Company’s Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of the Company’s Common Stock. The Company made the above-referenced payments only in respect of that portion of the gross proceeds from the closings for investors introduced to the Company by the consultant. In addition, the Company also incurred various expenses totaling $42,000 that are directly related to this private placement. In preparation for this private placement offering, the Company separately negotiated with certain Series A stockholders to waive their rights in order not to ratchet down the conversion price of their Series A preferred shares (see Note 9). In return for the waiver, the Company granted these Series A stockholders warrants to purchase 2,303,861 shares of Common Stock. The warrants are exercisable in August 2020, expire in 5 years and are exercisable at $1.20 per share, as adjusted. The exercise price is subject to certain customary adjustments, including subsequent equity sales and rights offerings. In addition, the warrants also included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result of this fundamental transaction provision, the warrants were accounted as derivative liability with a fair value upon issuance of $3,951,000 upon issuance. The Company accounted the fair value of $3,951,000 as a deemed dividend since if the down round provision of the Series A preferred shares had occurred, it would have been accounted as a deemed dividend due to it providing additional value to the Series A stockholders. Shares Issued for Services During the period ended March 31, 2020, the Company issued 220,601 shares of Common Stock to vendors for services rendered with a fair value of $321,000. These shares of Common Stock were valued based on the market value of the Company’s Common Stock price at the issuance date or the date the Company entered into the agreement related to the issuance. As previously discussed, the Company also issued 100,000 shares of common stock to a consultant for services rendered as a result of a private placement offering in February and March 2020. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Common Stock | 12. COMMON STOCK The following were Common Stock transactions during the year ended December 31, 2019: Shares and Warrants Issued as Part of the Company’s Underwritten Public Offering On April 4, 2019, we entered into an Underwriting Agreement (the “Underwriter Agreement”) with A.G.P./Alliance Global Partners, as representative of the several underwriters named therein (the “Underwriter” or “AGP”), relating to a firm commitment public offering (the “Public Offering”) of 6,389,776 units (the “Units”) consisting of an aggregate of (i) 6,389,776 shares (the “Firm Shares”) of Common Stock, and (ii) warrants to purchase up to 6,389,776 shares of Common Stock (the “Firm Warrants”; and the shares of Common Stock issuable from time to time upon exercise of the Firm Warrants, the “Firm Warrant Shares”), at a public offering price of $3.13 per Unit. Pursuant to the Underwriting Agreement, we also granted the Underwriter an option, exercisable for 45 days, to purchase up to 958,466 additional Units, consisting of an aggregate of (x) 958,466 shares of Common Stock (the “Option Shares”; and, together with the Firm Shares, the “Shares”) and (y) warrants to purchase up to 958,466 shares of Common Stock (the “Option Warrants”; and together, with the Firm Warrants, the “Warrants”; and the shares of Common Stock issuable from time to time upon exercise of the Option Warrants, the “Option Warrant Shares”; and, together with the Firm Warrant Shares, the “Warrant Shares”). The Warrants have an initial per share exercise price of $3.443, subject to customary adjustments, are exercisable immediately, and will expire five years from the date of issuance, or April 9, 2024. On April 9, 2019, we closed the Public Offering and issued 6,389,776 Units, consisting of an aggregate of 6,389,776 Firm Shares and Firm Warrants to purchase up to an aggregate of 6,389,776 Firm Warrant Shares. In connection with the closing, the Underwriter partially exercised its over-allotment option and purchased an additional 159,820 Units, consisting of an aggregate of 159,820 Option Shares and Option Warrants to purchase up to an aggregate of 159,820 Option Warrant Shares. In the aggregate, we issued 6,549,596 shares of common stock and received net proceeds of approximately $18,525,000, net of underwriting commissions and other offering expenses in the aggregate of $2,138,000. Included in the offering expenses were $162,000 in various legal and professional expenses that were incurred and paid in fiscal 2018 and accounted for as a deferred offering costs as of December 31, 2018. This amount was derecognized upon close of the public offering in April 2019 and was recorded as a reduction to paid in capital. In connection with the Public Offering, we also issued the Underwriter warrants to purchase up to 319,488 shares of our Common Stock (the “Underwriter Warrants”), at an exercise price of $3.913. The Underwriter Warrants are exercisable at any time, and from time to time, in whole or in part, during the four-year period commencing one year from the effective date of the Registration Statement. Shares Issued for the Acquisition of Verb Direct – Acquisition of Verb Direct Shares Issued for Services Shares Issued Upon Issuance of Convertible Note Convertible Notes Payable, Conversion of Notes Payable – Notes Payable, Convertible Notes Payable Conversion of Accounts Payable – The following were Common Stock transactions during the year ended December 31, 2018: Shares Issued from Stock Subscription Shares Issued for Services Shares Issued from Conversion of Note Payable Shares Issued Upon Issuance of Convertible Note Convertible Notes Payable, Shares Issued for Accrued Officer’s Salary Shares Issued Upon Exercise of Put Option Shares Repurchased. For the year ended December 31, 2018, the Company repurchased 46,668 shares of Common Stock from investors for $20,000. |
Restricted Stock Awards
Restricted Stock Awards | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards | ||
Restricted Stock Awards | 12. RESTRICTED STOCK AWARDS On December 20, 2019, we held the 2019 Annual Meeting of Stockholders (the “Meeting”), at which our stockholders approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of restricted stock award activity for the three months ended March 31, 2020 is presented below. Weighted- Weighted- Average Grant Date Shares Fair Value Non-vested at December 31, 2019 1,486,354 $ 1.36 Granted - - Vested (11,025 ) 1.36 Forfeited - - Non-vested at March 31, 2020 1,475,329 $ 1.36 The total fair value of restricted stock award that vest during the three months ended March 31, 2020 was $241,000 and is included in selling, general and administrative expenses in the accompanying statements of operations. As of March 31, 2020, the amount of unvested compensation related to issuances of restricted stock award was $1,758,000 which will be recognized as an expense in future periods as the shares vest. | 13. RESTRICTED STOCK AWARDS On December 20, 2019, we held the 2019 Annual Meeting of Stockholders (the “Meeting”), at which our stockholders approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of restricted stock award activity for the years ended December 31, 2019 and 2018 are presented below. Weighted- Average Grant Date Shares Fair Value Non-vested at December 31, 2017 - $ - Granted - - Vested - - Forfeited - - Non-vested at December 31, 2018 - - Granted 1,923,001 1.36 Vested (436,647 ) 1.36 Forfeited - - Non-vested at December 31, 2019 1,486,354 $ 1.36 A summary of option activity for the years ended December 31, 2019 and 2018 are presented below. On December 23, 2019, the Company granted 1,923,001 restricted stock awards to employees and directors. The restricted stock awards vest starting on grant date through January 10, 2022. These restricted stock awards were valued based on market value of the Company’s stock price at the date of grant and had aggregate fair value of $2,615,000. The total fair value of restricted stock award vested during the year ended December 31, 2019 was $616,000 respectively, and is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2019, the amount of unvested compensation related to issuances of restricted stock award was $1,999,000 which will be recognized as an expense in future periods as the shares vest. When calculating basic net income (loss) per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income (loss) per share, these shares are included in weighted average common shares outstanding as of their grant date. |
Stock Options
Stock Options | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Stock Options | 13. STOCK OPTIONS Effective October 16, 2014, the Company adopted the 2014 Stock Option Plan (the “Plan”) under the administration of the board of directors to retain the services of valued key employees and consultants of the Company. At its discretion, the Company grants share option awards to certain employees and non-employees under the Plan and accounts for it in accordance with ASC 718, Compensation – Stock Compensation. A summary of option activity for the three months ended March 31, 2020 is presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2019 4,233,722 $ 1.75 2.54 $ 995,000 Granted 185,887 1.39 - - Forfeited (2,501 ) 1.36 - - Exercised - - - - Outstanding at March 31, 2020 4,417,108 $ 1.72 2.54 $ 143,000 Vested March 31, 2020 1,820,725 $ 1.75 $ 28,000 Exercisable at March 31, 2020 1,337,946 $ 2.19 $ 26,000 During the three months ended March 31, 2020 the Company granted stock options to employees to purchase a total of 185,887 shares of Common Stock for services to be rendered. The options have an average exercise price of $1.39 per share, expire in five years, and vests in 4 equal installments during the four years from the grant date. The total fair value of these options at the grant date was approximately $246,000 using the Black-Scholes Option pricing model. The total stock compensation expense recognized relating to vesting of stock options for the three months ended March 31, 2020 amounted to $381,000. As of March 31, 2020, total unrecognized stock-based compensation expense was $4.0 million, which is expected to be recognized as part of operating expense through March 2024. The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.39 % 2.75 % Average expected term 5 years 5 years Expected volatility 270.1 % 201.3 % Expected dividend yield - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. | 14. STOCK OPTIONS On December 20, 2019, we held the 2019 Annual Meeting of Stockholders (the “Meeting”), at which our stockholders approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of option activity for the years ended December 31, 2019 and 2018 are presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2017 1,456,064 $ 3.90 2.09 $ - Granted 1,400,418 6.75 - - Forfeited (345,000 ) 5.85 - - Exercised (32,508 ) - - - Outstanding at December 31, 2018 2,478,974 5.25 2.93 - Granted 2,531,971 2.07 - - Forfeited (777,223 ) 6.42 - - Exercised - - - - Outstanding at December 31, 2019 4,233,722 $ 1.73 2.54 $ 995,000 Vested December 31, 2019 1,496,439 $ 2.13 $ 263,851 Exercisable at December 31, 2019 888,834 $ 2.55 $ 83,252 The following were stock options transactions during the year ended December 31, 2019: On December 23, 2019, the Company amended the exercise price of stock options of certain employees and consultants granted in prior period to purchase 1,340,333 shares of common stock to $1.36 per share. As a result of this amendment, the Company determined the fair value of these stock options before and after the amendment using the Black-Scholes Option Pricing model. The incremental difference of the fair value before and after the amendment amounted to $32,000, of which, $12,000 was recorded as part of stock based compensation expenses and the remaining $20,000 will be recognized as part of operating expense through July 2023 based upon its vesting. During the year ended December 31, 2019, the Company granted stock options to employees and consultants to purchase a total 2,531,971 shares of Common Stock for services rendered. The options have an average exercise price of $2.07 per share, expire between one and five years, vest starting from grant date through four years. The total fair value of these options at grant date was approximately $4,564,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2019 amounted to $1,961,000. As of December 31, 2019, the total unrecognized stock-based compensation expense was $4,228,000, which is expected to be recognized as part of operating expense through December 2023. The following were stock options transactions during the year ended December 31, 2018: During the year ended December 31, 2018, the Company granted stock options to employees and consultants to purchase a total 1,400,418 shares of Common Stock for services rendered. The options have an average exercise price of $6.75 per share, expire in five years, and vest on the grant date or over a period of four years from the grant date. The total fair value of these options at grant date was approximately $9,712,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2018 amounted to $1,870,000. During the year ended December 31, 2018, options were exercised resulting in the issuance of 32,508 shares of Common Stock. The Company received cash of $34,000 upon exercise of the options. The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: Years Ended December 31, 2019 2018 Risk-free interest rate 1.51%-2.75 % 2.25%-3.00 % Average expected term (years) 5 years 5 years Expected volatility 180%-413.83 % 184.45%-190.22 % Expected dividend yield - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. |
Warrants
Warrants | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Warrants | 14. WARRANTS The Company has the following warrants outstanding as of March 31, 2020, all of which are exercisable: Warrants Weighted- Price Weighted- Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 10,930,990 $ 3.07 4.25 $ - Granted 2,720,060 1.31 - - Forfeited - - - - Exercised - - - - Outstanding at March 31, 2020, all vested 13,651,050 $ 2.72 4.12 $ - At March 31, 2020, the intrinsic value of these stock options was $0 as the exercise price of these stock warrants were greater than the market price. During the period ended March 31, 2020, the Company granted 416,199 warrants to a consultant as part of a private placement offering and 2,303,861 warrants to Series A stockholders (see Note 11). | 15. STOCK WARRANTS The Company has the following warrants as of December 31, 2019 and 2018 are presented below: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2017 1,895,767 $ 1.95 2.62 $ - Granted 386,678 5.10 - - Forfeited (56,486 ) 1.05 - - Exercised (1,285,544 ) 1.80 - - Outstanding at December 31, 2018 940,415 3.60 2.32 1,806,000 Granted 10,386,181 2.97 - - Forfeited (46,667 ) 7.29 - - Exercised (348,938 ) 1.17 - - Outstanding at December 31, 2019, all vested 10,930,991 $ 3.07 4.25 $ - The following were stock warrant transactions during the year ended December 31, 2019: On December 31, 2019, the intrinsic value of these stock options was $0 as the exercise price of these stock warrants were greater than the market price. On April 9, 2019, the Company granted warrants to purchase a total of 6,869,084 shares of Common Stock as part of a public offering. The warrants are exercisable at an average price of $3.46 per share and will expire in April 2024. See Note 12, Common Stock, On April 11, 2019, the Company granted fully vested warrants to purchase a total of 163,739 shares of Common Stock for services rendered. The warrants are exercisable at an average price of $3.76 per share and will expire in April 2024. The total fair value of these warrants at the grant date was approximately $439,000 using the Black-Scholes Option pricing model and was expensed upon grant. On July 8, 2019, the Company granted fully vested warrants to purchase a total of 108,196 shares of Common Stock as partial consideration for the conversion of notes payable. The warrants are exercisable at an average price of $3.44 per share and will expire in July 2024. The total fair value of these warrants at the grant date was approximately $217,000 using the Black-Scholes Option pricing model and was expensed upon grant. See Note 6, Notes Payable On August 15, 2019, the Company granted warrants to purchase a total of 3,245,162 shares of Common Stock as part of a preferred stock offering. The warrants are exercisable at a price of $1.88 per share and will expire in August 2024. See Note 12, Common Stock, During the year ended December 31, 2019, a total of 348,938 warrants were exercised and converted into 189,237 shares of Common Stock at a weighted average exercise price of $1.15. The Company received $45,000 upon exercise of the warrants. The following were stock warrant transactions during the year ended December 31, 2018: During the year ended December 31, 2018, the Company granted warrants to note holders to purchase a total of 66,668 shares of Common Stock. The warrants are exercisable at an average price of $2.10 per share and will expire in January 2023. Warrants exercisable for an aggregate of 33,333 shares of Common Stock were accounted for as a derivative liability. On February 21, 2018, the Company granted warrants exercisable for 133,334 shares of Common Stock as part of the exercise of its put option with Kodiak. The exercise price of the warrants is $3.75 per share and the warrants expire on February 20, 2023. On August 8, 2018, the Company granted warrants exercisable for 163,114 shares of Common Stock in connection with the extension of the maturity date of a secured note payable. See Note 7, Notes Payable-Related Parties, On December 4, 2018, the Company granted warrants exercisable for 23,562 shares of Common Stock in connection with the extension of the maturity date of a secured note payable. See Note 7, Notes Payable-Related Parties, During the year ended December 31, 2018, 1,285,544 warrants were exercised resulting in the issuance of 1,074,921 shares of Common Stock. The Company received cash of $22,000 upon the exercise of the warrants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. INCOME TAXES Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2019 December 31, 2018 Net operating loss carry-forwards $ 7,591,000 $ 5,300,000 Share based compensation (635,000 ) (524,000 ) Non-cash interest and financing expenses (472,000 ) (694,000 ) Other temporary differences (63,000 ) (378,000 ) Less: Valuation allowance (6,421,000 ) (3,704,000 ) Deferred tax assets, net $ - $ - The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: December 31, 2019 December 31, 2018 Statutory federal income tax rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.9 )% (6.0 )% Non-deductible items (1.0 )% (0.1 )% Change in valuation allowance 28.9 % 27.9 % 0.0 % 0.0 % ASC 740 requires that the tax benefit of net operating losses carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a 100% valuation allowance against the asset amounts. Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities. The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of the year end December 31, 2019 or 2018. The Company has not accrued for interest or penalties associated with unrecognized tax liabilities. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted into law. The TCJ Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. The Company is currently assessing the extensive changes under the TCJ Act and its overall impact on the Company; however, based on its preliminary assessment of the reduction in the federal corporate tax rate from 35% to 21% to become effective on January 1, 2018, the Company currently expects that its effective tax rate for 2018 will be between 20% and 23%. Such estimated range is based on management’s current assumptions with respect to, among other things, the Company’s earnings, state income tax levels and tax deductions. The Company’s actual effective tax rate in 2019 may differ from management’s estimate. As of December 31, 2019, the Company had federal and state net operating loss carry forwards of approximately $28.7 million, which may be available to offset future taxable income for tax purposes. These net operating losses carry forwards begin to expire in 2034. This carry forward may be limited upon the ownership change under IRC Section 382. IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2019 but believes the provisions will not limit the availability of losses to offset future income. The Company is subject to income taxes in the U.S. federal jurisdiction and the state of Nevada. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. As of December 31, 2019, tax years 2015 through 2018 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years. |
Accrued Officers' Salary
Accrued Officers' Salary | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Accrued Officers' Salary | 17. ACCRUED OFFICERS’ SALARY Accrued officers’ salary consists of unpaid salaries for the Company’s Chief Executive Officer, who is also the owner of approximately 13% of the Company’s outstanding shares of Common Stock. As of December 31, 2019, and 2018, accrued officers’ salary amounted to $207,000 and $188,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 15. COMMITMENTS AND CONTINGENCIES Litigation a. EMA Financial, LLC On April 24, 2018, EMA Financial, LLC (“EMA”), commenced an action against the Company, styled as EMA Financial, LLC, a New York limited liability company, Plaintiff, against nFUSZ, Inc., Defendant, United States District Court, Southern District of New York, case number 1:18-cv-03634-NRB. The complaint sets forth four causes of action and seeks money damages, injunctive relief, liquidated damages, and declaratory relief related to the Company’s refusal to agree to EMA’s interpretation of a cashless exercise provision in a common stock warrant we granted to EMA in December 2017. The Company interposed several counterclaims, including a claim for reformation of the underlying agreements to reflect the Company’s interpretation of the cashless exercise provision. Both parties moved for summary judgment. On March 16, 2020, the United States District Court entered a decision agreeing with the Company’s position, denying EMA’s motion for declaratory judgement on its interpretation of the cashless exercise formula, and stating, inter alia, that “the Agreements read in their entirety reveal that nFUSZ, Inc.’s position regarding the proper cashless exercise formula is the only sensible one and that the cashless exercise formula must be enforced accordingly.” The court went on to order that in light of this finding, the parties should submit a proposal for future proceedings. Accordingly, the Company has instructed its counsel to prosecute the Company’s claims for reimbursement of all of the costs it incurred in connection with this action, including all attorneys’ fees as well as all damages it incurred as a result of EMA’s conduct. b. Former Employee The Company is currently in a dispute with a former employee of its predecessor bBooth, Inc. who has interposed a breach of contract claim in which he alleges that he is entitled to approximately $300,000 in unpaid bonus compensation from 2015. The Company does not believe his claims have any merit as they are contradicted by documentary evidence, and barred by the applicable statute of limitations, and barred by a release executed by the former employee when the Company purchased all of his shares of stock more than 4 years ago in January 2016. The Company intends to seek dismissal of the former employee’s claims through arbitration. c. Class Action On July 9, 2019, a purported class action complaint was filed in the United States District Court, Central District of California, styled SCOTT C. HARTMANN, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. VERB TECHNOLOGY COMPANY, INC., and RORY J. CUTAIA, Defendant, Case Number 2:19-CV-05896. On May 15, 2020, we executed a binding Memorandum of Understanding with the lead plaintiff in the Class Action lawsuit to settle that action and release the claims asserted therein. The terms of the settlement are confidential pending submission to the court, and subject to several contingencies, including but not limited to court approval. The Company has established an appropriate reserve to account for the settlement. d. Derivative Action On September 27, 2019, a derivative action was filed in the United States District Court, Central District of California, styled Richard Moore, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. Verb Technology Company, Inc., and Rory J. Cutaia, James P. Geiskopf, and Jeff Clayborne, Defendants, Case Number 2:19-CV-08393-AB-SS. The Company knows of no other material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of its assets or properties, or the assets or properties of any of its subsidiaries, are subject and, to the best of its knowledge, no adverse legal activity is anticipated or threatened. In addition, the Company does not know of any such proceedings contemplated by any governmental authorities. The Company knows of no material proceedings in which any of its directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. The Company believes it has adequately reserved for all litigation within its financials. Board of Directors The Company has committed an aggregate of $450,000 in board fees to its five board members over the term of their appointment for services to be rendered. Board fees are accrued and paid monthly. The members will serve on the board until the annual meeting for the year in which their term expires or until their successors has been elected and qualified. Total board fees expensed during the period ended March 31, 2020 was $105,000. As of March 31, 2020, total board fees to be recognized in future period amounted to $322,000 and will be recognized once the service has been rendered. The recent outbreak of COVID-19 may have a significant negative impact on our business, sales, results of operations and financial condition. The global outbreak of COVID-19 has led to severe disruptions in general economic activities, as businesses and federal, state, and local governments take increasingly broad actions to mitigate this public health crisis. We have experienced disruption to our business, both in terms of disruption of our operations and the adverse effect on overall economic conditions. These conditions will significantly negatively impact all aspects of our business. Our business is dependent on the continued health and productivity of our employees, including our software engineers, sales staff and corporate management team. Individually and collectively, the consequences of the COVID-19 outbreak could have a material adverse effect on our business, sales, results of operations and financial condition. Additionally, our liquidity could be negatively impacted if these conditions continue for a significant period of time and we may be required to pursue additional sources of financing to obtain working capital, maintain appropriate inventory levels, and meet our financial obligations. Currently, capital and credit markets have been disrupted by the crisis and our ability to obtain any required financing is not guaranteed and largely dependent upon evolving market conditions and other factors. Depending on the continued impact of the crisis, further actions may be required to improve our cash position and capital structure. The extent to which the COVID-19 outbreak ultimately impacts our business, sales, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, we may continue to experience significant impacts to our business as a result of its global economic impact, including any economic downturn or recession that has occurred or may occur in the future. | 18. COMMITMENTS AND CONTINGENCIES Employment Agreements On December 20, 2019, we entered into an Executive Employment Agreement with Mr. Cutaia (the “Employment Agreement”), which terminates and replaces his original employment agreement dated November 1, 2014, as subsequently amended by an amendment dated October 30, 2019. The Employment Agreement sets forth the terms and conditions of Mr. Cutaia’s employment. The Employment Agreement is for a four-year term, and can be extended for additional one-year periods. In addition to certain payments due to Mr. Cutaia upon termination of employment, the Employment Agreement contains customary non-competition, non-solicitation, and confidentiality provisions. Mr. Cutaia is entitled to an annual base salary of $430,000, which shall not be subject to reduction during the initial term, but will be subject to annual reviews and increases, if and as approved in the sole discretion of our Board, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). In addition, Mr. Cutaia is eligible to receive performance-based cash and/or stock bonuses upon attainment of performance targets established by our Board in its sole discretion, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). The Company shall make annual equity grants to Mr. Cutaia as determined by our Board in its sole discretion, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). Finally, Mr. Cutaia is eligible for certain other benefits, such as health, vision, and dental insurance, life insurance, and 401(k) matching. The Employment Agreement provides that Mr. Cutaia is entitled to the following severance package in the event he is “terminated without cause,” “terminated for good reason,” or “terminated upon permanent disability”: (i) monthly payments of $35,833 or such sum equal to his monthly base compensation at the time of the termination, whichever is higher, for a period of 36 months from the date of such termination and (ii) reimbursement for COBRA health insurance costs for 18 months from the date of such termination and, thereafter, reimbursement for health insurance costs for Mr. Cutaia and his family during the immediately subsequent 18-month period. In addition, all of Mr. Cutaia’s then-unvested RSAs or other awards will immediately vest, without restriction, and any unearned and unpaid bonus compensation, expense reimbursement, and all accrued vacation, personal, and sick days, and related items shall be deemed earned, vested, and paid immediately. For purposes of the Employment Agreement, “terminated without cause” means if Mr. Cutaia were to be terminated for any reason other than a discharge for cause or due to Mr. Cutaia’s death or permanent disability. For purposes of the Employment Agreement, “terminated for good reason” means the voluntary termination of the Employment Agreement by Mr. Cutaia if any of the following were to occur without his prior written consent, which consent cannot be unreasonably withheld considering our then-current financial condition, and, in each case, which continues uncured for 30 days following receipt by us of Mr. Cutaia’s written notice: (i) there is a material reduction by us in (A) Mr. Cutaia’s annual base salary then in effect or (B) the annual target bonus, as set forth in the Employment Agreement, or the maximum additional amount up to which Mr. Cutaia is eligible pursuant to the Employment Agreement; (ii) we reduce Mr. Cutaia’s job title and position such that Mr. Cutaia (A) is no longer our Chief Executive Officer; (B) is no longer our Chairman of the Board; or (C) is involuntarily removed from our Board; or (iii) Mr. Cutaia is required to relocate to an office location outside of Orange County, California, or outside of a 30-mile radius of Newport Beach, California. For purposes of the Employment Agreement, “terminated upon permanent disability” means if Mr. Cutaia were to be terminated because he is then unable to perform his duties due to a physical or mental condition for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days in any 12-month period. Litigation – Update former employee and Class Action a. EMA Financial, LLC On April 24, 2018, EMA Financial, LLC (“EMA”) commenced an action against the Company, styled as EMA Financial, LLC, a New York limited liability company, Plaintiff, against nFUSZ, Inc., Defendant, United States District Court, Southern District of New York, case number 1:18-cv-03634-NRB. The complaint sets forth four causes of action and seeks money damages, injunctive relief, liquidated damages, and declaratory relief related to the Company’s refusal to agree to EMA’s interpretation of a cashless exercise provision in a common stock warrant we granted to EMA in December 2017. The Company interposed several counterclaims, including a claim for reformation of the underlying agreements to reflect the Company’s interpretation of the cashless exercise provision. Both parties moved for summary judgment. On March 16, 2020, the United States District Court entered a decision agreeing with the Company’s position, denying EMA’s motion for declaratory judgement on its interpretation of the cashless exercise formula, and stating, inter alia, that “the Agreements read in their entirety reveal that nFUSZ, Inc.’s position regarding the proper cashless exercise formula is the only sensible one and that the cashless exercise formula must be enforced accordingly.” The court went on to order that in light of this finding, the parties should submit a proposal for future proceedings. Accordingly, the Company has instructed its counsel to prosecute the Company’s claims for reimbursement of all of the costs it incurred in connection with this action, including all attorneys’ fees as well as all damages it incurred as a result of EMA’s conduct. b. Former Employee The Company is currently in a dispute with a former employee of its predecessor bBooth, Inc. who has interposed a breach of contract claim in which he alleges that he is entitled to approximately $300,000 in unpaid bonus compensation from 2015. The Company does not believe his claims have any merit as they are contradicted by documentary evidence, and barred by the applicable statute of limitations, and barred by a release executed by the former employee when the Company purchased all of his shares of stock more than 4 years ago in January 2016. The Company intends to seek dismissal of the former employee’s claims through arbitration. c. Class Action On July 9, 2019, a purported class action complaint was filed in the United States District Court, Central District of California, styled SCOTT C. HARTMANN, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. VERB TECHNOLOGY COMPANY, INC., and RORY J. CUTAIA, Defendant, Case Number 2:19-CV-05896 d. Derivative Action On September 27, 2019, a derivative action was filed in the United States District Court, Central District of California, styled Richard Moore, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. Verb Technology Company, Inc., and Rory J. Cutaia, James P. Geiskopf, and Jeff Clayborne, Defendants, Case Number 2:19-CV-08393-AB-SS. The Company knows of no other material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of its assets or properties, or the assets or properties of any of its subsidiaries, are subject and, to the best of its knowledge, no adverse legal activity is anticipated or threatened. In addition, the Company does not know of any such proceedings contemplated by any governmental authorities. The Company knows of no material proceedings in which any of its directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. The Company believes it has adequately reserved for all litigation within its financials. Board of Directors The Company has committed an aggregate of $450,000 in board fees to its five board members over the term of their appointment for services to be rendered. Board fees are accrued and paid monthly. The members will serve on the board until the annual meeting for the year in which their term expires or until their successors has been elected and qualified. Total board fees expensed in 2019 totaled $175,000. Total board fees paid in 2019 totaled $183,000. As of December 31, 2019, total board fees to be recognized in future period amounted to $450,000 and will be recognized once the service has been rendered. |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 16. SUBSEQUENT EVENTS Issuance of Restricted Stock Awards On April 10, 2020, the board of directors of Verb Technology Company, Inc., a Nevada corporation (the “Company”), approved management’s COVID-19 Full Employment and Cash Preservation Plan (the “Plan”), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the “Cash Reduction Amount”) for a period of three months from April 16, 2020 through July 15, 2020 for one category of plan participants, and April 26, 2020 through July 18, 2020 for the other category of participants. The Plan was designed to promote the continued growth of the Company and avoid the lay-offs and staff cut-backs experienced by many companies affected by the COVID-19 economic crisis. The Cash Reduction Amount is to be paid in shares of the Company’s common stock (the “Shares”) through an allocation of shares from the Company’s 2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) and granted pursuant to stock award agreements entered into effective as of April 10, 2020 (the “Grant Date”) between the Company and each of the Company’s directors, executive officers, employees, and consultants. The stock award agreements provide that the Shares will vest on July 18, 2020 (the “Vesting Date”) as long as the recipient remains in continuous service to the Company during the time from the Grant Date through the Vesting Date. The Shares were valued at $1.198 per share in accordance with the provisions of the Omnibus Incentive Plan, which provides that the value shall be determined based on the volume weighted average price of the Company’s common stock during a period of up to the 30-trading days prior to the Grant Date. Total Common Stock granted as part of the Cash Preservation Plan on April 10, 2020 was 589,099 with a fair value of $866,000. The shares were valued based on the market value of the Company’s stock price on the grant date and will be amortized over the life of the agreements and recorded as stock compensation expense. As of the date of this report the restricted shares have not been issued to the respective employees. Issuance of Common Stock Subsequent to March 31, 2020, the Company issued 463,641 shares of Common Stock to vendors for services rendered with a fair value of $585,427. These shares of Common Stock were valued based on the market value of the Company’s stock price at the issuance date or the date the Company entered into the agreement related to the issuance. Subsequent to March 31, 2020, as part of the Company’ private placement offering, subscribed shares of 845,000 shares of common stock were issued in April and May 2020 upon receipt of cash proceeds of $1,014,000 (see Note 11). Grant of Stock Options Subsequent to March 31, 2020, the Company granted stock options to an employee to purchase a total of 160,750 shares of Common Stock for services rendered. The options have an average exercise price of $1.37 per share, expire in five years, and vest over a period of four years from grant date. The total fair value of these options at the grant date was $217,000 using the Black-Scholes option pricing model. Paycheck Protection Program On April 17, 2020, the Company received loan proceeds in the amount of $1,218,000 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after the earlier of (i) 24 weeks after the loan disbursement date and (ii) December 31, 2020 as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. The Company intends to use the proceeds for purposes consistent with the PPP. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, we cannot assure you that we will not take actions that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part. Economic Injury Disaster Loan On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration under the Economic Injury Disaster Loan program in the amount of $150,000. The loan is unsecured and payable over 30 years at an interest rate of 3.75%. Installment payments, including principal and interest, will begin on May 15, 2021. Non-Digital Products and Services Historically, we have also provided certain non-digital services to some of our enterprise clients such as printing and fulfillment services. We designed and printed welcome kits and starter kits for their marketing needs and provided fulfillment services, which consisted of managing the preparation, handling and shipping of our client’s custom-branded merchandise they use for marketing purposes at conferences and other events. We also managed the fulfillment of our clients’ product sample packs that verbCRM users order through the app for automated delivery and tracking to their customers and prospects. On May 20, 2020, we executed a contract with Range Printing, a company in the business of providing enterprise class printing, sample assembly, warehousing, packaging, shipping, and fulfillment services. Pursuant to the contract, through an automated process we have established for this purpose, Range will receive orders for samples and merchandise from us as and when we receive them from our clients and users, and print, assemble, store, package and ship such samples and merchandise on our behalf. The Range contract provides for a revenue share arrangement based upon the specific services that is designed to maintain our relationship with our clients by continuing to service their non-digital needs, while eliminating the labor and overhead costs associated with the provision of such services by us. The transition to Range Printing is in progress. | 19. SUBSEQUENT EVENTS Private Placement On February 5, 2020, the Company initiated a private placement, which is for the sale and issuance of up to five million shares of its Common Stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company’s Common Stock on that day, and is memorialized by a subscription agreement. As a result of this private placement, from February 25 through March 31, 2020, a total of 4,237,833 shares of Common Stock were subscribed. Total subscribed shares of 3,392,833 shares of Common Stock were issued with net cash proceeds of $3,430,000 after direct costs received as of March 31, 2020. The remaining subscribed shares of 845,000 shares of Common Stock were issued in April and May 2020 upon receipt of cash proceeds of $1,014,000. The Company’s private placement is exempt from the registration requirements of Section 5 of the Securities Act, in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the SEC. The Company’s private placement was managed by the Company; however, in connection with the closings, the Company paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of the closings), (ii) as a non-accountable expense allowance, an aggregate of $100,000 (or 2% of the gross proceeds of the closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of the Company’s Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of the Company’s Common Stock. The Company made the above-referenced payments only in respect of that portion of the gross proceeds from the closings for investors introduced to the Company by the consultant. In addition, the Company also incurred various expenses totaling $42,000 that are directly related to this private placement. In preparation for this private placement offering, the Company separately negotiated with certain Series A stockholders to waive their rights in order not to ratchet down the conversion price of their Series A preferred shares (see Note 10). In return for the waiver, the Company granted these Series A stockholders warrants to purchase 2,303,861 shares of Common Stock. The warrants are exercisable in August 2020, expire in 5 years and are exercisable at $1.20 per share, as adjusted. The exercise price is subject to certain customary adjustments, including subsequent equity sales and rights offerings. In addition, the warrants also included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result of this fundamental transaction provision, the warrants will be accounted as derivative liability with a fair value upon issuance of $3,951,000 upon issuance. The Company will account the fair value of $3,951,000 as a deemed dividend since if the down round provision of the Series A preferred shares had occurred, it would have been accounted as a deemed dividend due to it providing additional value to the Series A stockholders. Issuance of Restricted Stock Awards On April 10, 2020, the board of directors of Verb Technology Company, Inc., a Nevada corporation (the “Company”), approved management’s COVID-19 Full Employment and Cash Preservation Plan (the “Plan”), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the “Cash Reduction Amount”) for a period of three months from April 16, 2020 through July 15, 2020 for one category of plan participants, and April 26, 2020 through July 18, 2020 for the other category of participants. The Plan was designed to promote the continued growth of the Company and avoid the lay-offs and staff cut-backs experienced by many companies affected by the COVID-19 economic crisis. The Cash Reduction Amount is to be paid in shares of the Company’s common stock (the “Shares”) through an allocation of shares from the Company’s 2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) and granted pursuant to stock award agreements entered into effective as of April 10, 2020 (the “Grant Date”) between the Company and each of the Company’s directors, executive officers, employees, and consultants. The stock award agreements provide that the Shares will vest on July 18, 2020 (the “Vesting Date”) as long as the recipient remains in continuous service to the Company during the time from the Grant Date through the Vesting Date. The Shares were valued at $1.198 per share in accordance with the provisions of the Omnibus Incentive Plan, which provides that the value shall be determined based on the volume weighted average price of the Company’s common stock during a period of up to the 30-trading days prior to the Grant Date. Total Common Stock granted as part of the Cash Preservation Plan on April 10, 2020 was 589,099 with a fair value of $866,000. The shares were valued based on the market value of the Company’s stock price on the grant date and will be amortized over the life of the agreements and recorded as stock compensation expense. As of the date of this report the restricted shares have not been issued to the respective employees. Issuances of Common Stock Subsequent to December 31, 2019, the Company issued 407,633 shares of Common Stock to vendors for services rendered with a fair value of $444,000. These shares of Common Stock were valued based on the market value of the Company’s stock price at the issuance date or the date the Company entered into the agreement related to the issuance. Subsequent to December 31, 2019, the Company issued 11,025 shares of Common Stock to an employee associated with the vesting of a Restricted Stock Award. Subsequent to December 31, 2019, the Company issued 741,933 shares of Common Stock upon conversion of 1,150 Series A Preferred shares. Grant of Stock Options Subsequent to December 31, 2019, the Company granted stock options to employees and consultants to purchase a total of 323,887 stock options for services to be rendered. The options have an average exercise price of $1.38 per share, expire in five years, and vest over a period of four years from grant date. The total fair value of these options at the grant date was $437,000 using the Black-Scholes option pricing model. Paycheck Protection Program On April 17, 2020, the Company received loan proceeds in the amount of approximately $1,218,000 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on May 14, 2020. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc. and Verb Direct, LLC, its wholly owned subsidiary. Intercompany transactions have been eliminated in the consolidation. | Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc. (formerly nFüsz, Inc. and, before that, bBooth, Inc.). Intercompany accounts have been eliminated in the consolidation. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the three months ended March 31, 2020, the Company incurred a net loss of $1,946,000 and used cash in operations of $2,266,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2019 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. As of March 31, 2020, we had cash on hand of $1,615,000 and subsequently received $1,014,000 from a private placement offering that closed in March 2020 and $1,218,000 from the Paycheck Protection Program. We believe we have sufficient cash to sustain operations through September 2020. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, purchase price allocations, impairment of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, purchase price allocations, impairment of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Customers setup or installation fees for the creation and development of websites and phone application are recognized as revenue over the estimated subscription period. Design assets of the websites and phone application are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. In addition, certain revenue is recorded based upon stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as number of customer usage. A description of our principal revenue generating activities is as follows: Digital Sales – We offer cloud-based business software on a subscription basis. Subscriptions are paid in advance of the services or billed 30 days in arrears of the subscription period. The revenue is recognized over the subscription period. Welcome kits – We offer design and printing services to create corporate starter kits that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the welcome kits. Fulfillment – We offer print on demand and fulfilment services of various custom products our clients use for marketing purposes. The revenue is recognized upon completion and shipment of the products. Shipping – We charge our customers the costs related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the welcome kits or fulfillment products are shipped. | Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Consolidated Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Customers setup or installation fees for the creation and development of websites and phone application are recognized as revenue over the estimated subscription period. Design assets of the websites and phone application are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. In addition, certain revenue is recorded based upon stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as number of customer usage. A description of our principal revenue generating activities is as follows: Digital Sales – We offer cloud-based business software on a subscription basis. Subscriptions are paid in advance of the services or billed 30 days in arrears of the subscription period. The revenue is recognized over the subscription period. Welcome kits – We offer design and printing services to create corporate starter kits that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the welcome kits. Fulfillment – We offer print on demand and fulfilment services of various custom products our clients use for marketing purposes. The revenue is recognized upon completion and shipment of the products. Shipping – We charge our customers the costs related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the welcome kits or fulfillment products are shipped. |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers. | Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of revenue upon sale of products to our customers. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. As of March 31, 2020, we have one major customer that accounted for 11% of our accounts receivable individually and in aggregate. | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for year ended December 31, 2019 and 2018: Year Ended Year Ended December 31, 2019 December 31, 2018 Verb’s largest customers are presented below as a percentage of Verb’s aggregate: Revenues 1 major customer accounted for 13% of revenues None Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate: Purchases None None Accounts payable 1 major supplier accounted for 14% of accounts payable individually and in aggregate None |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. | |
Leases | Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets. Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (“ASC”) 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases (“ASC 842”), which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. See Note 5, Right-of-Use Assets and Operating Lease Liabilities | |
Long-Lived Assets | Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. Based on Management’s assessment, there were no indicators of impairment at March 31, 2020 or December 31, 2019. | Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. No impairment of long-lived assets was required for the years ended December 31, 2019 and 2018. |
Income Taxes | Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board’s (“FASB”) ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carry-forwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2019, and 2018, the Company has not established a liability for uncertain tax positions. | |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist principally of legal, accounting, and underwriters’ fees incurred related to the contemplated underwritten public offering of the Company’s Common Stock. These deferred offering costs were charged against the gross proceeds received in March 2019. | |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. |
Share Based Payment | Share Based Payments The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with the Financial Accounting Standards Board’s (“FASB”) ASC 718, Compensation – Stock Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. | Share Based Payment The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with the Financial Accounting Standards Board’s (“FASB”) ASC 718, Compensation – Stock Compensation. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. From prior periods until December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees . In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). The guidance was issued to simplify the accounting for share-based transactions by expanding the scope of ASU 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. We adopted ASU 2018-07 on January 1, 2019. The adoption of the standard did not have a material impact on our financial statements for the twelve months ended December 31, 2019 or the previously reported financial statements. The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2019 and 2018 are as follows: Year Ended Year Ended December 31, 2019 December 31, 2018 Expected life in years 1.0, 2.0 and 5.0 5.0 Stock price volatility 180%-413.83 % 184.45% -190.22 % Risk free interest rate 1.51%-2.75 % 2.25% - 3.00 % Expected dividends 0 % 0 % Forfeiture rate 22.48 % 18 % The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not customarily paid dividends in the past and does not expect to pay dividends in the future. |
Research and Development Costs | Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company’s cloud-based, Verb interactive video CRM SaaS platform. | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of March 31, 2020, and 2019, the Company had total outstanding options of 4,417,108 and 2,457,974, respectively, and warrants of 13,651,050 and 778,446, respectively, and outstanding restricted stock awards of 1,475,329 and 0, which were excluded from the computation of net loss per share because they are anti-dilutive. | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2019, and 2018, the Company had total outstanding options of 4,233,722 and 2,478,974, respectively, and warrants of 10,930,991 and 940,412, respectively, and outstanding restricted stock awards of 1,486,354 and 0, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. |
Acquisitions and Business Combinations | Acquisitions and Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trade-marks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. | |
Goodwill and Other Intangibles | Goodwill and other Intangibles In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill and other Intangible assets at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be done annually. Recoverability of goodwill is determined by comparing the fair value of Company’s reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in December 2020. | Goodwill In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be done annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in fiscal 2020. |
Intangible Assets with Finite Useful Lives | Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. The acquisition of Verb Direct, formerly Sound Concepts, occurred on April 12, 2019. The Company will perform its first impairment test in fiscal 2020. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 825 for disclosures about fair value of its financial instruments and ASC 820 to measure the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. |
Segments | Segments The Company has various revenue channels. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to (i) their similar customer base and (ii) the Company having a single sales team, marketing department, customer service department, operations department, finance department, and accounting department to support all revenue channels. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying condensed consolidated financial statements. | Segments The Company has various revenue channels. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to (i) their similar customer base and (ii) the Company having a single sales team, marketing department, customer service department, operations department, finance department, and accounting department to support all revenue channels. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Assumptions Used in Black-Scholes Model to Options Issued | The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2019 and 2018 are as follows: Year Ended Year Ended December 31, 2019 December 31, 2018 Expected life in years 1.0, 2.0 and 5.0 5.0 Stock price volatility 180%-413.83 % 184.45% -190.22 % Risk free interest rate 1.51%-2.75 % 2.25% - 3.00 % Expected dividends 0 % 0 % Forfeiture rate 22.48 % 18 % |
Acquisition of Verb Direct (Tab
Acquisition of Verb Direct (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | ||
Schedule of Fair Value of Assets Assumed and Liabilities Acquired | The following table summarizes the assets acquired, liabilities assumed and purchase price allocation: Assets Acquired: Other current assets $ 2,004,000 Property and equipment 58,000 Other assets 1,302,000 $ 3,364,000 Liabilities Assumed: Current liabilities (2,153,000 ) Long-term liabilities (1,068,000 ) (3,221,000 ) Intangible assets 6,340,000 Goodwill 16,337,000 Purchase Price $ 22,820,000 | The allocation of the purchase price was completed on December 31, 2019 through the assistance of a valuation specialist. The following table summarizes the assets acquired, liabilities assumed and purchase price allocation: Assets Acquired: Other current assets $ 2,004,000 Property and equipment 58,000 Other assets 1,302,000 $ 3,364,000 Liabilities Assumed: Current liabilities (2,153,000 ) Long-term liabilities (1,068,000 ) (3,221,000 ) Intangible assets 6,340,000 Goodwill 16,337,000 Purchase Price $ 22,820,000 |
Schedule of Amortization Expense for Future Periods for Intangible Assets | The following table summarizes the amortization expense to be recorded in future periods for intangible assets that are subject to amortization: Year ending Amortization 2020 $ 1,255,000 2021 1,195,000 2022 1,135,000 2023 1,075,000 2024 and thereafter 265,000 Total amortization $ 4,925,000 | |
Schedule of Pro Forma Statements of Operations | The unaudited pro forma statements of operations for the periods ended March 31, 2020 and 2019 give effect to the transaction to the merger as if it had occurred on January 1, 2019. Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (unaudited) (Proforma, Digital $ 1,457,000 $ 1,059,000 Welcome kits and fulfilment 728,000 2,265,000 Shipping 169,000 677,000 Total Revenue 2,354,000 4,001,000 Cost of revenue 1,063,000 2,248,000 Gross margin 1,291,000 1,753,000 Operating expenses 5,151,000 4,782,000 Other income (expense), net 1,914,000 (251,000 ) Net loss (1,946,000 ) (3,280,000 ) Deemed dividends to Series A stockholders (3,951,000 ) - Net loss attributed to common stockholders $ (5,897,000 ) $ (3,280,000 ) Loss per share $ (0.23 ) $ (0.21 ) Weighted average number of common shares outstanding - basic and diluted 25,992,426 15,566,835 | The unaudited pro forma statements of operations for the year ended December 31, 2019 and 2018 give effect to the transaction to the merger as if it had occurred on January 1, 2018. Year Ended December 31, Year Ended (Proforma, unaudited) (Proforma, unaudited) Digital $ 5,290,000 $ 3,734,000 Welcome kits and fulfilment 6,178,000 7,258,000 Shipping 1,624,000 1,774,000 Total Revenue 13,092,000 12,766,000 Cost of revenue 7,088,000 7,173,000 Gross margin 6,004,000 5,593,000 Operating expenses 22,048,000 14,295,000 Other expense, net (99,000 ) (4,326,000 ) Loss before income tax provision (16,143,000 ) (13,028,000 ) Income tax provision 2,000 1,000 Net loss $ (16,145,000 ) $ (13,029,000 ) Loss per share $ (0.76 ) $ (0.99 ) Weighted average number of common shares outstanding - basic and diluted 21,116,207 13,198,681 |
Schedule of Results of Operation of Subsidiary | Results of operation of Verb Direct subsequent to the acquisition are as follows: Period April 1, 2019 through December 31, 2019 Revenue $ 9,041,000 Cost of revenue 4,766,000 Operating expenses 6,308,000 Other income expense (11,000 ) Net loss $ (2,044,000 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment consisted of the following as of March 31, 2020 and December 31, 2019. March 31, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 39,000 39,000 Leasehold improvement 862,000 741,000 Total property and equipment 1,005,000 884,000 Accumulated depreciation (202,000 ) (164,000 ) Total property and equipment, net $ 803,000 $ 720,000 | Property and equipment consisted of the following as of December 31, 2019 and 2018. December 31, 2019 December 31, 2018 Computers $ 29,000 $ 28,000 Furniture and fixture 75,000 56,000 Machinery and equipment 39,000 24,000 Leasehold improvement 741,000 - Total property and equipment 884,000 108,000 Accumulated depreciation (164,000 ) (97,000 ) Total property and equipment, net $ 720,000 $ 11,000 |
Right-of-use Assets and Opera_2
Right-of-use Assets and Operating Lease Liabilities (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Schedule of Lease Cost | Period Ended March 31, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 175,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ — Weighted average remaining lease term – operating leases (in years) 5.11 Average discount rate – operating leases 4.0 % | Year Ended December 31, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 366,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ — Weighted average remaining lease term – operating leases (in years) 5.25 Average discount rate – operating leases 4.0 % |
Schedule of Operating Leases | March 31, 2020 Operating leases Right-of-use assets, net of amortization of $484,000 $ 3,140,000 Short-term operating lease liabilities $ 505,000 Long-term operating lease liabilities 3,432,000 Total operating lease liabilities $ 3,937,000 | December 31, 2019 Operating leases Right-of-use assets, net of amortization of $349,000 $ 3,275,000 Short-term operating lease liabilities $ 391,000 Long-term operating lease liabilities 3,591,000 Total operating lease liabilities $ 3,982,000 |
Schedule of Present Value of Lease Liabilities | Year ending Operating Leases 2020 597,000 2021 776,000 2022 751,000 2023 773,000 2024 and thereafter 1,661,000 Total lease payments 4,558,000 Less: Imputed interest/present value discount (576,000 ) Present value of lease liabilities $ 3,982,000 |
Advance of Future Receipts (Tab
Advance of Future Receipts (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Advances on Future Receipts | The Company has the following advances on future receipts as of March 31, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Balance at Note 1 December 24, 2019 June 30, 2020 10 % $ 506,000 $ 297,000 $ 503,000 Note 2 December 24, 2019 June 30, 2020 10 % 506,000 297,000 503,000 Total $ 1,012,000 594,000 1,006,000 Debt discount (137,000 ) (274,000 ) Net $ 457,000 $ 732,000 |
Advance on Future Receipts an_2
Advance on Future Receipts and Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Advances on Future Receipts | The Company has the following advances on future receipts as of December 31, 2019: Note Issuance Date Maturity Date Interest Original Balance at Balance at Note 1 December 24, 2019 June 30, 2020 10 % $ 506,000 $ 503,000 $ - Note 2 December 24, 2019 June 30, 2020 10 % 506,000 503,000 - Total $ 1,012,000 1,006,000 Debt discount (274,000 ) - Net $ 732,000 $ - |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Schedule of Notes Payable to Related Parties | The Company has the following related parties notes payable as of March 31, 2020 and December 31, 2019: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 825,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Total notes payable – related parties 1,177,000 1,177,000 Non-current (240,000 ) (1,065,000 ) Current $ 937,000 $ 112,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | The Company has the following related parties outstanding notes payable as of December 31, 2019 and 2018: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 825,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Note 4 (D) March 22, 2019 April 30, 2019 5.0 % 58,000 - - Total notes payable – related parties 1,177,000 1,177,000 Non-current (1,065,000 ) (1,065,000 ) Current $ 112,000 $ 112,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. (D) On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company’s Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2019. |
Deferred Incentive Compensati_2
Deferred Incentive Compensation to Officers (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | ||
Schedule of Deferred Incentive Compensation to Officers | Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 430,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 324,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 125,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 163,000 163,000 Total 1,042,000 1,042,000 Non-current (521,000 ) (1,042,000 ) Current $ 521,000 $ - (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and 125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $162,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. | Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 430,000 $ - Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 324,000 - Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 125,000 - Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 163,000 - Total 1,042,000 - Non-current (1,042,000 ) - Current $ - $ - (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and 125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and 163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Note Note Date Maturity Date Interest Rate Original Balance at Balance at Note payable (A) October 19, 2018 April 19, 2019 10 % $ 1,500,000 $ - $ 1,500,000 Note payable (B) October 30, 2018 April 29, 2019 5 % $ 400,000 - 400,000 Note payable (C) February 1, 2019 August 2, 2019 10 % $ 500,000 - - Total convertible notes payable - 1,900,000 Debt discount - (1,082,000 ) Total notes payable, net of debt discount $ - $ 818,000 (A) On October 19, 2018, the Company issued an unsecured convertible note to Bellridge Capital, LP (“Bellridge”), an unaffiliated third-party, in the aggregate principal amount of $1,500,000 in exchange for net proceeds of $1,242,000, representing an original issue discount of $150,000, and paid legal and financing expenses of $109,000. In addition, the Company issued 96,667 shares of its Common Stock with a fair value of $595,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in April 2019. The note was also convertible into shares of the Company’s Common Stock only on or after the occurrence of an uncured “Event of Default.” Primarily, the Company would be in default if it did not repay the principal amount of the note, as required. The other events of default are standard for the type of transaction represented by the related securities purchase agreement and the note. In the event of a default, the conversion price in effect on any date on which some or all of the principal of the note is to be converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provided its notice of conversion. Upon an Event of Default, the Company would owe Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that might also be due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that equaled 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price is unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $1,273,000 at the date of issuance. As a result of the issuance of the note, the Company incurred aggregate costs of $2,126,000 related to the note’s original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $1,500,000 and the remaining $626,000 as financing costs in October 2018. The note discount was being amortized over the six-month term of the note. In April 2019, the Company paid the balance of $1,500,000. As a result of the payment, the Company amortized the remaining debt discount of $144,000 to interest expense. The Company also remeasured the fair value of the derivative liability as of the payment date and recognized a change in fair market value in the derivative liability totaling $670,000. The revalued derivative liability of $1,396,000 was then extinguished with the payment of the note, resulting in a gain on debt extinguishment of the derivative liability of $1,396,000. There was no outstanding balance of the note as of December 31, 2019. (B) On October 30, 2018, the Company issued two unsecured convertible notes to one current investor and one otherwise unaffiliated third-party in the aggregate principal amount of $400,000. The notes bore interest at a rate of 5% per annum and matured on April 29, 2019. Upon the Company’s consummation of its underwritten public offering of the Company’s units, all, and not less than all, of (i) the outstanding principal amount and (ii) the accrued interest thereunder were to be converted into shares of the Company’s Common Stock. The per-share conversion price equaled seventy-five percent (75%) of the effective offering price of the Common Stock in the Company’s underwritten public offering. The Company determined that, because the conversion price was unknown, that the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the notes created a derivative with a fair value of $302,000 at the date of issuance and was accounted as a debt discount and was being amortized over the term of the notes payable. As of December 31, 2018, the balance of the notes outstanding was $400,000 and the balance of unamortized debt discount was $199,000. (C) On February 1, 2019, the Company issued an unsecured convertible note to Bellridge, an unaffiliated third-party, in the aggregate principal amount of $500,000 in exchange for net proceeds of $432,000, representing an original issue discount of $25,000, and paid legal and financing expenses of $43,000. In addition, the Company issued 16,667 shares of its Common Stock with a fair value of $128,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in August 2019. The note was also convertible into shares of the Company’s Common Stock only on or after the occurrence of an uncured “Event of Default.” Primarily, the Company would have been in default if it did not repay the principal amount of the note, as required. The other events of default were standard for the type of transaction represented by the related securities purchase agreement and the note. The conversion price in effect on any date on which some or all of the principal of the note would have been converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provides its notice of conversion. Upon an Event of Default, the Company would have owed Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that would have been due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that is at least equal to 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price was unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $388,000 at the date of issuance. As a result of the issuance of the note, the Company incurred aggregate costs of $584,000 related to the note’s original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $500,000 and the remaining $84,000 as financing costs. The note discount was being amortized over the six-month term of the note. On April 2, 2019, the Company increased the outstanding principal amount of the note by $25,000 to an aggregate of $525,000 and issued 8,606 shares of Common Stock with a fair value of $55,000. The Company accounted for the increase in principal and the fair value of the shares of Common Stock in the aggregate of $80,000 as part of its financing costs. In April 2019, the Company paid off the outstanding principal balance of $525,000. As a result of the payment, the Company amortized the remaining debt discount of $366,000 to interest expense. The Company also remeasured the fair value of the derivative liability as of the payment date and recognized a change in fair market value in the derivative liability totaling $260,000. The revalued derivative liability of $644,000 was then extinguished with the payment of the note, resulting in a gain on debt extinguishment of the derivative liability of $644,000. There was no outstanding balance of the note as of December 31, 2019. |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Schedule of Derivative Liability Using Binomial Pricing Model Assumptions | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: March 31, 2020 Upon Issuance December 31, 2019 Stock Price $ 1.26 $ 1.70 $ 1.55 Exercise Price $ 1.66 $ 1.55 $ 1.88 Expected Life 3.27 5.0 3.53 Volatility 211 % 212 % 216 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 2.22 % 2.47 % 1.64 % Fair Value $ 6,907,000 $ 3,951,000 $ 5,048,000 | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: December 31, 2019 Upon Issuance December 31, 2018 Stock Price $ 1.55 $ 4.78 $ 4.80 Exercise Price $ 1.88 $ 3.76 $ 2.70 Expected Life 3.53 2.75 1.78 Volatility 216 % 192 % 184 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 1.64 % 1.99 % 2.46 % Fair Value $ 5,048,000 $ 6,561,000 $ 2,576,000 |
Schedule of Derivative Liability Transactions | The details of derivative liability transactions as of and for the periods ended March 31, 2020 and 2019 are as follows: March 31, 2020 March 31, 2019 Beginning Balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and warrants 3,951,000 388,000 Change in fair value (2,092,000 ) (944,000 ) Ending Balance $ 6,907,000 $ 2,020,000 | The details of derivative liability transactions for the year ended December 31, 2019 are as follows: December 31, 2019 December 31, 2018 Beginning balance $ 2,576,000 $ 1,251,000 Fair value upon issuance of notes payable and warrants 6,561,000 1,877,000 Change in fair value (1,862,000 ) 1,167,000 Extinguishment (2,227,000 ) (1,719,000 ) Ending balance $ 5,048,000 $ 2,576,000 |
Restricted Stock Awards (Tables
Restricted Stock Awards (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards | ||
Summary of Restricted Stock Award Activity | A summary of restricted stock award activity for the three months ended March 31, 2020 is presented below. Weighted- Weighted- Average Grant Date Shares Fair Value Non-vested at December 31, 2019 1,486,354 $ 1.36 Granted - - Vested (11,025 ) 1.36 Forfeited - - Non-vested at March 31, 2020 1,475,329 $ 1.36 | A summary of restricted stock award activity for the years ended December 31, 2019 and 2018 are presented below. Weighted- Average Grant Date Shares Fair Value Non-vested at December 31, 2017 - $ - Granted - - Vested - - Forfeited - - Non-vested at December 31, 2018 - - Granted 1,923,001 1.36 Vested (436,647 ) 1.36 Forfeited - - Non-vested at December 31, 2019 1,486,354 $ 1.36 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Schedule of Stock Option Activity | A summary of option activity for the three months ended March 31, 2020 is presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2019 4,233,722 $ 1.75 2.54 $ 995,000 Granted 185,887 1.39 - - Forfeited (2,501 ) 1.36 - - Exercised - - - - Outstanding at March 31, 2020 4,417,108 $ 1.72 2.54 $ 143,000 Vested March 31, 2020 1,820,725 $ 1.75 $ 28,000 Exercisable at March 31, 2020 1,337,946 $ 2.19 $ 26,000 | A summary of option activity for the years ended December 31, 2019 and 2018 are presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2017 1,456,064 $ 3.90 2.09 $ - Granted 1,400,418 6.75 - - Forfeited (345,000 ) 5.85 - - Exercised (32,508 ) - - - Outstanding at December 31, 2018 2,478,974 5.25 2.93 - Granted 2,531,971 2.07 - - Forfeited (777,223 ) 6.42 - - Exercised - - - - Outstanding at December 31, 2019 4,233,722 $ 1.73 2.54 $ 995,000 Vested December 31, 2019 1,496,439 $ 2.13 $ 263,851 Exercisable at December 31, 2019 888,834 $ 2.55 $ 83,252 |
Schedule of Fair Value Assumptions Using Black-Scholes Method | The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.39 % 2.75 % Average expected term 5 years 5 years Expected volatility 270.1 % 201.3 % Expected dividend yield - - | The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: Years Ended December 31, 2019 2018 Risk-free interest rate 1.51%-2.75 % 2.25%-3.00 % Average expected term (years) 5 years 5 years Expected volatility 180%-413.83 % 184.45%-190.22 % Expected dividend yield - - |
Stock Warrants (Tables)
Stock Warrants (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Stock Warrants | ||
Schedule of Warrants Outstanding | The Company has the following warrants outstanding as of March 31, 2020, all of which are exercisable: Warrants Weighted- Price Weighted- Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 10,930,990 $ 3.07 4.25 $ - Granted 2,720,060 1.31 - - Forfeited - - - - Exercised - - - - Outstanding at March 31, 2020, all vested 13,651,050 $ 2.72 4.12 $ - | The Company has the following warrants as of December 31, 2019 and 2018 are presented below: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2017 1,895,767 $ 1.95 2.62 $ - Granted 386,678 5.10 - - Forfeited (56,486 ) 1.05 - - Exercised (1,285,544 ) 1.80 - - Outstanding at December 31, 2018 940,415 3.60 2.32 1,806,000 Granted 10,386,181 2.97 - - Forfeited (46,667 ) 7.29 - - Exercised (348,938 ) 1.17 - - Outstanding at December 31, 2019, all vested 10,930,991 $ 3.07 4.25 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2019 December 31, 2018 Net operating loss carry-forwards $ 7,591,000 $ 5,300,000 Share based compensation (635,000 ) (524,000 ) Non-cash interest and financing expenses (472,000 ) (694,000 ) Other temporary differences (63,000 ) (378,000 ) Less: Valuation allowance (6,421,000 ) (3,704,000 ) Deferred tax assets, net $ - $ - |
Schedule of Provision of Income Taxes | The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: December 31, 2019 December 31, 2018 Statutory federal income tax rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.9 )% (6.0 )% Non-deductible items (1.0 )% (0.1 )% Change in valuation allowance 28.9 % 27.9 % 0.0 % 0.0 % |
Description of Business (Detail
Description of Business (Details Narrative) - $ / shares | Feb. 02, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Reverse stock split | 1-for-15 reverse stock split | |||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Description of Business (Deta_2
Description of Business (Details Narrative) (10-K) - USD ($) | Apr. 12, 2019 | Feb. 02, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Reverse stock split | 1-for-15 reverse stock split | |||||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Cash payment of acquisition | $ 15,000,000 | |||||
Net loss | $ (1,946,000) | $ (3,008,000) | (15,918,000) | (12,127,000) | ||
Net cash used in operating activities | $ (2,266,000) | $ (1,089,000) | $ (8,118,000) | $ (4,157,000) | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | ||||||
Cash payment of acquisition | $ 15,000,000 | |||||
Issuance of restricted shares | 3,327,791 | |||||
Issuance of shares of common stock with a fair market value | $ 7,820,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net loss | $ (1,946,000) | $ (3,008,000) | $ (15,918,000) | $ (12,127,000) |
Cash in operations | (2,266,000) | $ (1,089,000) | (8,118,000) | (4,157,000) |
Cash on hand | 1,615,000 | $ 983,000 | $ 634,000 | |
Stock subscription receivable | $ 1,014,000 | |||
Outstanding Options [Member] | ||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 4,417,108 | 2,457,974 | 4,233,722 | 2,478,974 |
Outstanding Warrants [Member] | ||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 13,651,050 | 778,446 | 10,930,991 | 940,412 |
Outstanding Restricted Stock Awards [Member] | ||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 1,475,329 | 0 | ||
Customer Concentration Risk [Member] | Revenue [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Customer Concentration Risk [Member] | Revenue [Member] | One Customer [Member] | ||||
Concentration risk, percentage | 13.00% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | ||||
Concentration risk, percentage | 11.00% | |||
Supplier Concentration Risk [Member] | Purchase [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | 0.00% |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Maximum [Member] | ||||
Cash FDIC insured amount | $ 250,000 | $ 250,000 | ||
Paycheck Protection Program [Member] | ||||
Proceeds from loans | $ 1,218,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment of useful life | 5 years | |||
Impairment of long-lived assets | ||||
Intangible assets with finite lived estimated useful life | 5 years | |||
Outstanding Options [Member] | ||||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 4,417,108 | 2,457,974 | 4,233,722 | 2,478,974 |
Outstanding Warrants [Member] | ||||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 13,651,050 | 778,446 | 10,930,991 | 940,412 |
Restricted Stock [Member] | ||||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 1,486,354 | 0 | ||
Customer Concentration Risk [Member] | Revenue [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Customer Concentration Risk [Member] | Revenue [Member] | Major Customer One [Member] | ||||
Concentration risk, percentage | 13.00% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Major Customer One [Member] | ||||
Concentration risk, percentage | 11.00% | |||
Supplier Concentration Risk [Member] | Purchase [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | 0.00% |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | ||||
Concentration risk, percentage | 0.00% | 0.00% | 0.00% | |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Major Supplier One [Member] | ||||
Concentration risk, percentage | 14.00% | |||
Maximum [Member] | ||||
Cash FDIC insured amount | $ 250,000 | $ 250,000 | ||
Operating lease term | 94 months | |||
Minimum [Member] | ||||
Operating lease term | 36 months |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Assumptions Used in Black-scholes Model to Options Issued (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 5 years | 5 years |
Expected dividends | 0.00% | 0.00% |
Forfeiture rate | 22.48% | 18.00% |
Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 1 year | |
Stock price volatility | 180.00% | 184.45% |
Risk free interest rate | 1.51% | 2.25% |
Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 2 years | |
Stock price volatility | 413.83% | 190.22% |
Risk free interest rate | 2.75% | 3.00% |
Acquisition of Verb Direct (Det
Acquisition of Verb Direct (Details Narrative) - USD ($) | Apr. 12, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash payment of acquisition | $ 15,000,000 | |||
Amortization expense | $ 1,300,000 | |||
Estimated useful life | 5 years | |||
Intangible assets unamortized balance | 5,040,000 | $ 5,365,000 | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | ||||
Cash payment of acquisition | $ 15,000,000 | |||
Issuance of restricted shares | 3,327,791 | |||
Issuance of shares of common stock with a fair market value | $ 7,820,000 | |||
Aggregated goodwill and intangible assets | $ 22,677,000 | |||
Amortization expense | 325,000 | 975,000 | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Developed Technology [Member] | ||||
Amortization expense | $ 4,700,000 | $ 4,700,000 | ||
Estimated useful life | 5 years | 5 years | ||
Intangible assets, amortization method | Amortized on an accelerated basis | Amortized on an accelerated basis | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Customer Relationships [Member] | ||||
Amortization expense | $ 1,200,000 | $ 1,200,000 | ||
Estimated useful life | 5 years | 5 years | ||
Intangible assets, amortization method | Amortized on an accelerated basis | Amortized on an accelerated basis | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Domain Names [Member] | ||||
Amortization expense | $ 440,000 | $ 440,000 | ||
Intangible assets, amortization method | Tested for impairment on an annual basis | Tested for impairment on an annual basis |
Acquisition of Verb Direct (D_2
Acquisition of Verb Direct (Details Narrative) (10-K) - USD ($) | Apr. 12, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash payment of acquisition | $ 15,000,000 | |||
Estimated useful life | 5 years | |||
Amortization expense | $ 1,300,000 | |||
Intangible assets unamortized balance | 5,040,000 | $ 5,365,000 | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | ||||
Cash payment of acquisition | $ 15,000,000 | |||
Issuance of restricted shares | 3,327,791 | |||
Issuance of shares of common stock with a fair market value | $ 7,820,000 | |||
Aggregated goodwill and intangible assets | $ 22,677,000 | |||
Amortization expense | $ 325,000 | $ 975,000 | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Developed Technology [Member] | ||||
Estimated useful life | 5 years | 5 years | ||
Amortization expense | $ 4,700,000 | $ 4,700,000 | ||
Intangible assets, amortization method | Amortized on an accelerated basis | Amortized on an accelerated basis | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Customer Relationships [Member] | ||||
Estimated useful life | 5 years | 5 years | ||
Amortization expense | $ 1,200,000 | $ 1,200,000 | ||
Intangible assets, amortization method | Amortized on an accelerated basis | Amortized on an accelerated basis | ||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Domain Names [Member] | ||||
Amortization expense | $ 440,000 | $ 440,000 | ||
Intangible assets, amortization method | Tested for impairment on an annual basis | Tested for impairment on an annual basis |
Acquisition of Verb Direct - Sc
Acquisition of Verb Direct - Schedule of Fair Value of Assets Assumed and Liabilities Acquired (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill | $ 16,337,000 | $ 16,337,000 | |
Merger Agreement [Member] | |||
Other current assets | 2,004,000 | 2,004,000 | |
Property and equipment | 58,000 | 58,000 | |
Other assets | 1,302,000 | 1,302,000 | |
Total assets acquired | 3,364,000 | 3,364,000 | |
Current liabilities | (2,153,000) | (2,153,000) | |
Long-term liabilities | (1,068,000) | (1,068,000) | |
Total Liabilities Assumed | (3,221,000) | (3,221,000) | |
Intangible assets | 6,340,000 | 6,340,000 | |
Goodwill | 16,337,000 | 16,337,000 | |
Purchase Price | $ 22,820,000 | $ 22,820,000 |
Acquisition of Verb Direct - _2
Acquisition of Verb Direct - Schedule of Amortization Expense for Future Periods for Intangible Assets (Details) (10-K) | Dec. 31, 2019USD ($) |
Business Combinations [Abstract] | |
2020 | $ 1,255,000 |
2021 | 1,195,000 |
2022 | 1,135,000 |
2023 | 1,075,000 |
2024 and thereafter | 265,000 |
Total amortization | $ 4,925,000 |
Acquisition of Verb Direct - _3
Acquisition of Verb Direct - Schedule of Pro Forma Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Digital Member] | ||||
Revenue | $ 5,290,000 | $ 3,734,000 | ||
Welcome Kits & Fulfillment [Member] | ||||
Revenue | 6,178,000 | 7,258,000 | ||
Shipping [Member] | ||||
Revenue | 1,624,000 | 1,774,000 | ||
Merger Agreement [Member] | ||||
Revenue | $ 2,354,000 | $ 4,001,000 | 13,092,000 | 12,766,000 |
Cost of revenue | 1,063,000 | 2,248,000 | 7,088,000 | 7,173,000 |
Gross margin | 1,291,000 | 1,753,000 | 6,004,000 | 5,593,000 |
Operating expenses | 5,151,000 | 4,782,000 | 22,048,000 | 14,295,000 |
Other income (expense), net | 1,914,000 | (251,000) | (99,000) | (4,326,000) |
Net loss | (1,946,000) | (3,280,000) | (16,143,000) | (13,028,000) |
Deemed dividends to Series A stockholders | (3,951,000) | 2,000 | 1,000 | |
Net loss attributed to common stockholders | $ (5,897,000) | $ (3,280,000) | $ (16,145,000) | $ (13,029,000) |
Loss per share | $ (0.23) | $ (0.21) | $ (0.76) | $ (0.99) |
Weighted average number of common shares outstanding - basic and diluted | 25,992,426 | 15,566,835 | 21,116,207 | 13,198,681 |
Merger Agreement [Member] | Digital Member] | ||||
Revenue | $ 1,457,000 | $ 1,059,000 | ||
Merger Agreement [Member] | Welcome Kits & Fulfillment [Member] | ||||
Revenue | 728,000 | 2,265,000 | ||
Merger Agreement [Member] | Shipping [Member] | ||||
Revenue | $ 169,000 | $ 677,000 |
Acquisition of Verb Direct - _4
Acquisition of Verb Direct - Schedule of Results of Operation of Subsidiary (Details) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 2,354,000 | $ 9,000 | $ 9,100,000 | $ 32,000 | |
Cost of revenue | 1,063,000 | 30,000 | 4,870,000 | 52,000 | |
Operating expenses | 5,151,000 | 2,753,000 | 20,064,000 | 7,772,000 | |
Net income loss | $ (1,946,000) | $ (3,008,000) | $ (15,918,000) | $ (12,127,000) | |
Verb Direct [Member] | |||||
Revenue | $ 9,041,000 | ||||
Cost of revenue | 4,766,000 | ||||
Operating expenses | 6,308,000 | ||||
Other income expense | (11,000) | ||||
Net income loss | $ (2,044,000) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 38,000 | $ 4,000 | $ 67,000 | $ 20,000 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 38,000 | $ 4,000 | $ 67,000 | $ 20,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,005,000 | $ 884,000 | $ 108,000 |
Less: accumulated depreciation | (202,000) | (164,000) | (97,000) |
Property and equipment, net | 803,000 | 720,000 | 11,000 |
Computers [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 29,000 | 29,000 | 28,000 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 75,000 | 75,000 | 56,000 |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 39,000 | 39,000 | 24,000 |
Leasehold Improvement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 862,000 | $ 741,000 |
Right-of-Use Assets and Opera_3
Right-of-Use Assets and Operating Lease Liabilities (Details Narrative) - USD ($) | Jan. 02, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Dec. 31, 2018 |
Right-of-use assets | $ 1,451,000 | $ 3,140,000 | $ 3,275,000 | $ 2,173,000 | ||
Operating lease liabilities | 1,457,000 | $ 3,937,000 | $ 3,982,000 | 2,745,000 | ||
First 12 Months of Lease [Member] | ||||||
Lease term | 12 months | 12 months | ||||
Rent | $ 7,000 | $ 7,000 | ||||
Next 82 Months of the Lease [Member] | ||||||
Lease term | 82 months | 82 months | ||||
Rent | $ 39,000 | $ 39,000 | ||||
Lease Agreement [Member] | ||||||
Operating lease, description | In February 2019, the Company entered into a lease agreement with respect to the Company's corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 with a term of 94 months. | In addition, the Company leases its corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 under a lease with a term of 94 months. | ||||
Lease term | 94 months | 94 months | ||||
Four Office and Warehouse [Member] | ||||||
Aggregate lease payment | $ 31,000 | $ 31,000 | ||||
Lease extension description | December 2023 | December 2023 | ||||
Leasehold Improvement [Member] | ||||||
Lease incentive | $ 572,000 |
Right-of-Use Assets and Opera_4
Right-of-Use Assets and Operating Lease Liabilities (Details Narrative) (10-K) - USD ($) | Jan. 02, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Dec. 31, 2018 |
Right-of-use assets | $ 1,451,000 | $ 3,140,000 | $ 3,275,000 | $ 2,173,000 | ||
Operating lease liabilities | 1,457,000 | $ 3,937,000 | 3,982,000 | 2,745,000 | ||
Accounting Standards Update 2016-02 [Member] | ||||||
Right-of-use assets | 3,624,000 | |||||
Operating lease liabilities | $ 4,202,000 | |||||
First 12 Months of Lease [Member] | ||||||
Lease term | 12 months | 12 months | ||||
Rent | $ 7,000 | $ 7,000 | ||||
Next 82 Months of the Lease [Member] | ||||||
Lease term | 82 months | 82 months | ||||
Rent | $ 39,000 | $ 39,000 | ||||
Lease Agreement [Member] | ||||||
Operating lease, description | In February 2019, the Company entered into a lease agreement with respect to the Company's corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 with a term of 94 months. | In addition, the Company leases its corporate headquarters located at 2210 Newport Boulevard, Suite 200, Newport Beach, California 92663 under a lease with a term of 94 months. | ||||
Lease term | 94 months | 94 months | ||||
Four Office And Warehouse [Member] | ||||||
Aggregate lease payment | $ 31,000 | $ 31,000 | ||||
Lease extension description | December 2023 | December 2023 | ||||
Office Equipment [Member] | ||||||
Aggregate lease payment | $ 5,111 | |||||
Lease extension description | September 2021 | |||||
Leasehold Improvement [Member] | ||||||
Lease incentive | $ 572,000 |
Right-of-Use Assets and Opera_5
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost (included in general and administration in the Company's statement of operations) | $ 175,000 | $ 366,000 |
Cash paid for amounts included in the measurement of lease liabilities | ||
Weighted average remaining lease term - operating leases (in years) | 5 years 1 month 9 days | 5 years 2 months 30 days |
Average discount rate - operating leases | 4.00% | 4.00% |
Right-of-Use Assets and Opera_6
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Operating Leases (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||||
Right-of-use assets, net of amortization of $484,000 and $349,000 | $ 3,140,000 | $ 3,275,000 | $ 2,173,000 | $ 1,451,000 | |
Short-term operating lease liabilities | 505,000 | 391,000 | |||
Long-term operating lease liabilities | 3,432,000 | 3,591,000 | |||
Total operating lease liabilities | $ 3,937,000 | $ 3,982,000 | $ 2,745,000 | $ 1,457,000 |
Right-of-Use Assets and Opera_7
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Operating Leases (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||||
Amortization of right-of-use assets | $ 135,000 | $ 349,000 |
Right-of-Use Assets and Opera_8
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Present Value of Lease Liabilities (Details) (10-K) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Jan. 02, 2019 |
Leases [Abstract] | ||||
2020 | $ 597,000 | |||
2021 | 776,000 | |||
2022 | 751,000 | |||
2023 | 773,000 | |||
2024 and thereafter | 1,661,000 | |||
Total lease payments | 4,558,000 | |||
Less: Imputed interest/present value discount | (576,000) | |||
Present value of lease liabilities | $ 3,937,000 | $ 3,982,000 | $ 2,745,000 | $ 1,457,000 |
Advance of Future Receipts (Det
Advance of Future Receipts (Details Narrative) - USD ($) | Dec. 24, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt principal amount | $ 594,000 | $ 1,006,000 | ||
Repayments of notes | 411,000 | 630,000 | ||
Amortized debt discount | 137,000 | |||
Unamortized debt discount | $ 137,000 | 274,000 | ||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | ||||
Debt principal amount | $ 728,000 | |||
Purchase of future receipts | $ 1,012,000 | |||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company's operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company may pay off either note for $446,000 if paid within 30 days of funding; for $465,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. | |||
Principal payment | $ 6,000 | 7,000 | ||
Amortized debt discount | 284,000 | $ 10,000 | ||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid within 30 Days of Funding [Member] | ||||
Repayments of notes | 446,000 | |||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 31 and 60 Days of Funding [Member] | ||||
Repayments of notes | 465,000 | |||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 61 and 90 Days of Funding [Member] | ||||
Repayments of notes | $ 484,000 |
Advance of Future Receipts - Sc
Advance of Future Receipts - Schedule of Advances on Future Receipts (Details) - USD ($) | Oct. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Original Borrowing | $ 1,012,000 | $ 1,012,000 | ||||
Total | 594,000 | 1,006,000 | ||||
Debt discount | (137,000) | (274,000) | ||||
Net | $ 457,000 | $ 732,000 | ||||
Note 1 [Member] | ||||||
Issuance Date | Dec. 1, 2015 | [1] | Dec. 1, 2015 | [2] | ||
Maturity Date | Feb. 8, 2021 | [1] | Feb. 8, 2021 | [2] | ||
Interest Rate | 12.00% | [1] | 12.00% | [2] | ||
Original Borrowing | $ 1,249,000 | [1] | $ 1,249,000 | [2] | ||
Note 2 [Member] | ||||||
Issuance Date | Dec. 1, 2015 | [3] | Dec. 1, 2015 | [4] | ||
Maturity Date | Apr. 29, 2019 | Apr. 1, 2017 | [3] | Apr. 1, 2021 | [4] | |
Interest Rate | 5.00% | 12.00% | [3] | 12.00% | [4] | |
Original Borrowing | $ 112,000 | [3] | $ 112,000 | [4] | ||
Advance on Future Receipts [Member] | Note 1 [Member] | ||||||
Issuance Date | Dec. 24, 2019 | Dec. 24, 2019 | ||||
Maturity Date | Jun. 30, 2020 | Jun. 30, 2020 | ||||
Interest Rate | 10.00% | 10.00% | ||||
Original Borrowing | $ 506,000 | $ 506,000 | ||||
Total | $ 297,000 | $ 503,000 | ||||
Advance on Future Receipts [Member] | Note 2 [Member] | ||||||
Issuance Date | Dec. 24, 2019 | Dec. 24, 2019 | ||||
Maturity Date | Jun. 30, 2020 | Jun. 30, 2020 | ||||
Interest Rate | 10.00% | 10.00% | ||||
Original Borrowing | $ 506,000 | $ 506,000 | ||||
Total | $ 297,000 | $ 503,000 | ||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | |||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | |||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. |
Advance on Future Receipts an_3
Advance on Future Receipts and Notes Payable (Details Narrative) (10-K) - USD ($) | Dec. 24, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 08, 2019 | Dec. 04, 2018 | Aug. 08, 2018 |
Debt principal amount | $ 594,000 | $ 1,006,000 | |||||
Repayments of notes | 411,000 | 630,000 | |||||
Debt discount | 137,000 | ||||||
Repayment of notes payable | 630,000 | ||||||
Fair value of common shares | $ 3,430,000 | $ 1,195,000 | 2,979,000 | ||||
Number of shares issued, shares | 598,286 | ||||||
Warrants to purchase common stock | 108,196 | ||||||
Fair value of warrants | $ 215,000 | ||||||
Loss on debt extinguishment | 1,536,000 | $ (534,000) | |||||
Fair value of common stock and warrants issued | 1,410,000 | ||||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||||
Debt principal amount | $ 728,000 | ||||||
Purchase of future receipts | $ 1,012,000 | ||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company's operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company may pay off either note for $446,000 if paid within 30 days of funding; for $465,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. | ||||||
Debt discount | $ 284,000 | 10,000 | |||||
Principal payment | 6,000 | 7,000 | |||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid within 30 Days of Funding [Member] | |||||||
Repayments of notes | 446,000 | ||||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 31 and 60 Days of Funding [Member] | |||||||
Repayments of notes | 465,000 | ||||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 61 and 90 Days of Funding [Member] | |||||||
Repayments of notes | $ 484,000 | ||||||
Note Payable [Member] | |||||||
Debt principal amount | 1,340,000 | ||||||
Proceeds from issuance of unsecured promissory note | 1,300,000 | ||||||
Original issue discount | $ 40,000 | ||||||
Interest rate | 5.00% | ||||||
Debt maturity date | Apr. 10, 2019 | ||||||
Warrants to purchase common stock | 108,196 | 23,562 | 163,114 |
Advance on Future Receipts an_4
Advance on Future Receipts and Notes Payable - Schedule of Advances on Future Receipts (Details) (10-K) - USD ($) | Oct. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Original Borrowing | $ 1,012,000 | $ 1,012,000 | ||||
Total | 594,000 | 1,006,000 | ||||
Debt discount | (137,000) | (274,000) | ||||
Net | $ 457,000 | $ 732,000 | ||||
Note 1 [Member] | ||||||
Issuance Date | Dec. 1, 2015 | [1] | Dec. 1, 2015 | [2] | ||
Maturity Date | Feb. 8, 2021 | [1] | Feb. 8, 2021 | [2] | ||
Interest Rate | 12.00% | [1] | 12.00% | [2] | ||
Original Borrowing | $ 1,249,000 | [1] | $ 1,249,000 | [2] | ||
Note 2 [Member] | ||||||
Issuance Date | Dec. 1, 2015 | [3] | Dec. 1, 2015 | [4] | ||
Maturity Date | Apr. 29, 2019 | Apr. 1, 2017 | [3] | Apr. 1, 2021 | [4] | |
Interest Rate | 5.00% | 12.00% | [3] | 12.00% | [4] | |
Original Borrowing | $ 112,000 | [3] | $ 112,000 | [4] | ||
Advance on Future Receipts [Member] | Note 1 [Member] | ||||||
Issuance Date | Dec. 24, 2019 | Dec. 24, 2019 | ||||
Maturity Date | Jun. 30, 2020 | Jun. 30, 2020 | ||||
Interest Rate | 10.00% | 10.00% | ||||
Original Borrowing | $ 506,000 | $ 506,000 | ||||
Total | $ 297,000 | $ 503,000 | ||||
Advance on Future Receipts [Member] | Note 2 [Member] | ||||||
Issuance Date | Dec. 24, 2019 | Dec. 24, 2019 | ||||
Maturity Date | Jun. 30, 2020 | Jun. 30, 2020 | ||||
Interest Rate | 10.00% | 10.00% | ||||
Original Borrowing | $ 506,000 | $ 506,000 | ||||
Total | $ 297,000 | $ 503,000 | ||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | |||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | |||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest payable | $ 107,000 | $ 82,000 | $ 46,000 | |
Notes Payable [Member] | ||||
Interest expense, related parties | 35,000 | $ 35,000 | 141,000 | 211,000 |
Interest payable | $ 10,000 | $ 32,000 | $ 101,000 | $ 269,000 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest payable | $ 107,000 | $ 82,000 | $ 46,000 | |
Notes Payable [Member] | ||||
Interest expense, related parties | 35,000 | $ 35,000 | 141,000 | 211,000 |
Interest payable | $ 10,000 | $ 32,000 | $ 101,000 | $ 269,000 |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) - USD ($) | Oct. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||||
Original Borrowing | $ 1,012,000 | $ 1,012,000 | ||||||
Notes payable - related parties, net | 1,177,000 | 1,177,000 | $ 1,177,000 | |||||
Non-current | (240,000) | (1,065,000) | (1,065,000) | |||||
Current | $ 937,000 | $ 112,000 | 112,000 | |||||
Note 1 [Member] | ||||||||
Issuance Date | Dec. 1, 2015 | [1] | Dec. 1, 2015 | [2] | ||||
Maturity Date | Feb. 8, 2021 | [1] | Feb. 8, 2021 | [2] | ||||
Interest Rate | 12.00% | [1] | 12.00% | [2] | ||||
Original Borrowing | $ 1,249,000 | [1] | $ 1,249,000 | [2] | ||||
Notes payable - related parties, net | $ 825,000 | [1] | $ 825,000 | [1],[2] | 825,000 | [2] | ||
Note 2 [Member] | ||||||||
Issuance Date | Dec. 1, 2015 | [3] | Dec. 1, 2015 | [4] | ||||
Maturity Date | Apr. 29, 2019 | Apr. 1, 2017 | [3] | Apr. 1, 2021 | [4] | |||
Interest Rate | 5.00% | 12.00% | [3] | 12.00% | [4] | |||
Original Borrowing | $ 112,000 | [3] | $ 112,000 | [4] | ||||
Notes payable - related parties, net | $ 112,000 | [3] | $ 112,000 | [3],[4] | 112,000 | [4] | ||
Note 3 [Member] | ||||||||
Issuance Date | Apr. 4, 2016 | [5] | Apr. 4, 2016 | [6] | ||||
Maturity Date | Jun. 4, 2021 | [5] | Jun. 4, 2021 | [6] | ||||
Interest Rate | 12.00% | [5] | 12.00% | [6] | ||||
Original Borrowing | $ 343,000 | [5] | $ 343,000 | [6] | ||||
Notes payable - related parties, net | $ 240,000 | [5] | $ 240,000 | [5],[6] | 240,000 | [6] | ||
Note 4 [Member] | ||||||||
Issuance Date | [7] | Mar. 22, 2019 | ||||||
Maturity Date | [7] | Apr. 30, 2019 | ||||||
Interest Rate | [7] | 5.00% | ||||||
Original Borrowing | [7] | $ 58,000 | ||||||
Notes payable - related parties, net | [7] | |||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | |||||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | |||||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||
[5] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | |||||||
[6] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. | |||||||
[7] | On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company's Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2019. |
Notes Payable - Related Parti_6
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) (Parenthetical) - USD ($) | Apr. 11, 2019 | Apr. 04, 2016 | Dec. 01, 2015 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 22, 2019 | Dec. 31, 2018 | Oct. 30, 2018 | ||||
Notes payable - related parties, net | $ 1,177,000 | $ 1,177,000 | $ 1,177,000 | |||||||||
Repayments of debt | $ 630,000 | |||||||||||
Note 1 [Member] | ||||||||||||
Debt interest rate | 12.00% | [1] | 12.00% | [2] | ||||||||
Notes payable - related parties, net | $ 825,000 | [1],[2] | $ 825,000 | [2] | 825,000 | [1] | ||||||
Note 2 [Member] | ||||||||||||
Debt interest rate | 12.00% | [3] | 12.00% | [4] | 5.00% | |||||||
Notes payable - related parties, net | $ 112,000 | [3],[4] | $ 112,000 | [4] | 112,000 | [3] | ||||||
Note 3 [Member] | ||||||||||||
Debt interest rate | 12.00% | [5] | 12.00% | [6] | ||||||||
Notes payable - related parties, net | $ 240,000 | [5],[6] | $ 240,000 | [6] | 240,000 | [5] | ||||||
Note 4 [Member] | ||||||||||||
Debt interest rate | [7] | 5.00% | ||||||||||
Notes payable - related parties, net | [7] | |||||||||||
Mr. Rory J. Cutaia [Member] | Note 1 [Member] | ||||||||||||
Debt interest rate | 12.00% | |||||||||||
Mr. Cutaia [Member] | Note 1 [Member] | ||||||||||||
Maturity date description | February 8, 2021 | |||||||||||
Outstanding balance | 825,000 | 825,000 | 825,000 | |||||||||
Mr. Cutaia [Member] | Note 2 [Member] | ||||||||||||
Debt interest rate | 12.00% | |||||||||||
Maturity date description | April 1, 2017 | |||||||||||
Outstanding balance | $ 112,000 | $ 112,000 | $ 112,000 | |||||||||
Notes payable - related parties, net | $ 112,000 | |||||||||||
Mr. Cutaia [Member] | Note 3 [Member] | ||||||||||||
Debt interest rate | 12.00% | |||||||||||
Maturity date description | June 4, 2021 | |||||||||||
Outstanding balance | $ 343,000 | |||||||||||
Mr. Jeff Clayborne [Member] | Note 4 [Member] | ||||||||||||
Debt interest rate | 5.00% | |||||||||||
Maturity date description | April 30, 2019 | |||||||||||
Outstanding balance | $ 58,000 | |||||||||||
Repayments of debt | $ 58,000 | |||||||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | |||||||||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | |||||||||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||||||
[5] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. | |||||||||||
[6] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | |||||||||||
[7] | On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company's Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2019. |
Deferred Incentive Compensati_3
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||||
Total | $ 1,042,000 | $ 1,042,000 | |||||
Non-current | (521,000) | (1,042,000) | |||||
Current | $ 521,000 | ||||||
Rory Cutaia [Member] | |||||||
Date | [1] | Dec. 23, 2019 | Dec. 23, 2019 | ||||
Payment Date | [1] | 50% on January 10, 2021 and 50% on January 10, 2022 | 50% on January 10, 2021 and 50% on January 10, 2022 | ||||
Total | [1] | $ 430,000 | $ 430,000 | ||||
Rory Cutaia [Member] | |||||||
Date | Dec. 23, 2019 | [2] | Dec. 23, 2019 | [3] | |||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | [2] | 50% on January 10, 2021 and 50% on January 10, 2022 | [3] | |||
Total | $ 324,000 | [2] | $ 324,000 | [2],[3] | [3] | ||
Jeff Clayborne [Member] | |||||||
Date | [1] | Dec. 23, 2019 | Dec. 23, 2019 | ||||
Payment Date | [1] | 50% on January 10, 2021 and 50% on January 10, 2022 | 50% on January 10, 2021 and 50% on January 10, 2022 | ||||
Total | [1] | $ 125,000 | $ 125,000 | ||||
Jeff Clayborne [Member] | |||||||
Date | Dec. 23, 2019 | [2] | Dec. 23, 2019 | [3] | |||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | [2] | 50% on January 10, 2021 and 50% on January 10, 2022 | [3] | |||
Total | $ 163,000 | [2] | $ 163,000 | [2],[3] | [3] | ||
[1] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and 125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. | ||||||
[2] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $162,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. | ||||||
[3] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and 163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. |
Deferred Incentive Compensati_4
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) (Parenthetical) | Dec. 23, 2019USD ($) |
Rory Cutaia [Member] | |
Annual incentive compensation | $ 430,000 |
Rory Cutaia [Member] | Bonus [Member] | |
Annual incentive compensation | $ 324,000 |
Rory Cutaia [Member] | January 10, 2021 [Member] | |
Annual incentive compensation, percentage | 50.00% |
Rory Cutaia [Member] | January 10, 2021 [Member] | Nasdaq Up-Listing Award [Member] | |
Annual incentive compensation, percentage | 50.00% |
Rory Cutaia [Member] | January 10, 2022 [Member] | |
Annual incentive compensation, percentage | 50.00% |
Rory Cutaia [Member] | January 10, 2022 [Member] | Nasdaq Up-Listing Award [Member] | |
Annual incentive compensation, percentage | 50.00% |
Jeff Clayborne [Member] | |
Annual incentive compensation | $ 125,000 |
Jeff Clayborne [Member] | Bonus [Member] | |
Annual incentive compensation | $ 163,000 |
Jeff Clayborne [Member] | January 10, 2021 [Member] | |
Annual incentive compensation, percentage | 50.00% |
Jeff Clayborne [Member] | January 10, 2021 [Member] | Nasdaq Up-Listing Award [Member] | |
Annual incentive compensation, percentage | 50.00% |
Jeff Clayborne [Member] | January 10, 2022 [Member] | |
Annual incentive compensation, percentage | 50.00% |
Jeff Clayborne [Member] | January 10, 2022 [Member] | Nasdaq Up-Listing Award [Member] | |
Annual incentive compensation, percentage | 50.00% |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Oct. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 05, 2019 | Dec. 31, 2018 | |||
Original Borrowing | $ 1,012,000 | $ 1,012,000 | ||||||
Debt discount | $ (137,000) | $ (274,000) | ||||||
Note 1 [Member] | ||||||||
Note Date | Dec. 1, 2015 | [1] | Dec. 1, 2015 | [2] | ||||
Maturity Date | Feb. 8, 2021 | [1] | Feb. 8, 2021 | [2] | ||||
Interest Rate | 12.00% | [1] | 12.00% | [2] | ||||
Original Borrowing | $ 1,249,000 | [1] | $ 1,249,000 | [2] | ||||
Note 2 [Member] | ||||||||
Note Date | Dec. 1, 2015 | [3] | Dec. 1, 2015 | [4] | ||||
Maturity Date | Apr. 29, 2019 | Apr. 1, 2017 | [3] | Apr. 1, 2021 | [4] | |||
Interest Rate | 5.00% | 12.00% | [3] | 12.00% | [4] | |||
Original Borrowing | $ 112,000 | [3] | $ 112,000 | [4] | ||||
Total convertible notes payable | $ 400,000 | |||||||
Debt discount | $ (48,000) | (199,000) | ||||||
Note 3 [Member] | ||||||||
Note Date | Apr. 4, 2016 | [5] | Apr. 4, 2016 | [6] | ||||
Maturity Date | Jun. 4, 2021 | [5] | Jun. 4, 2021 | [6] | ||||
Interest Rate | 12.00% | [5] | 12.00% | [6] | ||||
Original Borrowing | $ 343,000 | [5] | $ 343,000 | [6] | ||||
Total convertible notes payable | ||||||||
Convertible Notes Payable [Member] | ||||||||
Total convertible notes payable | 1,900,000 | |||||||
Debt discount | (1,082,000) | |||||||
Total convertible notes payable , net of debt discount | 818,000 | |||||||
Convertible Notes Payable [Member] | Note 1 [Member] | ||||||||
Note Date | [7] | Oct. 19, 2018 | ||||||
Maturity Date | [7] | Apr. 19, 2019 | ||||||
Interest Rate | [7] | 10.00% | ||||||
Original Borrowing | [7] | $ 1,500,000 | ||||||
Total convertible notes payable | [7] | 1,500,000 | ||||||
Convertible Notes Payable [Member] | Note 2 [Member] | ||||||||
Note Date | [8] | Oct. 30, 2018 | ||||||
Maturity Date | [8] | Apr. 29, 2019 | ||||||
Interest Rate | [8] | 5.00% | ||||||
Original Borrowing | [8] | $ 400,000 | ||||||
Total convertible notes payable | [8] | 400,000 | ||||||
Convertible Notes Payable [Member] | Note 3 [Member] | ||||||||
Note Date | [9] | Feb. 1, 2019 | ||||||
Maturity Date | [9] | Aug. 2, 2019 | ||||||
Interest Rate | [9] | 10.00% | ||||||
Original Borrowing | [9] | $ 500,000 | ||||||
Total convertible notes payable | [9] | |||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | |||||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | |||||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||||||
[5] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | |||||||
[6] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. | |||||||
[7] | On October 19, 2018, the Company issued an unsecured convertible note to Bellridge Capital, LP ("Bellridge"), an unaffiliated third-party, in the aggregate principal amount of $1,500,000 in exchange for net proceeds of $1,242,000, representing an original issue discount of $150,000, and paid legal and financing expenses of $109,000. In addition, the Company issued 96,667 shares of its Common Stock with a fair value of $595,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in April 2019. The note was also convertible into shares of the Company's Common Stock only on or after the occurrence of an uncured "Event of Default." Primarily, the Company would be in default if it did not repay the principal amount of the note, as required. The other events of default are standard for the type of transaction represented by the related securities purchase agreement and the note. In the event of a default, the conversion price in effect on any date on which some or all of the principal of the note is to be converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provided its notice of conversion. Upon an Event of Default, the Company would owe Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that might also be due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that equaled 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price is unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $1,273,000 at the date of issuance.As a result of the issuance of the note, the Company incurred aggregate costs of $2,126,000 related to the note's original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $1,500,000 and the remaining $626,000 as financing costs in October 2018. The note discount was being amortized over the six-month term of the note.In April 2019, the Company paid the balance of $1,500,000. Prior to the payoff the Company recognized a change in fair market value in the derivative liability totaling $670,000. As part of the payoff, the Company amortized the remaining debt discount of $144,000 and recognized a gain on extinguishment of the derivative liability totaling $1,396,000.As of September 30, 2019, the outstanding balance of the note was $0 and unamortized debt discount was $0. | |||||||
[8] | On October 30, 2018, the Company issued two unsecured convertible notes to one current investor and one otherwise unaffiliated third-party in the aggregate principal amount of $400,000. The notes bore interest at a rate of 5% per annum and matured on April 29, 2019. Upon the Company's consummation of its underwritten public offering of the Company's units, all, and not less than all, of (i) the outstanding principal amount and (ii) the accrued interest thereunder were to be converted into shares of the Company's Common Stock. The per-share conversion price equaled seventy-five percent (75%) of the effective offering price of the Common Stock in the Company's recent underwritten public offering. The Company determined that, because the conversion price was unknown, that the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the notes created a derivative with a fair value of $302,000 at the date of issuance and was accounted as a debt discount and was being amortized over the term of the notes payable.On April 5, 2019, the Company converted the outstanding principal amount and accrued interest of $410,000 into 182,333 shares of Common Stock. Prior to the conversion, the Company recognized a change in fair market value in the derivative liability totaling $21,000. In addition, the Company amortized the remaining debt discount of $48,000 and recognized a gain on extinguishment of the derivative liability totaling $187,000.As of September 30, 2019, the outstanding balance of the note was $0 and unamortized debt discount was $0. | |||||||
[9] | On February 1, 2019, the Company issued an unsecured convertible note to Bellridge, an unaffiliated third-party, in the aggregate principal amount of $500,000 in exchange for net proceeds of $432,000, representing an original issue discount of $25,000, and paid legal and financing expenses of $43,000. In addition, the Company issued 16,667 shares of its Common Stock with a fair value of $128,000. The note was unsecured and did not bear interest; however, the implied interest was determined to be 10% since the note was issued at 10% less than its face value. The note matured in August 2019. The note was also convertible into shares of the Company's Common Stock only on or after the occurrence of an uncured "Event of Default." Primarily, the Company would have been in default if it did not repay the principal amount of the note, as required. The other events of default were standard for the type of transaction represented by the related securities purchase agreement and the note. The conversion price in effect on any date on which some or all of the principal of the note would have been converted would be a price equal to 70% of the lowest VWAP during the ten trading days immediately preceding the date on which Bellridge provides its notice of conversion. Upon an Event of Default, the Company would have owed Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that would have been due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that is at least equal to 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). The Company determined that, because the conversion price was unknown, the Company could not determine if it had enough authorized shares to fulfill the conversion obligation. As such, pursuant to current accounting guidelines, the Company determined that the conversion feature of the note created a derivative with a fair value of $388,000 at the date of issuance.As a result of the issuance of the note, the Company incurred aggregate costs of $584,000 related to the note's original issue discount, legal and financing expenses, the fair value of the Common Stock issued and the recognition of the derivative liability. The Company recorded these costs as a note discount up to the face value of the note of $500,000 and the remaining $84,000 as financing costs. The note discount was being amortized over the six-month term of the note.On April 2, 2019, the Company increased the outstanding principal amount of the note by $25,000 to an aggregate of $525,000 and issued 8,606 shares of Common Stock with a fair value of $55,000. The Company accounted for the increase in principal and the fair value of the shares of Common Stock in the aggregate of $80,000 as part its financing costs.In April 2019, the Company paid off the outstanding principal balance of $525,000. Prior to the payoff, the Company recognized a change in fair market value in the derivative liability totaling $260,000. In addition, the Company amortized the remaining debt discount of $366,000 and recognized a gain on extinguishment of the derivative liability totaling $644,000.As of September 30, 2019, the outstanding balance of the note was $0 and unamortized debt discount was $0. |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | Apr. 05, 2019 | Apr. 02, 2019 | Feb. 02, 2019 | Oct. 30, 2018 | Oct. 19, 2018 | Apr. 30, 2019 | Oct. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Debt principal amount | $ 594,000 | $ 1,006,000 | |||||||||||
Proceeds from issuance of convertible notes | $ 432,000 | 432,000 | $ 1,772,000 | ||||||||||
Original issue discount | 1,012,000 | 1,012,000 | |||||||||||
Fair value of common shares | 3,430,000 | 1,195,000 | 2,979,000 | ||||||||||
Financing costs | 84,000 | 1,625,000 | 798,000 | ||||||||||
Change in fair market value of derivative liability | (2,092,000) | $ (944,000) | (1,862,000) | 1,167,000 | |||||||||
Unamortized debt discount | 137,000 | 274,000 | |||||||||||
Gain on extinguishment of derivative liability | $ 1,536,000 | (534,000) | |||||||||||
Debt conversion amount | 3,066,000 | ||||||||||||
Number of shares issued, shares | 598,286 | ||||||||||||
Note 1 [Member] | |||||||||||||
Original issue discount | $ 1,249,000 | [1] | $ 1,249,000 | [2] | |||||||||
Interest rate | 12.00% | [1] | 12.00% | [2] | |||||||||
Maturity date | Feb. 8, 2021 | [1] | Feb. 8, 2021 | [2] | |||||||||
Note 2 [Member] | |||||||||||||
Debt principal amount | $ 400,000 | ||||||||||||
Original issue discount | $ 112,000 | [3] | $ 112,000 | [4] | |||||||||
Number of common stock shares issued upon conversion | 182,333 | ||||||||||||
Interest rate | 5.00% | 12.00% | [3] | 12.00% | [4] | ||||||||
Maturity date | Apr. 29, 2019 | Apr. 1, 2017 | [3] | Apr. 1, 2021 | [4] | ||||||||
Debt conversion percentage of amount | 75.00% | ||||||||||||
Fair value of derivatives | $ 302,000 | ||||||||||||
Outstanding balance of debt | 400,000 | ||||||||||||
Change in fair market value of derivative liability | $ 21,000 | ||||||||||||
Unamortized debt discount | 48,000 | $ 199,000 | |||||||||||
Gain on extinguishment of derivative liability | 187,000 | ||||||||||||
Debt conversion amount | $ 410,000 | ||||||||||||
Note 3 [Member] | |||||||||||||
Original issue discount | $ 343,000 | [5] | $ 343,000 | [6] | |||||||||
Interest rate | 12.00% | [5] | 12.00% | [6] | |||||||||
Maturity date | Jun. 4, 2021 | [5] | Jun. 4, 2021 | [6] | |||||||||
Outstanding balance of debt | |||||||||||||
Bellridge Capital, LLC [Member] | Note 1 [Member] | |||||||||||||
Debt principal amount | $ 1,500,000 | ||||||||||||
Proceeds from issuance of convertible notes | 1,242,000 | ||||||||||||
Original issue discount | 150,000 | ||||||||||||
Settlement of financing expense | $ 109,000 | ||||||||||||
Number of common stock shares issued upon conversion | 96,667 | ||||||||||||
Fair value of common shares | $ 595,000 | ||||||||||||
Interest rate | 10.00% | ||||||||||||
Maturity date | Apr. 30, 2019 | ||||||||||||
Debt conversion percentage of amount | 70.00% | ||||||||||||
Event of default description | Upon an Event of Default, the Company would owe Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that might also be due in respect thereof. The Company agreed that, on or after the occurrence of an Event of Default, it would reserve and keep available that number of shares of its Common Stock that equaled 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). | ||||||||||||
Fair value of derivatives | $ 1,273,000 | ||||||||||||
Aggregate cost incurred | $ 2,126,000 | ||||||||||||
Financing costs | $ 626,000 | ||||||||||||
Outstanding balance of debt | $ 1,500,000 | ||||||||||||
Change in fair market value of derivative liability | 670,000 | ||||||||||||
Unamortized debt discount | 144,000 | ||||||||||||
Gain on extinguishment of derivative liability | 1,396,000 | ||||||||||||
Bellridge Capital, LLC [Member] | Note 3 [Member] | |||||||||||||
Debt principal amount | $ 500,000 | ||||||||||||
Proceeds from issuance of convertible notes | 432,000 | ||||||||||||
Original issue discount | 25,000 | ||||||||||||
Settlement of financing expense | $ 43,000 | ||||||||||||
Number of common stock shares issued upon conversion | 16,667 | ||||||||||||
Fair value of common shares | $ 55,000 | $ 128,000 | |||||||||||
Interest rate | 10.00% | ||||||||||||
Maturity date | Aug. 31, 2019 | ||||||||||||
Debt conversion percentage of amount | 70.00% | ||||||||||||
Event of default description | Upon an Event of Default, the Company will owe Bellridge an amount equivalent to 110% of the then-outstanding principal amount of the note in addition to of all other amounts, costs, expenses, and liquidated damages that might also be due in respect thereof. The Company has agreed that, on or after the occurrence of an Event of Default, it will reserve and keep available that number of shares of its Common Stock that is at least equal to 200% of the number of such shares that potentially would be issuable pursuant to the terms of the securities purchase agreement and the note (assuming conversion in full of the note and on any date of determination). | ||||||||||||
Fair value of derivatives | $ 388,000 | ||||||||||||
Aggregate cost incurred | 584,000 | ||||||||||||
Financing costs | $ 80,000 | $ 84,000 | |||||||||||
Outstanding balance of debt | 525,000 | ||||||||||||
Change in fair market value of derivative liability | 260,000 | ||||||||||||
Unamortized debt discount | 366,000 | ||||||||||||
Gain on extinguishment of derivative liability | $ 644,000 | ||||||||||||
Number of shares issued, shares | 8,606 | ||||||||||||
Bellridge Capital, LLC [Member] | Note 3 [Member] | Minimum [Member] | |||||||||||||
Debt principal amount | $ 25,000 | ||||||||||||
Bellridge Capital, LLC [Member] | Note 3 [Member] | Maximum [Member] | |||||||||||||
Debt principal amount | $ 525,000 | ||||||||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $825,000, respectively. | ||||||||||||
[2] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and will mature on February 8, 2021, as amended. As of December 31, 2019 and 2018, the outstanding balance of the note amounted to $825,000, respectively. | ||||||||||||
[3] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of March 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | ||||||||||||
[4] | On December 1, 2015, the Company issued a note payable to a former member of the Company's board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2019 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2019, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | ||||||||||||
[5] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of March 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | ||||||||||||
[6] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2019, and December 31, 2018, the outstanding balance of the note amounted to $240,000, respectively. |
Convertible Series A Preferre_2
Convertible Series A Preferred Stock and Warrant Offering (Details Narrative) - USD ($) | Aug. 14, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 11, 2019 |
Warrant to purchase of common stock | 108,196 | ||||
Number of shares issued, shares | 598,286 | ||||
Series A Preferred Stock [Member] | |||||
Number of shares issued, shares | 5,030 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Conversion of stock, number of shares issued | 1,150 | 634 | |||
Preferred stock, shares outstanding | 3,246 | 4,396 | 0 | ||
Series A Preferred Stock and Warrants [Member] | |||||
Proceeds from issuance of preferred shares and warrants | $ 4,688,000 | ||||
Direct costs of issuance | $ 342,000 | ||||
At-the-market agreement terms, description | We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to "at-the-market" transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to "at-the-market" transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants | ||||
Preferred stock conversion, description | Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder's option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. | ||||
Common Stock [Member] | |||||
Warrant to purchase of common stock | 416,119 | 163,739 | |||
Number of shares issued, shares | 3,392,833 | 1,163,938 | |||
Conversion of stock, number of shares issued | 741,933 | 409,032 | |||
Securities Purchase Agreement [Member] | |||||
Warrant to purchase of common stock | 3,870,000 | ||||
Securities Purchase Agreement [Member] | Maximum [Member] | |||||
Number of share warrants granted to issue | 3,245,162 | ||||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | |||||
Number of shares agreed to be issued | 6,000 | ||||
Securities Purchase Agreement [Member] | Series A Preferred Stock and Warrants [Member] | |||||
At-the-market agreement terms, description | We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to "at-the-market" transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to "at-the-market" transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants). | ||||
Preferred stock conversion, description | Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder's option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. The holders of Series A Preferred Stock cannot convert the Series A Preferred Stock if, after giving effect to the conversion, the number of shares of our Common Stock beneficially held by the holder (together with such holder's affiliates) would be in excess of 4.99% (or, upon election by a holder prior to the issuance of any shares, 9.99% of the number of shares of Common Stock issued and outstanding immediately after giving effect to the issuance of any shares of Common Stock issuance upon conversion of the Series A Preferred Stock held by the holder). The conversion price of the Series A Preferred Stock is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. | ||||
Conversion price per share | $ 1.55 | ||||
Shareholders' approval percentage for mandatory conversion | 19.99% |
Convertible Series A Preferre_3
Convertible Series A Preferred Stock and Warrant Offering (Details Narrative) (10-K) - USD ($) | Aug. 14, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 11, 2019 |
Warrant to purchase of common stock | 108,196 | ||||
Number of shares issued, shares | 598,286 | ||||
Series A Preferred Stock [Member] | |||||
Number of shares issued, shares | 5,030 | ||||
Series A Convertible Preferred Stock [Member] | |||||
Conversion of stock, number of shares issued | 1,150 | 634 | |||
Preferred stock, shares outstanding | 3,246 | 4,396 | 0 | ||
Series A Preferred Stock and Warrants [Member] | |||||
Proceeds from issuance of preferred shares and warrants | $ 4,688,000 | ||||
Direct costs of issuance | $ 342,000 | ||||
At-the-market agreement terms, description | We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to "at-the-market" transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to "at-the-market" transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants | ||||
Preferred stock conversion, description | Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder's option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. | ||||
Warrant [Member] | |||||
Direct costs of issuance | $ 1,485,000 | ||||
Derivative liability | 6,173,000 | ||||
Reduction to additional paid in capital | $ 4,688,000 | ||||
Common Stock [Member] | |||||
Warrant to purchase of common stock | 416,119 | 163,739 | |||
Number of shares issued, shares | 3,392,833 | 1,163,938 | |||
Warrant exercise price | $ 3.76 | ||||
Conversion of stock, number of shares issued | 741,933 | 409,032 | |||
Securities Purchase Agreement [Member] | |||||
Warrant to purchase of common stock | 3,870,000 | ||||
Warrant exercise price | $ 1.88 | ||||
Securities Purchase Agreement [Member] | Maximum [Member] | |||||
Number of share warrants granted to issue | 3,245,162 | ||||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | |||||
Number of shares agreed to be issued | 6,000 | ||||
Securities Purchase Agreement [Member] | Series A Preferred Stock and Warrants [Member] | |||||
At-the-market agreement terms, description | We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to "at-the-market" transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to "at-the-market" transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants). | ||||
Preferred stock conversion, description | Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder's option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. The holders of Series A Preferred Stock cannot convert the Series A Preferred Stock if, after giving effect to the conversion, the number of shares of our Common Stock beneficially held by the holder (together with such holder's affiliates) would be in excess of 4.99% (or, upon election by a holder prior to the issuance of any shares, 9.99% of the number of shares of Common Stock issued and outstanding immediately after giving effect to the issuance of any shares of Common Stock issuance upon conversion of the Series A Preferred Stock held by the holder). The conversion price of the Series A Preferred Stock is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. | ||||
Conversion price per share | $ 1.55 | ||||
Shareholders' approval percentage for mandatory conversion | 19.99% | ||||
Number of common stock to be issued causing ineligibility to issue common stock | 4,459,725 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative liability | $ 6,907,000 | $ 2,020,000 | $ 5,048,000 | $ 2,576,000 | $ 1,251,000 |
Change in fair value of derivative liability | (2,092,000) | $ (944,000) | $ (1,862,000) | $ 1,167,000 | |
Warrants [Member] | |||||
Derivative liability | $ 3,951,000 |
Derivative Liability (Details_2
Derivative Liability (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative liability | $ 6,907,000 | $ 2,020,000 | $ 5,048,000 | $ 2,576,000 | $ 1,251,000 |
Additional derivative liability | 3,951,000 | 388,000 | 6,561,000 | 1,877,000 | |
Change in fair value of derivative liability | $ (2,092,000) | $ (944,000) | (1,862,000) | 1,167,000 | |
Gain on extinguishment of derivative liability | (2,227,000) | $ (1,719,000) | |||
Convertible Note [Member] | |||||
Additional derivative liability | 388,000 | ||||
Warrant [Member] | |||||
Additional derivative liability | $ 6,173,000 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liability Using Binomial Pricing Model Assumptions (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Stock Price | $ / shares | $ 1.26 | $ 1.55 | $ 4.80 |
Fair Value | $ | $ 6,907,000 | $ 5,048,000 | $ 2,576,000 |
Exercise Price [Member] | |||
Fair value assumptions, measurement input, exercise price per share | shares | 1.66 | 1.88 | 2.70 |
Expected Life [Member] | |||
Fair value assumptions, measurement input, term | 3 years 3 months 8 days | 3 years 6 months 10 days | 1 year 9 months 11 days |
Volatility [Member] | |||
Fair value assumptions, measurement input, percentage | 211 | 2.16 | 1.84 |
Dividend Yield [Member] | |||
Fair value assumptions, measurement input, percentage | 0 | 0 | 0 |
Risk Free Interest Rate [Member] | |||
Fair value assumptions, measurement input, percentage | 2.22 | 0.0164 | 0.0246 |
Upon Issuance [Member] | |||
Stock Price | $ / shares | $ 1.70 | $ 4.78 | |
Fair Value | $ | $ 3,951,000 | $ 6,561,000 | |
Upon Issuance [Member] | Exercise Price [Member] | |||
Fair value assumptions, measurement input, exercise price per share | shares | 1.55 | 3.76 | |
Upon Issuance [Member] | Expected Life [Member] | |||
Fair value assumptions, measurement input, term | 5 years | 2 years 9 months | |
Upon Issuance [Member] | Volatility [Member] | |||
Fair value assumptions, measurement input, percentage | 212 | 192 | |
Upon Issuance [Member] | Dividend Yield [Member] | |||
Fair value assumptions, measurement input, percentage | 0 | 0 | |
Upon Issuance [Member] | Risk Free Interest Rate [Member] | |||
Fair value assumptions, measurement input, percentage | 2.47 | 1.99 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Liability Transactions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Beginning balance | $ 5,048,000 | $ 2,576,000 | $ 2,576,000 | $ 1,251,000 |
Fair value upon issuance of notes payable and warrants | 3,951,000 | 388,000 | 6,561,000 | 1,877,000 |
Change in fair value | (2,092,000) | (944,000) | (1,862,000) | 1,167,000 |
Extinguishment | (2,227,000) | (1,719,000) | ||
Ending balance | $ 6,907,000 | $ 2,020,000 | $ 5,048,000 | $ 2,576,000 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Mar. 31, 2020 | Feb. 05, 2020 | Mar. 31, 2020 | Mar. 31, 2020 | Jul. 07, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | May 14, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 30, 2020 | Apr. 11, 2019 |
Warrant to purchase of common stock | 108,196 | |||||||||||
Number of shares services rendered | $ 321,000 | $ 388,000 | $ 1,778,000 | $ 1,545,000 | ||||||||
Series A Shareholders [Member] | ||||||||||||
Warrant to purchase of common stock | 2,303,861 | |||||||||||
Warrant term | 5 years | |||||||||||
Warrant exercise price | $ 1.20 | |||||||||||
Fair value derivative liability upon issuance | $ 3,951,000 | |||||||||||
Vendors [Member] | ||||||||||||
Number of shares services rendered, shares | 220,601 | |||||||||||
Number of shares services rendered | $ 321,000 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Common stock subscribed | 3,392,833 | 3,392,833 | 3,392,833 | 3,392,833 | 845,000 | 845,000 | ||||||
Subsequent Event [Member] | Vendors [Member] | ||||||||||||
Number of shares services rendered, shares | 463,641 | 407,633 | ||||||||||
Number of shares services rendered | $ 585,427 | $ 444,000 | ||||||||||
Common Stock [Member] | ||||||||||||
Sale and issuance of common stock | 6,549,596 | |||||||||||
Warrant to purchase of common stock | 416,119 | 416,119 | 416,119 | 416,119 | 163,739 | |||||||
Warrant exercise price | $ 3.76 | |||||||||||
Number of shares services rendered, shares | 320,601 | 39,998 | 1,015,981 | 319,346 | ||||||||
Number of shares services rendered | ||||||||||||
Private Placement [Member] | ||||||||||||
Common per-share price | $ 1.20 | |||||||||||
Sale and issuance description | The sale and issuance of up to five million shares of our Common Stock at a per-share price of $1.20 (represents a 20% discount to the $1.50 closing price of our Common Stock on that day | |||||||||||
Cash fee aggregate amount | $ 499,000 | |||||||||||
Private placement description | Our Private Placement was managed by the Company; however, in connection with our Closings, we paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of our Closings), (ii) as a non-accountable expense allowance, an aggregate of $99,000 (or 2% of the gross proceeds of our Closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of our Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of our Common Stock. We made the above-referenced payments only in respect of that portion of the gross proceeds from our Closings for investors introduced to us by the consultant. | |||||||||||
Share based compensation expense | $ 42,000 | |||||||||||
Private Placement [Member] | Consultant [Member] | ||||||||||||
Number of shares services rendered, shares | 100,000 | |||||||||||
Private Placement [Member] | Subsequent Event [Member] | ||||||||||||
Common per-share price | $ 1.20 | |||||||||||
Sale and issuance description | The sale and issuance of up to five million shares of its Common Stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company's Common Stock on that day, and is memorialized by a subscription agreement. | |||||||||||
Common stock subscribed | 4,237,833 | 4,237,833 | 4,237,833 | 4,237,833 | ||||||||
Cash fee aggregate amount | $ 499,000 | |||||||||||
Private placement description | The Company's private placement is exempt from the registration requirements of Section 5 of the Securities Act, in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the SEC. The Company's private placement was managed by the Company; however, in connection with the closings, the Company paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of the closings), (ii) as a non-accountable expense allowance, an aggregate of $100,000 (or 2% of the gross proceeds of the closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of the Company's Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of the Company's Common Stock. | |||||||||||
Private Placement [Member] | Common Stock [Member] | ||||||||||||
Sale and issuance of common stock | 3,392,833 | |||||||||||
Common stock subscribed | 4,237,833 | 4,237,833 | 4,237,833 | 4,237,833 | ||||||||
Proceeds sold of common stock | $ 3,430,000 | |||||||||||
Private Placement [Member] | Common Stock [Member] | Subsequent Event [Member] | ||||||||||||
Sale and issuance of common stock | 845,000 | |||||||||||
Proceeds sold of common stock | $ 1,014,000 | |||||||||||
Private Placement [Member] | Maximum [Member] | ||||||||||||
Sale and issuance of common stock | 5,000,000 | |||||||||||
Private Placement [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||||
Sale and issuance of common stock | 5,000,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) (10-K) - USD ($) | Apr. 30, 2019 | Apr. 09, 2019 | Apr. 04, 2019 | Mar. 28, 2018 | Apr. 30, 2019 | Oct. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 08, 2019 | Apr. 11, 2019 | Dec. 04, 2018 | Aug. 08, 2018 |
Number of shares issued, shares | 598,286 | |||||||||||||||
Warrant to purchase of common stock | 108,196 | |||||||||||||||
Value of shares issued for acquisition | $ 7,820,000 | |||||||||||||||
Number of shares services rendered | $ 321,000 | $ 388,000 | $ 1,778,000 | $ 1,545,000 | ||||||||||||
Number of stock options granted | 185,887 | 2,531,971 | 1,400,418 | |||||||||||||
Debt conversion amount | $ 3,066,000 | |||||||||||||||
Fair value of common shares | $ 3,430,000 | $ 1,195,000 | $ 2,979,000 | |||||||||||||
Note Holder [Member] | ||||||||||||||||
Number of stock options granted | 25,272 | |||||||||||||||
Number of stock options granted, value | $ 182,000 | |||||||||||||||
Number of common stock shares issued upon conversion | 96,667 | |||||||||||||||
Debt conversion amount | $ 595,000 | |||||||||||||||
Notes Payable [Member] | ||||||||||||||||
Number of common stock shares issued upon conversion | 780,619 | |||||||||||||||
Accounts Payable [Member] | ||||||||||||||||
Debt conversion amount | $ 10,000 | |||||||||||||||
Conversion of accounts payable into common stock shares | 4,142 | |||||||||||||||
Conversion of accounts payable into common stock | $ 10,000 | |||||||||||||||
Stock Subscription [Member] | ||||||||||||||||
Number of shares issued, shares | 1,163,938 | |||||||||||||||
Fair value of common shares | $ 2,979,000 | |||||||||||||||
Note Payable [Member] | ||||||||||||||||
Warrant to purchase of common stock | 108,196 | 23,562 | 163,114 | |||||||||||||
Warrant exercise price | $ 3.44 | |||||||||||||||
Warrant expiration date | Aug. 31, 2024 | |||||||||||||||
Number of common stock shares issued upon conversion | 1,243,189 | |||||||||||||||
Vendor [Member] | ||||||||||||||||
Number of shares services rendered, shares | 579,334 | |||||||||||||||
Number of shares services rendered | $ 1,162,000 | |||||||||||||||
Employees and Vendors [Member] | ||||||||||||||||
Number of shares services rendered, shares | 319,345 | |||||||||||||||
Number of shares services rendered | $ 1,546,000 | |||||||||||||||
Officers and Director [Member] | ||||||||||||||||
Number of shares services rendered, shares | 300,000 | |||||||||||||||
Number of shares services rendered | $ 1,539,000 | |||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||
Number of shares issued, shares | 27,148 | |||||||||||||||
Number of common stock shares issued upon conversion | 582,000 | |||||||||||||||
Debt conversion amount | $ 582,000 | |||||||||||||||
Investors [Member] | ||||||||||||||||
Number of shares repurchased of common stock, shares | 46,668 | |||||||||||||||
Number of shares repurchased of common stock | $ 20,000 | |||||||||||||||
Common Stock [Member] | ||||||||||||||||
Number of shares issued, shares | 3,392,833 | 1,163,938 | ||||||||||||||
Warrant to purchase of common stock | 416,119 | 163,739 | ||||||||||||||
Warrant exercise price | $ 3.76 | |||||||||||||||
Warrant expiration date | Apr. 30, 2024 | |||||||||||||||
Number of shares issued for acquisition | 3,327,791 | 3,327,791 | ||||||||||||||
Value of shares issued for acquisition | $ 7,820,000 | |||||||||||||||
Number of shares services rendered, shares | 320,601 | 39,998 | 1,015,981 | 319,346 | ||||||||||||
Number of shares services rendered | ||||||||||||||||
Number of common stock shares issued upon conversion | 1,243,189 | |||||||||||||||
Debt conversion amount | ||||||||||||||||
Fair value of common shares | $ 1,000 | |||||||||||||||
Number of shares repurchased of common stock, shares | (46,668) | |||||||||||||||
Public Offering [Member] | ||||||||||||||||
Proceeds from public offering | $ 18,525,000 | |||||||||||||||
Other offering expense | $ 2,138,000 | |||||||||||||||
Legal and professional expenses | $ 162,000 | |||||||||||||||
Public Offering [Member] | Underwriter Warrants [Member] | ||||||||||||||||
Warrant to purchase of common stock | 319,488 | |||||||||||||||
Warrant exercise price | $ 3.913 | |||||||||||||||
Underwriting Agreement [Member] | ||||||||||||||||
Number of units issued under offering | 6,389,776 | |||||||||||||||
Number of shares issued, shares | 6,389,776 | |||||||||||||||
Warrant to purchase of common stock | 6,389,776 | |||||||||||||||
Underwriting Agreement [Member] | Over-allotment Option [Member] | ||||||||||||||||
Number of units issued under offering | 159,820 | |||||||||||||||
Number of shares issued, shares | 159,820 | |||||||||||||||
Warrant to purchase of common stock | 159,820 | |||||||||||||||
Underwriting Agreement [Member] | Alliance Global Partners [Member] | ||||||||||||||||
Number of units issued under offering | 6,389,776 | |||||||||||||||
Number of shares issued, shares | 6,389,776 | |||||||||||||||
Warrant to purchase of common stock | 6,389,776 | |||||||||||||||
Shares issued price per share | $ 3.13 | |||||||||||||||
Underwriting Agreement [Member] | Alliance Global Partners [Member] | Option Shares [Member] | ||||||||||||||||
Number of units issued under offering | 958,466 | |||||||||||||||
Number of shares issued, shares | 958,466 | |||||||||||||||
Warrant to purchase of common stock | 958,466 | |||||||||||||||
Warrant exercise price | $ 3.443 | |||||||||||||||
Warrant term | 5 years | |||||||||||||||
Warrant expiration date | Apr. 9, 2024 | |||||||||||||||
Option Agreement [Member] | ||||||||||||||||
Number of shares issued, shares | 203,207 | 203,207 | ||||||||||||||
Warrant to purchase of common stock | 133,333 | 133,333 | ||||||||||||||
Warrant exercise price | $ 3.75 | $ 3.75 | ||||||||||||||
Fair value of common shares | $ 1,000,000 | $ 1,000,000 |
Restricted Stock Awards (Detail
Restricted Stock Awards (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards | ||
Fair value of granted restricted stock | $ 241,000 | |
Fair value of restricted stock award vested | $ 1,758,000 | $ 616,000 |
Restricted Stock Awards (Deta_2
Restricted Stock Awards (Details Narrative) (10-K) - USD ($) | Dec. 23, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Number of shares granted of restricted stock awards | 1,923,001 | |||
Fair value of granted restricted stock | $ 241,000 | |||
Fiar value of restricted stock award vested | $ 1,758,000 | $ 616,000 | ||
Unvested compensation related to issuances of restricted stock award | $ 1,999,000 | |||
Employees and Directors [Member] | ||||
Number of shares granted of restricted stock awards | 1,923,001 | |||
Fair value of granted restricted stock | $ 2,615,000 |
Restricted Stock Awards - Summa
Restricted Stock Awards - Summary of Restricted Stock Award Activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock Awards | |||
Number of Non-vested Shares, Outstanding Beginning | 1,486,354 | ||
Number of Shares, Granted | 1,923,001 | ||
Number of Shares, Vested | (11,025) | (436,647) | |
Number of Shares, Forfeited | |||
Number of Non-vested Shares, Outstanding Ending | 1,475,329 | 1,486,354 | |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ 1.36 | ||
Weighted Average Grant Date Fair Value, Granted | 1.36 | ||
Weighted Average Grant Date Fair Value, Vested | 1.36 | 1.36 | |
Weighted Average Grant Date Fair Value, Forfeited | |||
Weighted Average Grant Date Fair Value, Outstanding Ending | $ 1.36 | $ 1.36 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of stock options granted | 185,887 | 2,531,971 | 1,400,418 |
Exercise price of common stock granted | $ 1.39 | $ 2.07 | $ 6.75 |
Employees [Member] | |||
Number of stock options granted | 185,887 | ||
Exercise price of common stock granted | $ 1.39 | ||
Expiration period | 5 years | ||
Stock option vesting, description | Expire in five years, and vests in 4 equal installments during the four years from the grant date. | ||
Fair value of stock options grants | $ 246,000 | ||
Expense recognized relating to stock options | 381,000 | ||
Unrecognized stock based compensation expense | $ 4,000,000 | ||
Stock option, description | Expected to be recognized as part of operating expense through March 2024. |
Stock Options (Details Narrat_2
Stock Options (Details Narrative) (10-K) - USD ($) | Dec. 23, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Number of stock options granted | 185,887 | 2,531,971 | 1,400,418 | |
Exercise price of common stock granted | $ 1.39 | $ 2.07 | $ 6.75 | |
Number of common stock exercised | 32,508 | |||
Number of common stock exercised, value | $ 34,000 | |||
Employees and Consultants [Member] | ||||
Number of stock options granted | 1,340,333 | 2,531,971 | 1,400,418 | |
Exercise price of common stock granted | $ 1.36 | $ 2.07 | $ 6.75 | |
Fair value before amendment amount | $ 32,000 | |||
Stock based compensation expenses | 12,000 | |||
Recognized of operating expense | $ 20,000 | |||
Expiration period | 5 years | 5 years | ||
Stock option vesting period | 4 years | 4 years | ||
Fair value of stock options grants | $ 4,564,000 | $ 9,712,000 | ||
Expense recognized relating to stock options | 1,961,000 | $ 1,870,000 | ||
Unrecognized stock based compensation expense | $ 4,228,000 | |||
Stock option, description | Expected to be recognized as part of operating expense through December 2023 |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Number of options outstanding beginning balance | 4,233,722 | 2,478,974 | 1,456,064 |
Number of options granted | 185,887 | 2,531,971 | 1,400,418 |
Number of options forfeited | (2,500) | (777,223) | (345,000) |
Number of options exercised | (32,508) | ||
Number of options outstanding ending balance | 4,417,108 | 4,233,722 | 2,478,974 |
Number of options vested | 1,820,725 | 1,496,439 | |
Number of options exercisable | 1,337,946 | 888,834 | |
Weighted average exercise price outstanding beginning balance | $ 1.73 | $ 5.25 | $ 3.90 |
Weighted average exercise price granted | 1.39 | 2.07 | 6.75 |
Weighted average exercise price forfeited | 1.36 | 6.42 | 5.85 |
Weighted average exercise price exercised | |||
Weighted average exercise price outstanding ending balance | 1.72 | 1.73 | $ 5.25 |
Weighted average exercise price vested | 1.75 | 2.13 | |
Weighted average exercise price exercisable | $ 2.19 | $ 2.55 | |
Weighted average remaining contractual term outstanding | 2 years 6 months 14 days | 2 years 11 months 4 days | 2 years 1 month 2 days |
Weighted average remaining contractual term outstanding | 2 years 6 months 14 days | 2 years 6 months 14 days | 2 years 11 months 4 days |
Aggregate intrinsic value outstanding beginning balance | $ 995,000 | ||
Aggregate intrinsic value granted | |||
Aggregate intrinsic value forfeited | |||
Aggregate intrinsic value exercised | |||
Aggregate intrinsic value outstanding ending balance | 143,000 | 995,000 | |
Aggregate intrinsic value vested | 28,000 | 263,851 | |
Aggregate intrinsic value exercisable | $ 26,000 | $ 83,252 |
Stock Options - Schedule of Fai
Stock Options - Schedule of Fair Value Assumptions Using Black-Scholes Method (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Risk-free interest rate | 0.39% | 2.75% | |
Average expected term (years) | 5 years | 5 years | 5 years |
Expected volatility | 270.10% | 201.30% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Maximum [Member] | |||
Risk-free interest rate | 1.51% | 2.25% | |
Expected volatility | 180.00% | 184.45% | |
Minimum [Member] | |||
Risk-free interest rate | 2.75% | 3.00% | |
Expected volatility | 413.83% | 190.22% |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intrinsic value exercise price | $ 1,806,000 | |||
Series A Shareholders [Member] | ||||
Number of share warrants granted to issue | 2,303,861 | |||
Private Placement [Member] | Consultant [Member] | ||||
Number of share warrants granted to issue | 416,199 |
Warrants (Details Narrative) (1
Warrants (Details Narrative) (10-K) - USD ($) | Jun. 08, 2019 | Apr. 11, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2020 | Aug. 15, 2019 | Apr. 09, 2019 | Dec. 04, 2018 | Aug. 08, 2018 | Feb. 21, 2018 | Dec. 31, 2017 |
Intrinsic value exercise price | $ 1,806,000 | |||||||||||
Warrants purchase of common stock shares | 108,196 | |||||||||||
Fair value of warrants | $ 1,188,000 | |||||||||||
Proceeds from warrant exercised | $ 45,000 | $ 22,000 | ||||||||||
Kodiak [Member] | ||||||||||||
Warrants purchase of common stock shares | 133,334 | |||||||||||
Warrant exercise price per share | $ 3.75 | |||||||||||
Warrants expire date | Feb. 20, 2023 | |||||||||||
Note Payable [Member] | ||||||||||||
Warrants purchase of common stock shares | 108,196 | 23,562 | 163,114 | |||||||||
Warrant exercise price per share | $ 3.44 | |||||||||||
Warrants expire date | Aug. 31, 2024 | |||||||||||
Fair value of warrants | $ 217,000 | |||||||||||
Conversion of common stock, shares | 1,243,189 | |||||||||||
Note Holders [Member] | ||||||||||||
Warrants purchase of common stock shares | 66,668 | |||||||||||
Warrant exercise price per share | $ 2.10 | |||||||||||
Warrants expire date | Jan. 31, 2023 | |||||||||||
Number of warrant exercised | 33,333 | |||||||||||
Common Stock [Member] | ||||||||||||
Warrants purchase of common stock shares | 163,739 | 416,119 | ||||||||||
Warrant exercise price per share | $ 3.76 | |||||||||||
Warrants expire date | Apr. 30, 2024 | |||||||||||
Fair value of warrants | $ 439,000 | |||||||||||
Conversion of common stock, shares | 1,243,189 | |||||||||||
Common shares issued upon exercise of warrants, shares | 148,714 | 189,237 | 1,074,921 | |||||||||
Stock Warrant [Member] | ||||||||||||
Number of warrant exercised | 348,938 | 1,285,544 | ||||||||||
Conversion of common stock, shares | 189,237 | |||||||||||
Common stock weighted average exercise price | $ 1.15 | |||||||||||
Proceeds from warrant exercised | $ 45,000 | $ 22,000 | ||||||||||
Common shares issued upon exercise of warrants, shares | 1,074,921 | |||||||||||
Public Offering [Member] | ||||||||||||
Warrants purchase of common stock shares | 6,869,084 | |||||||||||
Warrant exercise price per share | $ 3.46 | |||||||||||
Warrants expire date | Apr. 30, 2024 | |||||||||||
Preferred Stock Offering [Member] | ||||||||||||
Warrants purchase of common stock shares | 3,245,162 | |||||||||||
Warrant exercise price per share | $ 1.88 | |||||||||||
Warrants expire date | Aug. 31, 2024 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |||
Number of Shares, Warrants Outstanding Beginning | 10,930,991 | 940,415 | 1,895,767 |
Number of Shares, Warrants granted | 2,720,060 | 10,386,181 | 386,678 |
Number of Shares, Warrants expired/cancelled | (46,667) | (56,486) | |
Number of Shares, Warrants exercised | (348,938) | (1,285,544) | |
Number of Shares, Warrants Outstanding Ending | 13,651,050 | 10,930,991 | 940,415 |
Weighted-Average Exercise Price, Outstanding Beginning | $ 3.07 | $ 3.60 | $ 1.95 |
Weighted-Average Exercise Price, granted | 1.31 | 2.97 | 5.10 |
Weighted-Average Exercise Price, exercised | 7.29 | 1.05 | |
Weighted-Average Exercise Price, expired/cancelled | 1.17 | 1.80 | |
Weighted-Average Exercise Price, Outstanding Ending | $ 2.72 | $ 3.07 | $ 3.60 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 4 years 2 months 30 days | 2 years 7 months 13 days | |
Weighted Average Remaining Contractual Life (Years), Outstanding Ending | 4 years 1 month 13 days | 4 years 2 months 30 days | 2 years 3 months 26 days |
Aggregate Intrinsic Value Outstanding Beginning | $ 1,806,000 | ||
Aggregate Intrinsic Value Outstanding Ending | $ 1,806,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Percentage of valuation allowance against the asset amount | 100.00% | |
Statutory federal corporate tax rate | 21.00% | 21.00% |
Income tax rate description | The Company is currently assessing the extensive changes under the TCJ Act and its overall impact on the Company; however, based on its preliminary assessment of the reduction in the federal corporate tax rate from 35% to 21% to become effective on January 1, 2018, the Company currently expects that its effective tax rate for 2018 will be between 20% and 23%. Such estimated range is based on management's current assumptions with respect to, among other things, the Company's earnings, state income tax levels and tax deductions. The Company's actual effective tax rate in 2019 may differ from management's estimate. | |
Federal and state net operating loss carry forwards | $ 28,700,000 | |
Net operating loss carry forwards expire date | 2034 | |
Change in control percentage | 50.00% | |
Tax Cuts and Jobs Act [Member] | ||
Statutory federal corporate tax rate | 21.00% | |
Income tax rate description | The Tax Cuts and Jobs Act (the "TCJ Act") was enacted into law. The TCJ Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the "Code"), that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) (10-K) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 7,591,000 | $ 5,300,000 |
Share based compensation | (635,000) | (524,000) |
Non-cash interest and financing expenses | (472,000) | (694,000) |
Other temporary differences | (63,000) | (378,000) |
Less: Valuation allowance | (6,421,000) | (3,704,000) |
Deferred tax assets, net |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision of Income Taxes (Details) (10-K) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (21.00%) | (21.00%) |
State taxes, net of federal benefit | (6.90%) | (6.00%) |
Non-deductible items | (1.00%) | (0.10%) |
Change in valuation allowance | 28.90% | 27.90% |
Provision for income taxes | 0.00% | 0.00% |
Accrued Officers' Salary (Detai
Accrued Officers' Salary (Details Narrative) (10-K) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued officers' salary | $ 207,000 | $ 207,000 | $ 188,000 |
Chief Executive Officer [Member] | |||
Ownership percentage | 13.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Apr. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2015 | |
Unpaid bonus compensation | $ 300,000 | |||
Board fees expensed | $ 175,000 | $ 105,000 | ||
Board fees to be recognized | 450,000 | 322,000 | ||
Five Board Members [Member] | ||||
Aggregate board fees | $ 450,000 | $ 450,000 | ||
bBooth, Inc. [Member] | ||||
Unpaid bonus compensation | $ 300,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) (10-K) - USD ($) | Dec. 20, 2019 | Dec. 31, 2019 | Apr. 30, 2018 | Mar. 31, 2020 |
Sought value by employee | $ 300,000 | |||
Board fees expensed | $ 175,000 | $ 105,000 | ||
Board fees paid | 183,000 | |||
Board fees to be recognized | 450,000 | 322,000 | ||
Five Board Members [Member] | ||||
Aggregate board fees | $ 450,000 | $ 450,000 | ||
Employment Agreement [Member] | Mr. Cutaia [Member] | ||||
Agreement term description | The Employment Agreement is for a four-year term, and can be extended for additional one-year periods. | |||
Annual salary | $ 430,000 | |||
Monthly payments description | The Employment Agreement provides that Mr. Cutaia is entitled to the following severance package in the event he is "terminated without cause," "terminated for good reason," or "terminated upon permanent disability": (i) monthly payments of $35,833 or such sum equal to his monthly base compensation at the time of the termination, whichever is higher, for a period of 36 months from the date of such termination and (ii) reimbursement for COBRA health insurance costs for 18 months from the date of such termination and, thereafter, reimbursement for health insurance costs for Mr. Cutaia and his family during the immediately subsequent 18-month period. In addition, all of Mr. Cutaia's then-unvested RSAs or other awards will immediately vest, without restriction, and any unearned and unpaid bonus compensation, expense reimbursement, and all accrued vacation, personal, and sick days, and related items shall be deemed earned, vested, and paid immediately. For purposes of the Employment Agreement, "terminated without cause" means if Mr. Cutaia were to be terminated for any reason other than a discharge for cause or due to Mr. Cutaia's death or permanent disability. For purposes of the Employment Agreement, "terminated for good reason" means the voluntary termination of the Employment Agreement by Mr. Cutaia if any of the following were to occur without his prior written consent, which consent cannot be unreasonably withheld considering our then-current financial condition, and, in each case, which continues uncured for 30 days following receipt by us of Mr. Cutaia's written notice: (i) there is a material reduction by us in (A) Mr. Cutaia's annual base salary then in effect or (B) the annual target bonus, as set forth in the Employment Agreement, or the maximum additional amount up to which Mr. Cutaia is eligible pursuant to the Employment Agreement; (ii) we reduce Mr. Cutaia's job title and position such that Mr. Cutaia (A) is no longer our Chief Executive Officer; (B) is no longer our Chairman of the Board; or (C) is involuntarily removed from our Board; or (iii) Mr. Cutaia is required to relocate to an office location outside of Orange County, California, or outside of a 30-mile radius of Newport Beach, California. For purposes of the Employment Agreement, "terminated upon permanent disability" means if Mr. Cutaia were to be terminated because he is then unable to perform his duties due to a physical or mental condition for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days in any 12-month period. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 15, 2020 | Apr. 10, 2020 | Dec. 23, 2019 | Mar. 31, 2020 | Jul. 07, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | May 14, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 17, 2020 |
Number of shares services rendered | $ 321,000 | $ 388,000 | $ 1,778,000 | $ 1,545,000 | |||||||
Number of stock options granted | 185,887 | 2,531,971 | 1,400,418 | ||||||||
Exercise price of common stock granted | $ 1.39 | $ 2.07 | $ 6.75 | ||||||||
Common Stock [Member] | |||||||||||
Number of shares services rendered, shares | 320,601 | 39,998 | 1,015,981 | 319,346 | |||||||
Number of shares services rendered | |||||||||||
Sale and issuance of common stock | 6,549,596 | ||||||||||
Private Placement [Member] | Common Stock [Member] | |||||||||||
Sale and issuance of common stock | 3,392,833 | ||||||||||
Gross proceeds sold of common stock | $ 3,430,000 | ||||||||||
Vendors [Member] | |||||||||||
Number of shares services rendered, shares | 220,601 | ||||||||||
Number of shares services rendered | $ 321,000 | ||||||||||
Employees and Consultants [Member] | |||||||||||
Number of stock options granted | 1,340,333 | 2,531,971 | 1,400,418 | ||||||||
Exercise price of common stock granted | $ 1.36 | $ 2.07 | $ 6.75 | ||||||||
Expiration period | 5 years | 5 years | |||||||||
Fair value of stock options grants | $ 4,564,000 | $ 9,712,000 | |||||||||
Subsequent Event [Member] | |||||||||||
Debt description | The board of directors of Verb Technology Company, Inc., a Nevada corporation (the "Company"), approved management's COVID-19 Full Employment and Cash Preservation Plan (the "Plan"), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the "Cash Reduction Amount") for a period of three months from April 16, 2020 through July 15, 2020 for one category of plan participants, and April 26, 2020 through July 18, 2020 for the other category of participants. The Plan was designed to promote the continued growth of the Company and avoid the lay-offs and staff cut-backs experienced by many companies affected by the COVID-19 economic crisis. The Cash Reduction Amount is to be paid in shares of the Company's common stock (the "Shares") through an allocation of shares from the Company's 2019 Omnibus Incentive Plan (the "Omnibus Incentive Plan") and granted pursuant to stock award agreements entered into effective as of April 10, 2020 (the "Grant Date") between the Company and each of the Company's directors, executive officers, employees, and consultants. The stock award agreements provide that the Shares will vest on July 18, 2020 (the "Vesting Date") as long as the recipient remains in continuous service to the Company during the time from the Grant Date through the Vesting Date. The Shares were valued at $1.198 per share in accordance with the provisions of the Omnibus Incentive Plan, which provides that the value shall be determined based on the volume weighted average price of the Company's common stock during a period of up to the 30-trading days prior to the Grant Date. Total Common Stock granted as part of the Cash Preservation Plan on April 10, 2020 was 589,099 with a fair value of $866,000. The shares were valued based on the market value of the Company's stock price on the grant date and will be amortized over the life of the agreements and recorded as stock compensation expense. As of the date of this report the restricted shares have not been issued to the respective employees. | ||||||||||
Number of shares granted of common stock,shares | 589,099 | ||||||||||
Number of shares granted of common stock | $ 866,000 | ||||||||||
Subsequent Event [Member] | Private Placement [Member] | Common Stock [Member] | |||||||||||
Sale and issuance of common stock | 845,000 | ||||||||||
Gross proceeds sold of common stock | $ 1,014,000 | ||||||||||
Subsequent Event [Member] | Vendors [Member] | |||||||||||
Number of shares services rendered, shares | 463,641 | 407,633 | |||||||||
Number of shares services rendered | $ 585,427 | $ 444,000 | |||||||||
Subsequent Event [Member] | Employees and Consultants [Member] | |||||||||||
Number of stock options granted | 160,750 | 323,887 | |||||||||
Exercise price of common stock granted | $ 1.37 | $ 1.38 | |||||||||
Expiration period | 5 years | 5 years | |||||||||
Stock option vesting, description | Expire in five years, and vest over a period of four years from grant date. | Expire in five years, and vest over a period of four years from grant date. | |||||||||
Fair value of stock options grants | $ 217,000 | $ 437,000 | |||||||||
Subsequent Event [Member] | Cash Preservation Plan [Member] | |||||||||||
Number of shares granted of common stock,shares | 589,099 | ||||||||||
Number of shares granted of common stock | $ 866,000 | ||||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||||||||||
Loan received | $ 1,218,000 | ||||||||||
Interest rate | 1.00% | ||||||||||
Subsequent Event [Member] | Economic Injury Disaster Loan Program [Member] | |||||||||||
Interest rate | 3.75% | ||||||||||
Unsecured Loan | $ 150,000 | ||||||||||
Debt term | 30 years | ||||||||||
Maturity date | May 15, 2021 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (10-K) - USD ($) | May 14, 2020 | Apr. 17, 2020 | Apr. 10, 2020 | Mar. 31, 2020 | Feb. 05, 2020 | Dec. 23, 2019 | Aug. 14, 2019 | Apr. 30, 2020 | Mar. 31, 2020 | Jul. 07, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | May 14, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Proceeds from subscribed common stock | $ 3,430,000 | $ 18,525,000 | $ 2,979,000 | ||||||||||||
Warrant to purchase of common stock | 108,196 | ||||||||||||||
Number of shares services rendered | $ 321,000 | $ 388,000 | $ 1,778,000 | $ 1,545,000 | |||||||||||
Number of shares issued, shares | 598,286 | ||||||||||||||
Number of stock options granted | 185,887 | 2,531,971 | 1,400,418 | ||||||||||||
Exercise price of common stock granted | $ 1.39 | $ 2.07 | $ 6.75 | ||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Number of shares issued, shares | 5,030 | ||||||||||||||
Vendors [Member] | |||||||||||||||
Number of shares services rendered, shares | 220,601 | ||||||||||||||
Number of shares services rendered | $ 321,000 | ||||||||||||||
Employees and Consultants [Member] | |||||||||||||||
Number of stock options granted | 1,340,333 | 2,531,971 | 1,400,418 | ||||||||||||
Exercise price of common stock granted | $ 1.36 | $ 2.07 | $ 6.75 | ||||||||||||
Expiration period | 5 years | 5 years | |||||||||||||
Fair value of stock options grants | $ 4,564,000 | $ 9,712,000 | |||||||||||||
Private Placement [Member] | |||||||||||||||
Common per-share price | $ 1.20 | ||||||||||||||
Sale and issuance description | The sale and issuance of up to five million shares of our Common Stock at a per-share price of $1.20 (represents a 20% discount to the $1.50 closing price of our Common Stock on that day | ||||||||||||||
Cash fee aggregate amount | $ 499,000 | ||||||||||||||
Private placement description | Our Private Placement was managed by the Company; however, in connection with our Closings, we paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of our Closings), (ii) as a non-accountable expense allowance, an aggregate of $99,000 (or 2% of the gross proceeds of our Closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of our Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of our Common Stock. We made the above-referenced payments only in respect of that portion of the gross proceeds from our Closings for investors introduced to us by the consultant. | ||||||||||||||
Private Placement [Member] | Maximum [Member] | |||||||||||||||
Sale and issuance of common stock | 5,000,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Common stock, subscribed | 845,000 | 3,392,833 | 845,000 | 3,392,833 | 3,392,833 | 845,000 | |||||||||
Proceeds from subscribed common stock | $ 1,014,000 | $ 1,014,000 | $ 3,430,000 | ||||||||||||
Debt description | The board of directors of Verb Technology Company, Inc., a Nevada corporation (the "Company"), approved management's COVID-19 Full Employment and Cash Preservation Plan (the "Plan"), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the "Cash Reduction Amount") for a period of three months from April 16, 2020 through July 15, 2020 for one category of plan participants, and April 26, 2020 through July 18, 2020 for the other category of participants. The Plan was designed to promote the continued growth of the Company and avoid the lay-offs and staff cut-backs experienced by many companies affected by the COVID-19 economic crisis. The Cash Reduction Amount is to be paid in shares of the Company's common stock (the "Shares") through an allocation of shares from the Company's 2019 Omnibus Incentive Plan (the "Omnibus Incentive Plan") and granted pursuant to stock award agreements entered into effective as of April 10, 2020 (the "Grant Date") between the Company and each of the Company's directors, executive officers, employees, and consultants. The stock award agreements provide that the Shares will vest on July 18, 2020 (the "Vesting Date") as long as the recipient remains in continuous service to the Company during the time from the Grant Date through the Vesting Date. The Shares were valued at $1.198 per share in accordance with the provisions of the Omnibus Incentive Plan, which provides that the value shall be determined based on the volume weighted average price of the Company's common stock during a period of up to the 30-trading days prior to the Grant Date. Total Common Stock granted as part of the Cash Preservation Plan on April 10, 2020 was 589,099 with a fair value of $866,000. The shares were valued based on the market value of the Company's stock price on the grant date and will be amortized over the life of the agreements and recorded as stock compensation expense. As of the date of this report the restricted shares have not been issued to the respective employees. | ||||||||||||||
Number of shares granted of common stock, shares | 589,099 | ||||||||||||||
Number of shares granted of common stock | $ 866,000 | ||||||||||||||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||||||||||||||
Proceeds from loans | $ 1,218,000 | ||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||||||||||
Number of shares issued, shares | 741,933 | ||||||||||||||
Conversion of preferred stock | 1,150 | ||||||||||||||
Subsequent Event [Member] | Vendors [Member] | |||||||||||||||
Number of shares services rendered, shares | 463,641 | 407,633 | |||||||||||||
Number of shares services rendered | $ 585,427 | $ 444,000 | |||||||||||||
Subsequent Event [Member] | Employee [Member] | |||||||||||||||
Number of shares restricted stock award | 11,025 | ||||||||||||||
Subsequent Event [Member] | Employees and Consultants [Member] | |||||||||||||||
Number of stock options granted | 160,750 | 323,887 | |||||||||||||
Exercise price of common stock granted | $ 1.37 | $ 1.38 | |||||||||||||
Expiration period | 5 years | 5 years | |||||||||||||
Stock option vesting, description | Expire in five years, and vest over a period of four years from grant date. | Expire in five years, and vest over a period of four years from grant date. | |||||||||||||
Fair value of stock options grants | $ 217,000 | $ 437,000 | |||||||||||||
Subsequent Event [Member] | Series A Stockholders [Member] | |||||||||||||||
Warrant to purchase of common stock | 2,303,861 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
Warrant exercise price | $ 1.20 | ||||||||||||||
Fair value derivative liability upon issuance | $ 3,951,000 | ||||||||||||||
Fair value of deemed dividend | $ 3,951,000 | ||||||||||||||
Subsequent Event [Member] | Private Placement [Member] | |||||||||||||||
Common per-share price | $ 1.20 | ||||||||||||||
Sale and issuance description | The sale and issuance of up to five million shares of its Common Stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company's Common Stock on that day, and is memorialized by a subscription agreement. | ||||||||||||||
Common stock, subscribed | 4,237,833 | 4,237,833 | 4,237,833 | ||||||||||||
Cash fee aggregate amount | $ 499,000 | ||||||||||||||
Private placement description | The Company's private placement is exempt from the registration requirements of Section 5 of the Securities Act, in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the SEC. The Company's private placement was managed by the Company; however, in connection with the closings, the Company paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount of $499,000 (or 10% of the gross proceeds of the closings), (ii) as a non-accountable expense allowance, an aggregate of $100,000 (or 2% of the gross proceeds of the closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares of the Company's Common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of the Company's Common Stock. | ||||||||||||||
Incurred expense | $ 42,000 | ||||||||||||||
Subsequent Event [Member] | Private Placement [Member] | Maximum [Member] | |||||||||||||||
Sale and issuance of common stock | 5,000,000 |