Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 10, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Verb Technology Company, Inc. | |
Entity Central Index Key | 0001566610 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 46,693,790 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 10,722,000 | $ 983,000 |
Accounts receivable, net of allowance of $216,000 and $230,000, respectively | 1,353,000 | 1,271,000 |
Inventory, net of allowance of $30,000 and $2,000, respectively | 12,000 | 103,000 |
Prepaid expenses | 675,000 | 236,000 |
Total current assets | 12,762,000 | 2,593,000 |
Right-of-use assets, net of accumulated amortization of $756,000 and $349,000 respectively | 2,868,000 | 3,275,000 |
Property and equipment, net of accumulated depreciation of $294,000 and $164,000, respectively | 907,000 | 720,000 |
Intangible assets, net of accumulated amortization of $1,953,000 and $975,000 respectively | 6,270,000 | 5,365,000 |
Goodwill (including provisional goodwill of $3,362,000 at September 30, 2020) | 19,699,000 | 16,337,000 |
Other assets | 69,000 | 69,000 |
Total assets | 42,575,000 | 28,359,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,346,000 | 4,338,000 |
Accrued officers' salary | 207,000 | 207,000 |
Accrued interest (including $87,000 and $82,000 payable to related parties) | 95,000 | 82,000 |
Advance on future receipts, net of discount of $176,000 and $274,000, respectively | 418,000 | 732,000 |
Notes Payable | 1,885,000 | |
Notes payable - related party | 1,177,000 | 112,000 |
Operating lease liability, current | 595,000 | 391,000 |
Deferred incentive compensation to officers, current | 521,000 | |
Contract liabilities and customer deposits | 685,000 | 306,000 |
Derivative liability | 4,545,000 | 5,048,000 |
Total current liabilities | 15,474,000 | 11,216,000 |
Long Term liabilities: | ||
Notes payable, non-current | 1,458,000 | |
Note payable - related party, non-current | 1,065,000 | |
Deferred incentive compensation to officers, non-current | 521,000 | 1,042,000 |
Deferred payroll taxes | 247,000 | |
Operating lease liability, non-current | 3,101,000 | 3,591,000 |
Total liabilities | 20,801,000 | 16,914,000 |
Commitments and contingencies | ||
Stockholders' equity | ||
Class A units, 100 shares authorized, 100 issued and outstanding as of September 30, 2020 | ||
Class B units, 2,642,159 shares authorized, 2,642,159 issued and outstanding as of September 30, 2020 | 3,065,000 | |
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 2,406 and 4,396 issued and outstanding as of September 30, 2020 and December 31, 2019 | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 46,663,790 and 24,496,197 shares issued and outstanding as of September 30, 2020 and December 31, 2019 | 5,000 | 2,000 |
Additional paid-in capital | 87,979,000 | 68,028,000 |
Accumulated deficit | (69,275,000) | (56,585,000) |
Total stockholders' equity | 21,774,000 | 11,445,000 |
Total liabilities and stockholders' equity | $ 42,575,000 | $ 28,359,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accounts receivable allowance | $ 216,000 | $ 230,000 |
Inventory allowance | 30,000 | 2,000 |
Net of amortization, right-of-use assets | 756,000 | 349,000 |
Property and Equipment, net of accumulated depreciation | 294,000 | 164,000 |
Intangible assets, net of amortization | 1,953,000 | 975,000 |
Provisional goodwill | 3,362,000 | |
Accrued interest, related parties | 87,000 | 82,000 |
Net of discount on future receipts | $ 176,000 | $ 274,000 |
Class A units, shares authorized | 100 | |
Class A units, shares issued | 100 | |
Class A units, shares outstanding | 100 | |
Class B units, shares authorized | 2,642,159 | |
Class B units, shares issued | 2,642,159 | |
Class B units, shares outstanding | 2,642,159 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 46,663,790 | 24,496,197 |
Common stock, shares outstanding | 46,663,790 | 24,496,197 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 2,406 | 4,396 |
Preferred stock, shares outstanding | 2,406 | 4,396 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Total revenue | $ 2,860,000 | $ 2,873,000 | $ 7,866,000 | $ 6,615,000 |
Cost of revenue | ||||
Total cost of revenue | 1,305,000 | 1,491,000 | 3,503,000 | 3,563,000 |
Gross margin | 1,555,000 | 1,382,000 | 4,363,000 | 3,052,000 |
Operating Expenses: | ||||
Research and development | 2,407,000 | 1,214,000 | 5,308,000 | 3,113,000 |
Depreciation and amortization | 388,000 | 518,000 | 1,108,000 | 1,025,000 |
General and administrative | 6,655,000 | 3,292,000 | 14,187,000 | 8,803,000 |
Total operating expenses | 9,450,000 | 5,024,000 | 20,603,000 | 12,941,000 |
Loss from operations | (7,895,000) | (3,642,000) | (16,240,000) | (9,889,000) |
Other income (expense), net | ||||
Other income (expense), net | (2,000) | (9,000) | 1,000 | (10,000) |
Financing costs | (248,000) | (1,486,000) | (248,000) | (1,625,000) |
Interest expense - amortization of debt discount | (110,000) | (21,000) | (384,000) | (1,647,000) |
Change in fair value of derivative liability | 975,000 | 2,802,000 | 4,295,000 | 3,320,000 |
Debt extinguishment, net | (691,000) | 1,536,000 | ||
Interest expense | (40,000) | (68,000) | (114,000) | (151,000) |
Total other income, net | 575,000 | 527,000 | 3,550,000 | 1,423,000 |
Net loss | (7,320,000) | (3,115,000) | (12,690,000) | (8,466,000) |
Deemed dividends to Series A stockholders | (3,951,000) | |||
Net loss to common stockholders | $ (7,320,000) | $ (3,115,000) | $ (16,641,000) | $ (8,466,000) |
Net loss per share to common stockholders - basic and diluted | $ (0.18) | $ (0.13) | $ (0.51) | $ (0.44) |
Weighted average number of common shares outstanding - basic and diluted | 41,216,642 | 23,155,801 | 32,375,054 | 19,038,802 |
SaaS Recurring Subscription Revenue [Member] | ||||
Revenue | ||||
Total revenue | $ 1,478,000 | $ 953,000 | $ 3,809,000 | $ 1,820,000 |
Other Digital Member] | ||||
Revenue | ||||
Total revenue | 360,000 | 485,000 | 1,166,000 | 1,081,000 |
Welcome Kits and Fulfillment [Member] | ||||
Revenue | ||||
Total revenue | 836,000 | 1,164,000 | 2,277,000 | 2,948,000 |
Cost of revenue | ||||
Total cost of revenue | 768,000 | 990,000 | 2,106,000 | 2,375,000 |
Shipping [Member] | ||||
Revenue | ||||
Total revenue | 186,000 | 271,000 | 614,000 | 766,000 |
Cost of revenue | ||||
Total cost of revenue | 188,000 | 280,000 | 554,000 | 761,000 |
SaaS and Other Digital [Member] | ||||
Cost of revenue | ||||
Total cost of revenue | $ 349,000 | $ 221,000 | $ 843,000 | $ 427,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Class A Units [Member] | Class B Units [Member] | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
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 | ||||||
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 | ||||||
Fair value of common stock upon conversion of convertible debt | 410,000 | 410,000 | |||||
Fair value of common stock upon conversion of convertible debt, shares | 182,333 | ||||||
Common shares issued upon of warrants | 45,000 | 45,000 | |||||
Common shares issued upon of warrants, shares | 173,714 | ||||||
Common stock upon issuance of convertible debt | 182,000 | 182,000 | |||||
Common stock upon issuance of convertible debt, shares | 25,272 | ||||||
Fair value of vested stock options and warrants | 1,950,000 | 1,950,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
Issuance of Series A convertible preferred stock | 4,688,000 | 4,688,000 | |||||
Issuance of Series A convertible preferred stock, shares | 5,030 | ||||||
Fair value of warrants issued with the Series A convertible preferred stock | (4,688,000) | (4,688,000) | |||||
Fair value of common shares issued for services | $ 930,000 | $ 930,000 | |||||
Fair value of common shares issued for services, shares | 354,288 | ||||||
Issuance of fractional shares | 139,036 | ||||||
Net loss | $ (8,466,000) | $ (8,466,000) | |||||
Balance at Sep. 30, 2019 | $ 2,000 | 66,730,000 | (49,133,000) | 17,599,000 | |||
Balance, shares at Sep. 30, 2019 | 5,030 | 23,409,949 | |||||
Balance at Jun. 30, 2019 | $ 2,000 | 64,617,000 | (46,018,000) | 18,601,000 | |||
Balance, shares at Jun. 30, 2019 | 22,655,185 | ||||||
Sale of common stock from public offering | 90,000 | 90,000 | |||||
Sale of common stock from public offering, shares | |||||||
Fair value of common stock issued to settle accounts payable | 1,410,000 | 1,410,000 | |||||
Fair value of common stock issued to settle accounts payable, shares | 598,286 | ||||||
Fair value of vested stock options and warrants | 591,000 | 591,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
Issuance of Series A convertible preferred stock | 4,688,000 | 4,688,000 | |||||
Issuance of Series A convertible preferred stock, shares | 5,030 | ||||||
Fair value of warrants issued with the Series A convertible preferred stock | (4,688,000) | (4,688,000) | |||||
Fair value of common shares issued for services | 202,000 | 202,000 | |||||
Fair value of common shares issued for services, shares | 156,478 | ||||||
Net loss | (3,115,000) | (3,115,000) | |||||
Balance at Sep. 30, 2019 | $ 2,000 | 66,730,000 | (49,133,000) | 17,599,000 | |||
Balance, shares at Sep. 30, 2019 | 5,030 | 23,409,949 | |||||
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 | |||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 12,337,000 | ||||
Sale of common stock from public offering, shares | 12,545,453 | ||||||
Sale of common stock from private placement | $ 1,000 | 4,443,000 | 4,444,000 | ||||
Sale of common stock from private placement, shares | 4,237,833 | ||||||
Fair value of vested stock options and warrants | 1,463,000 | 1,463,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
Fair value of common shares issued for services | 1,126,000 | 1,126,000 | |||||
Fair value of common shares issued for services, shares | 962,583 | ||||||
Issuance of common stock from warrant exercise | 2,165,000 | 2,165,000 | |||||
Issuance of common stock from warrant exercise, shares | 1,965,594 | ||||||
Fair value of warrants issued to Series A Preferred stockholders | (3,951,000) | (3,951,000) | |||||
Conversion of Series A Preferred to common stock | |||||||
Conversion of Series A Preferred to common stock, shares | (1,990) | 1,405,274 | |||||
Fair value of vested restricted stock awards | 2,211,000 | 2,211,000 | |||||
Fair value of vested restricted stock awards, shares | 1,050,856 | ||||||
Extinguishment of derivative liability | $ 159,000 | 159,000 | |||||
Class A units issued upon incorporation of Verb Acquisition Co. | 100 | ||||||
Fair value of Class B units issued for the acquisition of Ascend Certification | $ 3,065,000 | 3,065,000 | |||||
Fair value of Class B units issued for the acquisition of Ascend Certification, shares | 2,642,159 | ||||||
Net loss | (12,690,000) | (12,690,000) | |||||
Balance at Sep. 30, 2020 | $ 3,065,000 | $ 5,000 | 87,979,000 | (69,275,000) | 21,774,000 | ||
Balance, shares at Sep. 30, 2020 | 100 | 2,642,159 | 2,406 | 46,663,790 | |||
Balance at Jun. 30, 2020 | $ 3,000 | 71,399,000 | (61,955,000) | 9,447,000 | |||
Balance, shares at Jun. 30, 2020 | 3,246 | 30,267,063 | |||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 12,337,000 | ||||
Sale of common stock from public offering, shares | 12,545,453 | ||||||
Fair value of vested stock options and warrants | 689,000 | 689,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
Fair value of common shares issued for services | 230,000 | 230,000 | |||||
Fair value of common shares issued for services, shares | 193,533 | ||||||
Issuance of common stock from warrant exercise | 2,165,000 | 2,165,000 | |||||
Issuance of common stock from warrant exercise, shares | 1,965,594 | ||||||
Conversion of Series A Preferred to common stock | |||||||
Conversion of Series A Preferred to common stock, shares | (840) | 663,341 | |||||
Fair value of vested restricted stock awards | 1,002,000 | 1,002,000 | |||||
Fair value of vested restricted stock awards, shares | 1,028,806 | ||||||
Extinguishment of derivative liability | $ 159,000 | 159,000 | |||||
Class A units issued upon incorporation of Verb Acquisition Co. | 100 | ||||||
Fair value of Class B units issued for the acquisition of Ascend Certification | $ 3,065,000 | 3,065,000 | |||||
Fair value of Class B units issued for the acquisition of Ascend Certification, shares | 2,642,159 | ||||||
Net loss | (7,320,000) | (7,320,000) | |||||
Balance at Sep. 30, 2020 | $ 3,065,000 | $ 5,000 | $ 87,979,000 | $ (69,275,000) | $ 21,774,000 | ||
Balance, shares at Sep. 30, 2020 | 100 | 2,642,159 | 2,406 | 46,663,790 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities: | ||
Net loss | $ (12,690,000) | $ (8,466,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of common shares issued for services and vested stock options and warrants | 4,796,000 | 2,880,000 |
Financing costs | 248,000 | 1,625,000 |
Amortization of debt discount | 384,000 | 1,647,000 |
Change in fair value of derivative liability | (4,295,000) | (3,320,000) |
Debt extinguishment, net | (1,536,000) | |
Depreciation and amortization | 1,108,000 | 1,025,000 |
Amortization of right-of-use assets | 407,000 | 150,000 |
Allowance for inventory | 28,000 | 5,000 |
Allowance for doubtful accounts | (14,000) | 31,000 |
Effect of changes in assets and liabilities: | ||
Accounts receivable | 152,000 | (278,000) |
Prepaid expenses | (175,000) | 37,000 |
Inventory | 63,000 | 90,000 |
Other assets | (41,000) | |
Accounts payable, accrued expenses, and accrued interest | 646,000 | 280,000 |
Operating lease liability | (286,000) | (109,000) |
Deferred revenue and customer deposits | (162,000) | (526,000) |
Net cash used in operating activities | (9,790,000) | (6,506,000) |
Investing Activities: | ||
Cash paid upon acquisition of subsidiary | (15,000,000) | |
Cash acquired upon acquisition of subsidiary | 229,000 | 557,000 |
Purchase of property and equipment | (317,000) | (134,000) |
Net cash used by investing activities | (88,000) | (14,577,000) |
Financing Activities: | ||
Proceeds from sale of common stock | 16,781,000 | 18,524,000 |
Proceeds from sale of preferred stock | 4,688,000 | |
Proceeds from issuance of notes payable | 1,367,000 | 1,300,000 |
Advances on future receipts | 728,000 | |
Proceeds from convertible note payable | 432,000 | |
Proceeds from related party notes payable | 58,000 | |
Proceeds from warrant exercise | 2,165,000 | 45,000 |
Payment of convertible notes payable | (2,025,000) | |
Payment of notes payable | (630,000) | |
Payment of related party notes payable | (58,000) | |
Payment of advances of future receipts | (1,424,000) | |
Net cash provided by financing activities | 19,617,000 | 22,334,000 |
Net change in cash | 9,739,000 | 1,251,000 |
Cash - beginning of period | 983,000 | 634,000 |
Cash - end of period | 10,722,000 | 1,885,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 100,000 | 146,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of note payable upon acquisition of subsidiary | 1,885,000 | |
Fair value of common stock issued for subscription agreement | 340,000 | |
Fair value of restricted awards returned | 485,000 | |
Fair value of class B units issued upon acquisition of subsidiary | 3,065,000 | |
Fair value of common stock issued upon acquisition of subsidiary | 7,820,000 | |
Conversion of note payable and accrued interest to common stock | 1,184,000 | |
Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features | 3,951,000 | 6,561,000 |
Fair value of warrants issued and beneficial conversion feature to extinguish debt | 719,000 | |
Fair value of common shares, warrants and beneficial conversion feature of issued convertible note | 592,000 | |
Offset of deferred offering costs to proceeds received | 162,000 | |
Common stock issued to settle accounts payable | 10,000 | |
Lease assets and liabilities recorded upon adoption of ASC 842 | 1,856,000 | |
Assets acquired from the acquisition of subsidiary | 449,000 | 3,364,000 |
Liabilities assumed from the acquisition of subsidiary | $ 743,000 | $ 3,221,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
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. On 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. On 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. The par value per share of our Common Stock was not affected by the Reverse Stock Split. All shares and per share amounts have been retroactively restated as if the reverse split occurred at the beginning of the earliest period presented. Nature of Business We are a Software-as-a-Service (“SaaS”) applications platform developer. Our platform is comprised of a suite of interactive video-based 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 Stream eCommerce 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. We use the term “client” and “customer” interchangeably. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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/A for the fiscal year ended December 31, 2019 filed with the SEC on June 4, 2020. The 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., Verb Direct, LLC, its wholly owned subsidiary, and Verb Acquisition Co, 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 nine months ended September 30, 2020, the Company incurred a net loss of $12,690,000 and used cash in operations of $9,790,000. 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 September 30, 2020, we had cash on hand of $10,772,000. We believe we have sufficient cash to sustain operations through September 2021. 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 September 30, 2020, we had no customers that accounted for 10% of our accounts receivable individually. As of December 31, 2019, we had one customer that accounted for 10% of our accounts receivable individually and in aggregate. As of September 30, 2020 and 2019, we had no customers who accounted for 10% or more of our revenues. As of September 30, 2020, we had two vendors that accounted for 10% or more of our accounts payable individually and 38% in aggregate. As of December 31, 2019, we had one vendor that accounted for 10% or more of our accounts payable individually and in aggregate. As of September 30, 2020 and 2019, we had one vendor that accounted 10% or more of our purchases. Reclassifications Certain revenue amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications consist of reclassification of digital revenue between SaaS recurring subscription revenue and other digital revenue to provide additional clarity. These reclassifications had no effect to the previously reported net loss. Revenue Recognition The Company derives its revenue primarily from subscriptions to its digital SaaS application services, though it also derives revenue from certain non-digital services, such as printing and fulfillment services, the Company provides to some of its larger enterprise clients. The subscription revenue from the application services are recognized over the life of the subscription contracts and any extensions thereto. While the Company has been offering subscription services for a limited period of time, to date, the Company estimates the life of the subscription period to be approximately 36 months. The Company also charges customers setup, design, and installation fees for the development of websites among other associated and complimentary services. 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 non-digital revenue, and the related costs are reflected in cost of non-digital 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 the digital delivery of access to our applications, and our performance obligations are satisfied at that time. Shipping and handling activities for our non-digital services 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. Design assets of the websites and applications are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. A description of our principal revenue generating activities is as follows: SaaS recurring subscription revenue – represents digital subscription-based SaaS recurring revenue associated with verbCRM, verbLEARN, and verbLIVE. The revenue is recognized over the subscription period. Other Digital – represents digital non-subscription-based revenue consisting of product sample revenue as well as design fees generated through or in connection with our applications. The revenue for samples is recognized upon completion and shipment, while the design fees are recognized when the service has been rendered and the app is delivered to the customer. Welcome kits and fulfilment – We offer design and printing services to certain of our larger clients who request corporate starter kits for their new sales reps, and fulfillment of various customer products that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the starter kits or fulfillment products to the customer. Shipping – We charge our customers the costs plus a markup related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the corresponding welcome kits or fulfillment products are shipped. Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract but the Company has not yet delivered or completed its performance obligation to the customer. 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. 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. As of September 30, 2020, and 2019, the Company had total outstanding options of 5,099,038 and 2,914,641, respectively, and warrants of 13,351,245 and 11,132,960, respectively, outstanding restricted stock awards of 2,908,530 and 0, and 2,642,159 shares common shares potentially issuable from our Class B Units that were issued in August 2020, were excluded from the computation of net loss per share because they are anti-dilutive. Goodwill and Intangible Assets 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. The acquisition of Verb Acquisition Co formerly Ascend Certification, occurred on September 4, 2020. The Company will perform its first impairment test in fiscal 2021. 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 September 30, 2020 or December 31, 2019. 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. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS a. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed its acquisition of Verb Direct (formerly known as Sound Concepts, Inc.) 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 a 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 for a total purchase price of $22,820,000. 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 nine months ended September 30, 2020, the Company recorded amortization expense of $945,000. As of September 30, 2020, the remaining unamortized balance of the intangible assets was $4,420,000. Subsequent to its acquisition, Verb Direct recognized revenues in the aggregate of $7.7 million and $6.6 million during the nine months ended September 30, 2020 and 2019, respectively and $2.8 million and $2.9 million during the three months ended September 30, 2020 and 2019, respectively. b. ACQUISITION OF ASCEND CERTIFICATION On September 4, 2020, Verb Acquisition Co., LLC (“Verb Acquisition”), a subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Ascend Certification, LLC, dba SoloFire (“SoloFire”), the sellers party thereto (collectively, the “Sellers”), and Steve Deverall, solely in his capacity as the seller representative, under which Sellers agreed to sell their entire interest in SoloFire, representing all of the outstanding limited liability company membership interests of SoloFire, to Verb Acquisition for a base purchase price of $5,700,000, subject to certain post-closing adjustments totaling $750,000 for an adjusted purchase price of $4,950,000. As a result, Verb Acquisition issued to the Sellers an amended promissory note of $1,885,000 and 2,642,159 Class B Units of Verb Acquisition which are exchangeable for 2,642,159 shares of Verb’s Common Stock with an estimated fair value of $3,065,000 (see Note 16) for a total purchase price of $4,950,000. The promissory note is unsecured, bears interest at a rate of 0.14% per annum and will mature in October 2020. The amended promissory note was paid in full on October 1, 2020. The acquisition was intended to augment and diversify Verb’s SaaS business. Key factors that contributed to the recorded provisional goodwill and intangible assets in the aggregate of $5,245,000 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 SaaS business. Verb is required to allocate the purchase price to the acquired tangible assets, identifiable intangible assets, and assumed liabilities based on their fair values. At the date of the acquisition and of this Quarterly Report on Form 10-Q, management has not yet finalized its valuation analysis. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). Any prospective adjustments would change the fair value allocation as of the acquisition date. The Company is still in the process of reviewing underlying models, assumptions and discount rates used in the valuation of provisional goodwill and intangible assets. The following table summarizes the provisional fair value of the assets assumed and liabilities acquired and the provisional purchase price allocation on the date of acquisition: Assets Acquired: Cash $ 229,000 Accounts receivable 219,000 $ 448,000 Liabilities Assumed: Current liabilities (653,000 ) Long-term liabilities (90,000 ) (743,000 ) Intangible assets (provisional) 1,883,000 Goodwill (provisional) 3,362,000 Purchase Price $ 4,950,000 The provisional 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 provisional intangible assets, which consist of developed technology of $1,700,000 are being amortized over 5-years, customer relationships of $120,000 are being amortized over 3 years, non-competition clause of $60,000 is being amortized over 3 years, and domain names of $3,000 are determined to have infinite lives but will be tested for impairment on an annual basis. During the nine months ended September 30, 2020, the Company recorded amortization expense of $33,000. As of September 30, 2020, the remaining unamortized balance of the intangible assets was $1,850,000. The following comparative unaudited statements of operations present the Company’s results of operations after giving effect to the purchase of Verb Direct and SoloFire based on the historical financial statements of the Company and Verb Direct and SoloFire. The unaudited pro forma statements of operations for the nine and three months ended September 30, 2020 and 2019 give effect to the transaction to the merger as if it had occurred on January 1, 2019. Three months ended September 30, 2020 Three months ended September 30, 2019 Nine months September 30, Nine months September 30, (Proforma unaudited) (Proforma unaudited) (Proforma unaudited) (Proforma, SaaS recurring subscription revenue $ 1,661,000 $ 1,201,000 $ 4,511,000 $ 3,383,000 Other digital revenue 360,000 485,000 1,166,000 1,354,000 Welcome kits and fulfilment 836,000 1,164,000 2,277,000 5,213,000 Shipping 186,000 271,000 614,000 1,443,000 Total Revenue 3,043,000 3,121,000 8,568,000 11,393,000 Cost of revenue 1,344,000 1,548,000 3,661,000 5,951,000 Gross margin 1,699,000 1,573,000 4,907,000 5,442,000 Operating expenses (9,771,000 ) (5,353,000 ) (21,615,000 ) (16,100,000 ) Other income, net 574,000 526,000 3,550,000 1,406,000 Net loss $ (7,498,000 ) $ (3,254,000 ) $ (13,158,000 ) $ (9,252,000 ) |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019. September 30, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 40,000 39,000 Leasehold improvement 1,057,000 741,000 Total property and equipment 1,201,000 884,000 Accumulated depreciation (294,000 ) (164,000 ) Total property and equipment, net $ 907,000 $ 720,000 Depreciation expense amounted to $130,000 and $35,000 for nine months ended September 30, 2020 and 2019, respectively. |
Right-of-use Assets and Operati
Right-of-use Assets and Operating Lease Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
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 offices located in Newport Beach, California 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 September 30, 2020 and December 31, 2019, the Company had recorded right of use assets of $2,868,000 and $3,275,000, respectively, net of amortization. As September 30, 2020 and December 31, 2019, the Company had recorded lease liabilities of $3,696,000 and $3,982,000, respectively, related to these leases. Period Ended September 30, 2020 Period Ended September 30, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 524,000 $ 281,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 383.000 $ 281,000 Weighted average remaining lease term – operating leases (in years) 4.70 5.44 Average discount rate – operating leases 4.0 % 4.0 % September 30, 2020 December 31, 2019 Operating leases Right-of-use assets, net of amortization of $756,000 and $349,000, respectively $ 2,868,000 $ 3,275,000 Short-term operating lease liabilities $ 595,000 $ 391,000 Long-term operating lease liabilities 3,101,000 3,591,000 Total operating lease liabilities $ 3,696,000 $ 3,982,000 |
Advance of Future Receipts
Advance of Future Receipts | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Advance of Future Receipts | 6. ADVANCE OF FUTURE RECEIPTS The Company has the following advances on future receipts as of September 30, 2020: Note Issuance Date Maturity Date Interest Original Borrowing 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 Note 3 June 30, 2020 February 25, 2021 10 % 506,000 297,000 - Note 4 June 30, 2020 February 25, 2021 10 % 506,000 297,000 - Total $ 1,012,000 594,000 1,006,000 Debt discount (176,000 ) (274,000 ) Net $ 418,000 $ 732,000 Note 1 and 2 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 auto withdrew an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extended until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note. These advances were secured by the Company’s tangible and intangible assets. The Company accounted these advances on future receipts as a liability pursuant to current accounting guidelines. As a result, the Company recorded a liability of $1,012,000 to account for the future receipts sold and a debt discount of $285,000 to account for the difference between the future receipts sold and the cash received. The debt discount was being amortized over the term of the agreement. As of December 31, 2019, outstanding balance of the advances amounted to $1,006,000 and the unamortized debt discount of $274,000. During the period ended September 30, 2020, the Company paid the entire amount due of $1,006,000 and amortized the corresponding debt discount for $274,000. Note 3 and 4 On June 30, 2020, the Company received two secured advances from the same 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 a result, the Company recorded a liability of $1,012,000 to account for the future receipts sold and a debt discount of $284,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement. During the period ended September 30, 2020, the Company paid $418,000 the balance outstanding and amortized $108,000 of the debt discount. As of September 30, 2020 outstanding balance of the notes amounted to $594,000 and the unamortized balance of the debt discount was $176,000. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 7. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties notes payable as of September 30, 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 - (1,065,000 ) Current $ 1,177,000 $ 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 September 30, 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 September 30, 2020, and December 31, 2019, the outstanding principal balance of the note amounted to $112,000, respectively. As of September 30, 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 September 30, 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 $106,000 for nine months ended September 30, 2020 and 2019, respectively. The Company paid $100,000 and $96,000 in interest for the nine months ended September 30, 2020 and 2019, respectively. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 8. NOTES PAYABLE The Company has the following notes payable as of September 30, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ 1,218,000 $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 90,000 Note D September 4, 2020 October 1, 2020 0.14 % 1,982,000 1,885,000 Total notes payable 3,440,000 3,343,000 Non-current 1,458,000 1,458,000 Current $ 1,982,000 $ 1,885,000 (A) 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. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of September 30, 2020. (B) On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (SBA) under the Economic Injury Disaster Loan program in the amount of $150,000. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Installment payments, including principal and interest, will begin on May 15, 2021. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid. As a result, the Company accounted this $10,000 as part of “Other Income” in the accompanying Statement of Operations. (C) On May 1, 2020, SoloFire received loan proceeds in the amount of $90,000 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. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of September 30, 2020. (D) On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,982,000, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, with a maturity date of October 1, 2020. Effective September 30, 2020, the note was amended to $1,885,000 to account for contractual working capital adjustments. All other terms remain the same. On October 1, 2020, Verb Acquisition paid off the note in full. |
Deferred Incentive Compensation
Deferred Incentive Compensation to Officers | 9 Months Ended |
Sep. 30, 2020 | |
Compensation Related Costs [Abstract] | |
Deferred Incentive Compensation to Officers | 9. 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 these 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 a bonus for the successful up-listing to Nasdaq and the 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 these 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 Series A Preferred
Convertible Series A Preferred Stock and Warrant Offering | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Series Preferred Stock And Warrant Offering | |
Convertible Series A Preferred Stock and Warrant Offering | 10. CONVERTIBLE SERIES A PREFERRED STOCK AND WARRANT OFFERING On August 14, 2019, we entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (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 warrants (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 three months ended September 30, 2020, 1,990 shares of Preferred Stock were converted into 1,405,274 shares of Common Stock. As of September 30, 2020, 2,406 shares Series A Preferred stock are outstanding and potentially convertible into approximately 2.2 million shares of Common Stock. |
Derivative Liability
Derivative Liability | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 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 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. As of December 31, 2019, the Company had recorded a derivative liability of $5,048,000. During the period ended September 30, 2020, the Company recorded a derivative liability of $3,951,000 as a result of the issuance of 2,303,861 warrants to acquire common stock to Series A Preferred stockholders (see Note 12). The Company also recorded a change in fair value of ($4,295,000) to account for the changes in the fair value of these derivative liabilities during the nine months ended September 30, 2020. In addition, 95,000 shares of the Series A warrants that were accounted as derivative liability were exercised. As result, the Company computed the fair value of the corresponding derivate liability one last time which amounted to $159,000 and the pursuant to current accounting guidelines, the extinguishment was accounted as part of equity. At September 30, 2020, the fair value of the derivative liability amounted to $4,545,000. The details of derivative liability transactions as of and for the periods ended September 30, 2020 and 2019 are as follows: September 30, 2020 September 30, 2019 Beginning Balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and warrants 3,951,000 6,561,000 Change in fair value (4,295,000 ) (3,320,000 ) Extinguishment (159,000 ) (2,227,000 ) Ending Balance $ 4,545,000 $ 3,591,000 The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: September 30, 2020 Upon Issuance December 31, 2019 Stock Price $ 1.08 $ 1.70 $ 1.55 Exercise Price $ 1.62 $ 1.55 $ 1.88 Expected Life 2.78 5.0 3.53 Volatility 107 % 212 % 216 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.14 % 2.47 % 1.64 % Fair Value $ 4,545,000 $ 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. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity Transactions | 12. EQUITY TRANSACTIONS The Company’s Common Stock activity for the nine months ended September 30, 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. The Company’s private placement is exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (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. As a result of this private placement, from February through April 2020, a total of 4,237,833 shares of Common Stock were sold in exchange for cash proceeds of $4,444,000, net of direct fees and expenses in the aggregate of $641,000. 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 as Part of the Company’s Public Offering On July 24, 2020, the Company concluded its public offering pursuant to a registration statement on Form S-1 (File No. 333-239055) and issued and sold 12,545,453 shares of Common Stock (which included 1,636,363 shares of Common Stock sold pursuant to the exercise by the underwriters of an overallotment option). The net proceeds to the Company, after deducting the underwriting discounts and commissions and direct offering expenses was $12,337,000. Shares Issued for Services During the nine months ended September 30, 2020, the Company issued 962,583 shares of Common Stock to vendors for services rendered and to be rendered with a fair value of $1,126,000. 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. |
Restricted Stock Awards
Restricted Stock Awards | 9 Months Ended |
Sep. 30, 2020 | |
Summary Of Significant Accounting Policies [Line Items] | |
Restricted Stock Awards | 13. RESTRICTED STOCK AWARDS Pursuant to the Company’s December 2019 Omnibus Incentive Plan, a summary of restricted stock award activity for the nine months ended September 30, 2020 is presented below. Weighted- Shares Fair Value Fair Value Non-vested at December 31, 2019 1,486,354 $ 2,021,000 $ 1.36 Granted 2,871,471 3,379,000 1.18 Vested/deemed vested (1,050,856 ) (2,696,000 ) 1.26 Returned (336,533 ) 485,000 1.31 Forfeited (61,906 ) (91,000 ) 1.47 Non-vested at September 30, 2020 2,908,530 $ 3,544,000 $ 1.22 On April 10, 2020, the board of directors of 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 number of Shares issued were determined 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 589,098 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 its vesting term. During the period ended September 30, 2020, the Company granted an additional 2,871,471 shares of its restricted stock to employees and members of Board of Directors. The Restricted Stock Awards vest in various dates, starting on grant date up to July 2024. These Restricted Stock Awards were valued based on market value of the Company’s stock price at the respective date of grant and had aggregate fair value of $3,379,000, which is being amortized as stock compensation expense over its vesting term. During the period ended September 30, 2020 336,533 shares granted to various employees that vested were returned to the Company in exchange for the Company paying the corresponding income and payroll taxes of these employees amounting $485,000. Pursuant to current accounting guidelines, the Company accounted the return of the 336,533 shares and the payment of $485,000 for income and payroll taxes paid on behalf the employees as a reduction in additional paid in capital. The total fair value of restricted stock award that vested or deemed vested during the nine months ended September 30, 2020 was $2,696,000 and is included in selling, general and administrative expenses in the accompanying statements of operations. As of September 30, 2020, the amount of unvested compensation related to issuances of restricted stock award was $3,544,000 which will be recognized as an expense in future periods as the shares vest. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. STOCK OPTIONS Effective October 16, 2014, the Company adopted the 2014 Stock Option Plan (the “2014 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 nine months ended September 30, 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 $ 1.73 2.54 $ 995,000 Granted 1,035,637 1.37 - - Forfeited (170,321 ) 3.53 - - Exercised - - - - Outstanding at September 30, 2020 5,099,038 $ 1.59 2.54 $ - Vested September 30, 2020 2,563,321 $ 1.89 $ - Exercisable at September 30, 2020 1,644,015 $ 2.16 $ - At September 30, 2020, there was no intrinsic value as the exercise price of these stock options were greater than the market price. During the nine months ended September 30, 2020 the Company granted stock options to employees to purchase a total of 1,035,637 shares of Common Stock for services to be rendered. The options have an average exercise price of $1.37 per share, expire in five years, and cliff vest over a period of 0.4 to 4 years from the grant date. The total fair value of these options at the grant date was approximately $1,242,000 using the Black-Scholes Option pricing model. The total stock compensation expense recognized relating to vesting of stock options for the nine months ended September 30, 2020 amounted to $1,215,000. As of September 30, 2020, total unrecognized stock-based compensation expense was $3.8 million, which is expected to be recognized as part of operating expense through August 2024. The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Nine months ended September 30, 2020 2019 Risk-free interest rate 0.17% - 0.39 % 1.55% - 2.75 % Average expected term 1 to 5 years 3.6 to 5 years Expected volatility 270.10 - 270.57 % 180 – 275.29 % 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 | 9 Months Ended |
Sep. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 15. WARRANTS The Company has the following warrants outstanding as of September 30, 2020, all of which are exercisable: Warrants Weighted- Price Weighted- Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 10,930,991 $ 3.07 4.25 $ - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 3.53 - - Exercised (1,965,594 ) 1.10 - - Outstanding at September 30, 2020, all vested 13,351,251 $ 2.50 3.63 $ - At September 30, 2020, there was no intrinsic value as the exercise price of these stock warrants were greater than the market price. During the period ended September 30, 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 12). In addition, the Company also granted warrants to certain shareholders to purchase 1,910,594 shares of common stock as part of settlement with regards to the Company’s public offering that occurred in July 2020 (see Note 12) . The warrants are fully vested upon grant, exercisable at $1.10 per share, expire in 0.01 year with an estimated fair value of $248,000 using the Black-Scholes Option pricing model. The Company accounted the estimated fair value of $248,000 as a financing costs. During the period ended September 30, 2020, a total of 1,965,594 warrants were exercised into 1,965,594 shares of Common Stock at a weighted average exercise price of $1.10. The Company received cash of $2,165,000 upon exercise of the warrants. |
Issuance of Class A and B Units
Issuance of Class A and B Units | 9 Months Ended |
Sep. 30, 2020 | |
Issuance Of Class And B Units | |
Issuance of Class A and B Units | 16. ISSUANCE OF CLASS A and B UNITS a. Class A Units – during the period ended September 30, 2020, Verb Acquisition issued 100 Class A units to the Company as part of the organization of Verb Acquisition. The Class A Units have the following rights and privileges: 1. Priority on distributions; 2. Ability to remove the manager; 3. Drag-along rights; 4. Power to dissolve Verb Acquisition provided that a majority of the Class B Units also approve the dissolution; 5. Ability to appoint a liquidator to wind up the affairs of Verb Acquisition; 6. Entitled to distributions; 7. Approve board appointments; and 8. Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class B Units also approve the amendment. b. Class B Units – during the period ended September 30, 2020, Verb Acquisition issued 2,642,159 Class B Units as part of its acquisition of SoloFire (see Note 3). The Class B Units have the following rights and privileges: 1. Exchangeable for shares of the Company’s Common Stock at a conversion rate of 1 to 1; 2. Power to dissolve Verb Acquisition, provided that a majority of the Class A Units also approve the dissolution; 3. Entitled to profit distributions; 4. Approve board appointments made by the Class A Units; and 5. Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class A Units also approve the amendment. As the Class B Units are exchangeable for the Company’s Common Stock, for valuation purposes, the Company determined to use the trading price of the Company’s Common Stock at the date of the acquisition of SoloFire which amounted to $3,065,000. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. 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. 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. We believe we have established an appropriate reserve to account for the potential settlement. By Order dated October 27, 2020, the court granted preliminary approval of the class action 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. On November 5, 2020, we executed a binding settlement term sheet with the lead plaintiff in the derivative action to settle that action and release all 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 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 financial statements. Board of Directors The Company has committed an aggregate of $475,000 in annual 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 September 30, 2020 was $309,000 As of September 30, 2020, total board fees to be recognized in future period amounted to $90,000 and will be recognized once the service has been rendered. COVID-19 In March 2020, the World Health Organization declared that the rapidly spreading COVID-19 outbreak was a global pandemic (the “COVID-19 pandemic”). In response to the COVID-19 pandemic, many governments around the world have implemented, and continue to implement, a variety of measures to reduce the spread of COVID-19, including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, shelter-in place orders and required closures of non-essential businesses. 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS Issuance of Common Stock Subsequent to September 30, 2020, the Company issued 30,000 shares of Common Stock to vendors for services rendered with a fair value of $33,000. 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. Grant of Stock Options Subsequent to September 30, 2020, the Company granted stock options to an employee to purchase a total of 914,171 shares of Common Stock for services rendered. The options have an average exercise price of $1.33 per share, expire in five years, and vest over a period of 0.5 to 4 years from grant date. The total fair value of these options at the grant date was $1,016,000 using the Black-Scholes option pricing model. Restricted Stock Awards Subsequent to September 30, 2020, the Company issued a 60,000 Restricted Stock Awards to an advisory board member that cliff vest quarterly over one year from grant date with an aggregate fair value of $68,000. Registration of Common Stock, Options of Common Stock, and Shares of Common Stock Underlying Warrants On October 20, 2020, the Company filed a registration statement on Form S-3 with the SEC. The prospectus contained in the registration statement to the proposed resale by the selling security holders named in the prospectus or their permitted assigns of an aggregate of up to 8,393,387 shares of our Common Stock held by the selling security holders, which amount consists of (i) 5,087,326 shares of Common Stock outstanding as of the date of the registration statement, (ii) an aggregate of 416,199 shares of Common Stock issuable upon exercise of Common Stock purchase warrants issued to a non-U.S. consultant in connection with a private placement of Common Stock to certain of the Company’s selling security holders, (iii) 247,703 restricted stock units granted pursuant to a Restricted Stock Award Agreement, and (iv) an aggregate of 2,642,159 shares of Common Stock which will be issued in the future from time to time to those of the Company’s selling security holders that are holders of Class B Units of Verb Acquisition under an exchange agreement among the holders of Class B Units pursuant to which the holders of Class B Units may exchange their Class B Units for shares of the Company’s Common Stock on a one-for-one basis Payment of Note Payable In October 2020, the Company paid in full the note payable of $1,885,000 issued in September 2020 for the acquisition of SoloFire (see Note 3 and 8). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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/A for the fiscal year ended December 31, 2019 filed with the SEC on June 4, 2020. The 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., Verb Direct, LLC, its wholly owned subsidiary, and Verb Acquisition Co, LLC, its wholly owned subsidiary. Intercompany transactions 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 nine months ended September 30, 2020, the Company incurred a net loss of $12,690,000 and used cash in operations of $9,790,000. 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 September 30, 2020, we had cash on hand of $10,772,000. We believe we have sufficient cash to sustain operations through September 2021. 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. |
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 September 30, 2020, we had no customers that accounted for 10% of our accounts receivable individually. As of December 31, 2019, we had one customer that accounted for 10% of our accounts receivable individually and in aggregate. As of September 30, 2020 and 2019, we had no customers who accounted for 10% or more of our revenues. As of September 30, 2020, we had two vendors that accounted for 10% or more of our accounts payable individually and 38% in aggregate. As of December 31, 2019, we one vendor that accounted for 10% or more of our accounts payable individually and in aggregate. As of September 30, 2020 and 2019, we had one vendor that accounted 10% or more of our purchases. |
Reclassifications | Reclassifications Certain revenue amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications consist of reclassification of digital revenue between SaaS recurring subscription revenue and other digital revenue to provide additional clarity. These reclassifications had no effect to the previously reported net loss. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from subscriptions to its digital SaaS application services, though it also derives revenue from certain non-digital services, such as printing and fulfillment services, the Company provides to some of its larger enterprise clients. The subscription revenue from the application services are recognized over the life of the subscription contracts and any extensions thereto. While the Company has been offering subscription services for a limited period of time, to date, the Company estimates the life of the subscription period to be approximately 36 months. The Company also charges customers setup, design, and installation fees for the development of websites among other associated and complimentary services. 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 non-digital revenue, and the related costs are reflected in cost of non-digital 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 the digital delivery of access to our applications, and our performance obligations are satisfied at that time. Shipping and handling activities for our non-digital services 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. Design assets of the websites and applications are recognized when the work is completed. Licensing revenue is recognized over the estimated subscription period. A description of our principal revenue generating activities is as follows: SaaS recurring subscription revenue – represents digital subscription-based SaaS recurring revenue associated with verbCRM, verbLEARN, and verbLIVE. The revenue is recognized over the subscription period. Other Digital – represents digital non-subscription-based revenue consisting of product sample revenue as well as design fees generated through or in connection with our applications. The revenue for samples is recognized upon completion and shipment, while the design fees are recognized when the service has been rendered and the app is delivered to the customer. Welcome kits and fulfilment – We offer design and printing services to certain of our larger clients who request corporate starter kits for their new sales reps, and fulfillment of various customer products that our clients use for their marketing needs. The revenue is recognized upon completion and shipment of the starter kits or fulfillment products to the customer. Shipping – We charge our customers the costs plus a markup related to the shipping of their welcome kits and fulfillment products. The revenue is recognized when the corresponding welcome kits or fulfillment products are shipped. |
Contract Liabilities | Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract but the Company has not yet delivered or completed its performance obligation to the customer. |
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. |
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. |
Share Based Payments | 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 | 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. As of September 30, 2020, and 2019, the Company had total outstanding options of 5,099,038 and 2,914,641, respectively, and warrants of 13,351,245 and 11,132,960, respectively, outstanding restricted stock awards of 2,908,530 and 0, and 2,642,159 shares common shares potentially issuable from our Class B Units that were issued in August 2020, were excluded from the computation of net loss per share because they are anti-dilutive. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets 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. The acquisition of Verb Acquisition Co formerly Ascend Certification, occurred on September 4, 2020. The Company will perform its first impairment test in fiscal 2021. |
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 September 30, 2020 or December 31, 2019. |
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. |
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. |
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. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Verb Direct [Member] | |
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 |
Ascend Certification [Member] | |
Schedule of Fair Value of Assets Assumed and Liabilities Acquired | The following table summarizes the provisional fair value of the assets assumed and liabilities acquired and the provisional purchase price allocation on the date of acquisition: Assets Acquired: Cash $ 229,000 Accounts receivable 219,000 $ 448,000 Liabilities Assumed: Current liabilities (653,000 ) Long-term liabilities (90,000 ) (743,000 ) Intangible assets (provisional) 1,883,000 Goodwill (provisional) 3,362,000 Purchase Price $ 4,950,000 |
Schedule of Pro Forma Statements of Operations | The unaudited pro forma statements of operations for the nine and three months ended September 30, 2020 and 2019 give effect to the transaction to the merger as if it had occurred on January 1, 2019. Three months ended September 30, 2020 Three months ended September 30, 2019 Nine months September 30, Nine months September 30, (Proforma unaudited) (Proforma unaudited) (Proforma unaudited) (Proforma, SaaS recurring subscription revenue $ 1,661,000 $ 1,201,000 $ 4,511,000 $ 3,383,000 Other digital revenue 360,000 485,000 1,166,000 1,354,000 Welcome kits and fulfilment 836,000 1,164,000 2,277,000 5,213,000 Shipping 186,000 271,000 614,000 1,443,000 Total Revenue 3,043,000 3,121,000 8,568,000 11,393,000 Cost of revenue 1,344,000 1,548,000 3,661,000 5,951,000 Gross margin 1,699,000 1,573,000 4,907,000 5,442,000 Operating expenses (9,771,000 ) (5,353,000 ) (21,615,000 ) (16,100,000 ) Other income, net 574,000 526,000 3,550,000 1,406,000 Net loss $ (7,498,000 ) $ (3,254,000 ) $ (13,158,000 ) $ (9,252,000 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019. September 30, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 40,000 39,000 Leasehold improvement 1,057,000 741,000 Total property and equipment 1,201,000 884,000 Accumulated depreciation (294,000 ) (164,000 ) Total property and equipment, net $ 907,000 $ 720,000 |
Right-of-use Assets and Opera_2
Right-of-use Assets and Operating Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Cost | Period Ended September 30, 2020 Period Ended September 30, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 524,000 $ 281,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 383.000 $ 281,000 Weighted average remaining lease term – operating leases (in years) 4.70 5.44 Average discount rate – operating leases 4.0 % 4.0 % |
Schedule of Operating Leases | September 30, 2020 December 31, 2019 Operating leases Right-of-use assets, net of amortization of $756,000 and $349,000, respectively $ 2,868,000 $ 3,275,000 Short-term operating lease liabilities $ 595,000 $ 391,000 Long-term operating lease liabilities 3,101,000 3,591,000 Total operating lease liabilities $ 3,696,000 $ 3,982,000 |
Advance of Future Receipts (Tab
Advance of Future Receipts (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Advances on Future Receipts | The Company has the following advances on future receipts as of September 30, 2020: Note Issuance Date Maturity Date Interest Original Borrowing 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 Note 3 June 30, 2020 February 25, 2021 10 % 506,000 297,000 - Note 4 June 30, 2020 February 25, 2021 10 % 506,000 297,000 - Total $ 1,012,000 594,000 1,006,000 Debt discount (176,000 ) (274,000 ) Net $ 418,000 $ 732,000 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable to Related Parties | The Company has the following related parties notes payable as of September 30, 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 - (1,065,000 ) Current $ 1,177,000 $ 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 September 30, 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 September 30, 2020, and December 31, 2019, the outstanding principal balance of the note amounted to $112,000, respectively. As of September 30, 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 September 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The Company has the following notes payable as of September 30, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ 1,218,000 $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 90,000 Note D September 4, 2020 October 1, 2020 0.14 % 1,982,000 1,885,000 Total notes payable 3,440,000 3,343,000 Non-current 1,458,000 1,458,000 Current $ 1,982,000 $ 1,885,000 (A) 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. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of September 30, 2020. (B) On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (SBA) under the Economic Injury Disaster Loan program in the amount of $150,000. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Installment payments, including principal and interest, will begin on May 15, 2021. As part of the loan, the Company also received an advance of $10,000 from the SBA. While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount given through this program does not need to be repaid. As a result, the Company accounted this $10,000 as part of “Other Income” in the accompanying Statement of Operations. (C) On May 1, 2020, SoloFire received loan proceeds in the amount of $90,000 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. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of September 30, 2020. (D) On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,982,000, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, with a maturity date of October 1, 2020. Effective September 30, 2020, the note was amended to $1,885,000 to account for contractual working capital adjustments. All other terms remain the same. On October 1, 2020, Verb Acquisition paid off the note in full. |
Deferred Incentive Compensati_2
Deferred Incentive Compensation to Officers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 these 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 a bonus for the successful up-listing to Nasdaq and the 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 these Employees. The Company will pay 50% of the Nasdaq up-listing award on January 10, 2021 and the remaining 50% on January 10, 2022. |
Derivative Liability (Tables)
Derivative Liability (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liability Transactions | At September 30, 2020, the fair value of the derivative liability amounted to $4,545,000. The details of derivative liability transactions as of and for the periods ended September 30, 2020 and 2019 are as follows: September 30, 2020 September 30, 2019 Beginning Balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and warrants 3,951,000 6,561,000 Change in fair value (4,295,000 ) (3,320,000 ) Extinguishment (159,000 ) (2,227,000 ) Ending Balance $ 4,545,000 $ 3,591,000 |
Schedule of Derivative Liability Using Binomial Pricing Model Assumptions | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: September 30, 2020 Upon Issuance December 31, 2019 Stock Price $ 1.08 $ 1.70 $ 1.55 Exercise Price $ 1.62 $ 1.55 $ 1.88 Expected Life 2.78 5.0 3.53 Volatility 107 % 212 % 216 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.14 % 2.47 % 1.64 % Fair Value $ 4,545,000 $ 3,951,000 $ 5,048,000 |
Restricted Stock Awards (Tables
Restricted Stock Awards (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary Of Significant Accounting Policies [Line Items] | |
Summary of Restricted Stock Award Activity | Pursuant to the Company’s December 2019 Omnibus Incentive Plan, a summary of restricted stock award activity for the nine months ended September 30, 2020 is presented below. Weighted- Shares Fair Value Fair Value Non-vested at December 31, 2019 1,486,354 $ 2,021,000 $ 1.36 Granted 2,871,471 3,379,000 1.18 Vested/deemed vested (1,050,856 ) (2,696,000 ) 1.26 Returned (336,533 ) 485,000 1.31 Forfeited (61,906 ) (91,000 ) 1.47 Non-vested at September 30, 2020 2,908,530 $ 3,544,000 $ 1.22 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | A summary of option activity for the nine months ended September 30, 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 $ 1.73 2.54 $ 995,000 Granted 1,035,637 1.37 - - Forfeited (170,321 ) 3.53 - - Exercised - - - - Outstanding at September 30, 2020 5,099,038 $ 1.59 2.54 $ - Vested September 30, 2020 2,563,321 $ 1.89 $ - Exercisable at September 30, 2020 1,644,015 $ 2.16 $ - |
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: Nine months ended September 30, 2020 2019 Risk-free interest rate 0.17% - 0.39 % 1.55% - 2.75 % Average expected term 1 to 5 years 3.6 to 5 years Expected volatility 270.10 - 270.57 % 180 – 275.29 % Expected dividend yield - - |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrants Outstanding | The Company has the following warrants outstanding as of September 30, 2020, all of which are exercisable: Warrants Weighted- Price Weighted- Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 10,930,991 $ 3.07 4.25 $ - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 3.53 - - Exercised (1,965,594 ) 1.10 - - Outstanding at September 30, 2020, all vested 13,351,251 $ 2.50 3.63 $ - |
Description of Business (Detail
Description of Business (Details Narrative) - $ / shares | Feb. 02, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | |||
Reverse stock split | 1-for-15 reverse stock split | ||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Net loss | $ (7,320,000) | $ (3,115,000) | $ (12,690,000) | $ (8,466,000) | ||
Cash in operations | (9,790,000) | $ (6,506,000) | ||||
Cash on hand | 10,722,000 | $ 10,722,000 | $ 983,000 | |||
Outstanding Options [Member] | ||||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 5,099,038 | 2,914,641 | ||||
Outstanding Warrants [Member] | ||||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 13,351,245 | 11,132,960 | ||||
Outstanding Restricted Stock Awards [Member] | ||||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 2,908,530 | 0 | ||||
Shares Issuable from Class B Units [Member] | ||||||
Number of options and warrants excluded from the computation of net loss per share as anti-dilutive | 2,642,159 | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | No Customer [Member] | ||||||
Concentration risk, percentage | 10.00% | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | ||||||
Concentration risk, percentage | 10.00% | |||||
Customer Concentration Risk [Member] | Revenues [Member] | No Customer [Member] | ||||||
Concentration risk, percentage | 10.00% | 10.00% | ||||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Vendor One [Member] | ||||||
Concentration risk, percentage | 10.00% | |||||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Vendor Two [Member] | ||||||
Concentration risk, percentage | 38.00% | |||||
Customer Concentration Risk [Member] | Accounts Payable [Member] | One Vendor [Member] | ||||||
Concentration risk, percentage | 10.00% | |||||
Customer Concentration Risk [Member] | Purchases [Member] | One Vendor [Member] | ||||||
Concentration risk, percentage | 10.00% | 10.00% | ||||
Maximum [Member] | ||||||
Cash FDIC insured amount | $ 250,000 | $ 250,000 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Sep. 04, 2020 | Apr. 12, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 04, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Cash payment of acquisition | $ 15,000,000 | |||||||
Amortization expense | 1,953,000 | $ 975,000 | ||||||
Intangible assets unamortized balance | $ 6,270,000 | 6,270,000 | $ 5,365,000 | |||||
Revenues recognized | 2,860,000 | $ 2,873,000 | 7,866,000 | 6,615,000 | ||||
Stock issued during period value | 4,444,000 | |||||||
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 | |||||||
Purchase price | 22,820,000 | |||||||
Aggregated goodwill and intangible assets | $ 22,677,000 | |||||||
Amortization expense | 945,000 | |||||||
Intangible assets unamortized balance | 4,420,000 | 4,420,000 | ||||||
Revenues recognized | 2,800,000 | $ 2,900,000 | 7,700,000 | $ 6,600,000 | ||||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Developed Technology [Member] | ||||||||
Amortization expense | $ 4,700,000 | |||||||
Estimated useful life | 5 years | |||||||
Intangible assets, amortization method | Amortized on an accelerated basis | |||||||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Customer Relationships [Member] | ||||||||
Amortization expense | $ 1,200,000 | |||||||
Estimated useful life | 5 years | |||||||
Intangible assets, amortization method | Amortized on an accelerated basis | |||||||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | Domain Names [Member] | ||||||||
Amortization expense | $ 440,000 | |||||||
Intangible assets, amortization method | Tested for impairment on an annual basis | |||||||
Membership Interest Purchase Agreement [Member] | Ascend Certification [Member] | ||||||||
Purchase price | $ 5,700,000 | |||||||
Amortization expense | $ 33,000 | |||||||
Intangible assets unamortized balance | $ 1,850,000 | $ 1,850,000 | ||||||
Business combination post closing adjustments | 750,000 | |||||||
Adjusted purchase price | 4,950,000 | |||||||
Provisional goodwill and intangible assets | 5,245,000 | $ 5,245,000 | ||||||
Membership Interest Purchase Agreement [Member] | Ascend Certification [Member] | Promissory Note [Member] | ||||||||
Debt instrument face amount | 1,885,000 | $ 1,885,000 | ||||||
Membership Interest Purchase Agreement [Member] | Ascend Certification [Member] | Promissory Note [Member] | Class B Units Stock [Member] | ||||||||
Purchase price | $ 4,950,000 | |||||||
Stock issued during period shares | 2,642,159 | |||||||
Stock issued for exchange | 2,642,159 | |||||||
Stock issued during period value | $ 3,065,000 | |||||||
Debt instrument interest rate | 0.14% | 0.14% | ||||||
Membership Interest Purchase Agreement [Member] | Developed Technology [Member] | Ascend Certification [Member] | ||||||||
Amortization expense | $ 1,700,000 | |||||||
Estimated useful life | 5 years | |||||||
Membership Interest Purchase Agreement [Member] | Customer Relationships [Member] | Ascend Certification [Member] | ||||||||
Amortization expense | $ 120,000 | |||||||
Estimated useful life | 3 years | |||||||
Membership Interest Purchase Agreement [Member] | Domain Names [Member] | Ascend Certification [Member] | ||||||||
Amortization expense | $ 3,000 | |||||||
Estimated useful life | 3 years | |||||||
Intangible assets, amortization method | Tested for impairment on an annual basis | |||||||
Membership Interest Purchase Agreement [Member] | Non-Competition Clause [Member] | Ascend Certification [Member] | ||||||||
Amortization expense | $ 60,000 | |||||||
Estimated useful life | 3 years |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Assets Assumed and Liabilities Acquired (Details) - USD ($) | Sep. 30, 2020 | Sep. 04, 2020 | Dec. 31, 2019 | Apr. 12, 2019 |
Goodwill | $ 19,699,000 | $ 16,337,000 | ||
Verb Direct [Member] | ||||
Other current assets | $ 2,004,000 | |||
Property and equipment | 58,000 | |||
Other assets | 1,302,000 | |||
Total assets acquired | 3,364,000 | |||
Current liabilities | (2,153,000) | |||
Long-term liabilities | (1,068,000) | |||
Total liabilities assumed | (3,221,000) | |||
Intangible assets | 6,340,000 | |||
Goodwill | 16,337,000 | |||
Purchase Price | $ 22,820,000 | |||
Ascend Certification [Member] | ||||
Cash | $ 229,000 | |||
Accounts receivable | 219,000 | |||
Total assets acquired | 448,000 | |||
Current liabilities | (653,000) | |||
Long-term liabilities | (90,000) | |||
Total liabilities assumed | (743,000) | |||
Intangible assets (provisional) | 1,883,000 | |||
Goodwill (provisional) | 3,362,000 | |||
Purchase Price | $ 4,950,000 |
Acquisitions - Schedule of Pro
Acquisitions - Schedule of Pro Forma Statements of Operations (Details) - Merger Agreement [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | $ 3,043,000 | $ 3,121,000 | $ 8,568,000 | $ 11,393,000 |
Cost of revenue | 1,344,000 | 1,548,000 | 3,661,000 | 5,951,000 |
Gross margin | 1,699,000 | 1,573,000 | 4,907,000 | 5,442,000 |
Operating expenses | (9,771,000) | (5,353,000) | (21,615,000) | (16,100,000) |
Other income, net | 574,000 | 526,000 | 3,550,000 | 1,406,000 |
Net loss | (7,498,000) | (3,254,000) | (13,158,000) | (9,252,000) |
SaaS Recurring Subscription Revenue [Member] | ||||
Revenue | 1,661,000 | 1,201,000 | 4,511,000 | 3,383,000 |
Other Digital Member] | ||||
Revenue | 360,000 | 485,000 | 1,166,000 | 1,354,000 |
Welcome Kits and Fulfillment [Member] | ||||
Revenue | 836,000 | 1,164,000 | 2,277,000 | 5,213,000 |
Shipping [Member] | ||||
Revenue | $ 186,000 | $ 271,000 | $ 614,000 | $ 1,443,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 130,000 | $ 35,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,201,000 | $ 884,000 |
Less: accumulated depreciation | (294,000) | (164,000) |
Property and equipment, net | 907,000 | 720,000 |
Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 29,000 | 29,000 |
Furniture and Fixture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 75,000 | 75,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 40,000 | 39,000 |
Leasehold Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,057,000 | $ 741,000 |
Right-of-Use Assets and Opera_3
Right-of-Use Assets and Operating Lease Liabilities (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | |
Right-of-use assets | $ 2,868,000 | $ 3,275,000 | |
Operating lease liabilities | $ 3,696,000 | $ 3,982,000 | |
First 12 Months of Lease [Member] | |||
Lease term | 12 months | ||
Rent | $ 7,000 | ||
Next 82 Months of the Lease [Member] | |||
Lease term | 82 months | ||
Rent | $ 39,000 | ||
Lease Agreement [Member] | |||
Operating lease, description | In addition, the Company leases its corporate headquarters located in Newport Beach, California under a lease with a term of 94 months. | ||
Lease term | 94 months | ||
Four Office and Warehouse [Member] | |||
Aggregate lease payment | $ 31,000 | ||
Lease extension description | December 2023 | ||
Leasehold Improvement [Member] | |||
Lease incentive | $ 572,000 |
Right-of-Use Assets and Opera_4
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Lease Cost (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost (included in general and administration in the Company's statement of operations) | $ 524,000 | $ 281,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 383,000 | $ 281,000 |
Weighted average remaining lease term - operating leases (in years) | 4 years 8 months 12 days | 5 years 5 months 9 days |
Average discount rate - operating leases | 4.00% | 4.00% |
Right-of-Use Assets and Opera_5
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Operating Leases (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right-of-use assets, net of amortization of $756,000 and $349,000, respectively | $ 2,868,000 | $ 3,275,000 |
Short-term operating lease liabilities | 595,000 | 391,000 |
Long-term operating lease liabilities | 3,101,000 | 3,591,000 |
Total operating lease liabilities | $ 3,696,000 | $ 3,982,000 |
Right-of-Use Assets and Opera_6
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Operating Leases (Details) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 756,000 | $ 349,000 |
Advance of Future Receipts (Det
Advance of Future Receipts (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 24, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Advance future receipts | $ 594,000 | $ 1,006,000 | |||
Debt discount | 176,000 | 274,000 | |||
Payments of due amount | 1,006,000 | ||||
Amortized debt discount | 274,000 | ||||
Repayments of notes | $ 630,000 | ||||
Unamortized debt discount | 284,000 | $ 274,000 | |||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||
Debt principal amount | $ 728,000 | $ 728,000 | |||
Interest rate | 28.00% | ||||
Purchase of future receipts | $ 1,012,000 | $ 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. | 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. | |||
Principal payment | $ 6,000 | $ 6,000 | |||
Advance future receipts | 1,012,000 | ||||
Debt discount | $ 285,000 | ||||
Payments of due amount | 418,000 | ||||
Amortized debt discount | $ 108,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Advance on Future Receipts [Member] | |||||
Advance future receipts | |||||
Debt discount | |||||
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 ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
Original Borrowing | $ 1,012,000 | ||
Total | 594,000 | $ 1,006,000 | |
Debt discount | (176,000) | (274,000) | |
Net | $ 418,000 | 732,000 | |
Note 1 [Member] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2021 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Note 2 [Member] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Note 3 [Member] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Advance on Future Receipts [Member] | Note 1 [Member] | |||
Issuance Date | Dec. 24, 2019 | ||
Maturity Date | Jun. 30, 2020 | ||
Interest Rate | 10.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 503,000 | ||
Advance on Future Receipts [Member] | Note 2 [Member] | |||
Issuance Date | Dec. 24, 2019 | ||
Maturity Date | Jun. 30, 2020 | ||
Interest Rate | 10.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 50,300 | ||
Advance on Future Receipts [Member] | Note 3 [Member] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 10.00% | ||
Original Borrowing | |||
Total | $ 297,000 | ||
Advance on Future Receipts [Member] | Note 4 [Member] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 10.00% | ||
Original Borrowing | $ 506,000 | ||
Total | $ 297,000 | ||
[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 June 30, 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 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 June 30, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of June 30, 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. | ||
[3] | 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 June 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Interest payable | $ 95,000 | $ 82,000 | |
Notes Payable [Member] | |||
Interest expense, related parties | 106,000 | $ 106,000 | |
Interest payable | $ 100,000 | $ 96,000 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
Original Borrowing | $ 1,012,000 | ||
Notes payable - related parties, net | 1,177,000 | $ 1,177,000 | |
Non-current | (1,065,000) | ||
Current | $ 1,177,000 | 112,000 | |
Note 1 [Member] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2021 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Notes payable - related parties, net | [1] | $ 825,000 | 825,000 |
Note 2 [Member] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Notes payable - related parties, net | [2] | $ 112,000 | 112,000 |
Note 3 [Member] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Notes payable - related parties, net | [3] | $ 240,000 | $ 240,000 |
[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 June 30, 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 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 June 30, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of June 30, 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. | ||
[3] | 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 June 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) (Parenthetical) - USD ($) | Apr. 04, 2016 | Dec. 01, 2015 | Sep. 30, 2020 | Dec. 31, 2019 | |
Notes payable - related parties, net | $ 1,177,000 | $ 1,177,000 | |||
Note 1 [Member] | |||||
Interest rate | [1] | 12.00% | |||
Notes payable - related parties, net | [1] | $ 825,000 | 825,000 | ||
Note 2 [Member] | |||||
Interest rate | [2] | 12.00% | |||
Notes payable - related parties, net | [2] | $ 112,000 | 112,000 | ||
Note 3 [Member] | |||||
Interest rate | [3] | 12.00% | |||
Notes payable - related parties, net | [3] | $ 240,000 | 240,000 | ||
Mr. Rory J. Cutaia [Member] | Note 1 [Member] | |||||
Interest rate | 12.00% | ||||
Mr. Cutaia [Member] | Note 1 [Member] | |||||
Maturity date description | February 8, 2021 | ||||
Outstanding balance | 825,000 | 825,000 | |||
Mr. Cutaia [Member] | Note 2 [Member] | |||||
Interest rate | 12.00% | ||||
Maturity date description | April 1, 2017 | ||||
Outstanding balance | 112,000 | 112,000 | |||
Notes payable - related parties, net | $ 112,000 | ||||
Mr. Cutaia [Member] | Note 3 [Member] | |||||
Interest rate | 12.00% | ||||
Maturity date description | June 4, 2021 | ||||
Outstanding balance | $ 343,000 | ||||
Notes payable - related parties, net | $ 240,000 | $ 240,000 | |||
[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 June 30, 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 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 June 30, 2020, and December 31, 2019, the outstanding principal balance of the note was equal to $112,000, respectively. As of June 30, 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. | ||||
[3] | 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 June 30, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Total notes payable | $ 3,343,000 | |
Non-current | 1,458,000 | |
Current | $ 1,885,000 | |
Note A [Member] | ||
Issuance Date | Apr. 17, 2020 | |
Maturity Date | Apr. 17, 2022 | |
Interest Rate | 1.00% | |
Original Borrowing | $ 1,218,000 | |
Total notes payable | $ 1,218,000 | |
Note B [Member] | ||
Issuance Date | May 15, 2020 | |
Maturity Date | May 30, 2050 | |
Interest Rate | 3.75% | |
Original Borrowing | $ 150,000 | |
Total notes payable | $ 150,000 | |
Note C [Member] | ||
Issuance Date | May 1, 2020 | |
Maturity Date | May 1, 2022 | |
Interest Rate | 3.75% | |
Original Borrowing | $ 90,000 | |
Total notes payable | $ 90,000 | |
Note D [Member] | ||
Issuance Date | Sep. 4, 2020 | |
Maturity Date | Oct. 1, 2020 | |
Interest Rate | 0.14% | |
Original Borrowing | $ 1,982,000 | |
Total notes payable | 1,885,000 | |
Original Borrowing [Member] | ||
Total notes payable | 3,440,000 | |
Non-current | 1,458,000 | |
Current | $ 1,982,000 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 04, 2020 | May 15, 2020 | May 01, 2020 | Apr. 17, 2020 | Sep. 30, 2020 |
Notes payable | $ 3,343,000 | ||||
Note A [Member] | |||||
Interest rate | 1.00% | ||||
Maturity date | Apr. 17, 2022 | ||||
Notes payable | $ 1,218,000 | ||||
Note A [Member] | Paycheck Protection Program [Member] | |||||
Loan received | $ 1,218,000 | ||||
Interest rate | 1.00% | ||||
Note B [Member] | |||||
Interest rate | 3.75% | ||||
Maturity date | May 30, 2050 | ||||
Notes payable | $ 150,000 | ||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | |||||
Interest rate | 3.75% | ||||
Unsecured Loan | $ 150,000 | ||||
Debt term | 30 years | ||||
Maturity date | May 15, 2021 | ||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | Other Income [Member] | |||||
Advance received from unsecured loan | $ 10,000 | ||||
Note C [Member] | |||||
Interest rate | 3.75% | ||||
Maturity date | May 1, 2022 | ||||
Notes payable | $ 90,000 | ||||
Note C [Member] | Paycheck Protection Program [Member] | SoloFire [Member] | |||||
Loan received | $ 90,000 | ||||
Interest rate | 1.00% | ||||
Note D [Member] | |||||
Interest rate | 0.14% | ||||
Maturity date | Oct. 1, 2020 | ||||
Notes payable | $ 1,885,000 | ||||
Note D [Member] | SoloFire [Member] | |||||
Interest rate | 0.14% | ||||
Maturity date | Oct. 1, 2020 | ||||
Notes payable | $ 1,982,000 | ||||
Contractual working capital adjustments | $ 1,885,000 |
Deferred Incentive Compensati_3
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
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 | |
Payment Date | [1] | 50% on January 10, 2021 and 50% on January 10, 2022 | |
Total | [1] | $ 430,000 | 430,000 |
Rory Cutaia [Member] | |||
Date | [2] | Dec. 23, 2019 | |
Payment Date | [2] | 50% on January 10, 2021 and 50% on January 10, 2022 | |
Total | [2] | $ 324,000 | 324,000 |
Jeff Clayborne [Member] | |||
Date | [1] | Dec. 23, 2019 | |
Payment Date | [1] | 50% on January 10, 2021 and 50% on January 10, 2022 | |
Total | [1] | $ 125,000 | 125,000 |
Jeff Clayborne [Member] | |||
Date | [2] | Dec. 23, 2019 | |
Payment Date | [2] | 50% on January 10, 2021 and 50% on January 10, 2022 | |
Total | [2] | $ 163,000 | $ 163,000 |
[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 these 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 a bonus for the successful up-listing to Nasdaq and the acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $162,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to these Employees. The Company will pay 50% of the Nasdaq up-listing award on January 10, 2021 and the remaining 50% on January 10, 2022. |
Deferred Incentive Compensati_4
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) (Parenthetical) | Dec. 23, 2019USD ($) |
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 Series A Preferre_2
Convertible Series A Preferred Stock and Warrant Offering (Details Narrative) - USD ($) | Jul. 24, 2020 | Aug. 14, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Warrant to purchase of common stock | 1,965,594 | |||
Number of share warrants granted to issue | 1,910,594 | |||
Series A Preferred Stock and Warrants [Member] | ||||
Proceeds from issuance of preferred shares and warrants | $ 4,688,000 | |||
Direct costs of issuance | $ 342,000 | |||
Common Stock [Member] | ||||
Stock issued during period shares | 4,237,833 | |||
Conversion of stock, number of shares issued | 1,405,274 | |||
Securities Purchase Agreement [Member] | ||||
Warrant to purchase of common stock | 3,870,000 | |||
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. | |||
Conversion price per share | $ 1.55 | |||
Shareholders' approval percentage for mandatory conversion | 19.99% | |||
Securities Purchase Agreement [Member] | Maximum [Member] | ||||
Number of share warrants granted to issue | 3,245,162 | |||
Series A Preferred Stock [Member] | ||||
Stock issued during period shares | 5,030 | |||
Series A Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||
Number of shares agreed to be issued | 6,000 | |||
Series A Convertible Preferred Stock [Member] | ||||
Conversion of stock, number of shares issued | 1,990 | |||
Preferred stock, shares outstanding | 2,406 | 4,396 | ||
Series A Convertible Preferred Stock [Member] | Common Stock [Member] | ||||
Preferred stock, shares converted | 2,200,000 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative liability | $ 4,545,000 | $ 3,591,000 | $ 4,545,000 | $ 3,591,000 | $ 5,048,000 | $ 2,576,000 |
Warrant to purchase of common stock | 1,965,594 | 1,965,594 | ||||
Change in fair value of derivative liability | $ (975,000) | $ (2,802,000) | $ (4,295,000) | $ (3,320,000) | ||
Series A Warrants [Member] | ||||||
Derivative liability | $ 159,000 | $ 159,000 | ||||
Warrant to purchase of common stock | 95,000 | 95,000 | ||||
Warrants [Member] | ||||||
Derivative liability | $ 3,951,000 | $ 3,951,000 | ||||
Warrant to purchase of common stock | 2,303,861 | 2,303,861 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liability Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Beginning Balance | $ 5,048,000 | $ 2,576,000 | ||
Fair value upon issuance of notes payable and warrants | 3,951,000 | 6,561,000 | ||
Change in fair value | $ (975,000) | $ (2,802,000) | (4,295,000) | (3,320,000) |
Extinguishment | (159,000) | (2,227,000) | ||
Ending Balance | $ 4,545,000 | $ 3,591,000 | $ 4,545,000 | $ 3,591,000 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Liability Using Binomial Pricing Model Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Stock Price | $ / shares | $ 1.08 | $ 1.55 |
Fair Value | $ | $ 4,545,000 | $ 5,048,000 |
Exercise Price [Member] | ||
Fair value assumptions, measurement input, exercise price per share | shares | 1.62 | 1.88 |
Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 2 years 9 months 11 days | 3 years 6 months 10 days |
Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 1.07 | 2.16 |
Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0 | 0 |
Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 0.14 | 0.0164 |
Upon Issuance [Member] | ||
Stock Price | $ / shares | $ 1.70 | |
Fair Value | $ | $ 3,951,000 | |
Upon Issuance [Member] | Exercise Price [Member] | ||
Fair value assumptions, measurement input, exercise price per share | shares | 1.55 | |
Upon Issuance [Member] | Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 5 years | |
Upon Issuance [Member] | Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 2.12 | |
Upon Issuance [Member] | Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0 | |
Upon Issuance [Member] | Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 2.47 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Jul. 24, 2020 | Feb. 05, 2020 | Sep. 30, 2020 | Apr. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Warrant to purchase of common stock | 1,965,594 | 1,965,594 | |||||
Warrant exercise price | $ 1.10 | $ 1.10 | |||||
Value of shares issued for services | $ 230,000 | $ 202,000 | $ 1,126,000 | $ 930,000 | |||
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 issued for services | 962,583 | ||||||
Value of shares issued for services | $ 1,126,000 | ||||||
Common Stock [Member] | |||||||
Sale and issuance of common stock | 12,545,453 | 12,545,453 | 6,549,596 | ||||
Stock issued during period, shares | 4,237,833 | ||||||
Number of shares issued for services | 193,533 | 156,478 | 962,583 | 354,288 | |||
Value of shares issued for services | |||||||
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] | Common Stock [Member] | |||||||
Sale and issuance of common stock | 4,237,833 | ||||||
Proceeds sold of common stock | $ 4,444,000 | ||||||
Private Placement [Member] | Maximum [Member] | |||||||
Sale and issuance of common stock | 5,000,000 | ||||||
Public Offering [Member] | Common Stock [Member] | |||||||
Stock issued during period, shares | 12,545,453 | ||||||
Proceeds from issuance of stock | $ 12,337,000 | ||||||
Public Offering [Member] | Common Stock [Member] | Overallotment Option [Member] | |||||||
Stock issued during period, shares | 1,636,363 |
Restricted Stock Awards (Detail
Restricted Stock Awards (Details Narrative) - USD ($) | Apr. 10, 2020 | Sep. 30, 2020 |
Number of shares granted of restricted stock awards | 2,871,471 | |
Fair value of restricted stock award vested | $ 2,696,000 | |
Unvested compensation related to issuances of restricted stock award | $ 3,544,000 | |
Restricted Stock [Member] | ||
Number of shares granted of restricted stock awards | 2,871,471 | |
Fair value of granted restricted stock | $ 3,379,000 | |
Number of share vested and returned | 336,533 | |
Payment of income and payroll taxes | $ 485,000 | |
Cash Preservation Plan [Member] | ||
Number of shares granted of restricted stock awards | 589,098 | |
Fair value of granted restricted stock | $ 866,000 | |
Debt description | On April 10, 2020, the board of directors of 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 "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 number of Shares issued were determined 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 589,098 with a fair value of $866,000. The shares were valued based on the market value of the Company's stock price on the grant date and will be amortized over its vesting term. |
Restricted Stock Awards - Summa
Restricted Stock Awards - Summary of Restricted Stock Award Activity (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of Non-vested Shares, Outstanding Beginning | 1,486,354 |
Number of Shares, Granted | 2,871,471 |
Number of Shares, Vested/deemed vested | (1,050,856) |
Number of Shares, Returned | (336,533) |
Number of Shares, Forfeited | (61,906) |
Number of Non-vested Shares, Outstanding Ending | 2,908,530 |
Grant Date Fair Value, Outstanding Beginning | 2,021,000 |
Grant Date Fair Value, Granted | 3,379,000 |
Grant Date Fair Value, Vested/deemed vested | (2,696,000) |
Grant Date Fair Value, Returned | 485,000 |
Grant Date Fair Value, Forfeited | (91,000) |
Grant Date Fair Value, Outstanding Ending | 3,544,000 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 1.36 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 1.18 |
Weighted Average Grant Date Fair Value, Vested/deemed vested | $ / shares | 1.26 |
Weighted Average Grant Date Fair Value, Returned | $ / shares | 1.31 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 1.47 |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares | $ 1.22 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Intrinsic value exercise | |
Number of stock options granted | shares | 1,035,637 |
Exercise price of common stock granted | $ / shares | $ 1.37 |
Employees [Member] | |
Intrinsic value exercise | |
Number of stock options granted | shares | 1,035,637 |
Exercise price of common stock granted | $ / shares | $ 1.37 |
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 | $ 1,242,000 |
Expense recognized relating to stock options | 1,215,000 |
Unrecognized stock based compensation expense | $ 3,800,000 |
Stock option, description | Expected to be recognized as part of operating expense through August 2024. |
Employees [Member] | Minimum [Member] | |
Vesting period | 4 months 24 days |
Employees [Member] | Maximum [Member] | |
Vesting period | 4 years |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of options outstanding beginning balance | shares | 4,233,722 |
Number of options granted | shares | 1,035,637 |
Number of options forfeited | shares | (170,321) |
Number of options exercised | shares | |
Number of options outstanding ending balance | shares | 5,099,038 |
Number of options vested | shares | 2,563,321 |
Number of options exercisable | shares | 1,644,015 |
Weighted average exercise price outstanding beginning balance | $ 1.73 |
Weighted average exercise price granted | 1.37 |
Weighted average exercise price forfeited | 3.53 |
Weighted average exercise price exercised | |
Weighted average exercise price outstanding ending balance | 1.59 |
Weighted average exercise price vested | 1.89 |
Weighted average exercise price exercisable | $ 2.16 |
Weighted average remaining contractual term outstanding | 2 years 6 months 14 days |
Weighted average remaining contractual term outstanding | 2 years 6 months 14 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 | $ | |
Aggregate intrinsic value vested | $ | |
Aggregate intrinsic value exercisable | $ |
Stock Options - Schedule of Fai
Stock Options - Schedule of Fair Value Assumptions Using Black-Scholes Method (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 0.17% | 1.55% |
Average expected term | 1 year | 3 years 7 months 6 days |
Expected volatility | 270.10% | 180.00% |
Maximum [Member] | ||
Risk-free interest rate | 39.00% | 2.75% |
Average expected term | 5 years | 5 years |
Expected volatility | 270.57% | 275.29% |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Jul. 24, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Feb. 05, 2020 | Dec. 31, 2019 |
Intrinsic value exercise price | |||||
Number of share warrants granted to issue | 1,910,594 | ||||
Warrant exercisable | $ 1.10 | ||||
Warrant expire term | 4 days | ||||
Fair value of warrant | $ 248,000 | ||||
Warrant to purchase of common stock | 1,965,594 | ||||
Proceeds from exercise of warrant | $ 2,165,000 | $ 45,000 | |||
Warrants exercise price | $ 1.10 | ||||
Series A Shareholders [Member] | |||||
Number of share warrants granted to issue | 2,303,861 | ||||
Warrant to purchase of common stock | 2,303,861 | ||||
Warrants exercise price | $ 1.20 | ||||
Private Placement [Member] | Consultant [Member] | |||||
Number of share warrants granted to issue | 416,199 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Equity [Abstract] | |
Number of Shares, Warrants Outstanding Beginning | shares | 10,930,991 |
Number of Shares, Warrants Granted | shares | 4,630,654 |
Number of Shares, Warrants Forfeited | shares | (244,800) |
Number of Shares, Warrants Exercised | shares | (1,965,594) |
Number of Shares, Warrants Outstanding Ending | shares | 13,351,251 |
Weighted-Average Exercise Price, Outstanding Beginning | $ 3.07 |
Weighted-Average Exercise Price, Granted | 1.17 |
Weighted-Average Exercise Price, Forfeited | 3.53 |
Weighted-Average Exercise Price, Exercised | 1.10 |
Weighted-Average Exercise Price, Outstanding Ending | $ 2.50 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 4 years 2 months 30 days |
Weighted Average Remaining Contractual Life (Years), Outstanding Ending | 3 years 7 months 17 days |
Aggregate Intrinsic Value Outstanding Beginning | |
Aggregate Intrinsic Value Outstanding Ending |
Issuance of Class A and B Uni_2
Issuance of Class A and B Units (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock issued during period for acquisition value | $ 7,820,000 | |
Class A Units Stock [Member] | ||
Stock issued during period for acquisition | 100 | |
Class B Units Stock [Member] | SoloFire [Member] | ||
Stock issued during period for acquisition | 2,642,159 | |
Stock issued during period for acquisition value | $ 3,065,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2015 | |
Board fees expensed | $ 309,000 | |
Board fees to be recognized | 90,000 | |
Five Board Members [Member] | ||
Aggregate board fees | $ 475,000 | |
bBooth, Inc. [Member] | ||
Unpaid bonus compensation | $ 300,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 16, 2020 | Oct. 20, 2020 | Oct. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Number of shares services rendered | $ 230,000 | $ 202,000 | $ 1,126,000 | $ 930,000 | ||||
Number of stock options granted | 1,035,637 | |||||||
Exercise price of common stock granted | $ 1.37 | |||||||
Proceeds from exercise of warrant | $ 2,165,000 | 45,000 | ||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||
Common stock, shares outstanding | 46,663,790 | 46,663,790 | 24,496,197 | |||||
Warrant to purchase of common stock | 1,965,594 | 1,965,594 | ||||||
Payment of notes payable | $ 630,000 | |||||||
Subsequent Event [Member] | ||||||||
Common stock, shares authorized | 8,393,387 | |||||||
Common stock, shares outstanding | 5,087,326 | |||||||
Warrant to purchase of common stock | 416,199 | |||||||
Restricted stock units granted | 247,703 | |||||||
Common stock reserved for future issuance. | 2,642,159 | |||||||
Subsequent Event [Member] | SoloFire [Member] | ||||||||
Payment of notes payable | $ 1,885,000 | |||||||
Vendors [Member] | ||||||||
Number of shares services rendered, shares | 962,583 | |||||||
Number of shares services rendered | $ 1,126,000 | |||||||
Vendors [Member] | Subsequent Event [Member] | ||||||||
Number of shares services rendered, shares | 30,000 | |||||||
Number of shares services rendered | $ 33,000 | |||||||
Employee [Member] | Subsequent Event [Member] | ||||||||
Number of stock options granted | 914,171 | |||||||
Exercise price of common stock granted | $ 1.33 | |||||||
Expiration period | 5 years | |||||||
Stock option vesting, description | Expire in five years, and vest over a period of 0.5 to 4 years from grant date. | |||||||
Fair value of stock options grants | $ 1,016,000 | |||||||
Advisory Board Member [Member] | Subsequent Event [Member] | Restricted Stock [Member] | ||||||||
Number of restricted stock awards vested, shares | 60,000 | |||||||
Vesting period | 1 year | |||||||
Stock awards, aggregate fair value | $ 68,000 |